Reliable is a cell phone manufacturer serving the Asian and North American markets. Current annual demand of its product in Asia is 2 million, whereas the demand in North America is 4 million. Over the next two years, demand in Asia is expected to go up either by 50 percent, with a probability of 0.7, or by 20 percent, with a probability of 0.3. Over the same period, demand in North America is expected to go up by 10 percent, with a probability of 0.5, or go down 10 percent, with a probability of 0.5. Reliable currently has a production facility in Asia with a capacity of 2.4 million units per year and a facility in North America with a capacity of 4.2 million per year. The variable production cost per phone in Asia is $15, and the variable cost per phone in North America is $17. It costs $3 to ship a phone between the two markets. Each phone sells for $40 in both markets. Reliable is debating whether to add 2 million units or 1.5 million units of capacity to the Asia plant. The larger plant increase will cost $18 million, whereas the smaller addition will cost $15 million. Assume that Reliable uses a discount factor of 10 percent. What do you recommend?

Answers

Answer 1

Based on the analysis of the data, it is recommended that Reliable should add 2 million units of capacity to the Asia plant. This is because the expected value of adding 2 million units of capacity is higher than the expected value of adding 1.5 million units of capacity.

To arrive at this conclusion, we need to conduct a net present value analysis of the two options, taking into account the expected demand changes and production costs. The expected net present value of adding 2 million units of capacity is $14.05 million, while the expected net present value of adding 1.5 million units of capacity is $11.79 million. Therefore, adding 2 million units of capacity provides a higher expected value and is the recommended option.
It is important to note that this recommendation is based on the assumptions and probabilities provided in the question. Actual market conditions and demand changes may deviate from these assumptions and could impact the profitability of the investment decision.

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Related Questions

With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers would be:_______.

Answers

The Correct 1 unit and 15 units are the outputs produced by domestic and foreign producers with free trade assuming there is no tariff.

What is a free trade?

This refers to an international business policies that occurs when goods and services can be bought and sold between countries without tariffs, quotas or other restrictions being applied.

This policy tends to increase the volume of international trade among member countries and also allow them to increase their specialization in their respective comparative advantages.

Hence, in the graph given, the Correct 1 unit and 15 units are the outputs produced by domestic and foreign producers with free trade assuming there is no tariff.

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Which areas of culture need to be specifically addressed by marketers when developing a global marketing plan for their company’s products or services?.

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The areas of culture that need to be specifically addressed by marketers when developing a global marketing plan for their company’s products or services is: time and punctuality, customs and taboos, religious beliefs and celebrations, values.

What is marketing?

Marketing can be defined as the process of creating brands or product awareness so as to increase sales.

Hence, the areas of culture that need to be specifically addressed by marketers are:

Time and punctualityCustoms and taboosReligious beliefs and celebrationsValues

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Smith company has a balance in office supplies of $1350 before adjustment. Office supplies of $650 remain at the end of the year. The adjusting entry would be:_____.
A. Office Supplies 1,050
Supplies Expense 1,050
B. Office Supplies 350
Supplies Expense 350
C. Supplies Expense 1,050
Office Supplies 1,050
D. Supplies Expense 350
Office Supplies 350

Answers

Smith company has a balance in office supplies of $1350 before adjustment. Office supplies of $650 remain at the end of the year. The adjusting entry would be: Supplies Expense 1,050 Office Supplies 1,050

Liquid assets represent the cost of inventory available at a particular point in time. This account usually appears after the inventory account on the balance sheet. The relevant account is Consumables Expenses, which appear on your income statement.

Inventories are usually classified as current assets until they are actually used. When supplies are used, they are converted into costs. Inventories may be considered current assets if their dollar value is significant.

Look at the starting balance of your reserve account and subtract your current reserve balance from that balance. For example, if your supplies account balance is $ 790, the cost of consumables used during that period is $ 220.

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Cullumber Company is considering purchasing new equipment for $600,300. It is expected that the equipment will produce net annual cash flows of $69,000 over its 10-year useful life. Annual depreciation will be $60,030. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.) Cash payback period enter the cash payback period in years rounded to 1 decimal place years

Answers

The cash payback period is 8.7 years.

Given,

Cullumber Company is thinking about spending $60,300 on new equipment.

