What is the present worth of the savings

Assignment Help Business Economics
Reference no: EM131807470

The market volume for widgets is increasing by 15% per year from current profits of $200,000. Investing in a design change will allow the profit per widget to stay steady; otherwise, it will drop 3% per year. The interest rate is 10%. What is the present worth of the savings over the next 5 years? Over the next 10 years?

Reference no: EM131807470

Questions Cloud

Discuss employee will be paid on the last day of each month : The employee will be paid on the last day of each month. Should a journal entry be made on March 6
Savings account that earns interest : Your salary in year 1 is $30,000. You deposit a fixed percentage at the end of each year in a savings account that earns 6% interest.
Compute the amount of revenue and gross profit : Compute the amount of revenue and gross profit or loss to be recognized in 2016, 2017, and 2018 using the percentage-of-completion method?
What does a customer mean by quiet : What does a customer mean by quiet? How much do engineers influence customer perceived qualities? Objective measures versus targets.
What is the present worth of the savings : What is the present worth of the savings over the next 5 years? Over the next 10 years?
What is the present worth of the new product : The first cost to complete design and tooling will be $950K. The interest rate is 10%. What is the present worth of the new product?
What is the present worth of rebuilding : The interest rate is 12%. What is the present worth of rebuilding the dragline?
Strategy to understand nonverbal cues in group setting : What would be the best strategy to understand nonverbal cues in a group setting?
Prepare the statement of cash flows of metagrobolize : During 2011, equipment with a cost of $290,000 was sold. Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2011

Reviews

Write a Review

Business Economics Questions & Answers

  Maximum potential increase in the money supply

Suppose the banking system has vault cash of $1,000, deposits at the Fed of $2,000, and demand deposits of $10,000. A. If the reserve requirement is 20 percent, what is the maximum potential increase in the money supply, given the banks’ reserve posi..

  What effect does expansionary fiscal policy

What effect does expansionary fiscal policy (under flexible exchange rate) have on the supply and demand for dollar in the FX market? What happen to the nominal price of the dollar, export, import and aggregate demand?

  Final production of goods in the united states

If products produced at the Mexican subsidiary are used in the final production of goods in the United States - can you explain why the input costs would be more expensive for the United States firm?

  A cost-effective policy is always socially efficient

A cost-effective policy is always socially efficient. Enforcement costs are critical to the success of environmental programs and should be included in the overall social costs of the program when evaluating different policy options.

  What is the socially optimal level of pollution reduction

Two firms A and B face the following costs to reduce their level of pollution by the amount q: cA(q) = 2q^2 cB (q) = q^2 One unit of pollution generates a marginal damage of $2 to society. With no public intervention, what level of pollution reductio..

  Reduction should be assigned by regulatory authority to firm

Suppose you have three production facilities that are polluting a river. Each emits 20 units of pollution. Their marginal cost functions for reducing emissions are, respectively, MC1 = $6, MC2 = $8, MC3 = $10. a) If the objective is to cut emissions ..

  Monopolies in that monopolistically competitive industries

Monopolistically competitive industries differ from monopolies in that monopolistically competitive industries:

  Effective tool for mitigating exposure to a variety of risks

Hedging is an effective tool for mitigating exposure to a variety of risks. Generally speaking, corporations like to keep risk to a minimum, so I would assume that any corporation with exposure to foreign exchange risk would be utilizing hedges to re..

  What happens to the equilibrium quantity

Consider the market for natural gas. Suppose that a new drilling technique is invented that allows for the economical extraction of resources that were currently uneconomical to extract. What happens to the equilibrium price? What happens to the equi..

  In the short-run-firm can experience increasing

In the short-run, a firm can experience increasing, decreasing, or constant returns to scale. Decreasing returns to scale are often due to coordination and communication problems that create operating inefficiencies.

  Find the firm short run cost function

A firm's production function is qi = 4*Ki.2Li.4. The wage rate in this area is w = $15, and the cost of capital is r = .05. Find the firm's short run cost function, if Ki is fixed at $100,000. If the good is exported around the world at a price of $1..

  How much of this is interest and how much is principal

How much does he repay? How much of this is interest and how much is principal?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd