Assume that a national restaurant chain called BBQ builds 20 new restaurants at a cost of $1 million per restaurant. It outfits eachrestaurant with an additional $200,000 of equipment and furnishings. To help partially defray the cost of this expansion, BBQ issuesand sells 400,000 shares of stock at $30 per share.Instructions: Enter your answers rounded to 1 decimal place.a. What is the amount of economic investment that has resulted from BBQ's actions?millionb. How much purely financial investment took place?$million%24%24

Answered: . What is the amount of economic…

. What is the amount of economic investment that has resulted from BBQ's actions? $ million . How much purely financial investment took place? million %24

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 4E

See similar textbooks

Related questions

Q: Refer to Figure 8.3. For this society, aggregate saving is positive if aggregate income is .above…

A: For this type of society the aggregate savings will be positive when the aggregate income is above…

Q: Classify each of the following based on the macroeconomic definitions of saving and investment.…

A: Investment is the purchase of items to facilitate production of final goods and services.

Q: Don has an idea for a new business. In order to develop his idea, he needs to invest $600 today.…

A: According to the question, Don has an unique business concept. He has to invest $600 today in order…

Q: Lenders of funds in financial market gets opportunity to invest in O a. Banks of the government O b.…

A: The lenders of funds in the financial market invest where they seek great profits and are less…

Q: 11. There is evidence that the recession is coming to an end for Intelligent Engine Company. New…

A: Meaning of Recession and Expansion: The term recession refers to the state under the business…

Q: 2. is it possible for total saving to fall when people beome more thirfty?

A: Being more thrifty means people are using their money rationally & carefully and they are not…

Q: Make sure to show your work to get credit. 1. Assume: Yd = $194,000 b = .90 a = $…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: 5. Explain the concept of autonomous consumption

A: The concept of autonomous consumption is as follows :

Q: a. The supply of loanable funds slopes upward because O higher interest rates make it more costly to…

A: a. Savers will make more funds available at higher interest rates. Savings is the source of supply…

Q: Interest Rate Do * D₁ A B C Quantity 0 S₁ Multiple Choice Refer to the diagram. Suppose that the…

A: Saving is the source of supply of loanable funds and investment is the source of demand for loanable…

Q: Which of the following situations represents investment? Saving? Explain Your family takes out a…

A: The situation that represents investment or savings are as follows :

Q: 1. a. Explain consumption and saving function by using numerical example and diagram.

A: The consumption function shows the relationship between the consumption and disposable income. The…

Q: Classify each of the following based on the macroeconomic definitions of saving and investment.…

A: Saving is the piece of pay not spent on current consumption. At the end of the day, it is the cash…

Q: 6. In macroeconomist mind, Explain how they are able to distinguish the terms between investment and…

A: Stock is the ownership certificate of any company owned by shareholders.

Q: Suppose the government runs fewer budget deficit and there is a decrease in the average household…

A: Here, it is given that government has fewer budget deficit, which influence the demand for loanable…

Q: 1. Suppose the government borrows $20 million more next year than this year. a. How does the…

A: In an economy, governement borrowings affects the equilibrium level in the loanable funds market as…

Q: Suppose the market for loanable funds is currently in equilibrium. Which of the following factors…

A: 1. An rise in business confidence (c) is likely to result in an increase in interest rates in a…

Q: Consumption/Savings 1000 800 600 400 200 0 -200 200 400 Select one: 800 1000 1200 1400 1600 Refer to…

A: The consumption function depicts household spending relative to their disposable income, capturing…

Q: Using the saving-investment diagram, explain the effects on the interest rate of: a. The government…

A: Disposable income is the income available with the household sector for the spending purpose. It is…

Q: What is the term "investment" define? Explain in a economic sense.

A: A purchase made with the intention of creating income or capital growth is known as an investment.…

Q: Suppose there was a change in the tax laws to encourage savers to save more and as a result, assume…

A: According to this theory, the demand (DL)for loanable funds and the supply (SL) of loanable funds…

Q: 1. What are the ultimate reasons for analyzing the economic performance of a country/ market? How…

A: What are the ultimate reasons for analyzing the economic performance of a country/ market? The true…

Q: It has been said that a society with high savings rate is a society with a high standard of living.…

A: (Q) It has been said that a society with a high savings rate is a society with a high standard of…

Q: 4. In a capitalist market economy, the decision to save is made by the same people who make the…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: According to the law of demand, what is the relationship between price and quantity demanded?

A: The quantity demanded for a product is given as follows:Qx = f(Px,Py,M,Z)Qx: Quantity demanded for…

Q: One of the benefits financial capital markets offer savers is the opportunity to earn income. a.…

A: Financial markets are platforms that facilitate the buying and selling of financial securities,…

Q: 3. The meaning of saving and investment Classify each of the following based on the macroeconomic…

A: 3) According to macroeconomic definition of savings and investment, saving is when an individual is…

Q: Define the term the concept of return on investment?

