Answer:
a) This policy would be advantageous if the demand for sterile needles has elastic characteristics and the cross-price elasticity of demand linking drugs and sterile needles is high and
positive.
b) This policy would be unfavorable if the demand for sterile needles is characterized as inelastic while the cross-price elasticity between drugs and needles is high and
negative.
Explanation:
a) Under what conditions is this policy viewed as beneficial?
This policy is advantageous when the demand for sterile needles is elastic and the corresponding cross-price elasticity with drugs shows a positive and high relationship.
The elastic demand for sterile needles indicates that the quantity demanded increases more significantly in response to price changes.
The positive cross-price elasticity suggests that as the price of needles decreases, the demand for drugs decreases, assuming they are substitutes. Therefore, as the price of sterile needles approaches zero, the
demand for drugs diminishes.
b) Under what conditions is this policy seen negatively?
This policy turns unfavorable when the demand for sterile needles is inelastic and the cross-price elasticity relating drugs to needles is high and
negative.
An inelastic demand for sterile needles suggests the quantity demanded does not increase much with price reductions.
A
negative cross-price elasticity indicates that the two products, drugs and sterile needles, are
complements. Thus, as the price of sterile needles drops to zero, the
demand for drugs rises.
Answer:
ingresos/anualmente - costos/anualmente - impuestos = ganancias
Explanation:
20 horas/semana en un año tiene 4 semanas; 20*52=1040 horas/año
8 horas/1 domingo al año; trabaja solo 12 domingos; 8h*12=96h
$9/hora de ingresos
$1000 costos fijos
$1500 en viajes
20% de impuestos
1040+96= 1136 horas/año
1136*9= 10224 $/año en ingresos totales
10224-1000-1500=7724 ganancias antes de intereses e impuestos
7724*(1-0.20)=6179.20 ganancias netas
Opting for the lease is a more favorable choice. To illustrate, we examine the calculations for both options. First, we calculate the Net Present Value (NPV) for the Lease Option:
Year n Details CF ($) DF=1/(1.1)^n PV ($)
1 - Lease payment (30,000) 0.9091 (27,273)
2 - Lease payment (30,000) 0.8264 (24,793)
3 - Lease payment (30,000) 0.7513 (22,539)
4 - Lease payment (30,000) 0.6830 (20,490)
The NPV for the lease option equals (95,096).
For the Buy Option, we carry out the following calculations:
Year n Details CF ($) DF=1/(1.1)^n PV
0 Purchase cost (80,000) 1.0000 (80,000)
1 Maintenance costs (10,000) 0.9091 (9,091)
2 Maintenance costs (10,000) 0.8264 (8,264)
3 Maintenance costs (10,000) 0.7513 (7,513)
4 Maintenance costs (10,000) 0.6830 (6,830)
Residual value at end of year 4 20,000 0.6830 13,660
The NPV for the buy option results in (98,038).
To determine the equivalent annual annuity (EAA) for each option:
EAA = (r × NPV) / (1 - (1 + r)^-n)
where r is the discount rate per period and n shows the number of periods.
Calculating:
Lease option EAA = (0.1 × -95,096) / (1 - (1 + 0.1)^-4) = -30,000.
Buy option EAA = (0.1 × 98,038) / (1 - (1 + 0.1)^-4) = -30,928.
Since the lease option manifests a lower EAA of $30,000 compared to the buy option's $30,928, the lease is deemed the superior choice.