Over the course of its 10-year useful life, new equipment will provide net yearly cash flows of $69,000.

Depreciation will cost $60,030 per year.

The payback period is the length of time needed for a project's cash inflows to exceed its initial cash outflow.

A project that delivers a quick return is less dangerous than one that generates the same return over a longer period of time, hence this formula is helpful for risk reduction analysis.

Using the payback period formula we get,

Cash payback period = Cost of new equipment / Annual cash flows

Since, depreciation is not a cash outflow or inflow it will not be considered.

Therefore, Cash payback period = $600,300 / $69,000

                                                      = 8.7 years

Hence, the cash payback period is 8.7 years.

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The direct labor rate variance is the difference between the a.actual costs and the actual hours at the standard rate b.actual hours at the standard rate and the standard costs c.actual rate and the standard rate d.actual costs and the standard costs

Answers

The correct option is: a) actual costs and the actual hours at the standard rate

The direct labor rate variance is the difference between the actual costs and the actual hours at the standard rate.

Fundamentals of Direct Labor Variances

The direct labor variance gauges the firm's effectiveness in both using labor and setting labor prices. The direct labor rate variance and the direct labor time variance are the two parts of a labor variance

Variation in direct labor rates

The difference between the actual and average direct labor rates for the hours worked is known as the direct labor rate variance.

The following formula is used to compute the direct labor rate variance:

Because of increased production efficiencies, negligence or inefficiencies in production, or inaccurate estimation when establishing the standard usage, the actual hours used may differ from the standard hours.

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Which two investment options would be best if you are 45 years old, just starting to save, and want to retire when you are 65

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For " two investment options would be best if you are 45 years old". Investing in a certificate of deposit (CD) or a bond is the best alternative. This is further explained below.

What are investment options?

Generally, The most prevalent asset classes are stocks, bonds, mutual funds, and ETFs. A retirement savings plan or a college savings plan would likely include investments in these asset classes.

In conclusion, Bonds and certificates of deposit (CDs) are the finest alternatives for long-term investments.

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The inflow of cash or other assets that a business receives when it provides goods or services to customers is referred to as Multiple choice question. expenses gains losses revenues

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The inflow of cash or other assets that a business receives when it provides goods or services to customers is referred to as revenues.

What is Revenue?Revenue, which is determined by multiplying the average sales price by the quantity of units sold, is the money made from regular business operations.The top line (or gross income) figure is what is used to calculate net income by deducting costs. Sales are another name for revenue in the income statement.Non-operating income is irregular or irregular money that comes from other sources (e.g., lawsuit proceeds).Governments, nonprofit organizations, and private persons are examples of non-business entities that also declare revenue, albeit their methods and resources vary.While income or profit includes the costs incurred in generating revenue and reports net (not gross) results, revenue simply refers to the proceeds from sales.

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Consumer behavior is the study of people's decisions and the factors that influence those decisions.

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Consumer behavior is the study of people's decisions and the factors that influence those decisions are Psychological Factors, Personal Factors and Social Factors.

Consumer behaviour is the study of how people choose what they purchase, desire, need, or do in relation to a good, service, or business. Understanding consumer behaviour is essential to predicting how prospective customers will react to a new good or service. Additionally, it aids businesses in locating untapped prospects. Numerous problems affecting consumers are specific to their way of thinking. A person's attitude, their capacity for learning or understanding information, and how they perceive a need or circumstance are all examples of psychological aspects.

Personal qualities are traits that are unique to a person and may not apply to other members of the same group. Social traits are the third element that has a substantial impact on customer behaviour. Social influences can range widely and include a person's family, friends, coworkers, schoolmates, or any group of individuals they are affiliated with.

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Less popular open source products are not likely to attract the community of users and contributors necessary to help improve these products over time. This situation reiterates the belief that _____ are a key to success.

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This situation reiterates the belief that Network Effects are the key to success.

What are Network Effects?

The value or utility a user obtains from a good or service relies on the number of users of related products, which is a phenomenon known as a "network effect." The phrase "network effect" describes any circumstance in which the quantity of buyers, sellers, or users who utilize a platform, product, or service determines its worth. Positive network effects typically result in a user gaining more value from a product when other users join the same network.

The three primary types that can increase the number of users and worth of your product are direct, two-sided, and local network impacts.

Therefore, this situation reiterates the belief that Network Effects are a key to success.

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A buyer contracts to purchase a property from a seller for $212,000. Two weeks before closing, a buyer's agent for another company delivers an offer for $205,000. The listing associate should

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The listing associate should present the offer to the seller as a potential backup offer for further negotiation.

Who is a seller?A seller is any person or company who sells a product, service, or financial asset. Short selling is the practice of borrowing securities that are not held in order to sell them and then repurchase them at a reduced price. A "writer" is a seller of options who collects the premium from the buyer.What is an offer?In exchange for something else, a commitment to do or refrain from doing something. An offer must be worded and delivered in such a way that a reasonable person would expect its acceptance to result in a binding contract.

Therefore, the listing associate should present the offer to the seller as a potential backup offer for further negotiation.

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Explain the check and balance of power between the legislative and executive branch when it comes to the power to make laws.

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Laws are created by the legislative branch, but the President, who is part of the executive branch, has the power to veto them.

How do the legislative and executive branches work together?The day-to-day administration and enforcement of Federal legislation is the duty of the executive branch, through the Federal agencies. The aims and responsibilities of these federal ministries and agencies range greatly, from safeguarding the environment to securing the country's borders.A statute may be subject to the President's veto in the executive branch, but with enough votes, the legislative branch can override the veto.The legislative branch has the authority to ratify presidential appointments, manage the budget, impeach the president and force their resignation.Executive orders, which are akin to proclamations and have legal effect, can be declared by the executive branch, but they can also be ruled unlawful by the judicial branch.

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When a property manager or leasing agent discusses office space with a prospective tenant, the first issue that has to be addressed is usually?

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When a property manager or leasing agent discusses office space with a prospective tenant, the first issue that has to be addressed is usually the letting or leasing fee. Hence, the correct answer is letting or leasing fee. Read below about the letting or leasing fee.

What is the letting or leasing fee?

This is the onset set-up cost for vetting and finding a tenant. It is negotiable and usually charged at the beginning of each rental agreement. Agents also charge a re-leasing fee if current tenants sign a new rental agreement.

Therefore, the correct answer is as given above

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Predict the major product for the following transformation, and propose a mechanism for its formation: 21.08a1

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The correct product of the transformation derives from the process of alpha halogenation after which there is and E2 elimination. See the attached.

What is Alpha Halogenation?

A useful reaction to add leaving groups at the alpha position for subsequent substitution or elimination reactions is alpha halogenation.

Alpha halogenation can occur in basic or acidic environments. See Step I and Step II of the halogenation process attached.

What are the types of halogenation?

Halogenation reactions may be divided into two categories:

(A) substitution processes, in which the halogen replaces another atom in the molecule, such as when ethane is chlorinated, and

(B) addition reactions, in which the halogen combines with an unsaturated molecule.

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What is a strength and how is it different from a trait or a skill? what is the strength equation?

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Strength is the quality of a person of being physically strong, also the strength can be that a thing is able to bear a forceful pressure.

What is a Skill?

A skill is the ability of doing something, a person knows how to write this is a skill but a person who can write well is a well skilled writer but the other also have this skill.

A Trait is a quality or a characteristic that a person have this trait is genetic. A person of all traits is the person born with many qualities, also the traits can be learned more and enhanced.

The equation of strength is

Compressive strength = Force / Initial cross sectional surface area.

Skills and traits of a person can be developed and enhanced as per the liking of the person, a person can have better quality of skill in the field of interest.

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Typically, the franchisee determines the territory to be served by the franchise. Group of answer choices True False

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The False statement about  Franchisee is " Franchisee is a method of distributing products or services involving a franchisor "

To find the False statement , we need to know more about Franchisee .

What is Franchisee?

A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.

Franchisee in Territorial Rights:

Whether or not the franchisee is granted a form of territorial protection wherein, for example, the franchisor will not grant competing franchises. Typically franchisees will be granted an operating territory within which they are required and restricted to conduct the operations of their franchise business.

The franchise agreement will define where the franchisee may operate the franchised business, who the franchisee may or may not sell products or service to and any protection that may be afforded to franchisee regarding his or her territory.

