Answer: $39.60
Explanation:
A long call makes a profit when the price of the underlying stock is higher than the strike price and the cost of acquiring the call.
The Break-even point for the investor will be at the point where the underlying stock price will be the same as the strike price plus the cost paid to purchase the call.
Break-even point = Strike price + Price of call
= 37 + 2.60
= $39.60
To obtain a new customer, a business sells merchandise to the customer for . Normally, the merchandise sells for . For this sale, the business should record revenue of:
Answer:
$65
Explanation:
Explanation:
The above question is not complete. But I was able to find the complete question. Here it is:
To obtain a new customer, a business sells merchandise to the customer for $65. Normally, the merchandise sells for $85. For this sale, the business should record revenue of
A. $85
B. $65
C. Neither amount
The correct answer is $65 because revenue is actually the total amount made after a business transaction.
So, the merchandise recorded a revenue of $65.
Important reasons for a company to consider industry or region diversification include A. A desire to avoid putting all of its "eggs" in one industry or region basket, dimming growth opportunities in its present business, and opportunities to transfer its resources, expertise, and capabilities to other industries and regions. B. A need to soak up excess resources and avoid the temptation to allocate unneeded resources to the company’s various internal functional area activities. C. The benefits of giving company managers the opportunity to develop first-hand knowledge of other businesses, customers, technologies, and industry environments. D. Giving the company a broader base to pursue product innovation. E. Reducing the need to use price cuts to grow the company’s profits and return on investment in its main line of business.
Answer:
A. A desire to avoid putting all of its "eggs" in one industry or region basket, dimming growth opportunities in its present business, and opportunities to transfer its resources, expertise, and capabilities to other industries and regions.
Explanation:
The ability to transfer knowledge, and resources to other sectors is one of the reasons why diversification happens.
Which of the following typically involves the use of social networks to communicate and promote the benefits of products and services?a) social network shopping.b) social network advertising.c) door-to-door selling.d) word- of- mouth marketing.
Answer:
b) social network advertising
Explanation:
Advertising on social networks is being highly targeted by marketers, as the use of social networks has been growing more and more, through it it is possible to carry out the communication and promotion of product and service in a cheap, fast and dynamic way that can generate engagement and value, retain and attract new customers, in addition to creating a stronger relationship between customer and company, which positions the company in the market in a positive and competitive way.
The typical age-earnings cycle shows that:
a. there is a positive relationship between age and earnings that eventually turns into a negative relationship.
b. there is a constant positive relationship between age and earnings.
c. there is a constant negative relationship between age and earnings.
d. there is no relationship between age and earnings.
Answer:
A. there is a positive relationship between age and earnings that eventually turns into a negative relationship
Explanation:
The earning cycle is earning profile of a person at a period of their lifetime
This cycle usually starts with low earnings, but it starts to increase gradually to a period of age of around age 50, and then from this age it starts to fall.
From the question there is a positive relationship between age and earnings that eventually turns into a negative relationship
Relevant range is the range of activityâ (volume) over which total fixed costs and variable costs per unit can be assumed to remain the same.A. TrueB. False
Answer:
A. True
Explanation:
An important assumption used in Cost Volume Profit Analysis is the use of a relative range.
The term relative range is used to refer to the output range at which the firm expects to be operating within a short - term planning horizon. It is here that, total fixed costs and variable costs per unit can be assumed to remain the same.
However, it is important to note that the Economist looks at the whole range of output from zero to maximum and does not use this term at all. Hence, on their assumption total fixed costs and variable costs per unit will never remain the same.
The following account balances were taken from the 2021 adjusted trial balance of the Bowler Corporation: sales revenue, $485,000; cost of goods sold, $248,000; salaries expense, $61,000; rent expense, $36,000; depreciation expense, $46,000; and miscellaneous expense, $28,000. Prepare an income statement for 2021.
