Tom borrowed $40,000 from his parents to open a donut stand. He agrees to pay his parents a 5% yearly return on the money they lent him. His other yearly fixed costs equal $10,000. His variable costs equal $25,000. He sold 40,000 dozen donuts during the year at a price of $2.00 per dozen. Tom's economic profit is: O $80,000 O $43,000 O $45,000 O $37,000
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- 1.Link wants to make $100,000 after tax on his new venture into selling pizza-on-a-stick, using a "push along" cart at the beach. For each pizza-on-a-stick, he incurs raw material costs of $5 and sells them for $10. He pays a salary to his friend Zelda, who operates the cart for $50,000. If he buys the cart himself, he will incur fixed expenses of $20,000. Or, he can rent the cart and pay $1 to the cart supplier each time he sells a pizza stick. What is his point of indifference? That is, at what volume of pizza sticks is he indifferent about renting or buying the cart? (Insert a number ONLY) 2. Like Link, Chrom sells pizza-on-a-stick at the beach. But Chrom also sells dogs-in-a-pocket, which are hot dogs you can carry with you that have enough preservatives to survive in your pocket for years. For each pizza-on-a-stick, Chrom incurs raw material costs of $5 and sells them for $10. He incurs material costs of $3 for the dogs and sells them for $5. He sells 3 times as many dogs as he…1. Maria is the owner and operator of a small local bakery that has annual sales revenue of $200,000. The annual salary expense paid to Maria's employees is $50,000. The cost of supplies used during the year totals $50,000. The amount paid for the annual rent for the building and utilities is $30,000. Maria used $100,000 of her personal savings to purchase equipment for the shop. Maria could have earned a 10% interest rate on this $100,000 if it had been left in the bank. Maria has rerently been offered a job to work full-time as a pastry chef for $65,000 at a restaurant in town.. 1. Calculate the accounting profit for this business. 2. Calculate the economic profit for this business. 3. Explain whether Maria should continue to own and operate the bakery or whether she should accept the job at the restaurant.Giovanni earns a $100 bonus on each computer he sells plus a salary of $50,000. His total income last year was $75,000. How many computers did he sell
- The Carp family makes a $30,000 down payment on a $150,000 home. They finance it for 15 years at 3 7/8%. If annual taxes are $2,970 and homeowners insurance is $940, what will their total PITI payment be? If the bank charges 2 discount points, how much will the Carp family pay for them? Referring to question #15, if the Carp's have a gross monthly income of $5,600 and total fixed monthly expenses of $2,720, which includes their house payment, calculate the housing ratio and the debt to income ratio. Do they qualify?The Carp family makes a $30,000 down payment on a $150,000 home. They finance it for 15 years at 3 7/8%. If annual taxes are $2,970 and homeowners insurance is $940, what will their total PITI payment be?Three years ago, Marissa Moore started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Marissa sells the baskets for $25 each, and her variable costs are $15 per basket. She incurs $12,000 in fixed costs each year. How many baskets will Marissa have to sell this year if she wants to earn $30,000 in operating income? (Round answer to 0 decimal places, e.g. 5,275.)
- Jerry was working as a veternarian, and he earned an annual income of $135,000. He had savings of $86,000 in the bank, which was earning 3% interest per year. Then he decided to quit and start his own landscaping business. He used his $86,000 savings to purchase a truck and equipment. The values for his first year with his new business were: Revenue 265,000 Wages for employees 108,000 Insurance 2990 Depreciation 1920 Gasoline and vehicle 6125 maintenance Calculate Jerry's accounting profit for his first year. Answer:Dreya and Fred bought a $225,000 house. They made a 10% down payment and financed the rest at an APR of 4.5% over 15 years. How much will their monthly payment be for this loan? If Samatha finances the entire cost of a $700 bike at an APR of 2.95%, how much will she end up paying in total for the bike after paying off her loan in 2 years? You financed a boat for $12,500 boat at an APR of 6.25% over 4 years. How long will it take to pay off the boat if you make $400 monthly payments? Round to two decimal places.Carrie grandfather owns a farm. The farm earned $270,000 this year. The profits are expected to grow at 5.5% per year forever. What is the value of the farm if the discount rate is 9% ?
- A couple found a house selling for $113,500. The taxes on the house are $1400 per year, and insuarnce is $320 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 1570 down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is Ş4750. They nave more than 10 monthly payments on a car, a boat, and furniture. The total monthly payments for these items is $430. Their bank will approve a loan that has a total monthly mortgage payment of principal, Interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. a.) Determine the required down payment. b.) Determine the cost of 3 points c.) Determine 28% of their adjusted monthly income. d.) Determine the montly payments of principal and interest for a 20-year loan. e.) Determine their total monthly payment, including homeowners' insuarance and taxes. f.) Determine whether the couple will qualify for…ASAP 1)Claire wants to start her own dog treat business. She can purchase a suitable factory for $250,000. Claire currently has $135,000 in the bank earning 6 percent interest per year. Suppose Claire purchases the factory using her own money and then borrows the rest from the bank at 6%. Claire also has to pay other costs of running her business in the amount of $15420 per month. These costs include paying for energy, heat and salary and benefits to workers. (The value of the business is not considered a cost. The business is an asset that retains its value and can be sold if the owner wishes.) a. What is Claire’s annual implicit cost of purchasing the factory? b. What is Claire’s annual explicit cost of purchasing the factory? c. If Claire brings in annual total revenue of $300,000 what is her annual economic profit?Juan’s company said that company employees could put up to 15% of their salary into a 401(k) plan. The company would match it dollar for dollar. Juan made $80,000 and he and his wife were in the 33% tax bracket. The investment earned 8% a year. Jesse decided to save 15% on his own by putting the money in the bank every month at 2% interest. After five years, how much did Juan have? How much did Jesse have? Be sure to consider income tax in your calculations.