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Cost, Profit and Cost Function...Function There are many factors that are included in profit planning, such as cost, profitability and volume. Here the focus would be only on cost and profit. Cost is inversely proportional to profit, that means lower the cost, higher the profit (Jayapandian 2008, 393). The revenue curve is controlled by the customers, while the organization can only control the cost curve. The fluctuations in the variable cost changes the slope of the cost curve, but the increase of fixed cost may totally wipe out the profits of the company. Variable cost has high frequency of fluctuation than fixed...
4 Pages(1000 words)Essay
Average Cost Curves...and indicator on the graph of the SRAC is the Marginal Cost (MC). This is the total cost of producing the next unit. With an efficient factory running near capacity, this will be at a minimum, and less than the average. However, going beyond this point will cause the marginal cost to spike upward on a steeper slope than the average. When the marginal cost line crosses the average, production is at its most efficient. As marginal costs rise, it pulls the SRAC curve up with it, though at a less responsive rate. Acme could remain profitable...
4 Pages(1000 words)Case Study
Opportunity Cost...Opportunity Cost Opportunity cost is one of the topics in microeconomics that focuses on situations whereby investors have to make important decisions regarding allocation of the available resources. This paper focuses on the scarcity of resources as a reason why households and firms have to subject their alternatives to analysis resulting in opportunity cost. Government taxes and levies have been highlighted as some of the factors that lead to scarcity of resources portrayed in the paper as a major constraint. Environmental impact has also been discussed as a major factor leading to opportunity cost. A solution has been proposed to empower consumers and firms economically to help them satisfy their needs without sacrificing more... ...
7 Pages(1750 words)Term Paper
Opportunity cost...Opportunity Cost In the economics domain, there are three closely related terms that are used not interchangeably but in tandem to relay economic matters in the best palatable way. These are, scarcity, choice and opportunity cost. The three terms are used in the economic domain which is defined as the means of making deliberate production, distribution and the final utilization of the resources within the human society (Ojediran 76). In respect to this the definition of the three terms becomes handy. Scarcity is the tendency of the goods and services to be limited in supply necessitating choice of one of the very many options available and this leads to the...
2 Pages(500 words)Essay
Marginal cost...of the product over a specific time frame usually on a quarterly, semi-annually or yearly basis.
A break even analysis is also used to demonstrate, the benefits of doing business at the point where the cost of doing business is fully covered by the sales of the energy drink that is manufactured.
A forecast of the personal expenses and Marginal costing will also be a computation of the direct labor, direct material, direct expenses and the variable of the overheads.
Marginal cost statement
Marginal costing is an accounting system that is bests for everybody to...
6 Pages(1750 words)Essay
Opportunity cost...Opportunity cost The problem of opportunity cost and how it relates to the problem of choice between scarce resources.
The basic problem of Economics is the allocation of the scarce resources among the various unlimited needs of the human beings. These resources have competing uses and it is the task of the economic agents to make the allocation of the scare resources among the different uses. The agents make various choices of these resources and for each and every choice that is made there are a large number of options to choose from. For example by choosing to go for music DVD giving up a Film DVD then the benefit that would be derived by watching the film would be...
4 Pages(1000 words)Essay
Opportunity cost...Opportunity cost July 05, Opportunity cost Business organizations operate with the aim of making profit and costs play an important role in decisions for optimal profit margins. Decisions are therefore made to derive maximum value from expenditure. Similarly, cost decisions in daily lives aims at optimal utilities and these establishes significance of opportunity cost as resource constraints may dictate expenditure on limited items. This paper discusses the concept of opportunity cost through exploring definition of the concept and its two types, explicit...
2 Pages(500 words)Essay
Cost of capital, weighted avareage cost, cash flow, marginal cost...3rd year Return
9000
0.693
6237
4th year
8600
0.613
5271.8
Net Present Value(NPV)
6662.8
Calculation of IRR
Cash inflows
10000
8000
9000
8600
total=35600
35600/4=8900
20000/8900=2.2472
Year
cash flow
22% PVIF
Present value
1
10000
1.22
12200
2
8000
1.488
11904
3
9000
1.816
16344
4
8600
2.215
19049
Present value of inflows
59497
PVIF 12%
1
10000
1.12
11200
2
8000
1.254
10032
3
9000
1.405
12645
4
8600
1.574
13536.4
Present value of inflows
47413.4
59497
22%
59497
22%
47413.4
12%
40000
Cost
12083.6
19497
22%+19497/12083.6(10%)=22%+1.61351(10%)=22%+16.13%=38.13%
3).Weighted average cost of capital refers to the average rate return a firm expects to reward its investors...
2 Pages(500 words)Assignment
Opportunity Cost...International Economics; Questions & answers Question a Developing country of Sud Corn T.V 100,000 0 0 1000 The opportunity cost of 1000 television sets is 100,000 bushels of corn, therefore opportunity cost of producing a television set is given as,
(1 x 100,000)/1000
100
The opportunity cost of 100,000 bushels of corn is 10,000 television sets, therefore the opportunity cost of a bushel of corn in this country is giving as,
(1 x 1000)/ 100,000
0.01
The first ratio means that for developing country of Sud to produce additional unit of a television set, it must forgo 100 bushels of corn. On the other...
1 Pages(250 words)Assignment
Deforestation and Marginal Cost...World has been at the alarming condition of land deforestation. Deforestation is done either by clearing the entire land or degrading it. Main reasons cited for the purpose are cultivation, agriculture, collection of fuel wood, logging, mining, industrial development, large dams and tourism etc. All businesses conducting these activities provide reasons that apparently justify and for the short run only. For instance, commercial companies conduct logging for their need of timber and defend themselves with responses that logging is conducted with selective process and the entire forest is not cleaned up which ensure that forest re-grows. However, here the marginal cost incurred is much higher than...
2 Pages(500 words)Case Study
