Reference no: EM13889119
1. Jim’s diner is just about to open in Memphis, Tennessee. However, Jim is trying to decide whether he wants to offer Coke or Pepsi soda products. He determines that, to offer either product, he will have to spend $2,100 in sunk costs to purchase and install the appropriate paraphernalia, e.g., a large Coca-Cola or Pepsi sign out front. Ultimately, he chooses to offer Coke products and agrees to pay Coke 4 cents per ounce of Coke sold for the right to use its product. After Jim makes the investments specific to his soda choice, Coke returns and asks for a fixed (one-time) fee in addition to the 4 cents per ounce. What is the most Jim should be willing to pay?
2. Recently, the owner of a Trader Joe’s franchise decided to change how she compensated her top manager. Last year, she paid him a fixed salary of $55,000 and her store made $115,000 in profits (not counting payment to her top manager). She suspected the store could do much better and feared the fixed salary was causing her top manager to shirk on the job. Therefore, this year she decided to offer him a fixed salary of $27,000 plus 16% of the store’s profits. Since the change, the store is performing much better, and she forecasts profits this year to be $250,000 (again, not counting the payment to her top manager). Assuming the change in compensation is the reason for the increased profits, and that the forecast is accurate, how much more money will the owner make (net of payment to her top manager) because of this change?
|
What are the profit-maximizing price and output levels
: Robert’s New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. What are the profit-maximizing price and output levels? Explain them and calculate algebraic..
|
|
Define the revenue recognition principle
: Define the revenue recognition principle and explain why it is important to users of financial statements
|
|
Requires large risk premium to compensate for bearing risk
: Assume there is uncertainty about the cost of disposing of the waste: there is a fifty-fifty chance that they will be $10,000 or $30,000. How this uncertainty affects the cost-benefit calculation, if the government is risk neutral, or very risk avers..
|
|
What steps should community hospital take
: Case Study Question- What steps should Community Hospital take to prevent such a sentinel event from happening in the future
|
|
Decided to change how she compensated her top manager
: Jim’s diner is just about to open in Memphis, Tennessee. However, Jim is trying to decide whether he wants to offer Coke or Pepsi soda products. Recently, the owner of a Trader Joe’s franchise decided to change how she compensated her top manager. La..
|
|
Determine the weighted-average unit contribution margin
: Determine the weighted-average unit contribution margin. Determine the total number of units that the company must produce to break even.
|
|
Compute the break-even point in units and dollars
: Compute the break-even point in units and dollars and margin of safety in dollars Assuming no changes to selling price or costs
|
|
Withdrawal occurs at end of six months after his retirement
: Sam musso is planning to retire in 15 years. he can deposit money at 8% compounded quarterly. What deposit must he make at the end of each quarter until he retires so that he can make a withdrawal of $45,000 semiannually over five years after his ret..
|
|
Cost-benefit analysis
: Assume there are two groups in the population, and each contributes equally to the cost of the project, but two-thirds of the benefits accrue to the richer group. How this alter the cost-benefit calculation?
|