After graduation, you face a choice. one option is to work for a multinational consulting firm and earn a starting salary (benefits included) of $40,000. the other option is to use $5,000 in saving to start your own consulting firm. you could earn an interest return of 5 percent on your savings. you choose to start your own consulting firm. at the end of the first year, you add up all of your expenses and revenues. your total includes $12,000 in rent, $1,000 in office supplies, $20,000 for office staff, and $4,000 in telephone expenses. what are your total explicit cost and total implicit costs?

Suppose jamal purchases a pair of running shoes online for $60. if his state has a sales tax on clothing of 6 percent, how much is he required to pay in state sales tax?

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

Define the marginal rate of substitution between two goods (x and y). if a consumer’s preferences are given by u(x,y) = x3/4y1/4, compute the consumer’s marginal rate of substitution as a function of x and y. calculate the mrs if the consumer has chosen to consumer 48 units of x and 16 units of y. show your work. (use the back of the page if necessary.