A one-year Future contract is an agreement where​

Answers

Answer 1
One side has the right to buy an asset for a certain price in one year's time. One side has the obligation to buy an asset for a certain price in one year's time. One side has the obligation to buy an asset for a certain price at some time during the next year.

Related Questions

what symptom must be reported to a manger

Answers

vomiting, diarrhea, jaundice, or a fever accompanied by a sore throat

Each year, a bicycle repair shop receives $120,000 in total revenue. Annual costs include $40,000 for labor, $5,000 in parts, and $30,000 in equipment rental. The owner of the bicycle repair shop owns the building and could rent it out for $12,000 per year. She could be making $50,000 per year if she worked as a project manager instead. What is the owner's accounting profit

Answers

Answer:

Accounting profit= $45,000

Explanation:

The accounting profit does not take into account the opportunity cost of making a different decision. Therefore, the opportunity of renting the building and working as a project manager will not be taken into account.

Accounting profit= 120,000 - 40,000 - 5,000 - 30,000

Accounting profit= $45,000

Payroll entries.
Total payroll of Walnut Co. was $1,840,000, of which $320,000 represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $1,440,000. Income taxes withheld were $450,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employee's salaries and wages to $106,800 and 1.45% in excess of $106,800.
Instructions
(a) Prepare the journal entry for the salaries and wages paid.
(b) Prepare the entry to record the employer payroll taxes.

Answers

Answer:

A. Dr Salaries & Wages exp. $1,840,000

Dr Fed tax withheld & payable $450,000

Cr FICA Taxes withheld & payable $120,920

Cr Cash $2,169,080

B. Dr Employer's Tax expenses $112,920

Cr FICA taxes payable $120,920

Cr SUTA payable $4,800

Cr FUTA payable $3,200

Explanation:

a. Preparation of the journal entry for the salaries and wages paid.

Dr Salaries & Wages exp. $1,840,000

Dr Fed tax withheld & payable $450,000

Cr FICA Taxes withheld & payable $120,920

[($1,840,000-$320,000*7.65%)+($320,000*1.45%)]

Cr Cash $2,169,080

($1,840,000+$450,000-$120,920)

(Being net salaries and wages paid after holding taxes)

b. Preparation of the entry to record the employer payroll taxes.

Dr Employer's Tax expenses $112,920

($120,920-$4,800 -$3,200)

Cr FICA taxes payable $120,920

[($1,840,000-$320,000*7.65%)+($320,000*1.45%)]

Cr SUTA payable $4,800

($1,840,000-$1,440,000*1.2%)

Cr FUTA payable $3,200

($1,840,000-$1,440,000*.8%)

(Being employer's taxes made payable towards salaries & wages)

On January 1, 2020, Korsak, Inc. established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during the next four years for the difference between the market price of its common stock and a pre-established price of $20 on 120,000 SARs. Current market prices of the stock are as follows: January 1, 2020 $35 per share December 31, 2020 38 per share December 31, 2021 30 per share December 31, 2022 33 per share Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2020. *75. What amount of compensation expense should Korsak recognize for the year ended December 31, 2020

Answers

Answer:

$570,000

Explanation:

Missing question: "On December 31, 2022,50,000 SARs are exercised by executives. What amount of compensation expense should Korsak recognize for the year ended December 31, 2020"

Amount of compensation expense = [(33-20)*120,000*3/4] - [(30-20)*120,000*2/4]

Amount of compensation expense = [13*120,000*3/4] - [10*120,000*2/4]

Amount of compensation expense = 1,170,000 - 600,000

Amount of compensation expense = $570,000

So. the amount of compensation expense that Korsak should recognize for the year ended December 31, 2020 is $570,000.

