Disposable Income (YD) $ 0 200 400 600 800 1,000 Consumption (C) $ 150 300 450 600 750 900

Do not use Ai

CS 9  Economics  engineering economic analysis

Problem 2 Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i-10% and determine the acceptability of each project.

The product approach to measuring GDP values government production at(a) market prices.(b) its cost of production.(c) its estimated value to society.(d) the total amount of taxes it collects.(e) none of the above.

Find the IRR  Investment: $10 million   Annual Revenue: $103 million Breakdown: a) Ticket sales: $68 millionb) VIP Memberships: $13 million c) Concession revenues: $22 million   Annual Costs: $75 million Breakdown: a) Maintenance: $35 millionb) Salaries: $8 millionc) Concession costs: $6 million d) Event Operations: $10 million e) Overhead: $16 million   Major Maintenance Update every 20 years: $20 million

a b C $40; $40 $40; zero $150,000; $150,000 zero; $40

K L Q MPL APL (Q/L) VML (MPL*P) FC VC (L*150) TC 5 0 0 0 0         5 1 50 50 50 50 25 150 175 5 2 125 75 62.5 150 25 300 325 5 3 225 100 75 200 25 450 475 5 4 375 150 93.7 300 25 600 625 5 5 450 75 90 150 25 750 775 5 6 450 0 75 0 25 900 925 5 7 400 -50 57.14 -100 25 1050 1075 5 8 425 -75 53.12 -150 25 1200 1225 5 9 450 -25 50 -50 25 1350 1375 5 10 500 -50 50 -100 25 1500 1525 5 11 525 25 47.7 50 25 1650 1675   Define firm’s fixed costs. Next, what is Firm’s FC in the Table above. Why?