Answer: E. When newcomers can expect to earn attractive profits
Explanation:
The Threat of Entry refers to the threat that companies that are already in the market face from companies that are looking to enter the market.
If the market is so profitable that newcomers can expect to make attractive profits, a lot of companies will come into the market to make said profits which will increase the competition in the market.
International trade currently involves about ______________ worth of goods and services thundering around the globe. Group of answer choices
Answer: $20 trillion
Explanation:
International trade is a trade that occurs between different countries. Die to international trade, several countries can buy the goods and services that are not being produced in their countries.
It should also be noted that International trade currently involves about $20 trillion worth of goods and services thundering around the globe.
bank pays interest quarterly with an EAR of 9%. What is the periodic interest rate applicable per quarter
Answer:
2.18%
Explanation:
Effective interest rate = (1+i/m)^n - 1
i is stated as interest rate
m is the compounding frequency
Here, the compounding is quarterly and the effective interest rate is 8%
Since one year is equal to 4 quarter, the value of m is equals to 4
Effective interest rate = (1 + i/4)^4 - 1
9% = (1 + i/4)^4 - 1
0.09 + 1 = (1 + i/4)^4
(1.09)^1/4 = 1 + i/4
1 + i/4 = 1.02178
i/4 = 1.02178 - 1
i/4 = 0.2178
i/4 = 2.18%
One of the big weaknesses of organization structures that do not have cross-business collaboration is A. making it hard to effectively empower and motivate employees. B. making it difficult to have closely related activities report to a single executive. C. that pieces of strategically relevant activities and capabilities often end up scattered across many departments thus impeding cross-business strategic fits. D. that it impedes the use of outsourcing to parts of the world with lower wages. E. that it makes the firm vulnerable to shareholder lawsuits for not maximizing value creation.
Answer:
Option C, that pieces of strategically relevant activities and capabilities often end up scattered across many departments thus impeding cross-business strategic fits, is the right answer.
Explanation:
Option C is correct because the cross-business collaboration exhibits the process in which the expertise of different departments comes together and then work for the common goal. Generally, the capabilities and relevant activities are scattered in the different departments of the company. Therefore the cross-business team up those scattered abilities. In most of the cases, the team formed includes the people who are efficient and expert in their field. Therefore, option C is right.
According to, "Ditching the Dollar," having multiple reserve currencies to choose from is healthy because:
Answer: D. If one country creates all the reserves it can prevent other countries from trading.
Explanation:
Ditching the Dollar refers to a movement by nations to reduce the dependence on the US. dollar for transactions.
The USD is the major currency for trade around the world with it accounting for the currency of use in more than 50% of the entire World trade. This was due to the Bretton Woods Agreement and System which at the time pegged the USD to gold and other currencies at certain value to the USD.
The influence the USD gained that day continues today. Countries however are increasing becoming fed up by the United States using the Dollar to impose trade restrictions and sanctions on countries and then requiring everyone to fall in line because trades are mostly done in the currency controlled by the US, the USD.
For instance, when sanctions were imposed on Iran, the European Union looked for alternative means of payment for Iranian oil.
Ditching the Dollar therefore argues that having multiple reserve currencies to choose from is healthy because one country will not be able to control world trade as the US has.
Which of the following is not a part of checking a diversified company's business units for cross-business competitive advantage potential?
A. Ascertaining the extent to which sister business units have value chain match-ups that offer opportunities to combine the performance of related value chain activities and reduce costs
B. Ascertaining the extent to which sister business units have value chain match-ups that offer opportunities to transfer skills or technology or intellectual capital from one business to another
C. Ascertaining the extent to which sister business units are making maximum use of the parent company's competitive advantages
Answer:
C. Ascertaining the extent to which sister business units are making maximum use of the parent company's competitive advantages.
Explanation:
For a diversified company that has many business units, it is important for the sister units to provide opportunities that make more profit for the business.
These opportunities are generated by the ability of each sister unit to have a unique competitive edge not shared by other business units.
In analysing cross business competitive advantage among sister units, we don't consider which sister business units are making maximum use of the parent company's competitive advantages.
This is because the company's competitive advantage is a trait shared by all the business units. It does not show a unique competitive edge of sister units.
A method of allocating merchandise cost that assumes the first merchandise bought was the first merchandise sold is called the
Answer:
First - in - First - Out (FIFO) method
Explanation:
The First - in - First - Out (FIFO) method, assumes that the first goods received by the business will be the first ones to be delivered to the final customer.
It assumes that goods have been used in the order in which they are purchased.
