A company is considering switching from a cash only policy to a net 30 credit policy. The price per unit is $800 and the variable cost per unit is $600. The company currently sells 1,000 units per month. Under the proposed policy the company expects to sell 1,500 units per month. The required monthly return is 4%. If you were using NPV analysis to decide whether the company should switch to the net 30 credit policy, what amount would you use for the present value of the future incremental cash flows? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response

A company is considering switching from a cash only policy to a net 30 credit policy. The price per unit is $800 and the variable cost per unit is $600. The company currently sells 1,000 units per month. Under the proposed policy the company expects to sell 1,500 units per month. The required monthly return is 4%. If you were using NPV analysis to decide whether the company should switch to the net 30 credit policy, what amount would you use for the present value of the future incremental cash flows? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3. Individual Problems 18-3 A reserve price is a minimum price set by the auctioneer. If no bidder is willing to pay the reserve price, the item is unsold at a profit of $0 for the auctioneer. If only one bidder values the item at or above the reserve price, that bidder pays the reserve price. An auctioneer faces two bidders, each with a value of either $228 or $304, with both values equally probable. Without a reserve price, the second highest bid will be the price paid by the winning bidder. The following table lists the four possible combinations for bidder values. Each combination is equally likely to occur. On the following table, indicate the price paid by the winning bidder with and without the stated reserve price. Bidder 1 Value Bidder 2 Value Probability Price Without Reserve Price with $304 Reserve Price ($) ($) ($) $228 $228 0.25 $228 $304 0.25 $304 $228 0.25 $304 $304 0.25 Without a…
Note:- Give me corrcet and incorrect explanation Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
5. (b) Are the following statements true or false? Justify your answer (simply saying true or false will carry no credit). i) "A labor market dominated by a single buyer achieves Pareto efficiency if the buyer operates as a perfectly discriminating monopolist". ii) "A cake is divided between two individuals; Pareto optimality requires that they receive equal shares".
Livestock farmers frequently give antibiotics to their herds. The antibiotics create drug-resistant bacteria, making them less effective. This harms future users of antibiotics who will be using less-effective drugsA. What is the nature of the market failure? (3%)B. Explain whether livestock farmers are more likely to overuse or underuse antibiotics.
PROBLEM (1) (Rational Choice) Suppose your friend is about to buy a digital camera. A digital camera is identified with three dimensions; 1) resolution (in megapixels), 2) optical zoom (a real number) and 3) battery life (a number of hours). For example, A = (8, 4, 20) is a camera with 8mp resolution and x4 optical zoom and 20 hours of battery life. When he goes into a store, he faces a menu of cameras. When comparing two cameras if camera A is weakly better than B on at least 2 dimensions, it is weakly preferred to the other; written A ≥preferred B. a) Is this preference relation complete? Transitive? Prove it or show an example where the property doesn't hold. b) Suppose the agent chooses from any menu of cameras, a camera that is (weakly) preferred to all other cameras in the menu. Would this choice function be rational, given (a)? Briefly explain your reasoning.