Meric Mining Inc

question 17

Multiple Choice

Meric Mining Inc.recently reported $15, 000 of sales, $7, 500 of operating costs other than depreciation, and $1, 200 of depreciation.The company had no amortization charges, it had outstanding $6, 500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 35%.How much was the firm's net income after taxes? Meric uses the same depreciation expense for tax and stockholder reporting purposes.

• A) $3, 284.55
• B) $3, 457.42
• C) $3, 639.39
• D) $3, 830.94
• E) $4, 022.48

Analyze the impact of diminishing marginal utility on consumption decisions.

Understand and apply the concept of budget constraints in consumer choice analysis.

Examine the characteristics of normal and inferior goods in response to income and price changes.

Interpret and analyze consumption bundles within and beyond budget constraints.

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Definitions:

Moral Hazard

The situation where one party is more likely to take risks because another party bears the cost of those risks.

Adverse Selection

A situation where asymmetric information results in high-risk individuals being more likely to participate in a contract or agreement, potentially leading to market inefficiency.

Life Insurance

A contract between an insurer and a policyholder where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.

Productivity

A measure of the efficiency of a person, machine, system, etc., in converting inputs into useful outputs.