Question: Using the data in the table below, be prepared to answer the following: What is the added value (economic profit) for each company? What is
Using the data in the table below, be prepared to answer the following:
- What is the added value (economic profit) for each company?
- What is the cost per dollar of net output for each company?
- Which company has the comparative advantage?
- What is the value of the comparative advantage?
| McDonald's ($Millions) | Wendy's ($Millions) | |
|---|---|---|
| Revenues | 27,441 | 2,061 |
| Cost of Goods Sold (Materials) | 15,446 | 1,400 |
| Wages and Salaries | 2,488 | 274 |
| Capital Employed | 31,534 | 3,806 |
Interest Rate (Opportunity Cost of Capital) = 5.0%
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