Sea Green Enterprises reports the following assets and liabilities on its balance sheet. Net Book Value Fair Market Value Assets $600,000 $925,000 Liabilities 200,000 200,000 Sea Green just lost a product liability suit with damages of $10,000,000 being awarded to the plaintiff. Although Sea Green will appeal the judgment, legal counsel indicates the judgment is highly unlikely to be overturned by the appellate court. The product liability insurance carried by Sea Green includes a payout ceiling of $6,000,000. Assume any net assets of the company will be used to reduce the judgment. For how much of the judgment is the entity and its owners liable if Sea Green is a sole proprietorship, a partnership, an LLC, a C corporation, and an S corporation

Answers

Answer:

A. $3,275,000

B. $3,275,000

C. $3,075,000

D. $3,075,000

Explanation:

A. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a SOLE PROPRIETORSHIP,

First step is to calculate the FMV of the net assets

FMV of the net assets=($925,000 - $200,000)

FMV of the net assets =$725,000

Now let calculate the amount the owner is liable of

Amount liable=($10,000,000-$6,000,000)-$725,000

Amount liable= ($4,000,000 - $725,000).

Amount liable=$3,275,000

Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a SOLE PROPRIETORSHIP is $3,275,000

B. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a PARTNERSHIP

First step is to calculate the net FMV of the

net assets

Net FMV of the

net assets =($925,000 - $200,000)

Net FMV of the

net assets= $725,000

Now let calculate the partners are liable of

Amount liable=($10,000,000-$6,000,000)-$725,000

Amount liable= ($4,000,000 - $725,000).

Amount liable=$3,275,000

Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a PARTNERSHIP is $3,275,000

C. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a C corporation

Corporate debts=($10,000,000-$6,000,000)-$925,000

Corporate debts=($4,000,000 - $925,000).

Corporate debts =$3,075,000

Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a C corporation is $3,075,000

D. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a S corporation

Corporate debts=($10,000,000-$6,000,000)-$925,000

Corporate debts=($4,000,000 - $925,000).

Corporate debts =$3,075,000

Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a S corporation is $3,075,000

All of the following statements about the online insurance industry are true except: Group of answer choices the industry has been very successful in attracting visitors searching for information about prices and terms of insurance policies. the Internet has lowered search costs, increased price comparison, and decreased prices to consumers for all forms of insurance. websites of almost all the major firms provide the ability to obtain an online quote. the wave of interest in fintech companies has not yet reached the insurance industry.

Answers

C because that’s the answer I did it

Assume that IBM leased equipment that was carried at a cost of $182,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1, 2017, with equal rental payments of $35,685 at the beginning of each year. All executory costs are paid by Swander directly to third parties. The fair value of the equipment at the inception of the lease is $182,000. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 7%, no bargain-purchase option, and no transfer of title. Collectibility is reasonably assured with no additional cost to be incurred by IBM.
Prepare IBM’s January 1, 2017, journal entries at the inception of the lease
Date Account Titles & Explnation Debit Credit
January 1
January 1

Answers

Answer:

IBM

Journal entries at the inception of the lease

Date Account Titles & Explanation Debit Credit

January 1

Debit Accounts receivable (Sharon Swander Company) $182,000

Credit Leased Asset $182,000

To record the lease of the asset to Sharon Swander.

January 1

Debit Cash $35,685

Credit Accounts receivable (Sharon Swander Company) $35,685

To record the receipt of the first rental payment.

Explanation:

a) Data and Calculations:

Cost of equipment on lease = $182,000

Lease terms:

Lease period = 6 years

Annual rental payments = $35,685

Implicit interest rate = 7%

Double West Suppliers (DWS) reported sales for the year of $300,000, all on credit. The average gross profit percentage was 40 percent on sales. Account balances follow: Beginning Ending Accounts receivable (net) $ 45,000 $ 55,000 Inventory 60,000 40,000 Required: Compute the following turnover ratios. By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory.

Answers

Answer:

(1) Account receivable turnover Ratio = 6 times

Inventory turnover Ratio = 3.6 times

(2) Average days to collect receivables = 61 days

Average days to collect inventory = 101 days

Explanation:

(1). Net credit sales = $300,000

Average account receivable = ($45,000 + $55,000) ÷ 2 = $50,000

COG sold = $300,000 - (40% × $300,000) = $180,000

Average inventory = (60,000 + 40,000) ÷ 2 = 50,000

Account receivable turnover Ratio= Net Credit Sales ÷ Average Accounts receivable

= $300,000 ÷ 50,000

= 6 times

Inventory turnover Ratio= COG Sold ÷ Average Inventory

= 180,000 ÷ 50,000

= 3.6 times

(2). Average days to collect receivables= 365 ÷ 6

= 60.83 or 61 days

Average days to collect inventory= 365 ÷ 3.6

= 101.38 or 101 days

"Group Think" happens when
everyone agrees with the same
thought.
True or false

Answers

It is a phenomenon that can lead to poor decision-making True.

What is group think?

Group think is a phenomenon in which a group of people, influenced by their desire for consensus, make irrational or poor decisions. It often occurs when group members are unwilling or unable to express their individual opinions, or when group members feel pressure from an authority figure to come to an agreement. Group think can lead to poor decision-making, as group members may ignore potential problems or negative information that could be beneficial to the decision-making process. Additionally, group think can lead to conformity among members, making it difficult for them to think outside the box and come up with creative solutions.

Group Think can lead to poor decision-making because it eliminates any divergence of opinion, leading to conformity and the absence of critical thought. This can lead to an inability to objectively evaluate the risks and benefits involved in a decision, as well as a lack of creativity and innovation. Additionally, group think can lead to a lack of accountability, as members of a group may be less likely to challenge decisions or provide constructive criticism.

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A project scope statement provides the first phase the project.

True

False

Answers

Answer:

true coz i know the answer

Regardless which form of media used, all ads can be divided into _?_types based on the kind of message conveyed.
seven
C. five
b. two
d. three
a.

Answers

D. three types of ads
B is correct
Because is true

Your monthly salary is $5250. Each month, social security is taken out of your paycheck at a rate of 6.2%. How much is taken out of your paycheck each month for social security? ​

Answers

Answer:

$325,50

Explanation:

if monthly salary is $5250 and a rate of 6.2% is taken out for social security we will there for say:

social security =monthly salary × rate ÷ 100

=$5250 × 6,2÷100

=$325.50

Actual sales price is 20% higher than budgeted. Actual sales revenue in dollars is 14% higher than budgeted. Actual sales volume in units is 5% lower than budgeted. Actual input quantity per unit is 2% higher than budgeted. Actual input price is 4% lower than budgeted. Which of the following is true: Group of answer choices Sales volume variance is unfavorable and input efficiency variance is unfavorable Sales volume variance is unfavorable and input efficiency variance is favorable Sales volume variance is favorable and input efficiency variance is unfavorable Not enough information Sales volume variance is favorable and input efficiency variance is favorable

Answers

Answer: Sales volume variance is unfavorable and input efficiency variance is unfavorable

Explanation:

The sales volume variance is regarded as the difference in the revenue or the profit which is as a result of the difference between the actual sales and the budgeted sales.

With regards to the question, since the Actual sales volume in units is 5% lower than the budgeted sales, we can infer that the sales volume variance will be unfavourable. On the other hand, since, the actual input quantity per unit is 2% higher than budgeted input quantity per unit, then we can infer that the input efficient variance is unfavourable.

7. A monopolist has cost function  =  + 2 and the regulator is willing to allow the firm to use a two-part tariff per consumer  =  +  to cover total costs. Total demand is  = 102 −  and there are 100 identical consumers. Up to how much is willing to pay each indidual consumer to have the right to consume the good at marginal cost? What is the optimal tariff or tariff that would maximize social welfare (fixed part and marginal price) ?

Answers

Answer: hello your question is poorly written  below is the complete

A monopolist has cost function C = F + 2Q and the regulator is willing to allow the firm to use a  two-part tariff per consumer equal to T = A + pq to cover total costs. Total demand is Q = 102 − p and  there are 100 identical consumers. What is the optimal tariff or tariff that would maximize social welfare  (fixed part and marginal price)?

answer :  Fixed part = $5000 per customer = $500,000

               marginal price = $2

Explanation:

Marginal cost of monopolist = dc / dq = 2

Q = quantity of the concerned good/service.

p = price of concerned good/service

Based on profit maximizing condition of the monopoly firm under the two-part tariff system ; output of concerned goods/services = MC = price of concerned goods/service

P = MC

102 - Q = 2   ∴ Q = 100

back to the Total demand function ( p = 102-Q )

p = 102 - Q

p = 2

when Q = 0

p = 102 - Q = 102

hence; Total consumer surplus = 0.5 * ( 102 - 2 ) * ( 100-0 ) = $5000 i.e. fee charged by monopolist per customer

marginal / socially optimal price charged = $2

Total Fixed rate/part that the monopolist will charge from 100 customers

= (100*5000) = $500,000

Assume that in 2018, a copper penny struck at Philadelphia mint in 1796 was sold for $480,000. What was the rate of return on this investment?

