Tariffs, non-tariffs, import quotas and voluntary export restraints
Answer: $1,110 .
Explanation:
Given : Amount received by concession stand in gameday sales = $5,550
i.e. Gross income = $5,550
Profit for the event = $3,330
i.e. Net income =$3,330
According to the Net income formula ,
Gross income - expenses = Net income
⇒ Expenses = Gross income - Net income
⇒ Expenses = $5,550- $3,330
⇒ Expenses = $1,110
Thus , the expenses were $1,110 .
Answer: 204.76%
Explanation:
In the earlier scenario, furniture maker manufactured 47 (42 non defective) pieces per 5 laborers working 8 hours day.
Thus, the productivity in terms of units per labor hour is as follows:
= 1.05
Similarly, after the process improvement, the productivity in units per labor hour would be:
= 3.2
Thus change in productivity would be calculated as:
= 2.047 × 100
= 204.76%
Thus, the productivity of non defective parts would increase by 204.76%.
Answer:
Year Cash Flow (A) Cash Flow (B)
0 -37,500 -37,500
1 17,300 5,700
2 16,200 12,900
3 13,800 16,300
4 7,600 27,500
1) Using an excel spreadsheet and the IRR function:
IRR project A = 20%
IRR project B = 19%
2) Using the IRR decision rule, Bruin should choose project A.
3) In this case, since the length of the projects is only 4 years, then there should be no problem with the IRR decision rule, but for projects with longer time lengths, the discounts rates might vary and the best option is to use the modified internal rate of return (MIRR). But in this case the NPV of project B is higher, then Bruin should probably project B because it has a higher NPV. The NPV is always more important then the IRR.
4) Again using an excel spreadsheet and the NPV function:
NPV project A = $6,331
NPV project B = $8,139
5) first we must subtract cash flows from A by the cash flows from B:
1 $11,600
2 $3,300
3 -$2,500
4 -$19,900
then we calculate the IRR = 16%
Bruin should be indifferent between the two projects at a 16% discount rate. That means that at discount rates above 16%, you should choose project A, but at discount rates below 16%, you should choose project B
