(Ignore Income Taxes in This Problem

question 80

Multiple Choice

(Ignore income taxes in this problem.) Tighe Corporation is contemplating purchasing equipment that would increase sales revenues by $420,000 per year and cash operating expenses by $231,000 per year. The equipment would cost $747,000 and have a 9 year life with no salvage value. The annual depreciation would be $83,000. The simple rate of return on the investment is closest to:

• A) 25.3%
• B) 14.2%
• C) 11.1%
• D) 25.2%

Understand the Cobb-Douglas utility function and how it applies to consumption patterns over time.

Analyze the impact of external factors such as pests on agricultural output and storage.

Apply principles of intertemporal choice to optimize utility in an isolated economy.

Construct and interpret budget lines within the context of constrained optimization.

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Definitions:

Compensation Policy

The level of compensation and benefits for each type of position in the business.

Obligations

Duties or responsibilities that an individual or organization is required to fulfill, often by law, social norms, or personal commitment.

Pricing

The act of determining the value that will be charged for goods or services offered by a business.

Gross Profit

The financial gain calculated by subtracting the cost of goods sold from total revenue.