Shares of common stock of the Samson Co. offer an expected total return of 13.00 percent. The dividend is increasing at a constant 5.40 percent per year. The dividend yield must be:
Answer:
the dividend yield is 7.60%
Explanation:
The computation of the dividend yield is shown below:
As we know that
Required return = Dividend yield + Capital Gain Yield or growth rate
13% = Dividend yield + 5.4%
So, the dividend yield is
= 13% - 5.4%
= 7.60%
Hence, the dividend yield is 7.60%
We simply applied the above formula so that the dividend yield could come
White House officials often exude more confidence than they actually feel about future prospects for the economy. Why might this be a good strategy? Are there any dangers inherent in it?
Answer:
Following are the answer to this question:
Explanation:
It is a great approach since it encourages and guarantees enhanced investment in infrastructure. Even so, a reduction in the possible future investment funds caused by government confidence will also result in business mistakes or failures throughout the investment process, and that's why the officials of the White House frequently exude a greater level of pride in prospects for the economic system than they feel.
In the late the unemployment rate dropped below the natural rate of employment. Firms with cavancies wer having to pay:______.
Complete Question:
In the late 1990's, the unemployment rate dropped below the natural rate of unemployment. Firms with vacancies were having to pay higher wages to try and fill job openings. If inflation were to begin, it would most likely be described as:
A. Deficit pull inflation
B. Demand pull inflation
C. Cross deficit inflation
D. Cost push inflation
Answer:
Option D. Cost push inflation
Explanation:
The inflation that is all because of increase in the prices of input labor, Material, Overhead, etc. Thus increase in the price of end product is an impact of increase in input cost and also because of decreased supply of product. The decrease in product supply is because only those firms produce products that have a competitive cost advantage.
In the current case, when the unemployment rate falls below the natural rate of employment then this means that the demand of the labor has increased and thus the salaries and wages of the employee will also increase. The new job opening will have to be filled by putting forward an attractive offer to recruit employees. This is cost push inflation, because the cost of the input has increased which will increase the cost of production and thus increasing the price of the end product.
suppose the returns on long term corporate bonds and T-bills are normally distributed. Based on the values below answer the following questions: what is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? long term corporate bonds average return= 6.30%
Answer:
32.35% ( the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent )
Explanation:
Given data for long-term corporate bonds
Standard deviation : 8.3%
mean = 6.2%
To calculate the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent ( USING THE NORM-DIST FUNCTION )
P( x > 10% ) = 1 - P(x<10%) = 1 - NORM-DIST (10,6.2,8.3,TRUE ) = 0.3235
= 32.35%
attached below is the missing part of your question
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,110 in assets to launch the business. On October 31, the company’s records show the following items and amounts. Cash $ 13,470 Cash dividends $ 2,200 Accounts receivable 12,940 Consulting fees earned 12,940 Office supplies 2,400 Rent expense 2,640 Land 45,860 Salaries expense 5,920 Office equipment 17,020 Telephone expense 800 Accounts payable 7,820 Miscellaneous expenses 620 Common stock 83,110
Using the above information prepare an october income statement for the business.
Answer:
Ebony Ernst
Income statement for the month ended October 31
Consulting fees earned $12,940
Less Expenses :
Rent expense ($2,640)
Salaries expense ($5,920)
Telephone expense ($800)
Miscellaneous expenses ($620)
Profit or (Loss) $2,960
Explanation:
Income Statement shows the profit or loss resulting from the companies operations.
The Income statement comprises of revenues or income items and expenses items only.
So be careful to consider only these in solving this problem.
The Profit or loss is the final result and is determined by deducting expenses from revenue or income.
The management of Green Energy Manufacturing is analyzing variable overhead variances for the fiscal period just ended. The flexible budget called for $176,000 in variable overhead but actual variable overhead was $100,000. In computing the overhead variances, Green’s management discovered that it had used 40,000 pounds of direct material, rather than the budgeted amount of 44,000 pounds. (Pounds of direct material is the single overhead driver of variable overhead). The standard variable overhead rate per pound of direct material is $2.00.
What is Green's variable overhead efficiency variance?
A. $ 8,000 (U)
B. $16,000 (F)
C. $24,000 (U)
D. $ 8,000 (F)
The following data relates to Spurrier Company's estimated amounts for next year. Estimated: Department 1 Department 2 Manufacturing overhead costs $1,360,000 $3,560,000 Direct labor hours 553,000 DLH 803,000 DLH Machine hours 103,000 MH 37,000 MH What is the company's plantwide overhead rate if direct labor hours are the allocation base? (Round to two decimal places)
Answer:
$3,628 per direct labour hour.
