Exam 4: Investment Decisions: Look Ahead and Reason Back

​Use the following setup for the next question. A firm is deciding between two different sewing machines.Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. -​If the company plans to produce 9 units,which technology should the firm choose?

​A firm sells 1000 units per week.It charges $70 per unit,the average variable costs are $25,and the average costs are $65.In the short run,the firm should

​Use the following setup for the next question. A manufacturing firm is deciding whether or not to invest in a new printer that needs an initial investment of $150,000.The investment would increase cash flows in the first year by $80,000 and in the second year by $75,000. -​If the interest rate is 10% then the net present value of the investment is

​Projects with a positive NPV create

A firm sells 300,000 units per week.It charges $ 35 per unit,the average variable costs are $40,and the average costs are $55.At what price does the firm consider shutting-down in the long run?