Question

A firm has a current assets of $800,000, current liabilities of $600,000. The firm uses $200,000 of its cash balance to pay off a current liabilities. Calculate the current ratio before and after this transaction.

Answer 1

A firm currently uses 50,000 workers to produce 120,000 units of output per day. The daily wage per worker is $100, and the price of the firm's output is $48. The cost of other variable inputs is $400,000 per day.

Assume that total fixed cost equals $900,000. Calculate the values for the following four formulas:
•Total Variable Cost = (Number of Workers x Worker's Daily Wage) + Other Variable Costs
•Average Variable Cost = Total Variable Cost / Units of Output per Day
•Average Total Cost = (Total Variable Cost + Total Fixed Cost) / Units of Output per Day
•Worker Productivity = Units of Output per Day / Number of Workers