Answers

Answer:

The annual rate of return on this investment is 8.29%

Explanation:

The computation of the rate of return on this investment is shown below:

Since the copper penny is in 1795 is 1 cent

And,  

1 cent = .01 dollars

Now    

Year                                1796        2018  

Amount (in dollars) 0.01       $390,000

We know that  

Future Value = Present Value × ((1 + rate )^time period)  

Here,  

t = 2018 - 1795 = 222

So,    

.01 × ((1+rate)^(222)) = $480,000    

(1+rate)^(222) = $48,000,000    

1 + rate = $48,000,000^(1 ÷ 222)    

1 + rate = $48,000,000^(0.004505)    

1+rate = 1.082929503    

rate = 0.082929503    

Hence, The annual rate of return on this investment is 8.29%

g Over the last several years your company has collected the following monthly repair frequency history on a key piece of manufacturing equipment. If the average repair cost (parts and labor) is $356/repair, calculate the expected annual repair budget for this piece of equipment. Repairs/month Probability 0 0.02 1 0.05 2 0.08 3 0.1 4 0.12 5 0.13 6 0.12 7 0.16 8 0.11 9 0.09 10 0.02

Answers

Answer:

The expected annual repair budget for this piece of equipment is $1,933.20.

Explanation:

Note: See the attached excel file for the calculation of the expected annual repair budget for this piece of equipment.

In the attached excel file, the following formula is used

Expected monthly repair cost = Repairs/month * Probability * Average cost per repair

From the attached excel file, we have:

Expected annual repair budget = Total of expected monthly repair cost = $1,933.20

Therefore, the expected annual repair budget for this piece of equipment is $1,933.20.

You want to invest in a project in Wonderand. The project has an initial cost of W738,000 and is expected to produce cash inflows of W321,000 a year for 4 years. The project will be worthless after that. The expected inflation rate in Wonderland is 2.5% while it is 4.5% in the U.S. The applicable interest rate for a project like this in Wonderland is 13%. The current spot exchange rate is W1 = $2.3456.

Required:
What is the Net Present Value of this project in Wonderland's currency (i.e., in "W")?

Answers

Answer:

Wonderland

Net Present Value of this project in Wonderland's currency is:

= W169,256.05.

Explanation:

a) Data and Calculations;

Initial project cost = W738,000

Expected annual cash inflows = W321,000

Project duration = 4 years

Expected inflation rate in Wonderland = 2.5%

Applicable interest rate for the project = 13%

Real interest rate = 15.5% (13% + 2.5%)

Present value of annual cash inflows =  W907,256.05

Present value of initial cost outflows =   W738,000.00

Net Present Value of this project =         W169,256.05

Calculating the PV of the Cash Inflows from an online financial calculator:

N (# of periods)  4

I/Y (Interest per year)  15.5

PMT (Periodic Payment) = W321000

FV (Future Value)  0

Results

PV = W907,256.05

Sum of all periodic payments = W1,284,000.00

Total Interest = W376,743.95

Apple invented the modern smart phone but Android con trolled 80 percent of the world market in 2016 because of:__________.

Answers

Answer:

Stimulus diffusion

Explanation:

In simple words, When a concept spreads from its historical flame outwards, the original thought is altered by the future followers which is known as stimulus diffusion. Given of the manner civilization adjusts to various environmental, economic, as well as political contexts, mostly all cultural evicting will include some form of stimulus dissemination.

Thus, from the above we can conclude that the correct answer is stimulus diffusion.

