Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. firm a and and firm b decide to enter into a long-

Firm A and and Firm B decide to enter into a long-term contract where Firm...

90.2K

Verified Solution

Question

Accounting

Firm A and and Firm B decide to enter into a long-term contract where Firm B would supply inputs to Firm A at a specified prices and volume each year. Before signing a contract, Firm A is trying to decide how long the contract should be. Firm A estimates that each year the contract covers saves Firm A $1,400 in bargaining and opportunism costs. However, each year the contract covers also requires more legal fees. Firm A estimates that the number of hours it will need from lawyers, L, has a functional relationship with the number of years on the contract so that L = Y2 + 3Y where Y is the number of years for the contract.

If Firm A's lawyers charge $180 per hour, how long should the contract be? (3 points)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

What types of debt securities has Ross Stores (ROST) issued? What are the current ratings and yields...

Programming
1.2K views

Objectives • Use the static methods and static fields. •Use the method-call/return mechanism. • Use the random-number generation. •...

Psychology
1.2K views

Describle several factors that aid and hinder learning from experience. a. Hinder Denial - Projection - Regression - Displacement _ Emotional insulation...

Basic Math
1.2K views

Do the following sets of vectors span R^3? 1) [1,3,1], [3,9,4], [8,24,10], [-10,-30,-13] 2) [1,2,3], [-1,-2,-4], [1,2,2] 3)...

Biology
1.2K views

1 Explain one way in which facilitated diffusion is the same as simple diffusion and...

Physics
1.2K views

133 The system shown in figure is just on the verge of slipping The coefficient...

Geometry
1.2K views

r t 5 4 sint cost 4 3 2 1 A Clear All Draw 5...

Algebra
1.2K views

You invested $3000 between two accounts paying 2% and 9% annual interest, respectively. If the...

Algebra
1.2K views

What is the parent function of f(x) = (x-20) - 3?(x-20)(x-3)x

Accounting
1.2K views

Help Save & Exit www.eco Soldin une towed 594000 www.tot terec, alborkouts for the year...

Accounting
1.2K views

Plz I am on exam If ABC company had an asset with carrying amount of...

Finance
1.2K views

Which statement is NOT correct? If a security is with beta =0, that security is...