OXAGON is an industrial city that will be built in NEOM. One of the factories interested to join there has been producing a dependable product used by farmers, municipalities, and suburbanites alike to control grass in fields and gardens. Contributions to NEOM revenue have been minimized by international dumping of generic glyphosate, as announced in mid-2021 due to Pandemic of COVID-19. The factory sales price was decreased from $4,072 to $60,308 per gallon to compete with the highly competitive pricing, and it is expected that the international price will be around $6,968 per gallon. Assume when the price was set at $4,072 per gallon, there was a prediction that in 5 years the price would inflate to $9,853 per gallon. Determine the interest adjusted rate for inflation, if the inflation is 11% and the interest is 3% per year real return is expected by the factory__

OXAGON is an industrial city that will be built in NEOM. One of the factories interested to join there has been producing a dependable product used by farmers, municipalities, and suburbanites alike to control grass in fields and gardens. Contributions to NEOM revenue have been minimized by international dumping of generic glyphosate, as announced in mid-2021 due to Pandemic of COVID-19. The factory sales price was decreased from $4,072 to $60,308 per gallon to compete with the highly competitive pricing, and it is expected that the international price will be around $6,968 per gallon. Assume when the price was set at $4,072 per gallon, there was a prediction that in 5 years the price would inflate to $9,853 per gallon. Determine the interest adjusted rate for inflation, if the inflation is 11% and the interest is 3% per year real return is expected by the factory__

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 9E

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ABC,Inc., is a leading manufacturer to tufted carpeting under the Ironside brand. During the past year, Ironside sold 16 million square yards (units) of carpeting at average wholesale price of Rs.8.75 per unit. This year, disposable income per capita is expected to surge from Rs.26670 to Rs.29000 in a booming economic recovery. Without any price change, Ironsides marketing director expects current-year sales to rise to 25 million units. In an effort to reduce excess end-of-the-model-year inventory, ABC,Inc. offered a 3.5% discount off the average price of tufted carpeting under the Ironside brand sold during the month of August. Customer response was enthusiastic, with unit sales rising by 12% over the previous months level in result of the price decrease.Calculate the income arc elasticity of demand. Calculate the point price elasticity of demand for tufted carpeting. (Hint: Use ΔQ=12%)
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