Explanation:
Total manufacturing overhead cost and total direct labour hours
Particulars Dep 1 Dep 2 Total
Manufacturing overhead cost 1,360,000 3,560,000 4,920,000
Direct labour hours 553,000 803,000 1,356,000
Plant-wide overhead rate = Total manufacturing overhead / Total direct labour rate
Plant-wide overhead rate = $4,920,000 / 1,356,000
Plant-wide overhead rate = $3,628
Therefore, the Plant-wide overhead rate is $3,628 per direct labour hour.
Polk Products is considering an investment project with the following cash flows:
Year Cash Flow
0 $100,000
1 40,000
2 90,000
3 30,000
4 60,000
The company has a 10 percent cost of capital. What is the project's discounted payback? Show your calculations?
a. 1.67 years
b. 1.86 years
c. 2.11 years
d. 2.49 years
e. 2.67 years
Answer:
b. 1.86 years
Explanation:
The computation of the project's discounted payback is shown below:-
Year Cash Flows Discounted CFs (at 10%) Cumulative
Discounted CFs
0 -$100,000 -$100,000 -$100,000
1 $40,000 $36,363.64 -$63,636.36
2 $90,000 $74,380.17 $10,743.80
3 $30,000 $22,539.44 $33,283.25
4 $60,000 $40,980.81 $74,264.05
Discounted Payback Period = Years before full recovery +
(Uncovered Cost at start of the year ÷ Cash Flow during the year)
Now we will put the values into the formula
= 1 + ($63,636.36 ÷ $74,380.17)
= 1 + 0.86
= 1.86 years
Blazer Sports Store is preparing to pay its quarterly dividend of $7.75 a share this quarter. The stock closed at $105.64 a share today. What will the ex-dividend stock price be if the relevant tax rate is 19 percent and all else is held constant
Answer:
$99.3625
Explanation:
The computation of ex-dividend stock price is shown below:-
Ex-dividend stock price = Stock closing price - Stock dividend × (1 - tax rate)
= $105.64 - $7.75 × (1 - 19%)
= $105.64 - $7.75 × 0.81
= $105.64 - 6.2775
= $99.3625
Therefore for computing the ex-dividend stock price we simply applied the above formula.
In a lean environment, the journal entry to record conversion costs would include a debit to the raw and in process inventory account.
a) true
b) false
Answer: True
Explanation:
Lean is used by organizations in order to prevent wastages and to also improve the effectiveness and efficiency at such organizations.
In a lean environment, the journal entry to record conversion costs would include a debit to the raw and in process inventory account.
The answer above is true.
Roberto Corporation was organized on January 1, 2021. The firm was authorized to issue 88,000 shares of $5 par common stock. During 2021, Roberto had the following transactions relating to shareholders' equity: Issued 10,800 shares of common stock at $5.70 per share. Issued 19,300 shares of common stock at $9.70 per share. Reported a net income of $98,000. Paid dividends of $41,000. Purchased 3,500 shares of treasury stock at $11.70 (part of the 19,300 shares issued at $9.70). What is total shareholders' equity at the end of 2021
Answer:Shareholder's equity =$264,820
Explanation:
Purcahse of treasury stock =Shares purchased×price purchased
=3,500 shares×$11.70 per share
=$40,950
Shareholder's equity =Equity capital+Net income− Dividend−Treasury stock
Given
Net income = $98,000
Dividends =$41,000
but Equity capital =Shares issued× the Issued price + Shares issued× the Issued price +....
= 10,800 x $5.70 + 19,300 x 9.70=61,560 + 187,210=$248,770
Shareholder's equity = $248,770 + $98,000 - $41,000 -$40,950= $264,820.
Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:__________
a. $5
b. $6.50
c. $9.50
d. $11.
Answer:
B
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
(5 x $0.5) +( 4 x $1) = $6.50
May Bakery, Inc. reported a prior-period adjustment in 2016.An accounting error caused net income of prior years to be overstated by $6,000.Retained Earnings at December 31, 2015, as previously reported, was $39,000.Net income for 2016 was $72,000, and dividends declared were $23,000.Prepare the company's statement of retained earnings for the year ended December 31, 2016.