Answer:
Bowler Corporation
Income Statement for 2021
Sales revenue $485,000
Less Cost of goods sold ($248,000)
Gross Profit $237,000
Less Expenses
salaries expense $61,000
rent expense $36,000
depreciation expense $46,000
miscellaneous expense $28,000 ($171,000)
Net Income/ (Loss) $66,000
Explanation:
Income Statement shows the Operating performance of the the company over the financial period.
Income/loss = Sales - Expenses.
The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15% 20% 0.4 9 5 0.3 18 12 a. Calculate the expected rates of return for the market and Stock J. b. Calculate the standard deviations for the market and Stock J. Ehrhardt, Michael C.. Corporate Finance: A Focused Approach (p. 287). Cengage Learning. Kindle Edition.
Answer:
A) The expected return for the market is 13.5 and stock is 11.6.
B) The standard deviation of the market is 3.85 and stock is 6.22.
Explanation:
[tex]\text{The formula to find the expected value.} \\\mu =E(X) = \sum xP(x) \\\text{Expceted return from market.} \\\mu_m = E(rates \ of \ return \ on \ market) \\= (15)(0.3)+(9)(0.4)+(18)(0.3) \\= 13.5 \\\text{The expected rate of return from stock J.} \\\mu_j = E(rates \ of \ return \ on \ market) \\= (20)(0.3) + (5)(0.4) + (12)(0.3) \\= 11.6 \\[/tex]
[tex]\\B. \text{The formula for variance.}\\\sigma ^2 = Var(X) \\= \sum x^2 P(x)- \mu^2 \\Standard \ deviation, \sigma = \sqrt{\sigma ^2} \\\text{Vraince from market.} \\\sigma _m ^2 = \left [ (15)^2 (0.3) + (9)^2 (0.4) + (18)^2 (0.3) \right ] - (13.5)^2 \\= 167.1 - 182.25 \\= 14.85 \\[/tex]
[tex]Standard \ deviation = \sqrt{14.85} \\= 3.85357 \\\text{Variance of stock J.} \\\sigma _j ^2 = \left [ (20)^2 (0.3) + (5)^2 (0.4) + (12)^2 (0.3) \right ] - (11.6)^2 \\= 173.2 - 134.56 \\= 38.64 \\Standard \ deviation \ of \ stock \ J = \sqrt{38.64} \\= 6.216108 \\= 6.22[/tex]
The legal environment for public employees differs from private sector employment because public employees:
Answer: d. all of the above
Explanation:
Public employees are generally more protected than private employees. As they fall under the Civil Service, they are protected by civil service laws which require more care for employees than in private employ where employees are less protected.
Government employees employees are also protected by the various constitutional rights bestowed on them. Even though private employees have constitutional rights as well, it is harder to enforce them in private employ than it is in Government employ.
Public employees also enjoy a property interest in their job which means that generally, they cannot be fired without being given a chance to defend themselves especially when they can prove a legitimate entitlement claim. This is in contrast to private employees that can be fired at will.
4 majors that require at least 2 accounting courses:
Answer:
Business Administration and in general, all business degrees require at least two accounting courses, often even more, since accounting is such an important part in any business.
Finance is another degree that requires at least 2 accounting courses (likely more). Finance is closely linked to accounting, because finance is often dedicated to the study of aggregate accounting variables like those appearing in financial statements.
Economics is a degree that often requires at least 2 accounting courses, including a course in public accounting. It is important for economists to understand the accounting reality of governments and organizations.
Finally, International relations is a degree that often includes accounting courses as well.
Residents of a South American country are not allowed to convert their currency into other currencies. However, all foreign businesses with deposits in banks there may, at any time, convert all their currency into foreign currency and take it out of the country. The currency in this country is
Answer: Externally Convertible.
Explanation:
Externally convertible currencies are those currencies which have such a heavy restriction on their trade that the country's own residents are forbidden to convert it into foreign currency.
In a bid to allow some sort of investment however, the Government will allow non-residents such as foreign businesses to convert currency so as to be able to freely conduct their businesses without fear of being unable to gain adequate returns.
