Compare the present value of economic profit

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Reference no: EM13730819

QUESTIONS FOR CRITICAL THINKING 1
From the end-of-chapter discussion questions (DQ) and problems (P)

Salvatore Chapter 1:

a. Discussion Questions: 9.
b. Problems: 6, 15, and spreadsheet problem (p. 39)

Note:
1. P15(d): Compare the present value of economic profit in each of the next three years and the loss of $50,000 in the third year using 15% as the discount rate.
2. The spreadsheet problem (b): Calculate a mean, .... to statistically describe the data of both variables, Time and Age.

Froeb et al. Chapter 3:

a. Individual problems: 3-1 and 3-3.

Salvatore Chapter 3:

a. Discussion Questions: 9.
b. Problems: 1(a), 7, and 9.

Note:
1. DQ9: Does maximum sales (revenue) equal maximum profit (see figure 3-4)?
2. Revised P1(a): Derive the total-revenue, average-revenue, and marginal-revenue schedules from Q = 0 to Q = 4 by 1s.
Average revenue (AR) = total revenue (TR)/Q
Marginal revenue (MR) = change in total revenue/change in Q

For example:

Q TR AR MR
2 14 7 (=14/2)
3 18 6 (=18/3) 4 (=(18-14)/(3-2)

3. Revised P9: With the total-revenue schedule of Problem 1 and the total-cost schedule of Problem 7, show the profit-maximizing level of output (profit=TR-TC).

Froeb et al. Chapter 4:

a. Individual problems: 4-5 and 4-6.

Submit this assignment by 11:59 p.m. (ET) on Sunday of Module/Week 1.

Reference no: EM13730819

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