Gen Combo Managerial Economics & Business Strategy; Connect Access Card
9th Edition
ISBN: 9781260044294
Author: Baye
Publisher: MCG
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Chapter 1, Problem 12PAA
To determine
To find:
The refrigerator that should be purchased by the individual.
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You are in the market for a new refrigerator for your company's lounge, and you have narrowed the search down to two models. The energy-efficient model sells for $700 and will save you $45 at the end of each of the next five years in electricity costs. The standard model has features similar to the energy-efficient model but provides no future saving in electricity costs. It is priced at only $500. Assuming your opportunity cost of funds is 6 percent, which refrigerator should you purchase?
You are in the market for a new refrigerator for your company's lounge, and
you have narrowed the search down to two models. The energy efficient model sells for $500 and will save
you $25 at the end of each of the next five
years in electricity costs. The standard model has features similar to the
energy efficient model but provides no future saving in electricity costs. It is
priced at only $400. Assuming your opportunity cost of funds is 5 percent,
which refrigerator should you purchase?
After graduation, you face a choice. You can work for a multinational consulting firm and earn a starting salary (including benefits) of
$45,000, or you can start your own consulting firm using $5,500 of your own savings. If you keep your money in a savings account,
you can earn an interest rate of 5 percent. You choose to start your own consulting firm. At the end of the first year, you add up all of
your expenses and revenues. Your expenses include $18,000 for rent, $1,000 for office supplies, $26,000 for labor, and $4,700 for
telephone expenses. After operating your consulting firm for a year, your total revenues are $95,000.
Instructions: Enter your answers as a whole number.
a. What is your accounting profit?
2$
b. What is your economic profit?
2$
Chapter 1 Solutions
Gen Combo Managerial Economics & Business Strategy; Connect Access Card
Ch. 1 - Prob. 1CACQCh. 1 - What is the maximum amount you would pay for an...Ch. 1 - Prob. 3CACQCh. 1 - Prob. 4CACQCh. 1 - Prob. 5CACQCh. 1 - Prob. 6CACQCh. 1 - Prob. 7CACQCh. 1 - Prob. 8CACQCh. 1 - Prob. 9CACQCh. 1 - Prob. 10CACQ
Ch. 1 - Prob. 11PAACh. 1 - Prob. 12PAACh. 1 - Prob. 13PAACh. 1 - Prob. 14PAACh. 1 - Prob. 15PAACh. 1 - As a marketing manager for one of the worlds...Ch. 1 - Prob. 17PAACh. 1 - Prob. 18PAACh. 1 - Prob. 19PAACh. 1 - Prob. 20PAACh. 1 - Prob. 21PAACh. 1 - Prob. 22PAACh. 1 - Prob. 23PAACh. 1 - Prob. 24PAA
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