1Let's say Cane received a special order for 5,000Betas for $42 per unit. What would be the netadvantage of accepting the order?They would lose $5,000.O They would gain $5,000.They would gain $10,000.They would lose $10,000.

DETAILED ANALYSISCalculating the Net Advantage of Accepting a Special OrderScenario:A company…

Answered: 1 Let's say Cane received a special…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Old MacDonald produces hay. He has a single employee, Jack. If Jack works for x hours he can produce x bales of hay. Each bale of hay sells for $1. The cost to Jack of working x hours is c(x) = x2/10. (a) What is the efficient number of bales of hay for Jack to cut? _____________ (b) If the most that Jack could earn elsewhere is zero, how much would MacDonald have to pay him to get him to work the efficient amount? ______________ (c) What is MacDonald’s net profit? _______________ (d) Suppose that Jack would receive $1 for passing out leaflets, an activity that involves no effort whatsoever. How much would he have to receive from MacDonald for producing the efficient number of bales of hay? ____________ (e) Suppose now that the opportunity for passing out leaflets is no longer available, but that MacDonald decides to rent his hayfield out to Jack for a flat fee. How much would he rent it for? ___________
1. Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh's first idea is to stop giving complimentary cocktails, wine, and beer to the international flying public. He calculates this will save 5,000,000 drinks per year, and each drink costs $0.50, for a total of $2.5 million per year. Instead of complimentary drinks, Josh estimates that the airlines company can sell 2,000,000 drinks at $5.00 per drink. The net savings would amount to $12.5 million per year! Josh's boss really likes the idea and agrees to give Josh a lumpsum bonus now equaling 0.1% of the present equivalent worth of three years of net savings. If the company's MARR is 20% per year, what is Josh's bonus?
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1 Let's say Cane received a special order for 5,000 Betas for $42 per unit. What would be the net advantage of accepting the order? They would lose $5,000. O They would gain $5,000. They would gain $10,000. They would lose $10,000.