Answers
Related Questions
Bond Yields are:_________
a. quoted as the average monthly rate of return and assume the bond is purchased today at the quoted price and held for twelve months.
b. quoted as annual rates of return and assume the bond is purchased today at the stated price and sold one year from today.
c. stated as a percentage of the maturity value and assume the bond is held to maturity.
d. stated as an annual rate of return and assume the bond is purchased today and held until maturity
Answers
Answer:
d. stated as an annual rate of return and assume the bond is purchased today and held until maturity
Explanation:
Bonds are financial debt instruments that are sold to investors in exchange for the interest or yeild they will generate over time.
Yield to maturity is the total yield that a bond will have from point of sale till maturity.
The yield is stated as an annual rate of return. For example 7% per year.
Usually the longer the maturity period of bonds the higher the yield of the bond
The outstanding capital stock of Coronado Corporation consists of 1,900 shares of $100 par value, 9% preferred, and 5,400 shares of $50 par value common. Assuming that the company has retained earnings of $87,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. (a) The preferred stock is noncumulative and nonparticipating. (Round answers to 0 decimal places, e.g. $38,487.) Preferred Common $enter a dollar amount rounded to 0 decimal places 17100 $enter a dollar amount rounded to 0 decimal places 70400 (b) The preferred stock is cumulative and nonparticipating. (Round answers to 0 decimal places, e.g. $38,487.) Preferred Common $enter a dollar amount rounded to 0 decimal places 51300 $enter a dollar amount rounded to 0 decimal places 36200 (c) The preferred stock is cumulative and participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 0 decimal places, e.g. $38,487.) Preferred Common $enter a dollar amount rounded to 0 decimal places 61332 $enter a dollar amount rounded to 0 decimal places 38556
Answers
Answer:
Coronado Corporation
a) The preferred stock is noncumulative and nonparticipating:
Allocation Preferred Stock Common Stock
of Dividends
$87,500 $17,100 ($190,000 * 9%) $70,400 ($87,500 - 17,100)
b) The preferred stock is cumulative and nonparticipating:
Allocation Preferred Stock Common Stock
of Dividends
$87,500 $51,300 ($190,000 * 9%)*3 $36,200 ($87,500 - 51,300)
c) The preferred stock is cumulative and participating
Allocation Preferred Stock Common Stock
of Dividends
$87,500 $48,944 $38,556
Amount due $17,100 ($190,000 * 9%)
Participation $31,844 = $31,844/$87,500 * 100 = 36.4%
Participation = $87,500 - ($17,100 + $38,556) = $31,844
Explanation:
a) Data and Calculations:
Outstanding capital stock:
9% Preferred stock = 1,900 shares of $100 par value ($190,000)
Common stock = 5,400 shares of $50 par value ($270,000)
Assuming retained earnings = $87,500 to be paid out in dividends.
No preference stock dividends were paid out during the last 2 years.
1) The preferred stock is noncumulative and nonparticipating:
Allocation Preferred Stock Common Stock
of Dividends
$87,500 $17,100 ($190,000 * 9%) $70,400 ($87,500 - 17,100)
2) The preferred stock is cumulative and nonparticipating:
Allocation Preferred Stock Common Stock
of Dividends
$87,500 $51,300 ($190,000 * 9%)*3 $36,200 ($87,500 - 51,300)
3) The preferred stock is cumulative and participating
Allocation Preferred Stock Common Stock
of Dividends
$87,500 $48,944 $38,556
Amount due $17,100 ($190,000 * 9%)
Participation $31,844 = $31,844/$87,500 * 100 = 36.4%
Participation = $87,500 - ($17,100 + $38,556) = $31,844
Profit is only a liability for the business. Can you justify this?
Answers
Answer:
A growing company may not be earning any profits yet, but may nevertheless provide a great investment opportunity.
Other times, a lack of profitability can be a huge red flag that something is wrong with the firm.
Explanation:
What is the future of discussion of fourms?
Answers
Answer:
Improve communication. ...
Increase collaboration. ...
Better engagement. ...
Receive the 5 key methods of employee engagement straight to your inbox.
Seek assistance and support. ...
Help drive usage of your online collaboration tool.
Your division has been asked to compile a recommendation for the price point for an innovative software application. You need to know how much customers will be willing to pay and under what circumstances. Conduct a scientific experiment. Access traditional sources and electronic sources. Conduct primary research for firsthand information. Routine tasks often require informal research methods.
Answers
Answer:
:Conduct a Scientific experiment
Explanation:
From the question, we are given an instance, whereby Your division has been asked to compile a recommendation for the price point for an innovative software application. You need to know how much customers will be willing to pay and under what circumstances. In this case you need to
Conduct a scientific experiment. An experiment can be regarded as
a procedure that is been carried out so that an hypothesis can be validated or refuted. It gives an insight about cause-and-effect so that the outcomes can be known if some of the favors in the experiment is manipulated.
FOR FRIEND AND SHIFTING PLZ DO NOT FLAG THIS
ok so heres your hero customs
try to think of a quirk then look for what you want
more to come just wait
Answers
Answer:
ooooooooo I want that whole fit
Explanation:
The outstanding capital stock of Coronado Corporation consists of 1,900 shares of $100 par value, 9% preferred, and 5,400 shares of $50 par value common. Assuming that the company has retained earnings of $87,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.
a. The preferred stock is noncumulative and nonparticipating.
b. The preferred stock is cumulative and nonparticipating.
c. The preferred stock is cumulative and participating.
Answers
Answer:
preferred stock dividends = 1,900 x $100 x 9% = $17,100
common stocks = 5,400 stocks
a) distribution of dividends:
preferred stocks = $17,100
common stocks = $70,400
b) distribution of dividends:
preferred stocks = $17,100 x 3 = $51,300
common stocks = $36,200
c) distribution of dividends:
preferred stocks = $51,300 + (1,900/7,300 x $19,100) = $56,271
common stocks = $17,100 + (5,400/7,300 x $19,100) = $29,429
At the beginning of 2019, Donna Company had $1,000 of supplies on hand and this amount was properly recorded as a debit in a Supplies (asset) account. During 2019, the company purchased supplies amounting to $6,200 (paid for in cash and debited to the supplies account). At December 31, 2019, a count of supplies revealed that $1,600 of supplies were on hand. The adjusting entry that Donna Company made on December 31, 2019 to adjust the Supplies account would include
Answers
Answer:
Credit to Supplies for $5,200
Explanation:
Based on the information given if At the beginning of 2019 the Company had the amount of $1,000 of supplies on hand in which the amount was recorded properly as a debit in a Supplies account, which means that i During 2019, the company purchased supplies amounting to the amount of $6,200 The adjusting journal entry that Donna Company would record at the end of the current year to adjust the Supplies account would include a:
Credit to Supplies for $5,200.
($6,200-$1,000)
The toy buyer had the option of ordering stuffed animals directly from the manufacturer or from a nearby wholesaler. The manufacturer will not ship orders for less than $1,200 total list price. Delivery typically requires five weeks, and freight averages 2.5% of total billed cost. Trade discounts on this merchandise are 40% and 10%; terms are 2/10, n/30.
A wholesaler, located in the retailer's area, stocks many of the same stuffed animals. He does not require a minimum order and will deliver at no charge in the area if the order has a billed cost of at least $500. The manufacturer and wholesaler base cost on the same list price; however, the wholesaler sells with trade discounts of 40% and 8% and terms of 1/15. n/30.
Required:
What is the difference in the total net cost (including freight) of merchandise with a total list price of $1, 200 from these two vendors?
Answers
Answer:
difference between supplies = $4.68
Explanation:
cost of merchandise from manufacturer if paid within discount period:
$1,200 x (1 - 40%) = $720
$720 x (1 - 10%) = $648
freight cost = $648 x 2.5% = $16.20
discount for early payment = $648 x 2% = $12.96
total cost = $651.24
cost of merchandise from wholesaler if paid within discount period:
$1,200 x (1 - 40%) = $720
$720 x (1 - 8%) = $662.40
discount for early payment = $648 x 1% = $6.48
total cost = $655.92
difference between supplies = $4.68
Cost of merchandise from manufacturer if paid within discount period:
$1,200 x (1 - 40%) = $720 and $720 x (1 - 10%) = $648
Cost of merchandiseFreight cost = $648 x 2.5% = $16.20
Discount for early payment = $648 x 2% = $12.96
Then Total cost is = $651.24
Then the price of merchandise from wholesaler if paid within discount period: $1,200 x (1 - 40%) = $720 and $720 x (1 - 8%) = $662.40
After that discount for early payment is= $648 x 1% = $6.48
Then the full cost is = $655.92
Thus, the right answer is that the difference between supplies = $4.68
Find out more information about cost of merchandise here:
brainly.com/question/7019300
For each of the following scenarios, show how each market is affected. Label the initial equilibrium price P1, and the original quantity Q1. Label the new equilibrium price P2 and the quantity Q2.Due to perfect weather conditions, there is a larger than expected crop of oranges this year. The weather conditions do not affect the crop of tangerines. Citrus juice is made from either oranges or tangerines and consumers have no preference for one or the other. Lastly, citrus juice and oatmeal are complements and oats are required to make oatmeal.a. Market for oranges,b. Market for citrus juice,c. Market for tangerines,d. Market for oatmeal,e. Market for oats.
