Answer:
The marginal revenue product of the second worker is $150.
Explanation:
- This is because when we change from 1 worker to 2 workers, the total product increases by 30 (from 20 when there were 1 worker to 50 when there wew 2 workers).
- The value of this extra product, considering that the price of every T-shirt is $5 (marginal revenue of this product) equals
. - This is additional value in dollars that the company has because incuding an extra employee when it changes from oneto two employees.
Answer:
ROE would have changed by 8.52%
Explanation:
First we calculate the current ROE using Dupont Equation which gives ROE as,
ROE = Net Income/Sales * Sales/Total Assets * Total Assets/Equity
or
ROE = Net Profit Margin * Total Assets Turnover * Equity Multiplier
- Current ROE = 10600/295000 * 1.4 * 1.75 = 0.0880 or 8.8%
The condition says that the net income could have increased to 20850 but other factors will remain constant. Thus, to calculate new ROE, we will calculate the new Net Profit margin but the total assets turnover and the equity multiplier will remain constant as sales assets and capital structure is not changing.
- New ROE = 20850/295000 * 1.4 * 1.75 = 0.17316 or 17.32%
- The ROE would have changed by 17.32 - 8.80 = 8.52%
Answer:
b. No, the return is less than the required rate of 9%
Explanation:
Projected sale = 100000
Projected exp = 86000
Profit = 14000
Assets= 200000
Return on assets = 14000/200000 = 7%
Expected return = 9%
Hence, project should not be taken
Answer:
Consider the following explanation
Explanation:
The discussion started with Mr. Friedman explaining how the want and setting up on MNCs have become way more easier than it was a couple of decades ago. This is because the role of business in the society has increases. With increasing population the demand needs to be met on that level as well. Agreeing with the latter point Mr. Karthik said that yes, the demand needs to met but that should not make MNC and their setup easy. The quality according to him suffers.
Mr.Karthik said that the MNCs are also huge retail shops who must make sure that their production of goods and services are worth opting for. This is actually what business is supposed to do. Unlike the two gentlemen who are busy taking out the judgement on what is right and wrong in business and role it plays in the society, Mr.SInger started to add an important aspect. According to his view the greater role of business today, lies in the fact that it must benefit the society and reap positive externalities.
This is where the Corporate social responsibility comes in. The usage of resources and then replenishing it back into the nature is very very important according to Mr.Singer. He explained why the industries should not be given the liberty to discharge waste anywhere but must be either penalised or made to indulge in the act of social responsibility. With such conclusive thought s all th three agreed on a larger perspective of business.
