JJF Development is planning to build a new high-rise apartment complex on the Sunshine Coast. It will be highly profitable for the company if the project receives government approval. However, the shadow cast by the proposed high-rise will completely cover the swimming pool and sunbathing area of the nearby Elizabeth Hotel in shade from 1pm onwards. Therefore, the owners of the Elizabeth Hotel believe that the development will make their hotel a less desirable destination for holidaymakers, and will impact the profitability of the company. They instead want JJF to build only a low-rise development, as this will not impact them at all. Their respective benefits are shown below: Gains to Elizabeth Hotel ($million) Gains to JJF ($million) Total (Smillion) Low Rise is Constructed 400 300 700 High Rise is Constructed 130 900 How much would both parties receive if "cash on the table" was equally divided between them from constructing the proposed high rise development? Answer to the nearest whole number (in $million, with no decimal places, $ sign, space or commas).

JJF Development is planning to build a new high-rise apartment complex on the Sunshine Coast. It will be highly profitable for the company if the project receives government approval. However, the shadow cast by the proposed high-rise will completely cover the swimming pool and sunbathing area of the nearby Elizabeth Hotel in shade from 1pm onwards. Therefore, the owners of the Elizabeth Hotel believe that the development will make their hotel a less desirable destination for holidaymakers, and will impact the profitability of the company. They instead want JJF to build only a low-rise development, as this will not impact them at all. Their respective benefits are shown below: Gains to Elizabeth Hotel ($million) Gains to JJF ($million) Total (Smillion) Low Rise is Constructed 400 300 700 High Rise is Constructed 130 900 How much would both parties receive if "cash on the table" was equally divided between them from constructing the proposed high rise development? Answer to the nearest whole number (in $million, with no decimal places, $ sign, space or commas).

