MACROECONOMICS W/CONNECT
18th Edition
ISBN: 9781307253092
Author: McConnell
Publisher: Mcgraw-Hill/Create
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 4P
To determine
Theeconomic and financial investments.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Why in the long run the rate of return on investments reflects the riskiness of those investments?
Imagine that you are a financial manager for a medium-sized company.
Describe how you would use capital budgeting techniques to determine whether a business investment is a good idea.
Give an example of a business investment venture and how you would use capital budgeting to ensure it is a good investment.
ADVANCED ANALYSIS A firm faces the following costs: total cost of capital = $1,000; price paid for labor = $12 per labor unit; and
price paid for raw materials = $4 per raw-material unit.
%3D
Instructions: In parts a and b, enter your answers for total cost as a whole number. Round your answers for average total cost to 2
decimal places. In part c, enter your answer as a whole number.
a. Suppose the firm can produce 5,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of
raw materials. What are the total cost and average total cost of producing the 5,000 units of output?
TC = $
%D
ATC = $
b. Now assume the firm improves its production process so that it can produce 6,000 units of output this year by combining its fixed
capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 6,000
units of output?
TC =
$
ATC = $
c. If units of output can always be sold for $1 each,…
Knowledge Booster
Similar questions
- Assume that a national restaurant chain called BBQ builds 15 new restaurants at a cost of $1 million per restaurant. It outfits each restaurant with an additional $200,000 of equipment and furnishings. To help partially defray the cost of this expansion, BBQ issues and sells 300,000 shares of stock at $30 per share. Instructions: Enter your answers rounded to 1 decimal place. a. What is the amount of economic investment that has resulted from BBQ's actions? $ million b. How much purely financial investment took place? $ millionarrow_forwardAssume that a national restaurant firm called BBQ builds 15 new restaurants at a cost of $1 million per restaurant. It outfits each restaurant with an additional $200,000 of equipment and furnishings. To help partially defray the cost of this expansion, BBQ issues and sells 300,000 shares of stock at $30 per share. Instructions: Round your answers to 1 decimal place. a. What is the amount of economic investment that has resulted from BBQ's actions? million b. How much purely financial investment took place? millionarrow_forwardI get a stock tip that Canada Goose is about to diversify their products by releasing a line of summer swimwear. I have $3,000 of my own money that I invest in Canada Goose stock. Suppose that their swimwear does very well and the value of their stock rises by 50%. How much money have I made (in dollar terms)?arrow_forward
- Discuss the three potential factors that may motivate a firm to invest abroad.arrow_forwardThree students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are the rates of return on the students’ investment projects: Student Return (Percent) Carlos 4 Felix 7 Janet 15 Assume borrowing and lending is prohibited, so each student uses only personal saving to finance his or her own investment project. Complete the following table with how much each student will have a year later when the project pays its return. Student Money a Year Later (Dollars) Carlos Felix Janet Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate rr. A student would choose to be a lender in this market if his or her expected rate of return is than rr. Suppose the interest rate is 6 percent. Among these three students, the quantity of loanable funds supplied would be ,…arrow_forwardSummarize the leading theories to explain each type of investment.arrow_forward
- Suppose that the initial dividend on a stock is £1. The interest rate is 3 percent and the growth rate of dividends is constant at 2 percent. What is the price of the stock?arrow_forwardYou have $10,000 available for investment in stock. You are looking for agrowth stock that can grow your investment to $35,000 over five years. Whatkind of growth rate are you looking for?arrow_forwardWhat would be the value of sales given that value of output is $31,000 and changs in stock is $10,000arrow_forward
- Regarding the previous page, consider you and your partner are planning to become a franchise of an international food chain (L’Osteria, Subway, ...) and think about the following problems: • What impact do you think current economic conditions have on your investment plan • Explain the nature and the current status of risks involved in your plan.arrow_forwardIf you're authorized with some invested capital, what is the potential market that you're most interested in? Why you choose this market?arrow_forwardDefine and explain the internal rate of return on a new investment?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning