Anovatech provides cloud computing services to other businesses. It uses programmers (labor) and servers (capital) to produce its services. It costs Anovatech $6,000 a month to hire a programmer, and $200 a month to rent a server. (For simplicity, assume all inputs are continuously divisible.) Today, Anovatech has 64 servers in their datacenters. Anovatech can use servers to provide more service, or they can hire programmers to think of ways to run those servers more efficiently. Anovatech's production function is proportional to the sum of the square roots of the number of programmers they employ and the number of servers they rent, so assume that q=K+L for some unit of output service. Anovatech has a monthly budget of $200,000.Anovatech thinks they have an opportunity to win a contract for 30 units a month of cloud computing service. Anovatech management thinks that cost is a bit steep in the short run, but maybe in the long run they can bring the cost down. In the long run, what is the lowest cost at which Anovatech would be able to produce 30 units a month of service?How many programmers and servers would they employ?L

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.

Why does an organization prepare a balance sheet? a. to reveal what the organization owns and owes at a point in time b. to reveal how well the company utilizes its cash c. to calculate retained earnings for a given accounting period d. to calculate gross profit for a given accounting period