A: Return on investment measures the performance which is used to evaluate the efficiency of an…

Q: Which of the following is an example of investment? OA. Continental buying Airbus planes OB. Mike…

A: In economics, investment refers to the purchase of goods that are not consumed today but are used in…

Q: 7. Why does invest only in workers and neglecting capital expenditures hurt workers? Explain

A: The economics as a study is based upon the idea that the resources which are present with the…

Q: d. Suppose that society decided to reduce consumption and increase investment. What groups might…

A: Consumption is the measure of the health of the demand side of the economy, whereas investments…

Q: The following table contains data on the relationship between saving and income. a. Rearrange the…

A: The income per year and the savings per year is given below but not in the right order. Income per…

Q: Acme Prototype, Inc. is considering the purchase of a metal 3D printer. MARR is 12% per year and the…

A: Annual Worth of the two alternatives is the discounted annual cost /benefit which any alternative…

Q: Suppose you spent $100000 to purchase some machinery equipments for your firm, this expenditure will…

A: The objective of the question is to identify the correct economic term for the expenditure made on…

Q: What term do economists use to refer to the minamum amount that investors must eam on the funds hey…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Make sure to show your work to get credit. 1. Assume: Yd = $194,000 b = .90 a = $ 8,000 A)What is…

A: Yd = 194,000 b = 0.90 a = 8,000

Question

Assume that a national restaurant chain called BBQ builds 20 new restaurants at a cost of $1 million per restaurant. It outfits each
restaurant with an additional $200,000 of equipment and furnishings. To help partially defray the cost of this expansion, BBQ issues
and sells 400,000 shares of stock at $30 per share.
Instructions: Enter your answers rounded to 1 decimal place.
a. What is the amount of economic investment that has resulted from BBQ's actions?
million
b. How much purely financial investment took place?
$
million
%24
%24

Expert Solution

Step 1

Here the restaurant chain build 20 new restaurants.

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

ADVANCED ANALYSIS A firm faces the following costs: total cost of capital = $1,000; price paid for labor = $12 per labor unit; and price paid for raw materials = $4 per raw-material unit. %3D Instructions: In parts a and b, enter your answers for total cost as a whole number. Round your answers for average total cost to 2 decimal places. In part c, enter your answer as a whole number. a. Suppose the firm can produce 5,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5,000 units of output? TC = $ %D ATC = $ b. Now assume the firm improves its production process so that it can produce 6,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 6,000 units of output? TC = $ ATC = $ c. If units of output can always be sold for $1 each,…
2. The company that you manage has already spent $5 million on developing a new product – a website that combines You Tube, Twitter, and Facebook – called You Twit Face. The development is not quite finished. It will cost an extra $3 million to finish development and complete the product. At a recent meeting, your salespeople report that the expected sales of your new product (if you finish) are $7 million total. If you do not finish developing the product you can sell the incomplete product to another company for $2 million. What is the MC of finishing the development? __________________ What is the MB of finishing the development? __________________ Should you finish the product? Why or why not? Use the idea of “thinking at the margin” to explain your answer.
Mike spends RM35,000 per annum on painting supplies and storage space. He recently received two job offers from a famous marketing firm – one offer was for RM 95,000 per year, and the other was for RM 105,000. However, he turned both jobs down to continue a painting career. If Mike sells 20 paintings per year at a price of RM 8,000 each: Question 1: What are his accounting profits? Question 2: What are his economic profits?
Fill in the blanks in the following table
Question 2 Lamya has initial investment of SR45, 000. If it were to be invested on stocks, the market interest rate would be 0.12 (12%).However, the industry uses capital and labor as inputs and sells 2, 800 belts per month at SR25 market price. If the cost of the machine that produces the belts is SR 30,000 and labor cost is 20,000. Calculate the following: a. Total revenue. b. Opportunity cost of capital c. Economic profit d. Accounting profit e. From your answer in (c), is the business profitable from the economic profit point of view? Explain your answer. Question 3 The table below gives some data on the population of Crescent Highland. Use the provided information to fill the table. YEARS 1 2 3 4 5 6 7 Population: 16 Years Older or Over (Millions) LabourForce (Millions) Employed (Millions) Unemployed (Millions)…
How do firms measure their profit? by the sum of total sales revenue by the total value of outstanding shares of stock by subtracting total costs from total revenues O by subtracting total revenues from total costs
With the use of an example, briefly explain the main difference between the ex-ante and the ex-post opportunity cost of capital. Why does this matter for the evaluation of an investment decision? In what ways can managers utilise the distinction between ex-ante and ex-post opportunity cost of capital when deciding on the firm’s strategy?
10
Define (1) Economic Stocks and (2) Economic Flows.
Fill out the tabe using the formulas for each (AFC, AVC, ATC, MC) and plot each on the graph.
Mary’s Apples grows organic apples and sells them to national grocery chains, local grocers, and markets. Mary purchased a machine for $450,000 that sorts the apples by size. The largest apples are sold as loose apples to the various stores, the medium-sized apples are bagged and sold to the grocers in their bagged state, and the smallest apples are sold to deep discounters or to a local manufacturing plant that processes the apples into applesauce. Mary is considering keeping the small apples and processing them into apple juice that would be sold under Mary’s own label to local grocers. The small apples currently sell to the deep discounters and local manufacturers for $1.10 per dozen. The variable cost to prepare the small apples for sale, including transporting the apples, is $0.30 per dozen. Mary can sell each gallon of organic apple juice for $3.50 per gallon. It takes two dozen small apples to make one gallon of apple juice. The cost to produce the organic apple juice will be…
M2.