Adelivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $150 per day. assume that the additional vehicle would be capable of delivering 1500 packages per day and that each package that is delivered brings in $0.15 in revenue. also assume that adding the delivery vehicle would not affect any other costs.

instructions: round your answers to 1 decimal place.

a) what are the mrp and mrc?

mrp = $.
mrc = $.

should the firm add this delivery vehicle? yes / no.

b) now suppose that the cost of renting a vehicle doubles to $300 per day. what are the mrp and mrc?

mrp = $.
mrc = $.

should the firm add a delivery vehicle under these circumstances? yes / no.

c) next suppose that the cost of renting a vehicle falls back down to $150 per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. what are the mrp and mrc in this situation?

mrp = $.
mrc = $.

would adding a vehicle under these circumstances increase the firm's profits? yes / no.

When marietta chooses to only purchase a combination of goods that lie within her budget line, she: is decreasing utility. is maximizing utility. likely has negative savings. must reduce the quantity?

Which economic system could be characterized by the "iron fist", meaning a central authority figure has control over most of the economy? market economy command economy traditional economy free enterprise economy

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine