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1. Anne spends Php30, per year on painting supplies and storage space. She recently received two {2] job offers from a famous marketing firm one
1. Anne spends Php30, per year on painting supplies and storage space. She recently received two {2] job offers from a famous marketing firm one offer was Phpll per year and the other was PhpSD per yea r. However, she turned both jobs down to continue a painting career. If Ann sells 25 painting per year at a price of Php each: a. 1it"iihat are her accounting prots? b. What are her economic prots? 2. The manager of Tires Incorporated is contemplating the purchase of a new automated machine that will cost Php and has a useful life of five years. The machine will yield {yearend} cost reduction to Automated Products of [see table 1}: a. What is the PU of the cost savings of the machine if the interest rate is 8%? b. Should the manager purchase the machine? Yes or No? 5. An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000 and the implicit cost is $55,000. All revenues are received and costs are borne, at the end of each year. If the interest rate is 5% determine the present value of a stream of: a. accounting profits b. economic profits
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