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

The Acmeville Metropolitan Bus Service currently charges $0.88 for an all-day ticket, and has an average of 623 riders a day. The bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $1.11. The marketing department's studies indicate this price increase would reduce usage to 346 riders per day. Calculate the absolute value of the price elasticity of demand for bus tickets using the simple percentage change method. Round your answer to one decimal place.
The government is considering undertaking four projects. These projects are mutually exclusive, and the estimated present worth of their costs and the present worth of their benefits are shown in millions of dollars in the table below. All of the projects have the same duration. Assuming no do-nothing alternative, which alternative would you select? Justify your choice by using a benefit-cost (BC()) analysis on incremental investment. Click the icon to view the data for the four projects. Which project(s) should be excluded from subsequent consideration? Select all that apply. A. None of the projects B. Project A2 C. Project A1 D. Project A3 E. Project A4 Fill in the table below. (Round to two decimal places.) Project A1 A2 A3 A4 www Incremental Investment A4 - A3 A2 - A4 BC(1) 47 1.36 2.8 1.64 BC(1) K-j
Techware Incorporated is considering the introduction of two new software products to the market. The company has four options regarding these products: introduce neither product, introduce product 1 only, introduce product 2 only, or introduce both products. Research and development costs for products 1 and 2 are $180,000 and $150,000, respectively. Note that the first option entails no costs because research and development efforts have not yet begun. The success of these software products depends on the national economy in the coming year. The company's revenues, depending on its decision and the state of the economy, are given in the file P09_33.xlsx. The probabilities of a strong, fair, or weak economy in the coming year are assessed to be 0.10, 0.60, and 0.30, respectively. a. Use PrecisionTree to identify the strategy that maximizes Techware's expected net revenue. Techware's optimal decision is to introduce Select: both products - product 1 only - product 2 only - neither…
Kipling Equipment Inc. must decide to produce either a face mask or a face shield to X alleviate the spread of a quickly evolving coronavirus. The face mask is disposable and developing it could potentially lead to a profit of $300,000 if competition is high or a profit of $470,000 if competition is low. The face shield, on the other hand, is reusable and has the potential of generating a fixed profit of $430,000 irrespective of high or low competition. The probability of high competition is 52% while that of low competition is 48%. Co Part A Construct a decision tree or a payoff table for the decision problem and use it to answer the following questions. a) What is the expected monetary value of the optimal decision? $ b) Based on expected monetary value, what should the Kipling do? $ Produce face shield c) What is the upper bound on the amount Kipling should pay for additional information? $ Part B
say the managers of the dinner restaurant (previously mentioned) decided to implement the new strategy of targeting higher-income consumers. Suppose that the quality improvements associated with this strategy change will increase the variable costs for the average entrée from $2.50 to $4.50 and that the price change associated with this strategy will raise the price of the average entrée from $8.00 to $13.0O. If the base sales level for the restaurant is 400 entrées per week, then the breakeven level of entrée sales that the manager should be considering is: Select one: O a. 141 entrées per week O b. -200 entrées per week O c. -141 entrées per week O d. 200 entrées per week
You are the marketing manager of the Business Unit (BU) that produces polystyrene (which is an input to making lightweight rigid foam). The current Demand/Supply balance, as measured by the ICIS price, is $800 per ton of polystyrene. The BU has 2 plants and can produce a total of 1800 tons. At full capacity utilization, the BU’s average variable cost equals $1300/t and its average total cost equals $1700/t.Plant 1 has a capacity of 600 tons and a marginal cost of $900/t. Plant 2 has capacity of 1200 tons and a marginal cost of $1500/t. Due to exit of one competitor, you expect next year’s polystyrene ICIS price to increase to $1200. 1. How much volume of polystyrene do you expect to produce next year, if any? 2. What is your expected contribution margin for next year? 3. What is your expected profit for next year?
Logan and Berkeley have a thriving dog grooming business which operates 5 hours a day for 4 days a week. They currently have one dog groomer and are considering hiring a second groomer. They believe that after a 12 week period, the second groomer should be able to groom 3 dogs per hour, but only groom 1 dog per hour in the first 12 weeks while they learn the ropes. By adding a second groomer, Logan and Berkeley would need to install an additional sink, costing $20,000, and also incur an additional $27 per hour in labour costs. Apart from labour, their current costs are $15 per dog groom (covering items such as dog shampoo) and $30,000 in fixed costs per year (eg. rent). They currently charge $50 per dog groom. How many weeks would it take for the second groomer to pay off and make a profit? Choices are: A) 11.6 B) 23.6 C) 36.7 D) 49.7 Could you go over exactly what to add to the costs?
You have been promoted to be the new manager of Nefertiti Hotel, and you must decide where to build a new hotel. The finance department believes that Morocco is the better option due to the tax benefits of $5 million, while the marketing department estimates the present value of gross operating profits to be only $10 million in Morocco compared to $14 million in Tunisia. If it costs $15 million to build the hotel in either location, would it be more profitable to build in Morocco or Tunisia? If the hotel is located in Morocco, what would the firm's economic profits be?compute, show solution, explain
You have hired a contractor to remodel your kitchen, and you have a budget of $12,000. The contractor has given you an estimate of $10,000 to complete the work. As the project progresses, however, the dollar amount continues to rise due to increasing materials costs, and, in the end, you are charged $15,000. In this case, you know that the variances were due to the increased materials costs required in order to complete the project as agreed. Sometimes, however, when you encounter a variance, whether favorable or unfavorable, you may not initially know the reason for the difference. As part of your decision making, you will need to do some analysis to determine the cause(s) for any variances you encounter so that you can account for them in future projects. With these thoughts in mind, respond to the following: Describe a time when you encountered a variance between what was planned and the end result, whether in your personal or professional life. Note: This variance could be in your…
A sales position is offered at a pharmaceutical company with two salary options. Option A would pay an annual base salary of $15,000 plus a commission of 7% on sales. Option B would pay an annual base salary of $30,000 plus a commission of 6% on sales. The equation y 15,000+0.07x models salary Option A and the equation y 30,000+0.06x models salary Option B, where x represents the amount of annual sales and y represents the annual salary in both equations. Determine the annual sales required for the options to result in the same annual salary. The annual sales required would be $ (Type an integer or a decimal)
The city of Oakmont is interested in developing some lake front property into a sports park (picnic facilities, boat docks, swimming area, etc.). A consultant has estimated that the city would need to invest $3 million in this project. In return, the developed property would return $500,000 per year to the city through increased tax revenues and recreational benefits to the public. What would the life of this project need to be in order to be cost-beneficial to the city? The interest rate on municipal bonds is 4% per year. E Click the icon to view the interest and annuity table for discrete compounding when i= 4% per year. The life of the project needs to be at least years in order to be cost-beneficial to the city. (Round up to the nearest whole number.)
Moses Inc. is a small electric company that provides power to customers in a small rural area in the Southwest. The company is currently maximizing its profits by selling electricity to consumers at a price of $0.15 per kilowatt-hour. Its marginal cost is $0.05 per kilowatt-hour, and its average cost is $0.15 per kilowatt-hour. A government regulator is considering a proposal to regulate the firm’s price at $0.05 per kilowatt-hour. Would such a policy improve social welfare? Explain