Respuesta :
Answer:
Following are the responses to the given question:
Explanation:
[tex]\text{Present value of profit} = ( Revenue - cost ) \times Unit\ sold[/tex]
[tex]= (\$100 - \$65 ) \times 1,050\\\\= (\$35 ) \times 1,050\\\\= \$36,750[/tex]
For point a:
[tex]\text{PV of profits} = PV(REV -COST) \times Units \ sold[/tex]
[tex]= (\frac{\$100}{ (1 + .01)} - \$65) \times 1,110\\\\= (\frac{\$100}{ (1 .01)} - \$65) \times 1,110\\\\= (99.0 -65) \times 1,110\\\\= 34\times 1,110\\\\= \$37,740\\[/tex]
Changes in monthly profits:
[tex]= \$37,740 - \$36,570 = \$1,170[/tex]
At 1%, the credit offer raises the company's earnings for one month.
For point b:
[tex]\text{PV of profits} = PV(REV -COST) \times Units \ sold[/tex]
[tex]=(\frac{\$100}{(1 + .015)} -\$65) \times 1,110\\\\=(\frac{\$100}{(1.015)} -\$65) \times 1,110\\\\=33.52\times 1,110\\\\= 37,207.2[/tex]
Changes in monthly profits:
[tex]= \$37,207.2- \$36,570 = $637.2.[/tex]
At 1.5%, the loan offering raises the company's earnings for one month.
For point c:
[tex]\text{PV of profits} = PV(REV -COST) \times Units \ sold[/tex]
[tex]= (\$100 - \$65 ) \times 60\\\\ = \$2,100[/tex]
[tex]\text{PV of profits} = PV(REV -COST) \times Units \ sold[/tex]
[tex]= (\frac{\$100}{(1 + .015)} - \$65) \times 60\\\\= (\frac{\$100}{(1.015)} - \$65) \times 60\\\\=33.52 \times 60\\\\= 2011.2[/tex]
Changes in monthly profits:
[tex]= \$2,011.2 -\$2,100 = \$88.8[/tex]
At a cost of 1.5%, the credit rates decrease the company's income for one month.