The efficient frontier of risky assets is:_______
A. The portion of the minimum-variance portfolio that represents the highest standard deviations.
B. The portion of the minimum-variance portfolio that includes the portfolios with the lowest standard deviation.
C. The portion of the minimum-variance portfolio that lies above the global minimum variance portfolio.
D. The set of portfolios that have zero standard deviation.

Answers

The answer is d I hope this helps

Why should interest earned NOT be a factor with your emergency fund?
O Interest-bearing accounts at banks earns a high rate of interest, therefore, interest is not a concern.
It should be a factor.
O Inflation can eat up the interest earned.
O The emergency fund is not intended to grow wealth

Answers

Answer:

O The emergency fund is not intended to grow wealth

Media Relations are marketing activities that involves writing press releases and organizing news conferences for a sports organization

A) True
B) False

Answers

Answer:

Hello! Your answer is, A)True

Explanation:

Hope I helped! Ask me anything if you have any questions! Brainiest plz! Hope you make an 100% and have a wonderful day! -Amelia♥

Answer A) which is true

Augustus Company is considering investing in new equipment. Based on the following, what is the Average Annual Operating Income (as in the Accounting Rate of Return calculation)?

Estimated Cost of New Equipment $500,000
Useful life in years 5
Estimated Residual Value $50,000
Expected New Cash Inflows over life of asset $700,000

Answers

Answer:

$50,000

Explanation:

Estimated Cost of New Equipment = $500,000

Useful life in years = 5

Estimated Residual Value = $50,000

Expected New Cash Inflows over life of asset = $700,000

Annual depreciation expense = (Estimated Cost of New Equipment-Estimated Residual Value)/Useful life in years

= ($500,000 - $50,000) / 5

= $450,000 / 5

= $90,000

Average annual cash flow = Expected New Cash Inflows over life of asset/ Useful life in years

= $700,000/5

= $140,000

Average annual operating income = Average annual cash flow - Annual depreciation expense

= $140,000 - $90,000

= $50,000

Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $1,350 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $900 per unit. a. If a transfer price of $1,000 per unit is established and 75,000 units of materials are transferred, with no reduction in the Components Division's current sales, how much would Ziegler Inc.'s total operating income increase

Answers

Answer:

the increase in the total operating income is $33,750,000

Explanation:

The calculation of the increase in the total operating income is given below:

= Material units × (outside supplier unit - variable cost per unit)

=75,000 units × ($1,350 - $900)

= $33,750,000

Hence, the increase in the total operating income is $33,750,000

We simply applied the above formula so that the correct amount could come

And, the same is relevant

Mary is interested in becoming a franchisee in Cactus Katie's Grill, a very successful fast food chain specializing in food dishes from the American southwest. Which of the following problems is Mary most likely to encounter if she agrees to become a franchisee?
a) high initial costs and fees
b) lack of financing
c) lack of managerial assistance
d) poor name recognition and visibility

Answers

Answer:

a) high initial costs and fees

Explanation:

A franchise is formed when a business obtains the licence to use another business's brand to operate.

The franchisor (brand owner) usually gives managerial assistance, training, and other needed support.

The franchisee is the entity using the franchisor's brand name. There is usually an initial royalty payment and other fees paid the use the franchisor's brand.

Choose 2 multinational companies (1 U.S.-based company + 1 foreign-based company).
Visit the websites of the 2 companies and conduct research using databases such as Business and Company ASAP and Business
Source Complete.
How do these 2 multinational companies have organized their global business operations?
What are their similarities and differences, and what might explain those similarities and differences?
How might you characterize their business and international strategies?

Answers

Tools like nation portfolio analysis and political risk assessment, which primarily concentrate on the potential benefits from doing business in emerging countries, are used by companies that seek new markets.

How a Global Corporation Operates?

An organisation is considered a global corporation if its operations span at least two nations. Some individuals would classify any business having an overseas branch as a multinational corporation. Some people might restrict the term to only include businesses with at least 25% of their revenue coming from sources outside of their own nation.

What Are Some of the Risks Facing Global Corporations?

The various nations and regions in which multinational firms operate expose them to dangers. These include potential dangers to regulations or the law, political unpredictability, crime and violence, and cultural

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What entrepreneurial skills do you think would be necessary to start a DJ business?

Answers

Answer:What Skills Do You Need To Make Money As A DJ Entrepreneur? · Ambition · Drive · Discipline · Leadership · Creative Thinking · Strategic Thinking.

Explanation:

7. How micro and macro economics are interdependent
to each other?​

Answers

Explanation:

Actually micro and macroeconomics are interdependent. The theories regarding the behaviour of some macroeconomic aggregates (but not all) are derived from theories of individual behaviour. ... Similarly, the theory of aggregate consumption function is based upon the behaviour patterns of individual consumers.

Vextra Corporation is considering the purchase of new equipment costing $38,000. The projected annual cash inflow is $11,600, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Vextra requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows:

Periods 12%
1 0.8929
2 1.6901
3 2.4018
4 3.0373

What is the net present value of the machine (rounded to the nearest whole dollar)?

a. $(35,233).
b. $(2,767).
c. $38,000.
d. $(3,700).
e. $5,233.

Answers

Answer:

b

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.  

When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.

NPV can be calculated using a financial calculator  

Cash flow in year 0 = $-38,000.

Cash flow in year 1 - 4 = $11,600

I = 12%

NPV = $(2,767).

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

Assume that three identical units of merchandise were purchased during October, as follows:
Units Cost
Oct. 5 Purchase 1 $5
12 Purchase 1 13
28 Purchase 1 15
Total 3 $33
Assume one unit is sold on October 31 for $28. Determine cost of merchandise sold, gross profit, and ending inventory under the average cost method.

Answers

Answer:

Cost of Merchandise sold: $11

Gross Profit: $17

Ending inventory: $22

Explanation:

STATEMENT SHOWING INVENTORY RECORD UNDER WEIGHTED AVERAGE METHOD          

RECIEPTS   COST OF GOODS SOLD   BALANCE  

DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $

balance            

05-Oct 1 5 5      

12-Oct 1 13 13      

28-Oct 1 15 15      

TOTAL 3 11 33 1 11 11 2 11 22

         

Gross Profit:          

Sales revenue   28      

Less: Cost of good sold   11      

Gross Profit:   17      

The pounds of bananas sold each week at all Metro Seattle Alberstons stores as a function of price, p , in dollars/pound(lb.) is given by q ( p ) = 100 e 1.5 ( 5 − p ) 1. What is the price elasticity of demand for bananas at $.20/lb. ? (nearest 0.01) Bananas are Select an answer at that price? 2. What is the price elasticity of demand for bananas at $1/lb. ? Bananas are Select an answer at that price? 3. At what price is the maximum revenue per week achieved? +/- $0.01 4. What is that maximum revenue per week? 5. How many pounds will be sold each week at that optimal price

Answers

Answer:

a) 0.3 ( Inelastic  )

b) 1.5 ( elastic  )

c) $0.66 =  ( 1/1.5 )

d)  $44342.77

e) 66514.1633 Ib

Explanation:

Function =  q (p) = 100e^1.5 ( 5 − p )

∴ q = 100e^(7.5 - 1.5p)

dq/dp = 100 ( -1.5 ) e^(7.5-1.5p)

hence E (p ) = | p/q * dq/dp |

                     = | -1.5p |

a) Determine the price elasticity of demand at $0.20 / Ib

E( 0.2 ) = | -1.5 * 0.2 |

         = 0.3

given that E < 1  inelastic more revenue is generated when prices are increased

b) price elasticity at $1 / Ib

E ( 1 ) = | -1.5 * 1 |

         = 1.5     given that E > 1  ( Elastic ) , hence when prices are raised less revenue is generated

c) Determine price at which maximum revenue is achieved

i.e.   E(P) = -1  ( for max revenue )

        -1 = | -1.5p |

therefore p ( price at which max revenue is achieved ) = ( 1 / 1.5 ) = $0.66

d) maximum revenue per week

q * p = ( 0.66 )* 100*e^(7.5 - 1.5*0.66)

        = $44342.77

e) How many pounds will be sold each week at optimal price

quantity sold at optimal price ( q )

q = 100*e^(7.5 - 1.5*0.66)

   = 66514.1633

Other Questions
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