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Given the production function
Q = A Kα Lβ Nγ
where Q is the rate of output and K, L, and N represent inputs of capital, labor and land, respectively, determine:
(a)The specific conditions under which returns to scale would be increasing, constant, and decreasing.
(b)The equation for the marginal product function for each input
Question 4
In high school Jeff often made money in the summer by mowing lawns in the neighborhood. He just finished his freshman year of college and, after taking a Business 101 class, he has some ideas about how to scale up his lawn mowing operation. Previously, he had used his father's push mower, but he is thinking about getting a riding mower that will save time and allow him to do more lawns. He found a used, zero turn, riding mower on Craigslist for $1,000. He will also need a trailer to pull the mower behind his pickup; that will cost him an additional $600. With the new mower he can take on an additional 20 lawns per week at an average cash inflow of $22 per lawn he will receive at the end of each week. He has 12 weeks of summer in which to mow lawns. (For convenience, assume that the mower and trailer will have no value after Jeff is done with his work this summer.) The discount rate for Jeff is 11% (note that this is an annual rate). What is the Net Present Value of the mower/trailer project?
Question 2
Juanita has an opportunity to invest in her friend's clothing store. The initial investment is $10,200 and the expected annual cashflows thereafter are {$300; $700; $1,300; $2,000; $2,000; $5,000; $5,000}. What is Juanita's IRR on this investment? (Allow two decimals in the percentage but do not enter the % sign.)
Question 3
Fabrice is looking to buy a new plug-in hybrid vehicle. The purchase price is $14,000 more than a similar conventional model. However, he will receive a $6,300 federal tax credit that he will realize at the end of the year. He estimates that he will save $1,300 per year in gas over the conventional model; these cash outflows can be assumed to occur at the end of the year. The cost of capital (or interest rate) for Fabrice is 6%. How long will Fabrice have to own the vehicle to justify the additional expense over the conventional model? In other words, what is the DISCOUNTED payback period in years? Discount future cash flows before calculating payback rounded UP to a whole year. (Enter just the number without comma and round off decimals.)
Juanita has an apportunity to invest in her friend clothing store.the initial investment is $10,200 and the expected annual cash flow thereafter are ($300,$700,$1,300, $2000,$5000,$5000) . What is Juanita IRR on this investment?
3.Assume now that there are two groups in the population. Each contributes equally to the cost of the project, but two-thirds of the benefits accrue to the richer group. Discuss how this alters the cost-benefit calculation. Under what circumstances will the decision to undertake the project be altered?
1.Consider the projest that costs $100,000 and yields a return of $30,000 for five years. At the end of the fifth year, there is the cost of $20,000 to dispose of the waste from the project. Should the project be undertaken if the discount rat eis 0? 10 percent? 15 percent? The interest rate at which the net present discounted value of the project is zero is referred to as the internal rate of return of the project
b. Sahar is analyzing the probability to open her own beauty salon. If she chooses to operate her own salon she would have to pay Rs. 70,000 p.m as rent and staff that would cost her Rs. 30,000 p.m and is expected to earn Rs. 150,000 p.m. While if she continues working as the head makeup artist in one of renowned salons of Karachi she would earn 120,000. Analyze the information above and find explicit and implicit cost.
You purchased 10 shares of L& T Company last year. On 5th March 2019, the
company has declared a dividend Rs 50 per share. The income is earned but not yet
collected in your account during this financial year
88. Culture Extravaganza produce ballets in Boston and New York. Monthly total revenue are given by
TRB = 1,000 QB0.5
and TRN = 2,000 QN0.5
where QB is the monthly number of Boston patrons and QN is the monthly number of New York ballet attendees. Salaries of the performers are based on attendance and the firm estimates that the marginal cost is $10 per attendee in each city.
i) If Culture Extravaganza attempts to practice third-degree price discrimination, what will be the profit-maximizing prices and rates of output in each city?
ii) Will the firm earn more profit using price discrimination than if a uniform price is set? Explain.