1. Exercise 8.1US Airways owns a piece of land near the Pittsburgh International Airport. The land originally cost US Airways $375,000. The airline is consideringbuilding a new training center on this land. US Airways determined that the proposal to build the new facility is acceptable if the original cost of theland is used in the analysis, but the proposal does not meet the airline's project acceptance criteria if the land cost is above $600,000. A developerrecently offered US Airways $3.00 million for the land.Should US Airways build the training facility at this location?○ NoYes

This above decision on whether or not US Airways should build the training facility hankers on the…

Answered: 1. Exercise 8.1 US Airways owns a piece…

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

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 1E

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1. An industrial engineer has designed 2 alternative methods for accomplishing a production job. Both methods involve the acquisition of the same working place and other capital equipment to be used for this job only. Method A calls for a crew consisting of 3 men each costing P30/hr. This method will result in the production of 10 units/hr of which 2 will be rejects. Method B calls for a crew of 2 men each costing P35/hr and should result in the production of 8 units/hr of which 1 will be reject. The cost of the direct material lost in each reject is P20. If a certain total number of units is to be produced, find which method is NOT economical.
choose the correct answer. 2.
Please answer question with details on how to do it. Thank you.
Problem # 2 The University Eye Institute in upper New-York state is a state-of-the-art ophthalmology center that specializes in a sophisticated laser surgery to correct myopia. Current annual volume is 1000 operations. A major customer of the center is the United Health Insurance system. United currently sends the University Eye Institute 200 patients per year or 20% of the total. United pays $2,500 per operation as does every payor. The United Health Insurance Company is satisfied with the quality and service provided by the University Eye Institute and has proposed that they send the Center an additional 100 patients (operations) per year. United proposes that the fee be reduced to $2,000 for the additional 100 patients and for the prior 200 patients. Assume the fee paid by payors other than United Health remains the same. a) What is the marginal revenue per patient if the proposal is accepted? b) What is the marginal cost per patient if the proposal is accepted? Here are some cost…
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US Airways owns a piece of land near the Pittsburgh International Airport. The land originally cost USAirways $375,000. The airline is considering building a new training center on this land. US Airwaysdetermined that the proposal the new facility is acceptable if the original cost of the land is used in theanalysis, but the proposal does not meet the airline’s project acceptance criteria if the land cost is above$850,000. A developer recently offered US Airways $2.5 million for the land.Explain fully if US Airways should build the training facility at this location or not.
The company World Airline System is composed of the routes X and Y, and each route requires 10 aircraft. These routes can be serviced by three types of aircraft — A, B, and C. There are 5 (five) Type A aircraft available, 10 (ten) Type B, and 10 (ten) Type C. These aircraft are identical except for their operating costs, which are as follows: Annual Operating Cost ($ millions) Aircraft Type Route X Route Y A 1.5 1.5 B 2.5 2.0 C 4.5 3.5 The aircraft have a useful life of 5 (five) years and a salvage value of $1 million. The aircraft owners do not operate the aircraft themselves, but rent them to operators. Owners act competitively to maximize their rental income, and operators attempt to minimize their operating costs. Airfares are also competitively determined. Assume the cost of capital is 10%. Which aircraft would be used on which route, and how much would each aircraft be worth? What would happen to usage and prices of each aircraft if…
This is for subject engineering economic analysis. I need both questions answered please, these are together. a) A new business is starting up. They estimate the materials for their product will cost $47/item. Labor to manufacture the product will be $15/item. Utilities are estimated at $600/month. Rent will be $4,500/month. Taxes are estimated at $7/item. How many product items need to be manufactured each month (assuming all are sold) to obtain a monthly profit of $3,500 if each item is priced at $100? b) A 15 KW motor cost $550 five years ago. The cost index then for electrical machinery was 525. It is 500 now. How much do you estimate a 12 KW motor would cost now? Use (0.5+x/100) for the Motor Power Sizing Exponent. (You can use 7 for the x-value in this problem)
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9
An increase in the cost of heating and cooling a building may not reduce NOI if these costs can be passed along to the companies that lease the space. true of false
Timothy quits his job which pays $84000 a year, to enrol in a 2-year graduate programme. His annual school expenses are $58000 for tuition, $9500 for books and 3600 for food. What core principles are considered in timothy decision making? A snowboard company currently hires 10 skilled employees who are paid a weekly wage of $1,000.00. the cost of capital is $3000 and it is fixed, which means that it does not vary with output. The company is currently producing 240 snowboards. The company’s cost will be $13,500 if it produces an additional snowboard. A customer is willing to pay $550 for the 241st snowboard. Should the company produce and sell it? What core principles are considered in the snowboard company’s decision making?

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