Mathematical Expressions and Order of Operations - Speech or Presentation Example

1) Ch. 3 exercise E3.6 ROI analysis using DuPont model. a. Firm D has net income of $27,900, sales of $930,000, and average total assets of $465,000. Calculate the firm’s margin, turnover, and ROI. Margin = net income/sales = 27900/930000 = $0.03. Turnover = sales/average total assets = 930000/465000 = 2. ROI = margin*turnover = 0.06.b. Firm E has net income of $75,000, sales of $1,250,000, and ROI of 15%. Calculate the firm’s turnover and average total assets. ATS (average total assets) = 75000/0.

15 = $500000 Turnover= 0.15*1250000/75000 = 2.5c. Firm F has ROI of 12.6%, average total assets of $1,730,159, and turnover of 1.4. Calculate the firm’s sales, margin, and net income. Sales = 0.126*1730159 = 218000.03 Net income = 0.126*0.126*1730159 = 27468.2) 2B21. Given: Selling price per unit, $20; total fixed expenses, $5,000; variable expenses per unit, $15. Find break-even sales in units. Break-even sales in units = 5000/(20-15)=$1000.2. Given: Sales, $40,000; variable expenses, $30,000; fixed expenses, $7,500; net income, $2,500.

Find break-even sales in dollars. Break-even sales in dollars = 40000-30000-7500-2500 = 03. Given: Selling price per unit, $30; total fixed expenses, $33,000; variable expenses per unit, $14. Find total sales in units to achieve a profit of $7,000, assuming no change in selling price. Total sales in units = 33000+7000/(33000/(30-14) = (40*16)/33 = 19.39 units.4. Given: Sales, $50,000; variable expenses, $20,000; fixed expenses, $20,000; net income,$10,000. Assume no change in selling price; find net income if activity volume increases 10%.

Net income = (50000-20000)(1.1)-20000 = 33000-20000 = $13000.5. Given: Selling price per unit, $40; total fixed expenses, $80,000; variable expenses per unit, $30. Assume that variable expenses are reduced by 20% per unit, and the total fixed expenses are increased by 10%. Find the sales in units to achieve a profit of $20,000, assuming no change in selling price. New total fixed expenses = 88000 (up by 10%). New variable expenses per unit = (30*0.8) = $24. Sales=(88000+20000)/(40-24) = 108000/16 = 6750 units.3. Chapter 712.

Key Question The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. Indicate in each calculation whether you are inflating or deflating the nominal GDP data. 1960=$2376.74 1968=$3467.09 1978=$4761.30 1988=$5911.86 1998=$8515.984. Chapter 82. Key Question Suppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP? Assume that population is 100 in year 1 and 102 in year 2. What is the growth rate of GDP per capita?

Growth rate = 1200/30000 = 4%. Growth rate per capita = 306-300/300 = 2%.11. Key Question If the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? What is the “rule of 70”? How long would it take for the price level to double if inflation persisted at (a) 2, (b) 5, and (c) 10 percent per year? Rate of inflation = 11/110 = 10%.The rule of 70 calculates the number of years required for a measure to double, provided the annual increase in percentage multiplied by 70.

2% (35 years) 5% (14 years) 10% (7 years)Chapter 202. Key Question Graph the accompanying demand data, and then use the midpoint formula for Ed to determine price elasticity of demand for each of the four possible $1 price changes. What can you conclude about the relationship between the slope of a curve and its elasticity? Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment.The price elasticity of demand is unity.

Below the equilibrium point, which denoted a point of no profit no loss between the sales and demand, an increase in demand would cause a fall in price, thereby resulting in a producer surplus. As such, more goods are produced and the low price results in decreased profits. In the case of the region above the equilibrium point, an increase in price would require the production of less goods. Therefore, for a quantity of goods sold, the profit margin would be greater. Hence, the demand curve is considered to be elastic in this region.

Chapter 227. Key Question A firm has fixed costs of $60 and variable costs as indicated in the table on the following page. Complete the table and check your calculations by referring to question 4 at the end of Chapter 23. a. Graph total fixed cost, total variable cost, and total cost. Explain how the law of diminishing returns influences the shapes of the variable-cost and total-cost curves.b. Graph AFC, AVC, ATC, and MC. Explain the derivation and shape of each of these four curves and their relationships to one another.

Specifically, explain in nontechnical terms why the MC curve intersects both the AVC and the ATC curves at their minimum points.c. Explain how the location of each curve graphed in question 7b would be altered if (1) total fixed cost had been $100 rather than $60 and (2) total variable cost had been $10 less at each level of output.Total ProductTotal Fixed CostTotal Variable CostTotal CostAverage Fixed CostAverage Variable CostAverage Total CostMarginal Cost06006016045105604510545260851453042.572.540360120180204060354601502101537.552.530560185245123749356602252851037.547.5407602703308.638.5747.

17458603253857.540.6248.12559603904506.6543.3349.9865106046552564.6510.65751) If the total fied cost was increased to $100 from $60, the AFC, AVC and ATC would shift upwards while the MC would remain unchanged. 2) If TVC reduced by $10, then the AFC would remain unchanged, AVC and ATC would shift downwards while MC would remain unchanged.