Answered: What is the profitability index of the…

What is the profitability index of the following project? Capital $1,500,000 Investment Project Life 25 Annual Benefits $200,000 Annual Costs $150,000 Salvage Value $60,000 Discount Rate 7%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

What is the profitability index of the following project?
Capital
$1,500,000
Investment
Project Life
25
Annual Benefits $200,000
Annual Costs
$150,000
Salvage Value
$60,000
Discount Rate
7%

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Douglas Fur is a small manufacturer of fake-fur boots in San Diego. The following table shows the company's total cost of production at various production quantities. Fill in the remaining cells of the table. Quantity Total Cost Marginal Cost (Pairs) (Dollars) (Dollars) 0 1 2 3 4 5 6 120 210 270 315 380 475 630 Fixed Cost (Dollars) Variable Cost Average Variable Cost (Dollars) (Dollars per pair) Average Total Cost (Dollars per pair) On the following graph, plot Douglas Fur's average total cost curve (ATC) using the green points (triangle symbol). Next, plot its average variable cost curve (AVC) using the purple points (diamond symbol). Finally, plot its marginal cost curve (MC) using the orange points (square symbol). Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
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TR = 40 Q - 3Q^2 fixed lost = 30$ and each unit costs 10$ find maximum profit that can be obtained?