Using the sales revenue ($ millions) data for Microsoft Corp., between years 199
ID: 1217387 • Letter: U
Question
Using the sales revenue ($ millions) data for Microsoft Corp., between years 1994-2011 (see below) equations for a linear trend projection and a constant rate of growth were estimated: Do not round up the numbers keep them up to 3 decimal points for accuracy Using linear trend model forecast the sales revenue for years 2015 and 2020. Using growth model find sales revenue for the year 1993; and the annual growth rate between 1994 and 2011. Using growth model forecast the sales revenue for years 2015 and 2020. The general linear demand for good X is estimated to be Q = 18,000-175P+0.35 M - 16P_RExplanation / Answer
Answer 1;
Total Revenue = $1,200,000
i. Expilcit cost = Cost of Raw Materials + Labor expenses + Utilities + Rent
= 230,000 + 535,000 + 75,000 + 25,000
= 865,000
Implicit cost = 9.5 per cent of 250,000
= 23,750
Accounting profit = Total revenue - Explicit cost
= 1,200,000 - 865,000
= $ 335,000
Economic profit = Total revenue - explicit cost - implicit cost
= 1,200,000 - 865,000 - 23,750
= $311250
ii. New implicit cost = 15 per cent of 250,000
= 37,500
Total economic profits = 335000 - 37500 = 297,500
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