(a)
To determine:
The higher profit among the two firms in which one is using robotics and other is using human workers in a recession scenario.
Introduction:
As there are two firms which are producing smart phones. Among these two firms, one is using robotics technology which is very costly although containing less variable cost and the other firm is using human workers which are not so costly but constitute a higher variable cost.
(b)
To determine:
The higher profit among the two firms in which one is using robotics and other is using human workers in a boom scenario.
Introduction:
As there are two firms which are producing smart phones. Among these two firms, one is using robotics technology which is very costly although containing less variable cost and the other firm is using human workers which are not so costly but constitute a higher variable cost.
(c)
To determine:
The higher beta among the two firms in which one is using robotics and other is using human workers.
Introduction:
As there are two firms which are producing smart phones. Among these two firms, one is using robotics technology which is very costly although containing less variable cost and the other firm is using human workers which constitute a higher variable cost.
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Chapter 17 Solutions
INVESTMENTS(LL)W/CONNECT
- Company XYZ produces and sells two types of calculators: Basic and Scientific. The Basic has a lower selling price per unit compared to the Scientific. However, the Basic has a higher contribution margin compared to the Scientific. Due to fixed production capacity, the company has a cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Basic calculators. What would be the effect on total profits? O a. Total profits would decrease O b. Total profits would remain the same Oc. Cannot be determined using the above information O d. None of the given answers O e. Total profits would increasearrow_forwardIndustry is evaluating two different manufacturing systems (Alpha and Beta): Possible Outcome Probability Rate of Return Alpha System Rate of Return Beta System Optimistic .35 .40 .15 Most likely .45 .25 .30 Pessimistic .20 (.10) (.20) Which manufacturing system provides the lowest expected return? why? Alpha System Beta System Not enough informationarrow_forwardCompany XYZ produces and sells two types of calculators: Basic and Scientific. The Basic has a lower selling price per unit compared to the Scientific. However, the Basic has a higher contribution margin compared to the Scientific. Due to fixed production capacity, the company has a cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Basic calculators. What would be the effect on total profits? O a. Total profits would remain the same O b. Total profits would increase Oc. Cannot be determined using the above information O d. Total profits would decrease Oe. None of the given answersarrow_forward
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- Company XYZ produces and sells two types of calculators: Basic and Scientific. The Basic has a lower selling price per unit compared to the Scientific. However, the Basic has a higher contribution margin compared to the Scientific. Due to fixed production capacity, the company has cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Scientific calculators. What would be the effect on total profits? O a. None of the given answers O b. Total profits would remain the same O c Cannot be determined using the above information O d. Total profits would increase Oe. Total profits would decreasearrow_forwardThis problem, like the first one, is a brain teaser. If a market is efficient, how is it possible for an investor to earn a profit?arrow_forwardWhich of the following is an example of a way in which companies can create value by exploiting real options? A.Exercising in-the-money real options immediately B.Optimally delaying or abadoning projects C.Abandoning good projects in favor of newer projects D.Acting quickly to take on the new projects even if there is no cost to waitarrow_forward
- Depict on a graph a perfectly competitive market with a negative externality. Utilise the graph to cleary highlight and discuss the problems associated with the negative externality.[hint: focus on the quantity difference between the market equilibrium and the socially desirable equilibrum] now consider what happens if the market consolidates and becomes a monopoly (there is no need to depict this on a graph). Do you think the obesity and diabetes will increase or decrease? [hint: focus on the quantity difference betweeen a monopoly and perfectly competitive market]arrow_forwardWhy do managers want a high ROI, and how would they strive to increase their ROI?arrow_forwardA manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision to two alternatives: buy one machine or buy two. If only one machine is purchased and demand is more than it can handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines were purchased at the same time. The estimated probability of low demand is .30, and the estimated probability of high demand is .70. The net present value associated with the purchase of two machines initially is $79,200 if demand is low and $130,600 if demand is high. The net present value for one machine and low demand is $99,000. If demand is high, there are three options. One option is to do nothing, which would have a net present value of $124,680. A second option is to subcontract; that would have a net present value of $115,650. The third option is to…arrow_forward
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
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