14. Tara is considering leaving her current job, which pays $56,000 per year, to starta new company that manufactures a line of special pens for personal digitalassistants. Based on market research, she can sell about 160,000 units during thefirst year at a price of $20 per unit. With annual overhead costs and operatingexpenses amounting to $3,160,000, Tara expects a profit margin of 25 percent.This margin is 6 percent larger than that of her largest competitor, Pens, Inc.a. If Tara decides to embark on her new venture, what will her accountingcosts be during the first year of operation? Her implicit costs? Heropportunity costs?b. Suppose that Tara's estimated selling price is lower than originallyprojected during the first year. How much revenue would she need in orderto earn positive accounting profits? Positive economic profits?

Answered: Image /qna-images/answer/a328cf8b-2667-4092-963c-83ec9e3cb0ed.jpg

Answered: 14. Tara is considering leaving her…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.6P

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Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company that develops applications for smartphones. Based on market research, she can sell about 50,000 units during the first year at a price of $4 per unit. With annual over-head costs and operating expenses amounting to $145,000, Jamie expects a profit "margin of 20 percent. This margin is 5 percent larger than that of her largest competitor, Apps Inc. a. If Jamie decides to embark on her new venture, what will her accounting costs be during the first year of operation? Her implicit costs? Her opportunity costs? b. Suppose that Jamie’s estimated selling price is lower than originally projected during the first year. How much revenue would she need in order to earn positive account-ing profits? Positive economic profits? 2. Approximately 14 million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the U.S. economy $300 billion in…
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18Please make sure your answer is correct and I will give a positive review!
Example 2 A new pharmaceutical plant will be built with an initial investment of $1.2 billion which will be an upfront payment. The construction of the plant will take one year after which there will be an expected yearly cashflow of $65 million for 20 years. The discount rate (the rate of return which could be expected if the money were invested elsewhere) is 5.9%. If you are the manager in charge of this project, will you move forward? Show all work.
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Imagine you are the owner of a downtown Laredo building that you lease out for a yearly amount of $ 45,000 over a span of five years. Assume that the explicit expenses for maintaining the building are $ 20,000, and an additional implicit cost of $15,000 exists. All earnings and costs occur at the conclusion of each year. Suppose the interest rate is 7.5 percent, Determine the present value for both the stream of: (i) your accounting profits. Show your steps. (ii) economic profits. Show your steps

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