BEA683 Economics For Managers Student158431 Essay

This is a scenario presented where by an organization is willing to procure Discopress gadgets. The firm is willing to make a $10,000 capital investment. The case study below seeks to answer the question on the best approach, so as to spend as little on acquisition cost. While at the same time ensuring that, they get maximum returns on their initial investment. This however, has placed them in a position of two scenarios as they seek to ensure maximum returns on the investment. The study seeks to determine whether the MOD option is viable, as they look for value for their money.

Imagine that you have decided to open a small ice cream stand on campus called "Ice-Campusades." You are very excited because you love ice cream (delicious!) and this is a fun way for you to apply your business and economics skills! Here is the first month's scenario--you order the same number (and the same variety) of ice creams each day from the ice cream suppliers, and your ice creams are always marked at $1.50 each. However, you notice that there are days when ice creams remain unsold but other days when there are not enough ice creams for the number of customers.

The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .

Apple Incorporation is one of the biggest high technology company that operates worldwide. Is was established on April 1, 1976 in California by Steve Wozniak, Steve Jobs and Ronald Wayne.The company is known for designing and manufacturing several technology devices include Smart Phones (iPhone), Tablets, iPods, iPads, Mac, Apple TV, Apple watches as known as smart watches, it also produce software’s like the OS X and iOS operating systems, and offers several online services such as iCloud, Apple Pay, Apple Care. The company strategy is to designee and enhances its own operating systems, software, hardware and other services by providing customers with new developed technology.

Net operating Outlay = 580,000 (Equipment cost + Shipping Charge + Installation Charge + Net Working Cap)

b) Assume now that a new technique, technique 4, is developed. It combines 2 units of labor, 2 of land, 6 of capital, and 3 of entrepreneurial ability. In view of the resource prices in the table, will the firm adopt the new technique? Explain your answer.

* The business does not expect to make a profit for a least one year or maybe even two

National income and output are used in economic studies to estimate the value of goods and services produced in an economy a snapshot of a country’s economic activity. A system of national account is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others.

Low initial investment: With some large pieces of equipment, you could be looking at spending several hundred thousand dollars if you decide to purchase them. If your business is still relatively small, you may be unable to secure a loan to help you purchase additional equipment. As a result, cash outflow in that amount could mean the difference between your business doing okay while growing or needing to lay off people for lack of funds. With construction equipment leasing, the up front cost will be much lower.

100 + (5,200-5,000) / 5,000 × 100 = (100 + 200) / 5,000 × 100 = 300 / 5,000 × 100 = 0.06 × 100 = 6%Return on Investment

In option A the low net present value is zero to invest, medium net present value is two million, and the high net present value is five million. The expected value to invest in a real estate development is three million one hundred thousand. In option B the low net present value is one million, medium net present value is two million, and the high net present value is three million. The expected value to invest in a retail franchise just for hats is two million six hundred and fifty thousand.

a. Assuming the most current operational cost levels, what sales must it generate to recoup the above investment?

The economic profit of Midnight hour would show a 200K decrease on the accounting profits, if the investment was earned at 20%. You have to take into account the opportunity costs.

The estimation of start-up money requires the investing decision. The prices of different types of non-current assets and the approximate monthly expenses show in the tables below are needed to make the investing decision.

While constructing cash flows for each of the options, the expenditure of $250,000 already incurred by Monkey manufacturing, should be treated as Sunk Cost. A sunk cost is something that is already been incurred in the past and will not affect the decision to accept/reject any future projects. Given this expenditure on computer hardware and software has already been incurred and cannot be reversed, it should be treated as a Sunk cost and as such will not be considered while calculating the cash flow for each of the options