On November 1, 2016, a $216,000, 9-month, noninterest-bearing note is issued at a 10% discount rate.
Required:
1. Determine the effective interest rate.
2. Prepare the appropriate journal entry on December 31, 2016, to record interest on the note for the 2016 financial statements.
3. Prepare the appropriate journal entry(s) on July 31, 2017, to record interest and the payment of the note.
4. Prepare the appropriate journal entry to record the issuance of the note
Answer:
1) effective interest rate (for the 9 months period)= (1 + 10%/12)⁹ - 1 = 1.07754 -1 = 0.07754 = 7.75%
2) accrued interest = ($15,545/9) x 2 = $3,454.44 = $3,454
December 31, 2016, accrued interest on non-interest bearing note
Dr Discount on notes receivable 3,454
Cr Interest revenue 3,454
3) July 31, 2017, collection of non-interest bearing note receivable
Dr Cash 216,000
Dr Discount on notes receivable 12,091
Cr Notes receivable 216,000
Cr Interest revenue 12,091
4) November 1, 2016, non-interest bearing note receivable issued [I will assume that the note receivable was made for a sales operation (if it was made for a loan, you can just change sales revenue for cash)]
Dr Notes receivable 216,000
Cr Sales revenue / cash 200,455
Cr Discount on notes receivable 15,545
Explanation:
we have to first calculate the present value of the note using the 10% discount rate:
PV = $216,000 / (1 + 10%/12)⁹ = $216,000 / (1 + 0.8333%)⁹ = $200,454.88 = $200,455
you've observed the following returns on crash-n-Burn computers stock over the past five years: 17 percent, -4 percent, 20 percent, 12 percent, and 10 percent. a) what was the arithmetic average return on the company's stock over this five year periods?
Answer: 11%
Explanation:
Arithemetic mean is the average of a set of numeric variables that is calculated by adding them up and dividing by the number of variables there are.
= (0.17 + (-0.04) + 0.2 + 0.12 + 0.10)/5
= 0.55/5
= 0.11
= 11%
If the economy is normal, Matthews, Inc. stock is expected to return 14.3 percent. If the economy falls into a recession, the stock's return is projected at a negative 8.7 percent. The probability of a normal economy is 80 percent. What is the variance of the returns on this stock
Answer:
Variance =0.008464
Explanation:
The probability that there will be recession = 100 – 80 = 20%
Therefore expected return = Return × probability
=(0.8 × 14.3) + (0.2 × -8.7)
= 9.7%
Total probability is calculated in the table (use the attached table)
Standard deviation (SD) = [Total probability (84.64%) × (Return (8.7%) - Expected Return (14.3%))^2 / Total probability (84.64%) ]^(1/2)
=9.2%
Thus, variance = (SD)^2
variance =0.008464
Here I Sit Sofas has 6,000 shares of common stock outstanding at a price of $83 per share. There are 710 bonds that mature in 19 years with a coupon rate of 5.7 percent paid semiannually. The bonds have a par value of $1,000 each and sell at 94 percent of par. The company also has 4,900 shares of preferred stock outstanding at a price of $36 per share. What is the capital structure weight of the debt
Answer:
Weight of Bonds = 99.0%
Explanation:
The weight of capital component is the proportion of the market value of that capital in relation to the total market value.
Hence, the weight of bond would be the ratio of the its market value to the total market value
Market Value
Equity = 83× 6000 = 498,000
Bonds = 710× 1000 × 94 = 66,740,000
Preferred stock = 36× 4900 = 498,000
Total 67,414,400
Weight of Bonds =( Market value of bonds/Total market Value) × 100
=(66,740,000 / 67,414,400) × 100 = 99.0%
Weight of Bonds = 99.0%
The concept of markup under monopolistic competition would best be described as the attempt of firms to make their products look like those of other firms in the industry, thus "marking them up" in a similar style.
a. difference between the marginal cost and the price of the monopolistic competitor.
b. difference between total revenue and total cost of the monopolistic competitor
c. difference between the average total cost and the price of the monopolistic competitor.
d. attempt of firms to mark up their prices above those of their rivals.