Answers
Answer:
See answers below; in details.
Explanation:
A rephrase of the question:
Consider the following conditions and describe what happens to equilibrium price and quantity in each of the listed markets.
(A) MARKET FOR ORANGES
- There are better (or perfect) weather conditions this year
- This will bring about a larger harvest of oranges
- Q2 > Q1
- P2 < P1 , owing to the law of demand and supply. Truly, in this case, 'all other things' such as consumer taste are constant and the weather conditions didn't increase or reduce the turnout of tangerines.
(B) MARKET FOR CITRUS JUICE
- The information given (where consumer taste is constant) shows that the law of rationality applies. Customers/Consumers are rational. They'll go for the cheaper type of citrus juice and this price depends on the magnitude of raw materials such as the tangerines or oranges themselves.
- Given a higher output of oranges, the market for citrus juice will boom. Hence Q2 of citrus juice > Q1 of citrus juice
- P2 of citrus juice < P1 of citrus juice
(C) MARKET FOR TANGERINES
- The information given about absence of consumer preference shows that oranges & tangerines are perfect substitutes.
- Substitution here means that one can perfectly replace the other and/or both fruits give the same value to end users.
- This means that there'll be less purchase of tangerines (either raw or juice) owing to the increased availability of oranges. Keep in mind that the quantity of tangerines harvested or produced did not fall in the year.
- So Q2 = Q1
- There is less purchase of tangerines this year and tangerine is a perishable good (it spoils or loses value with time) so, to encourage consumer purchase, producers in the market for tangerine will reduce the price. So P2 < P1
(D) MARKET FOR OATMEAL & (E) MARKET FOR OATS
- Citrus juice and oatmeal are complements. This means that they go together; in consumption. Just like the consumption of PMS is complementary to the consumption of car tires.
- The markets for oats and oatmeal will boom because the market for citrus juice is booming.
- As people consume more citrus juice, they'll purchase and consume more oatmeal.
- The output of oats under this weather condition isn't given so, we'll assume it to be constant.
- So the quantity of oats is constant but the price of oats will rise because its demand will rise or has risen. Q2 = Q1 ; P2 > P1
- In the market for oatmeal, quantity will increase and price will rise, due to higher demand. Q2 > Q1 ; P2 > P1
At the time a $400 petty cash fund is being replenished, the company's accountant finds vouchers totaling $300 and petty cash of $100. The vouchers include: postage, $80; business lunches, $120; delivery fees, $60; and office supplies, $40. Which of the following is not recorded when recognizing expenditures from the petty cash fund?
A. Debit petty cash, $300
B. Credit petty cash, $300
C. Debit office supplies, $40
D. Debit postage expense, $80
Answers
Answer:
A. Debit petty cashier at the end of the
In the manufacture of car tires, a particular production process is known to yield 10 tires with defective walls in every batch of 100 tires produced. From a production batch of 100 tires,
a sample of 4 is selected for testing to destruction
Find the probability that the sample contains 1 defective tire.
Answers
Answer:
urkrorllkrkfkkflfllrlrklrlrlrlkrk kdklkkklor
Which type of marketing intermediary are sales representatives of manufacturers and wholesalers?
A. Industrial distributors
B. Service providers
C. Agents
D. Brokers
Answers
Answer:
C. Agents
Explanation:
They are sales representatives for manufacturers or wholesalers and usually are hired on a commission basis.
Consider the market for widgets. Widgets are produced in the United States, unless producers aren’t willing to meet the quantity demanded at a particular price. In that case, widgets are imported.
Suppose that the price with free trade is $7. If lawmakers want to ensure that U.S. widget producers can sell at least 8,000 widgets, what might they do?
Price
Quantity Demand
Quantity SuppliedDomestically
Quantity Imported
$6 13,000 2,000 8,000
$7 12,000 4,000 8,000
$8 11,000 6,000 5,000
$9 10,000 8,000 2,000
$10 9,000 9,000 0
$11 8,000 10,000 0
impose a tax on imported widgets
provide a subsidy for imported widgets
impose an import quota
Answers
Answer:
impose a tax on imported widgets - if the government imposes a tax on imported widgets, imported widgets will become more expensive to consumeres, making consumers flock to domestically produced widgets, prompting domestic firms to increase domestic supply to at least 8,000 widgets.
impose an import quota - the government can also simply impose an import quota of 4,000 widgets, which will oblige consumers to buy at least 8,000 domestic widgets if they want to satisfy their demand of 12,000 widgets.
This information relates to Ayayai Real Estate Agency.
Oct. 1 Stockholders invest $29,100 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $30,000.
3 Buys office furniture for $3,610, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads,
$10,000 (not paid by Roads at this time).
10 Receives cash of $130 as commission for acting as rental agent renting an
apartment.
27 Pays $600 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $2,500 in salary for October.
Prepare the debit-credit analysis for each transaction.
Answers
Answer:
Oct. 1
Dr Increase Assets
Dr Cash $29,100
Cr Increase stockholders'equity
Cr Common stock $29,100
Oct. 2
Dr No Effect
Dr No Effect $0
Cr No Effect
Cr No Effect $0
Oct. 3
Dr Increase Assets
Dr Office furniture $3,610
Cr Increase Liabilities
Cr Accounts payable $3,610
Oct. 6
Dr Increase Assets
Dr Accounts receivable $10,000
Cr Increase Revenues
Cr Service revenue $10,000
Oct. 10
Dr Increase Assets
Dr Cash $130
Cr Increase Revenues
Cr Service revenue $130
Oct. 27
Dr Decrease Liabilities
Dr Accounts payable $600
Cr Decrease Assets
Cr Cash $600
Oct. 30
Dr Increase Expenses
Dr Salaries and wages expense $2,500
Cr Decrease Assets
Cr Cash $2,500
Explanation:
Preparation of the debit-credit analysis for each transaction.
Oct. 1
Dr Increase Assets
Dr Cash $29,100
Cr Increase stockholders'equity
Cr Common stock $29,100
(Being To record common stock)
Oct. 2
Dr No Effect
Dr No Effect $0
Cr No Effect
Cr No Effect $0
Oct. 3
Dr Increase Assets
Dr Office furniture $3,610
Cr Increase Liabilities
Cr Accounts payable $3,610
( Being To record purchase of office furniture)
Oct. 6
Dr Increase Assets
Dr Accounts receivable $10,000
Cr Increase Revenues
Cr Service revenue $10,000
( Being To record service revenue)
Oct. 10
Dr Increase Assets
Dr Cash $130
Cr Increase Revenues
Cr Service revenue $130
(Being To record service revenue)
Oct. 27
Dr Decrease Liabilities
Dr Accounts payable $600
Cr Decrease Assets
Cr Cash $600
(Being To record payment of office furniture)
Oct. 30
Dr Increase Expenses
Dr Salaries and wages expense $2,500
Cr Decrease Assets
Cr Cash $2,500
(Being To record salaries expense)
Select the sentence that best demonstrates professional writing skills. Group of answer choices
a. If you forget to clock in or out, please let Melanie Smith or I know, and we will correct your timesheet.
b. If you forget to clock in or out, please let Melanie Smith or me know, and we will correct your timesheet.
c. If you forget to clock in or out, please let Melanie Smithor myself know, and we will correct your timesheet.
Answers
Answer:
b. If you forget to clock in or out, please let Melanie Smith or me know, and we will correct your timesheet.
Explanation:
Here me represent that it would be referred to ourselves while on the other hand, the myself and I are used for reflecting an action back to ourselved and the sentence subject
Therefore according to the given scenario, the option b is correct
And, the remaining of the options are incorrect
Match each variable with the best representation of where it appears in the financial accounting statements. Each is only matched once and some responses might not have a match. - Accounts payable - Change in Accounts Receivable - Change in Notes Payable - Property Plant and Equipment - Revenue - Change in long term debt A. Long Term Liabilities on the Balance Sheet B. The Income Statement C. Current Liabilities on the Balance Sheet D. Financing Segment Statement of Cash flows E. Financing Segment on the Statement of Cash Flows F. Fixed Assets on the Balance Sheet G. Operating Segment on the Statement of Cash Flow
Answers
Answer:
Variable Financial accounting statements.
Accounts payable Current liabilities in the balance sheet.
Change in accounts receivable Operating segment on the statement of
Cash flows.
Change in note payable Financing segment on the statement of
cash flows.
Property, Plant and Equipment Fixed assets on the balance sheet.
Revenue The income statement.
