Problem3:Tom has been asked to estimate the cost today of a 10 hp electric motor for a new plantbeing analyzed. He has the following data:- His company paid $1000 for a 5 hp electric motor 5 years ago.Electric motors within this range of capacity have a power sizing exponent (x) of0.69.- Five years ago, the electric motors Cost Index was 125; it is 175 today.What estimate for the electric motor cost today will Tom obtain? Problem1:A summer camp for youngsters has the following data:Charge per camper (selling price)Fixed costs$144$4800Variable cost per camperCapacity1. Write the total revenue equation.2. Write the total cost equation.3. Determine the breakeven point in units.4. Calculate the breakeven point in dollars.5. If fixed costs decrease 10%, what is the new breakeven point in units and in dollars?6. What is the profit or loss of the session if the camp operates at 80% capacity?Problem 2:A company is considering a capital cost of $80000 to acquire new machinery. The expectedannual revenue is $45000. After 6 years its salvage value will be $15000. An overhaul costing$10000 will be needed in year 3. The operation and maintenance cost (O&M) will be $5000 peryear. Complete the corresponding table and cashflow diagram below.a. Cash flow tableYear0123456$96200 campersCapital Cost AnnualRevenueb. Cash flow diagramO&MOverhaulSalvageCost

m has been asked to estimate the cost today of a 10 hp electric motor for a ne ng analyzed. He has the following data: His company paid $1000 for a 5 hp electric motor 5 years ago. Electric motors within this range of capacity have a power sizing exponent ( 0.69. Five years ago, the electric motors Cost Index was 125; it is 175 today. at estimate for the electric motor cost today will Tom obtain?

m has been asked to estimate the cost today of a 10 hp electric motor for a ne ng analyzed. He has the following data: His company paid $1000 for a 5 hp electric motor 5 years ago. Electric motors within this range of capacity have a power sizing exponent ( 0.69. Five years ago, the electric motors Cost Index was 125; it is 175 today. at estimate for the electric motor cost today will Tom obtain?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

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James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store. After one year, James sold the business for 320,000. His accountant calculated his profit to be: Sale revenue 320,000 Purchase price 250,000 Total profit: 70,000 James calculates his economic profit to be: Accounting profit 70,000 Implicit cost 37, 500 (250,000 @ 15% for one year) Economic profit 32,500 He recently learned that NPV of a project returns economic profit relative to the best alternative, so he calculates the NPV: PV Year 0 - 250,000 -250,000 Year 1 + 320,000 278,261 = 320,000/1.15 NPV 28,261 Which is different from 32,500 that he obtained using the first method. What is he doing wrong?
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Managerial Economics (Book Only) | 12th Edition Chapter 8, Problem 8PProblemMultiplant Operation. Appalachia Beverage Company, Inc. is considering alternative proposals for expansion into the Midwest. Alternative 1: Construct a single plant in Indianapolis, Indiana, with a monthly production capacity of 300,000 cases, a monthly fixed cost of $262,500, and a variable cost of $3.25 per case. Alternative 2: Construct three plants, one each in Muncie, Indiana; Normal, Illinois; and Dayton, Ohio, with capacities of 120,000, 100,000, and 80,000, respectively, and monthly fixed costs of $120,000, $110,000, and $95,000 each. Variable costs would be only $3 per case because of lower distribution costs. To achieve these cost savings, sales from each smaller plant would be limited to demand within its home state. The total estimated monthly sales volume of 200,000 cases in these three Midwestern states is distributed as follows: 80,000 cases in Indiana, 70,000 cases in Illinois, and 50,000…
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