Answer:
The correct answer is the option A: Difference between the marginal cost and the price of the monopolistic competitor.
Explanation:
To begin with, the concept known as "Markup" in the field of business and economics refers to the difference in the price and the cost of a good that is able to sale. Moreover, the "markup" is added into the total cost of the production of the good in order to obtain a profit for the sale of that good, so therefore that it implicates the percentage that the producer gains for selling his product to a consumer. So that is why this concept is understood as that difference comprehended between the sale price and the cost of the good produced.
Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market's required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows:________ Stock Investment Beta A. $ 200,000 1.50 B. $ 300,000 -0.50 C. $ 500,000 1.25 D. $1,000,000 1.75
Answer:
r Portfolio = 0.1489 or 14.89%
Explanation:
To calculate the required rate of return of Global Investment Fund's portfolio, we first need to determine the return on Market (rM) using the CAPM equation for required rate of return.
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free rateWe already know the required rate of return for the market and the risk free rate. The beta for market is always 1. SO, the return on market is also 13.25% because at a beta of 1, the return on market and the required rate of return on market is same.
Now we need to calculate the required rate of return of each stock and then calculate the weighted average of the required rate of returns of each stock to calculate the required rate of return for the Global Investment Fund.
r A = 0.07 + 1.5 * (0.1325 - 0.07)
r A = 0.16375 or 16.375%
r B = 0.07 + (0.1325 - 0.07) * -0.5
r B = 0.03875 or 3.875%
r C = 0.07 + 1.25 * (0.1325 - 0.07)
r C = 0.148125 or 14.8125%
r D = 0.07 + 1.75 * (0.1325 - 0.07)
r D = 0.179375 or 17.9375%
Total investment in GIF = 200000 + 300000 + 500000 + 1000000
Total investment in GIF =2000000
required rate of return of Global Investment Fund (GIF) is,
r Portfolio = 0.16375 * 200000/2000000 + 0.03875 * 300000/2000000 +
0.148125 * 500000/2000000 + 0.179375 * 1000000/2000000
r Portfolio = 0.1489 or 14.89%
What is a major drawback to outsourcing, and what solution could company management institute? courcehero
Answer with Explanation:
Some of the major drawback of outsourcing and how these issues must be tackled is listed as under:
Loss of control. When the company outsources its one of operating department then the company looses the control that previously it was able to emphasize on the management. Usually the company department is outsourced to a professional firm that knows every single issue related to the task assigned. But sometimes issue arises when the the service company pretends that it is highly professional in dealing with the issues but they are not. Its almost rare in developed countries because of rule of law. In such cases the company has to avoid the contract and look for another firm to cooperate in this area.Reputational Risk: The negligence of working of third party may result in reputational losses. This may also have financial impacts in the form of loss of loyalty and sales. This risk is inherent risk and the solution is that the company must not form a contract until they are well assure of the professionalism of the firm.Confidentiality Risk: The competitive advantage can be due to a new IT system implemented that integrates the information and lower the cost of information for the company that helps it in making much better decisions and is the reason of competitive advantage. The loss of this confidential data might result in loss of ideas or mechanism working knowledge that competitor may use to overcome the competitive advantage. The solution to this can be awarding tender to the firm that is professional and agreeing them that they will not breach the confidentiality and if they do that then they will compensate the company.Coordination Issue: It is one of the major issue that the Outsourcing vendors don't frequently coordinate with the company because they have to manage other company data as well. The company and the firm must agree upon issues that must be resolved on a priority and in a defined time period."On June 12th, a customer buys 100 shares of DEF stock at $49 per share. On June 30th of the same year, the customer sells the stock at $39. On July 10th of the same year, the customer buys DEF stock at $42. The customer's cost basis in DEF stock is:"
Answer:
The customer's cost basis in DEF stock is:
$4,900
Explanation:
The stock price = $49 per share
Number of shares = 100
The value on June 12 = $4,900 ($49 x 199)
The DEF stock cost basis is the amount which is initially paid for the purchase of the 100. When the DEF stock is sold, the tax liability is determined by how much is spent to buy the security (cost basis) and the sales price. Since the security is sold at a price lower than the original purchase price, the difference is not taxable as a capital gain.
