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- 2. A man is considering investing P500, 000 to open a semi-automatic auto-washingbusiness in a city of 400, 000 population. The equipment can wash, on the average, 12 carsper hour, using two men to operate it and to do small amount of hand work. The man plansto hire two men, in addition to himself, and operate the station on an 8-hour basis, 6 daysper week, 50 weeks per year. He will pay his employees P25. 00 per hour. He expects tocharge P25. 00 for a car wash. Out-of-pocket miscellaneous cost would be P8, 500 permonth.He would pay his employees for 2 weeks for vacations each year. Because of the length ofhis lease, he must write off his investment within 5 years. His capital now is earning 15%,and he is employed at a steady job that pays P25, 000 per month. He desires a rate ofreturn of at least 20% on his investment. Would you recommend the investment?a) Use ROR method b) Use present worth method c) Use future worth method d) Solve for the payback period and the IRR2. According to data from the Longitudinal Survey of Companies of 2017, labor productivity in Chile is higher, on average, in larger companies, being large companies (86.5 million pesos per workerper year) almost 6 times more productive than microenterprises (15 million pesos per worker per year). Does this observation necessarily contradictthe Law of Diminishing Returns? How could it be explained that workers are more productive in larger companies? 3. Boco has a very popular pastry shop in his neighborhood. To carry out his work, he hires two productive factors: kilos of flour (H) and hours of use of a mixing machine (M). Its production function is given by f (H, M) = [min (H, aM)] b with a greater than zero. Using this information, determine what kind of returns to scale the technology presents that Boco uses. 4. When all inputs have decreasing marginal productivities, then the production functions exhibit diminishing returns to scale. True or False. Justify your answer.Harvey quit his job at State University, where he earned $62,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $4,000 a year. To start the business, he cashed in $50,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 10,000 units of software at $72 for each unit. Of the $72 per unit, $60 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The economic profits of Harvey's firm in the first year were
- Who, in your opinion is the most influential and important entrepreneur of the last 10 years and why?Suppose that the XYZ Corp. (which is a profit-maximizing enterprise) produces “gadgets” according to the following production function: Q = 300K + 100KL + 2000L - L^2 , where Q is the number of gadgets per year, K is the amount of capital (machines) that are used, and L is the number of workers employed per year. Gadgets sell for $100 each. a) If XYZ has 10 machines, and workers cost $100,000/year (including benefits and direct ancillary expenses), how many workers should XYZ hire? b) If the workers cost $120,000, how many workers should XYZ hire? c) If workers cost $100,000 but gadgets sell for $80 each, how many workers should XYZ hire? d) If XYZ instead has 20 machines, how many workers should it hire when workers cost $100,000 and gadgets sell for $100?a. Is it possible to have diminishing returns to a single factor of production and constant returns to scale at the same time? Discuss.
- (Maple) The output, Q, of an Internet firm depends in the short term on capital, K, and time, t. The production and savings functions are given by Respectively, where a and b are positive constants. Assuming that capital accumulation is equal to savings, show that If the initial capital is c, solve this equation to obtain an expression for K in terms of t and the constants, a, b and c. Write down the corresponding expression for Q. Comment on the qualitative behaviour of this solution in the case whenKendall is a successful data analyst working at Amazon. She had one passion for all these years, she loves organizing parties. She decides to quit her job that she was making $150,000 per year, and uses her $200,000 savings, on which she was earning 10 percent annual return, to start her own business. In the first year, she earns revenue of $500,000, and her costs are as follows: Lease $50,000 Utilities $8,000 Wages $32,000 Materials $26,000 Food/Beverage $50,000 a. What is Kendall’s accounting profit? b. What is Kendall’s economic profit?Question 2 Lamya has initial investment of SR45, 000. If it were to be invested on stocks, the market interest rate would be 0.12 (12%).However, the industry uses capital and labor as inputs and sells 2, 800 belts per month at SR25 market price. If the cost of the machine that produces the belts is SR 30,000 and labor cost is 20,000. Calculate the following: a. Total revenue. b. Opportunity cost of capital c. Economic profit d. Accounting profit e. From your answer in (c), is the business profitable from the economic profit point of view? Explain your answer. Question 3 The table below gives some data on the population of Crescent Highland. Use the provided information to fill the table. YEARS 1 2 3 4 5 6 7 Population: 16 Years Older or Over (Millions) LabourForce (Millions) Employed (Millions) Unemployed (Millions)…
- Azril is going to buy 5 new color photostat machine which is a new high technology model from Japan to be place in his new branch shop at Petaling Jaya. Which benefit of SMEs MOST related to this action? Azril akan membeli 5 mesin fotostat warna baru yang merupakan model baharu dari Jepun untuk diletakkan di kedai cawangan barunya di Petaling Jaya. Yang manakah manfaat PKS YANG PALING berkaitan dengan tindakan ini? Select one: A. Increase the networking with large firms/ Meningkatkan rangkaian dengan firma besar B. It improve the transfer of foreign technology / Ia meningkatkan pemindahan teknologi asing C. Strengthen the basic structure of the country's industry/ Memperkukuh struktur asas industri negara D. SMEs is the backbone of the economy/ PKS tulang belakang ekonomiIf Costco can’t find enough land in a particular location tobuild its usual store format, should it leverage the Costcobrand name anyway and build something smaller, suchas conventional department stores or grocery stores, inthese areas? Why or why not?Zubair purchases material by Rs. 20,000 per year and pays R. 10,000 for storage space. He recently received two job offers from a famous marketing firm—one offer was for Rs. 250,000 per year, and the other was for Rs. 190,000. However, he turned both jobs down to continue his business. If he sells 50 units of his product per year at a price of Rs. 10,000 each: a. What are her accounting profits? b. What are her economic profits?