Mr. Smith at Acme Production, Inc. is trying to determine the true economic value (TEV) for a new computerized machine. This machine costs $20 per hour to operate and can be used for a year before it needs to be replaced. A system crash costs $500,000, and the probability that the machine will crash is 5%. The next-best alternative has a price of $150,000. It can also be used for a year and costs $15 per hour to operate. The cost of a system crash for this alternative is also $500,000, and the probability that it will crash is 15%. Acme plans to operate this machine 8 hours per day, 365 days, over the next year. The true economic value (TEV) of the machine is: $185,400. $175,000. $154,000. $210,400.

As a finance manager at allsports communication, charlie worries about the firm's borrowing requirements for the upcoming year. he knows the benefit of estimating allsports' cash disbursements and short-term investment expectations. facing these concerns, a(n) would provide charlie with valuable information by providing a good estimation of whether the firm will need to do short-term borrowing. capital budget cash budget operating budget line item budget

Any point on a country's production possibilities frontier represents a combination of two goods that an economy:

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?