You are happy to see that today's Productivity results relative to goal are trending positively overall; however, you want to focus on really improving one team over the next four hours of your shift. Based on examining the last three hours, which team should you focus on to most positively impact your area's overall results
Answer:
If I were to choose, I'd go for Team 4.
Explanation:
Team 1 is currently on an upward trend with the fastest improvement in their overall productivity moving from 92% to 103%, an 11.9% growth in 6 hours;Team 2 had a slight recession but by the end of the 6 hour period were almost back where they started at 104%, a 1.9% decline. Given that they are still back on an upward trend, I'd give them little or not energy as their 6-hour performance has been the most consistent overall;Team 3 started their performance at 95% and plummetted from then to about 90%, a regressed performance of about 5.3%Team 4 went from 103% to 91%, an 11.7% decline in performance.So given that team 4 has the potential to revert back to, at the very least the starting performance of 103%, and that they have the highest rate of decline in performance, I'd focus on them to improve the overall performance of teams.
Cheers!
William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D = 19,100 units/year
Ordering cost S = $26/order
Holding cost H = $3/unit/year
A) Calculate the EOQ for the workbooks.
B) What are the annual holding costs for the workbooks?
C) What are the annual ordering costs?
Answer: EOQ = 575.38 units ≈ 575 units
Annual holding cost =$862.5 ≈ $863
annual ordering cost=$863.65 ≈ $864
Explanation:
a)the EOQ for the workbooks=[tex]\sqrt{ 2 X Demand x ordering cost / holding cost}[/tex]
= [tex]\sqrt{2 x 19,100 x 26 / 3}[/tex] = [tex]\sqrt{331,066.667}[/tex]
= 575.38 units ≈ 575 units
b)the annual holding costs for the workbooks
Annual holding cost = Economic order quantity x Holding cost /2
= (575 x 3)/2=$862.5 ≈ $863
c) the annual ordering costs = Demand X Ordering cost/ EOQ
= 19,100 x 26/575
=$863.65 ≈ $864
interest is eligible to be capitalized as part of an assets cost rather than being expensed immediately when:
Answer:
d. All of these answer choices are correct.
Explanation:
Capitalization of interest rates is not always appropriate. The ideal situation to do so is whenever an asset needs major investment and long construction time, thus generating a considerable amount of interest costs.
Moreover, if there are huge extra accounting and administrative costs associated with capitalizing interest costs, and the advantage of the extra information is relatively low, you do not need to capitalize it.
So the all given options are fulfilled
Hence, the correct option is d.
promissory note received from a customer in exchange for an account receivable is recorded by the payee as
Answer: Note Receivable
Explanation:
A Note Receivable is a written document from a party promising to repay another party with interest on amounts borrowed in form of cash or otherwise thereby creating a debtor - creditor relationship between them.
When a promissory note is received from a customer in exchange for an accounts receivable it is a Note Receivable and the Payee being the creditor will record it as such.
What new and innovative mechanisms, laws, or practices could corporate America put in place to address the corporate misconduct that we often find in the news
Answer:
enact stringent laws against tax evasion.
Explanation:
One common misconduct among corporations today involves avoiding taxes (tax evasion), despite the efforts of government in prosecuting offenders more cases are reported.
By enacting laws with maximum punishment for offenders, this may scare off attempts to evade taxes.
The CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $495,000 $495,000 Variable costs 235,000 48,000 Contribution margin 260,000 447,000 Fixed costs 160,000 347,000 Net income $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company.
