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Author Question: Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for 250,000 a year. He ... (Read 93 times)

audragclark

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on: Jun 29, 2018
Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for 250,000 a year. He pays his farm hands 28,000 a year.
 
  Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

Question 2

What is the present value of 1,000 to be received 2 years in the future with an interest rate of 8 percent?
 
  A) 857.34
  B) 925.93
  C) 1080.00
  D) 1166.40


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kiamars2010

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Jake's rent is a fixed cost. He is renting his land on a long-term lease and so the land is a fixed factor. The wages Jake pays are a variable cost. Labor is a variable factor so the wages are a variable cost.

Answer to Question 2

A


audragclark

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

JaynaD87

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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