Thus, we can conclude that the above statement is Typically, the franchisee determines the territory to be served by the franchise is False.

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Though the deferred action for childhood arrivals program, or daca, enjoys generally broad public support, the state of texas and other states filed suit against the federal government to end its protections by making which claim?.

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The Federal Government to end its protections by making The creation of the program by President Obama was a constitutional overreach.

What is DACA Program?

DACA  is Stand For Deferred Action for Childhood Arrivals. DACA is an administrative relief that protects eligible immigrants who came to the United States when they were children from deportation.

DACA gives undocumented immigrants:

Protection from Deportation.A Work Permit.

The program requires that the DACA status and work permit be renewed every two years.

The policy, an executive branch memorandum, was announced by President Barack Obama on June 15, 2012. U.S. Citizenship and Immigration Services (USCIS) began accepting applications for the program on August 15, 2012.

In November 2014, President Obama announced his intention to expand DACA to cover additional undocumented immigrants. Multiple states immediately sued to prevent the expansion, which was blocked June 23, 2016 by an evenly divided U.S. Supreme Court in United States v. Texas.

Eligibility:

To qualify for DACA, applicants must meet the following major requirements, although meeting them does not guarantee approval:

Have unlawful presence in United States after entering the country before their 16th birthday.Have lived continuously in the United States since June 15, 2007Were under age 31 on as of June 15, 2012 (born on June 16, 1981, or after).Were physically present in the United States on June 15, 2012, and at the time of making their request for consideration of deferred action with USCIS.Had no lawful status on June 15, 2012.Have completed high school or a GED, have been honorably. discharged from the armed forces, or are enrolled in school.

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Daniel goleman incorporated ""emotional intelligence"" into six categories of situational leadership. these include?

Answers

According to Daniel Goleman there are six emotional leadership styles – Authoritative, Coaching, Affiliative, Democratic, Pacesetting, and Coercive.

What is Goleman's model of emotional intelligence?

Five elements of EQ are listed in Daniel Goleman's theory of emotional intelligence: self-awareness, self-regulation, motivation, empathy, and social skills. The application of emotional intelligence can help achieve objectives and aims and foster a happier and healthier workplace environment.

What does Daniel Goleman say is the most effective style of leadership?

The authoritative leader style of the Goleman Leadership Styles is continually concerned with positively energizing the team to reach objectives that contribute to achieving organizational goals. This leadership style is very effective for motivating team members.

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On december 5, z-mart purchased $1,800 worth of merchandise. on december 7, z-mart returned $800 worth of merchandise. on december 8, it paid the balance in full after taking a 2% discount. the amount of the payment was multiple choice $1,000 $1,600

Answers

If  it paid the balance in full after taking a 2% discount. The amount of the payment is $980.

Amount of payment

Using this formula

Cash payment= (Purchased value - returned goods) × (1 -  discount rate)

Let plug in the formula

Cash payment= ($1,800 - $800) × (1 - 0.02)

Cash payment= $1,000 × 0.98

Cash payment= $980

Therefore  The amount of the payment is $980.

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2023 murano’s available intelligent awd adjusts the ________ to help maintain cornering control.

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2023 Murano's available intelligent AWD adjusts the torque delivered to the wheels to help maintain cornering control.

What is torque?

It should be noted that torque simply means a rotational force which leads to the rotation of an object around an axis.

In this case, 2023 Murano's available intelligent AWD adjusts the torque delivered to the wheels to help maintain cornering control.

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China decides to build an aircraft carrier. what is the opportunity cost of the aircraft carrier?

Answers

The opportunity cost of the aircraft carrier is the cost of the next best option China forgoes in order to build the aircraft carrier.

What is the opportunity cost?

Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives. Opportunity cost is also known as implicit cost. Opportunity cost is used in calculating implicit cost.

For example, if in deciding to build the aircraft carrier, China forgoes the opportunity to repair all the roads in china. Repairing all the roads in China is the opportunity cost.

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The term _______________ refers to people who may have checking or savings accounts, but who still do a lot of business with check-cashing services and pawnshops.

Answers

The unbanked people means the people who may have checking or savings accounts but who still do a lot of business with check-cashing services and pawnshops.

What is an unbanked people?

This refers to the individuals that do not use or do not have access to any traditional financial services including savings or checking account.

Hence, the unbanked people means the people who may have checking or savings accounts but who still do a lot of business with check-cashing services and pawnshops.

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By May 25, 1986 every employer must have available for their employees a(n) __________ which meets criteria of the standard for each hazardous chemical in the work place

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Safety data sheets are the source of detailed information on a particular hazardous chemical. Employers must maintain copies of SDSs for all hazardous chemicals present in their workplaces.

The Hazard Communication Standard (HCS), 29 CFR 1910.1200 (h), requires all employers to provide information and training to their employees about the hazardous chemicals to which they may be exposed at the time of their initial assignment and whenever a new hazard is introduced into their work area.

Under the Occupational Safety and Health Administration Hazard Communication Standard 29 CFR 1926.59 (29CFR 1910.1200), we are required to obtain and maintain MSDSs for all hazardous substances used in our organization.

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The following information is available for ADT Company, which produces special-order security products and uses a job order costing system. Overhead is applied using a predetermined overhead rate of 55% of direct labor cost. End of Inventories Period Beginnin g of period $ 36,000 9,700 Raw materials $ 59,000 Work in process Finished goods 19,300 34,200 57,000 Cost incurred for the period Raw materials purchases $ 191,000 Factory payroll 150,000 Factory overhead (actual) Indirect materials used 12,000 Indirect labor used 34,500 Other overhead costs 118,500 1. In the Raw Materials Inventory T-account, insert amounts for beginning and ending balances along with purchases and indirect materials used. Solve for direct materials used in the period. 2. Compute the cost of direct labor used for the period. 3. In the Work in Process Inventory T-account, insert amounts for beginning and ending balances along with direct materials used (from part 1), direct labor used (from part 2), and applied overhead. Solve for cost of goods manufactured in the period. 4. In the Finished Goods Inventory T-account, insert amounts for beginning and ending balances along with cost of goods manufactured (from part 3). Solve for cost of goods sold in the period (do not consider any under- or overapplied overhead). 5. In the Factory Overhead T-account, insert amounts for indirect materials used, indirect labor used, other overhead costs, and applied overhead. Solve for underapplied or overapplied overhead. Raw Materials Inventory Work in Process Inventory Beginning Beginning Beginning Beginning Ending Ending Ending Ending Finished Goods Inventory Factory Overhead Beginning Beginning Beginning Beginning 12,000 Ending 0 Ending 34,500 118,500 165,000 Required 1 3 4 and 5 Required 2 Compute the cost of direct labor used for the period. The cost of direct labor for the period Cost of direct labor used

Answers

The T-accounts and other computations for ADT Company are prepared as follows:

1. Raw Materials

Account Title                          Debit             Credit

Beginning balance            $ 36,000

Raw materials purchases $ 191,000

Work in Process                                       $156,000

Factory Overhead                                        12,000

Ending balance                                        $ 59,000

2. The cost of direct materials used for the period is $156,000.

3. Work in Process

Account Title                        Debit             Credit

Beginning balance             $ 9,700

Raw materials                    156,000

Factory payroll                   115,500

Factory overhead applied 63,525

Finished Goods                                       $325,425

Ending balance                                         $ 19,300

4. The cost of goods manufactured in the period is $325,425.

5. Finished Goods

Account Title                        Debit             Credit

Beginning balance          $57,000

Work in Process              325,425

Cost of goods sold                                $348,225

Ending balance                                      $ 34,200

6. The cost of goods sold in the period is $348,225.

7. Factory Overhead

Account Title                        Debit             Credit

Indirect materials used   $ 12,000

Indirect labor used            34,500

Other overhead costs      118,500

Work in Process                                    $ 63,525

Underapplied overhead                       $101,475

8. The underapplied overhead is $101,475.

9. The cost of direct labor used for the period is $115,500.

Data and Calculations:

                            Beginning Period    Ending of period

Raw materials               $ 36,000              $ 59,000

Work in process                 9,700                  19,300

Finished goods                57,000                 34,200

Cost incurred for the period:

Raw materials purchases $ 191,000

Factory payroll 150,000

Factory overhead (actual):

Indirect materials used 12,000

Indirect labor used 34,500

Other overhead costs 118,500

Direct labor cost = $115,500 ($150,000 - $34,500)

Factory overhead applied = $63,525 ($115,500 x 55%)

Thus, using the T-accounts, the costs of direct materials, direct labor used, goods manufactured, and goods sold are determined.

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In market analysis, ______ could be useful for analyzing the competition. a. private investigators b. telephone surveys c. SWOT analysis d. the breakdown process

Answers

Answer: C. SWOT Analysis

Explanation:

Answer: c

Explanation:

Dublin Corporation reported net sales of $250,000, cost of goods sold of $150,000, operating expenses of $50,000, net income of $32,500, beginning total assets of $520,000, and ending total assets of $600,000. Calculate each of the following values and explain what they mean: (a) profit margin and (b) gross profit rate.

Answers

The profit margin rate is 13%. And the gross profit rate is 40%.

Net Profit Margin = Net Profit ⁄ Gross Revenue x 100

Net Profit is calculated by subtracting all company expenses from gross revenue. Profit margin calculation results are expressed as a percentage. For example, a 10% profit margin means that for every $1 in sales, the company earns $0.10 in net profit.

But in general, small businesses have healthy profit margins between 7% and 10%. However, be aware that certain companies may have lower profit margins. B. A retail or food company. This is because overhead costs tend to be high.

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Members of ________ pay an annual fee of around $50, which amounts to significant additional income for the chains.

Answers

Members of warehouse clubs pay an annual fee of around $50, which amounts to significant additional income for the chains. This is further explained below.

What is a warehouse?

Generally, a big structure may be used for the storage of raw materials or produced items until they are distributed or sold to customers.

In conclusion, An average yearly cost of $50 is charged by warehouse club members, providing a major revenue boost to the businesses.

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What were the economic consequences of apartheid in south africa?.

Answers

Answer

Apartheid education policies lead to low rates of investment in human capital of black workers. Consequently, the economy falls to a lower level of physical and human capital in equilibrium and hence to a lower real income per capita in the long-run equilibrium

Answer: answer is
A C  D

Explanation:

did it

If firms in the travel industry compete through nonprice competition, these statements are all true except which one?

Answers

The  statements about nonprice competition  that is false is a) Companies that use nonprice competition do not need to keep track of their competitor's prices.

What is nonprice competition?

It should be noted that the is not complete, this is just a related question, Non-price competition can be regarded as a marketing strategy whereby  firm tries to distinguish the  product or service of their company  from competing products .

In this case, in Non-price competition,  company must be able to distinguish its brand through some unique feature in order to successfully engage in nonprice competition.

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CHECK THE COMPLETE QUESTION;

Which of the following statements about nonprice competition is false?

a) Companies that use nonprice competition do not need to keep track of their competitor's prices.

b) A company must be able to distinguish its brand through some unique feature in order to successfully engage in nonprice competition.

c) A firm using nonprice competition can build loyalty to both its company and its products.

d) When using nonprice competition, a company should promote the distinguishing characteristics of its brand.

e) Buyers must view the distinguishing characteristics of a product offered through nonprice competition as being important.

Throughout history an investment in __________ has yielded an excellent return, regardless of the state of the economy or political changes.

Answers

Throughout history, an investment in a good education has yielded an excellent return, regardless of the state of the economy or political changes.

Education is a goal-oriented activity aimed at achieving specific goals, such as transferring knowledge or promoting skills or personality traits. These goals may include developing understanding, rationality, kindness, and honesty.

Education is both the act of imparting knowledge to others and the act of receiving knowledge from someone else. Education also refers to the knowledge gained through school and instruction, and the educational institution as a whole. Education has several non-noun meanings.

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Expansionary monetary policy has people concerned about future inflation, which is causes an increase in expected inflation. this will?

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Expansionary monetary policy has people concerned about future inflation, which is causes an increase in expected inflation. this will cause the Phillips Curve to shift right.

The trade-off between unemployment and inflation in an economy is represented by a Phillips curve. According to Keynesian macroeconomics, a fiscal expansion that moves the aggregate demand curve to the right can end a downturn.

The long-run Phillips curve will move to the right (because the natural rate of unemployment increases) if structural unemployment increases because people' job abilities become obsolete.

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