Change in long term debt Investing segment on the statement of
cash flows.
On January 1, 2019, Cullumber Corporation acquired machinery at a cost of $1650000. Cullumber adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the double-declining balance method of depreciation for this machine. Assuming a 30% tax rate, the cumulative effect of this accounting change on beginning retained earnings, is
Answers
Answer:
$0
Explanation:
Since in the given situation there is a depreciation method change i.e. from the straight-line method to double-declining method so there would be no impact restrospectively.
Hence, there would be no cumulative impact as it creates the impact prospectively
So the impact would be zero
The purpose of domains in a typical IT infrastructure is to: a. help organize the roles, responsibilities, and accountabilities for risk management and risk mitigation. b. control the activities and behaviors of employees and limit their accessibility to certain domains. c. define the policies that will eliminate all possibilities and avenues of attack. d. identify the domains most likely to be attacked and the relative cost and impact of potential attacks
Answers
Answer:
a. help organize the roles, responsibilities and accountabilities for risk management and risk mitigation.
Explanation:
Domain connects remote users to the organization network. It helps host to define the access to specific user. Domain holds all the critical information and data in the system. It defines the roles and responsibilities for risk mitigation.
Melissa Shallowford contributed a patent, accounts receivable, and $22,340 cash to a partnership. The patent had a book value of $8,650. However, the technology covered by the patent appeared to have significant market potential. Thus, the patent was appraised at $92,840. The accounts receivable control account was $34,300, with an allowance for doubtful accounts of $2,200. The partnership also assumed a $9,010 account payable owed to a Shallowford supplier.
Required:
On December 31, provide the journal entry for Shallowford's contribution to the partnership Rotor to the chart of accounts for the exact wordino of the account titles ONOW journals do not use ines for journal explanations. Every Ave on a journal page is used for debitor credil entries CNOW journals wol automatically indont a credit entry when a credit amount is entered.
Answers
Answer:
Date General Journal Debit Credit
Dec. 31 Cash $22,340
Patent $92,840
Accounts receivable $34,300
Allowance for doubtful accounts $2,200
Accounts payable $9,010
Holly Shallowford's , Capital $138,270
(To record capital brought in by Shallowford's)
On October 31 of the current year, Bell Sports received a bank statement dated October 30. Information has been obtained from the bank statement and from the records of the business. Prepare a bank statement reconciliation. Use Oct. 31 of the current year as the date.
Answers
Answer and Explanation:
The preparation of the bank reconciliation is presented below:
For company books
Balance $4,226
Less: service charges -$16
Adjusted balance $4,210
For bank statement
Balance $4,461
Add: outstanding deposits $448
Less: outstanding checks
Number 110 $37
Number 111 $75
Number 114 $587
Adjusted balance $4,210
You work in the finance division of a company listed in the Stock Exchange. You have just learned that your supervisor has been using infomation on quarterty retums, prior to the time they are made public, to trade in the company's stock. Is this unethical? If yes, name the elhical issue. Explain why you think there is or not an ethical issue
Answers
Answer:
Yes it is. Ethical issue ⇒ Insider Trading.Explanation:
Trading on the stock exchange is supposed to be as fair as possible so that every investor has a fair chance of making returns. If a person - like this supervisor - is using information that is material but not publicly disclosed yet to trade on markets, the fairness of the market is compromised because the person will have an edge over other investors which will enable them make unfair profits.
Information on quarterly returns is usually material so we can expect it to be material here as well which means that the supervisor is engaged in insider trading.
Insider trading is not only unethical but also highly illegal. Reporting your supervisor can get them sent to jail.
Makers Corp. had additions to retained earnings for the year just ended of $194,000. The firm paid out $184,000 in cash dividends, and it has ending total equity of $4.89 million. The company currently has 120,000 shares of common stock outstanding. a. What are earnings per share
Answers
Answer:
Makers Corp.
The Earnings Per Share are:
= $3.15.
Explanation:
a) Data and Calculations:
Additions to retained earnings for the year = $194,000
Cash dividends paid out = 184,000
Net income = $378,000
Total equity = $4.89 million
Outstanding shares = 120,000
Earnings per share = Net Income/Outstanding shares
= $378,000/120,000
= $3.15
b) The earnings per share (EPS) is a financial metric that is widely used to corporate value. It indicates the amount of money that a company makes for its stockholders per share. It is computed by dividing the net income by the number of outstanding shares.
Aimi Corporation, based in Japan, decides to open a big manufacturing and distribution center in China. It does this by acquiring operating facilities from another company in China. The management at Aimi believes that adopting this approach will provide the company with instant access to new markets. In this context, the HR function at Aimi Corporation will:a.need to extend and expand its scope and operations to provide the appropriate contributions to firm performance.b.need to be extended to include employees of the Chinese company involved in the acquisition.c.need to be extended to include another set of employees but will not change in any other meaningful way.d.become complicated because of the disparate relationship between the staff in Aimi's home-country and the staff of the acquired company.
Answers
Answer: a. need to extend and expand its scope and operations to provide the appropriate contributions to firm performance.
Explanation:
The HR function will need to take into account the acquisition of these ew operating facilities and the fact that it will come with new employees and new ways to relate to those employees as they are from another country as the one that Aimi is based in.
The HR function will therefore have to extend and expand its scope and operations to incorporate this new situation and provide the appropriate contribution to the company from it.
is it right to kick someone out just because they are not on the lease and or had been evicted in the past?
Answers
When manager Mariah Pitner delivered the company's financial report to local bankers and analysts, she was acting in a(n) _____ role.
Answers
Answer:
When manager Mariah Pitner delivered the company's financial report to local bankers and analysts, she was acting in a(n) _assistant secretary_ role.BSW Corporation has a bond issue outstanding with an annual coupon rate of 5.4 percent paid quarterly and four years remaining until maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions justify a 11 percent, compounded quarterly, required rate of return. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Answers
Answer:
$820.74
Explanation:
Rate = 11%/4 = 0.0275
Nper = 4*4 = 16
Pmt = 1000*5.4%*1/4 = $13.50
Fv = $1,000.00
Present value of bond = PV (Rate, Nper, Pmt, Fv)
Present value of bond = PV(0.0275, 16, 13.50, 1000)
Present value of bond = $820.74
So, the fair present value of the bond if market conditions justify a 11 percent, compounded quarterly is $820.74
look at the screenshot
a,b, or c
Answers
Answer:
A
Explanation:
i don't know basta A ang napili ko
Mutual interdependence occurs when
a. all firms in an industry are affected by the same macro economic conditions, such as a recession, inflation, interest rates, exchange rates, etc.
b. the actions of firms are independent of each other.
c. the actions of one firm in an industry are easily recognized and perhaps copied by others.
d. monopolists recognize that they must face eventual competition in the long run.
Answers
Answer:
See below
Explanation:
Mutual interdepence means that action of one firm is seen and copied by others.
A company produces and sells hair dryers in a market where price (p) and demand (D) are related follows: p = $35+ (3,000)/D-(4,800)/D2 The fixed cost (Ct) is $800 per month and the variable cost per hair dryer (c.) is $38. - Add to % E Q
With reference to the company in Question 1, assume price and demand are unrelated. The company sells the hair dryers for $80 each if they spend $8,000 per month on advertising (C.). CF and c, remain as indicated in Question 1. The maximum production capacity is 5,000 hair dryers per month.
a) What is the demand breakeven point?
b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in variable costs? Explain your answer.
Answers
Answer:
Explanation:
Given that:
[tex]p = 35 + \dfrac{3000}{D}- \dfrac{4800}{D^2}[/tex]
The total revenue = p × D
∴
multiplying both sides by D; we have:
[tex]p\times D = 35 \times D + \dfrac{3000}{D} \times D- \dfrac{4800}{D^2}\times D[/tex]
[tex]= 35 D +3000}{D} - \dfrac{4800}{D}[/tex]
The total cost = (Per unit Variable cost × D) + Advertising cost
The total cost = 38D + 8000
The selling price = 80
From D units, the total revenue = 80D
∴
The break-even will take place when total revenue equals total cost.
So;
8000 + 38D = 80D
8000 = 80 D - 38D
8000 =42D
D = 8000/42
D = 190.48
(b)
Suppose the new sales price
Then;
8000 + 38D = 88D
8000 = 88D - 38D
8000 = 50D
D = 160
Hence, the break-even decreases by:
[tex]\Big(\dfrac{190.48-160}{190.48}\times 100\Big) = 16\%[/tex]
However; suppose the variable cost = 30.4
Then;
8000 + 30.4D = 80D
8000 = 80D - 30.4D
8000 = 49.6D
D = 8000/49.6
D = 161.29
Therefore;
This implies that the break-even decreased by:
[tex]\Big(\dfrac{190.48-161.29}{190.48}\times 100\Big) = 15.32\%[/tex]
Hence, the break-even is more likely to change by 10% in its selling price.