The Drosselmeier Corporation, located in munich, makes Christmas nutcrackers and has an annual plant capacity of 2,400 product units. Its predicted operating results (in German marks) for the year are:Production and sales of 2,000 units, total sales DM 180,000Manufacturing CostsFixed…
Point price elasticity of demand, Optimal price Optimal Price. Last month, Rick’s Bike Shop, Inc. increased the price on the 24 ounce can of bearing grease by 1%. In response, sales dropped by 4%. A. Calculate the point price elasticity…
Craine Crossroads has 100 two-bedroom apartments that currently rent for $900 per month. The complex currently has five vacant units, matching the vacancy rate for two-bedroom units in the market area. Additional other income from recreation room fees and parking…
Point Elasticity and Arc Elasticity Please show the work in answering the below questions. Thank you. 1. B. B. Lean’s deluxe garment bag sales recovered from 4,800 units to 6,000 units following a price reduction from $140 to $130 per…
Best Client Company has sales of 1,300 units at $60 a unit. Variable expenses are 45% of the selling price and total fixed expenses are $37,180. If Cartel Company expects next year’s total sales could increase 14%, they want to…
You are planning to form a portfolio with two securities, the details of which are as follows: Security Expected Return Standard Deviation1 12% 4%2 10% 3% Assume that the returns on these two securities are perfectly negatively correlated. Calculate portfolio…
The manager of a life insurance company is trying to decide what annual premium to charge a group of policyholders, each of whom has just received his or her 40th birthday. A check of mortality tables indicates that, for every…
You are considering a five-year lease of office space for R&D personnel. Once signed, the lease cannot be canceled. It would commit your firm to six annual $100,000payments with the first payment due immediately. What is the present value of…
A monopolist produces a product whose demand price and production costs vary with quality s and quantity q according to: P(s, q) = s(1 – q)C(s,q) = s^2q (a) Calculate the price and quality levels that a monopolist would choose,…
Barnes Air Conditioning, Inc., has two classes of preferred stock: floating rate preferred stock and straight (normal) preferred stock. Both issues have a par value of $100. The floating rate preferred stock pays an annual dividend yield of 6 percent,…
