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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