Problem 05-20 Excel Exercise Parts 1 and 2 According to The Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Suppose that as part of the restructuring plan Mitsubishi conducts an analysis of how labor and capital are used in its production process. Prior to restructuring Mitsubishi's marginal rate of technical substitution is 0.12 (in absolute value). To hire workers, suppose that Mitsubishi must pay the competitive hourly wage of 1800. In the study of its production process and markets where capital is procured, suppose that Mitsubishi determines that its marginal productivity of capital is 0.8 small cars per hour at its new targeted level of output and that capital is procured in a highly competitive market. The same study indicates that the average selling price of Mitsubishi's smallest car is 1,200,000 Problem 05-20 - Excel Exercise Part 2 of 2 Assume that the information about Mitsubishi Motors from the problem changed to the following: Current narginal rate of technieal subatitution Mage rate Marginal product of capital Price of snallest car 0.13 1,800 0.5 1,500,000 Instruction: Using the spreadsheet provided in Part 1, update the data to the values provided here and enter the recomputed answers
Problem 05-20 Excel Exercise Parts 1 and 2 According to The Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Suppose that as part of the restructuring plan Mitsubishi conducts an analysis of how labor and capital are used in its production process. Prior to restructuring Mitsubishi's marginal rate of technical substitution is 0.12 (in absolute value). To hire workers, suppose that Mitsubishi must pay the competitive hourly wage of 1800. In the study of its production process and markets where capital is procured, suppose that Mitsubishi determines that its marginal productivity of capital is 0.8 small cars per hour at its new targeted level of output and that capital is procured in a highly competitive market. The same study indicates that the average selling price of Mitsubishi's smallest car is 1,200,000 Problem 05-20 - Excel Exercise Part 2 of 2 Assume that the information about Mitsubishi Motors from the problem changed to the following: Current narginal rate of technieal subatitution Mage rate Marginal product of capital Price of snallest car 0.13 1,800 0.5 1,500,000 Instruction: Using the spreadsheet provided in Part 1, update the data to the values provided here and enter the recomputed answers
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Required:
1. Determine the rete at which Mitsubishi can rent capital
2. Determine the marginal productivity of labor at its new targeted level of output
Instruction: Enter your response rounded to four decimal places
Marginal poduct or abor
2. Determine the marginal productivity of labor at its new targeted level of outout.
Instruction: Enter your response rounded to four decimal places
Margna podut of r
3. To minimize costs Mitsubishi should hire capital and labor until the marginal rate of technical substitution reaches what proportion?
Instruction: Enter your response rounded to four decimal places
hwmarginal nee
Transcribed Image Text:Required information
Problem 05-20 Excel Exercise Parts 1 and 2
According to The Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to
reverse declining global sales. Suppose that as part of the restructuring plan Mitsubishi conducts an analysis of how labor
and capital are used in its production process. Prior to restructuring Mitsubishi's marginal rate of technical substitution is
0.12 (in absolute value). To hire workers, suppose that Mitsubishi must pay the competitive hourly wage of ¥1,800. In the
study of its production process and markets where capital is procured, suppose that Mitsubishi determines that its
marginal productivity of capital is 0.8 small cars per hour at its new targeted level of output and that capital is procured in
a highly competitive market. The same study indicates that the average selling price of Mitsubishi's smallest car is
1,200,000.
Problem 05-20 - Excel Exercise Part 2 of 2
Assume that the information about Mitsubishi Motors from the problem changed to the following:
0.13
Current marginal rate of technical substitution
Wage rate
Harginal product of capital
Price of anallest car
1,000
0.5
1,500,000
Instruction: Using the spreadsheet provided in Part 1, update the data to the values provided here and enter the recomputed answers
for the original questions on this page.
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