A phone manufacturer recently introduced a new smartphone. The company invested $100 million in equipment for the new design mold (the mold is malleable and can be sold for $20.0 million to be used on another project) and $10 million in a new microchip used specifically for the phone (not valuable to anyone else). Labor and the cost of materials necessary to make each phone is about $75.00. This year, a competitor has developed a similar phone that has significantly reduced demand for the new phone. Now, the original manufacturer is deciding whether they should continue production of the new phone. a. What, if anything, can be viewed as a sunk cost?b. What is the rule, as a function of quantity and price, as to whether this manufacturer should shut down?c. If the estimated demand is 500,000 phones, what is the break-even price for phone?

Pressure systems, inc., manufactures high-accuracy liquid-level transducers. it is investigating whether it should update certain equipment now or wait to do it later. if the cost now is $200,000, what will the equivalent amount be 3 years from now at an interest rate of 10% per year?

Afarmer is an example of what kind of producer?

Suppose that a major city’s main thoroughfare, which is also an interstate highway, will be completely closed to traffic for two years, from january 2014 to december 2015, for reconstruction at a cost of $535 million. if the construction company were to keep the highway open for traffic during construction, the highway reconstruction project would take much longer and be more expensive. suppose that construction would take four years if the highway were kept open, at a total cost of $800 million. the state department of transportation had to make its decision in 2014, one year before the start of construction (so that the first payment was one year away). so the department of transportation had the following choices: (i) close the highway during construction, at an annual cost of $267.5 million per year for two years. (ii) keep the highway open during construction, at an annual cost of $200 million per year for four years. now suppose the interest rate is 80%. calculate the present value of the costs incurred under each plan.