Answer:
a. Degree of Operating Leverage = Contribution Margin / Net Income
Armstrong Company = 260,000 / 100,000 = 2.6
Contador Company = 447,000 / 100,000 = 4.47
b. Armstrong Contador
Sales revenue 544,500 544,500
Variable costs 258,500 52,800
Contribution margin 286,000 491,700
Fixed Costs 160,000 347,000
Net Income $126,000 $144,700
Calculation of Sales revenue increase by 10%
495,000 * 1.10 = 544,500
235,000 * 1.10 = 258,500
48,000 * 1.10 = 52,800
Alpaca Corporation had revenues of $240,000 in its first year of operations. The company has not collected on $19,400 of its sales and still owes $26,000 on $80,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $14,500 in salaries. Owners invested $25,000 in the business and $25,000 was borrowed on a five-year note. The company paid $3,600 in interest that was the amount owed for the year, and paid $5,100 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 30%. Compute net income for the first year for Alpaca Corporation.
Answer:
$97,545
Explanation:
The computation of the net income for the first year is shown below:
Revenue $240,000
Less: Cost of Goods Sold -$80,000
Gross Margin $160,000
Less:
Salaries expense -$14,500
Insurance payment -$2,550 ($5,100 ÷ 2 )
Interest expense - $3,600
Profit before tax $139,350
Tax at 30% -$41,805
Net Income $97,545
We simply deduct all the expenses and the taxes from the sales revenue so that the net income could arrive
Which of the following statements are accurate about the population regression model?
(a) u_i is the stochastic component of Yi.
(b) a^ + B^Xi is the systematic component of Yi.
(c) Both (a) and (b) are correct.
(d) Neither (a) nor (b) are correct.
Answer:
Option (A) is the only accurate statement about a population regression model.
Explanation:
Option A is the only correct answer because ui is the stochastic component of Yi.
On the other hand, option B is incorrect. It would only be correct for a sample regression model. This is because alpha (α) and beta (β) have hats or caps on them. The hat shows that they are estimated values (estimated from the given/measured population values for Y and X).
In this duo-variable (two-variable) regression model, ui without a cap is the stochastic component of Yi.
Budgets are normally more effective when all levels of management are involved in the budgeting process. True or False
Answer:
The given statement is "True".
Explanation:
The budgeting process for something like a commercial enterprise has always been based on the most recent financial statement of an organization, investment money as well as distribution channels, business objectives as well as the viewpoint in which the industry operates.So that the spending plan is generally more accurate unless all agencies and therefore all top executives are actively engaged.Compute the uncollectible account expense, and make the appropriate journal entry, for the current year assuming the uncollectible account expense is determined as follows:
a. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sales.
b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales.
c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach.
The estimate based on an aging of accounts receivable is that an allowance of $12,000 would be appropriate.
Question Completion:
Johnson Corporation’s Unadjusted Trial Balance at year-end included the following accounts:
Debit Credit
Sales (75% represent credit sales) (credit) $1,152.000
Accounts Receivable(debit) $288,000
Allowance for Doubtful Accounts (credit) $2,184
Answer:
Johnson Corporationa. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sale:
Journal Entry:
Debit Uncollectible Accounts Expense $11,520
Credit Allowance for Doubtful Accounts $11,520
To record the uncollectible accounts expense for the year.
b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales:
Journal Entry:
Debit Uncollectible Accounts Expense $12,960
Credit Allowance for Doubtful Accounts $12,960
To record the uncollectible accounts expense for the year.
c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach
Journal Entry:
Debit Uncollectible Accounts Expense $9,816
Credit Allowance for Doubtful Accounts $9,816
To record the uncollectible accounts expense for the year.
Explanation:
a) Data and Determination of Uncollectible Expenses and Allowances:
Sales (75% represent credit sales) (credit) $1,152,000
Accounts Receivable(debit) $288,000
Allowance for Doubtful Accounts (credit) $2,184
1. Uncollectible Accounts Expense = 1% of Sales:
= 1% of $1,152,000
= $11,520
2. Uncollectible Accounts Expense = 1.5% of Credit Sales:
= 1.5% of $864,000 (75% of $1,152.000 )
= $12,960
3. Allowance for Doubtful Accounts based on an aging of accounts receivable of $12,000:
Adjustment required to bring the Allowance for Doubtful Accounts to $12,000 is $9,816 ($12,000 - 2,184).
1. Discuss the strategic relevance of identifying the industry's dominant economic features. Give four examples of relevant factors and discuss what makes them strategically important facts.
Answer with Explanation:
Identifying industry’s dominant economic features helps in understanding what key factors ensures its survival and success. The understanding of business environment also helps in making informed decisions that generates value for the company. Some of the important industry's dominant economic features are as under:
Market Size and Growth Rate: This helps in understanding how large is the market. If the market size very large then it means we have running customers which means we rarely have repetitive customer. Hence the chances of survival are more in a relative large market as apposed to small market. Similarly the market growth rate is also an attractive factor because greater the market growth rate the greater would be chances of success because new customer entrants are continuously growing with great numbers. This great pace will generate great sales in the future as well.
Scope of Rivalry: The number of competitors operating in the market and their size is often termed as scope of rivalry. Furthermore, the greater are the number of competitors in the market the lower is the bargaining power of the competitors and vice versa. This means that the profit earning will be affected with the population of competitors in the market as every competitor will try to attract the customers by discounting their product prices. The survival of new entrant in such a market is very difficult.
Level of Product Differentiation: If are considering a car market of a developing country like Indonesia, Pakistan, Mongolia, Uzbekistan, etc which have higher population and the level of purchasing power of people very low than developed countries like US and UK. This means that the level of product differentiation will be very low. Hence the survival of highly differentiated product in such market is very difficult. So the level of product differentiation may alter your decision making process.
Technology Adoption Cost: If the technology adoption cost is very low then it more risky market as the product may get obsolete very early and the life-cycle of the product will be very shorter. This means that the revenue generated from the product would be lower as the demand of new technology takes all the sales away.
Profitability of the Market Segment: The profit margin of the product of a particular market segment is higher and the level of risk is also within a acceptable range then it will be strategically important because the amount invested will be recovered earlier because higher profit margins. We can also increase the sale of the product by reducing the price in market which prizes its customer at a high, this will increase the demand and profits of the company. Hence it is a successful and survival ensuring market.
According to the following data,
2000
2019
Average hourly wage
$14
$23
CPI
170
254
a. by what percentage did nominal wages increase between 2000 and 2019?
b. by what percentage did consumer prices increase between 2000 and 2019?
c. Did real wages increase between 2000 and 2019?
Answer:
A.Nominal wages will increase by 64%
B.Consumer prices will increase by 49.41%
C.Real wages will increase by 14.85%
Explanation:
The computations are shown below:
a. Computation for what percentage did nominal wages increase between 2000 and 2019
Using this formula
Nominal wages = (Average hourly wage 2019-Average hourly wage 2000)÷Average hourly wage 2000
Let plug in the formula
Nominal wages($23 - $14) / ($14)
Nominal wages= ($9) / ($14)
Nominal wages= 64%
Therefore Nominal wages will increase by 64%
b. Computation for what percentage did consumer prices increase between 2000 and 2019
Using this formula
Consumer prices=(CPI 2019-CPI 2000)÷CPI 2000
Let plug in the formula
Consumer prices= (254 - 170) / (170
Consumer prices= (84) / (170)
Consumer prices= 49.41%
Therefore Consumer prices will increase by 49.41%
c. Computation for real wages increase between 2000 and 2019
Real wages increase= ($14 × 254) / (170)
Real wages increase= $20.92
Real wages increase= $23 - $20.92
Real wages increase= $2.08
Real wages increase= ($2.08 / $14) × 100
Real wages increase= 14.85%
Therefore the Real wages will increase by 14.85%
Answer:
Poop
Explanation: