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##### Lab Assignment 8: Chapters 19 and 20

**Description**

solution

**Question**

Question;1.;value:5.00 points;Compute;the amount of each foreign currency that can be purchased for $620,000;a.;1;Danish krone = $0.1760 (Round your answer to;2 decimal places.);Foreign;currency;krone;b.;1;Indian rupee = $0.0222 (Round your answer to;2 decimal places.);Foreign;currency;rupee;c.;1;Israeli shekel = $0.2787 (Round your answer;to 2 decimal places.);Foreign;currency;shekel;2;value:5.00 points;Jenny?s Day Care is considering a merger with;Lionel?s Diaper Manufacturers. Jenny?s total operating costs of producing;services are $625,000 for sales volume (Sj) of $2.7 million. Lionel?s total;operating costs of producing services are $390,000 for a sales volume (SL) of;$1.7m.;a.;Calculate the average cost of production for the;two firms. (Round your answers to 2 decimal;places.);Average cost;Jenny's;%;Lionel's;%;b.;For a sales volume of $4.4 million, calculate the;reduction in production costs the merged firms need to experience such that;the total average cost (TAC) for the merged firms is equal to 20 percent.;Needed;reduction in production costs;$;3.;award:5 out of;5.00 points;Peter?s TV Supplies is considering a merger with;Jan?s Radio Supply Stores. Peter?s total operating costs of producing;services are $380,000 for a sales volume (SP) of $5.8;million. Jan?s total operating costs of producing services are $63,000 for a;sales volume (Sj) of $680,000.;a.;Calculate the average cost of production for the;two firms. (Round your answers to 2 decimal;places.);Average cost;Peter;%;Jan;%;b.;If the two firms merge, calculate the total;average cost (TAC) for the merged firm assuming no synergies. (Round your answer to 2 decimal places.);Total;average cost;%;c.;Suppose, instead, that synergies in the;production process result in a cost of production for the merged firms;totaling $400,000 for a sales volume of $6,480,000. Calculate the total;average cost (TAC) for the merged firm. (Round your answer to 2 decimal places.);Total;average cost;%;4.;award:5 out of;5.00 points;Convert;each of the following direct quotes to dollar indirect quotes;a.;1;Danish krone = $0.1815 (Round your answer to;3 decimal places.);Exchange;rate;krone;b.;1;Indian rupee = $0.0233 (Round your answer to;3 decimal places.);Exchange;rate;rupee;c.;1;Israeli shekel = $0.2798 (Round your answer;to 3 decimal places.);Exchange;rate;shekel

Paper#38147 | Written in 18-Jul-2015

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