Answer:
Particulars Amount
Retained earnings January 1,2016 $39,000
as originally posted
Prior period adjustment $6,000
Retained earnings as adjusted $33,000
Net Income for the year $72,000
$105,000
Dividends declared $23,000
Retained earnings December 31, 2016 $82,000
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,090,000, and it would cost another $22,500 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $627,000. The machine would require an increase in net working capital (inventory) of $16,500. The sprayer would not change revenues, but it is expected to save the firm $430,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 30%. Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.
a. What is the Year-0 net cash flow?
$
b. What are the net operating cash flows in Years 1, 2, and 3?
Year 1: $
Year 2: $
Year 3: $
c. What is the additional Year 3 cash flow (i.e, the after-tax salvage and the return of working capital)?
$
d. If the project's cost of capital is 13 %, what is the NPV of the project?
$
Should the machine be purchased?
a. Yes
b. No
Answer:
a) -$1,129,000
b) net operating cash flows:
year 1 = $412,239
year 2 = $448,152
year 3 = $350,428
c) total year 3 cash flow (including after tax salvage value and working capital) = $831,759
after tax salvage value = $464,831
working capital = $16,500
d) NPV = $179,733
e) the machine should be purchased
Explanation:
initial investment year 0 = $1,090,000 + $22,500 + $16,500 (net working capital) $1,129,000
depreciation per year:
year 1 = 33.33% x $1,112,500 = $370,796
year 2 = 44.45% x $1,112,500 = $490,506
year 3 = 14.81%% x $1,112,500 = $164,761, carrying value after depreciation = $86,437
if sold at $627,000 at the end of year 3, the after tax net cash flow = $627,000 - [($627,000 - $86,437) x 30%] = $464,831
cash flow year 1 = [($430,000 - $370,796) x (1 - 30%)] + $370,796 = $412,239
cash flow year 2 = [($430,000 - $490,506) x (1 - 30%)] + $490,506 = $448,152
operating cash flow year 3 = [($430,000 - $164,761) x (1 - 30%)] + $164,761 = $350,428
total cash flow year 3 = [($430,000 - $164,761) x (1 - 30%)] + $164,761 + $16,500 + $464,831 = $831,759
NPV = $179,733
< Back to Assignment Attempts: Average: / 1 3. Rules versus discretion This question addresses the issue of whether monetary policy should be made by discretionary policy or be implemented according to a set of rules. Which of the following statements reflect arguments in favor of policy by rule rather than discretion? Check all that apply. The time inconsistency of policy problem can be eliminated by having the central bank commit to a particular policy rule. Monetary rules may lead to a lower sacrifice ratio because the public is more confident that the Federal Reserve will keep inflation low. It is impossible for a policy rule to consider all the possible scenarios and specify, in advance, the right policy response. It is better to appoint qualified individuals who will respond to any situation as best they can. Monetary rules reduce the flexibility of the Federal Reserve. Grade It Now Save & Continue Continue without saving
Answer:
Monetary rules may lead to a lower sacrifice ratio because the public is more confident that the Federal Reserve will keep inflation low.The time inconsistency of policy problem can be eliminated by having the central bank commit to a particular policy rule.Explanation:
Monetary Policy by a central bank is what decides how much money will be in an Economy and so can have influence on interest and inflation rates.
There have been some arguments as to whether Central banks like the Fed should use a Rule based approach where monetary policy is in line with set rules vs Discretionary where the Fed can implement monetary policy based on their perception of Economic events.
Some of the arguments presented by proponents for the Rule based approach are;
If certain rules in place to govern monetary policy in terms of inflation keep the inflation rate stable and low, the sacrifice ratio will be lower. The sacrifice ratio refers to the costs of a fluctuating inflation rate on the economy with producers producing less when inflation falls as they wait for it to rise again. If the rate is kept low, the producers would have to produce regardless. If the Fed were to commit to certain rules, policy will be implemented on a consistent basis such as the increase in money supply every period. This would remove the time inconsistency of policy problem.What is LVN Corporation's direct labor efficiency variance? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
Complete Question:
LVN Corporation's direct labor costs and related information for the month of June were as follows:
500 Actual total direct labor-hours
1000 Standard total direct labor-hours
Total direct labor cost $16,500
Unfavorable direct labor rate (rate) variance $600
What is LVN Corporation's direct labor efficiency variance?
A. $16,500 unfavorable
B. $7950 unfavorable
C. $7950 favorable
D. $16,500 favorable
Answer:
$7,950 Unfavorable
Explanation:
As we know that:
"Labor Efficiency Variance = (Actual Labor Hours Worked for Actual Production − Standard Hours for Actual Production) * Standard Rate"
If we consider the parenthesis elements in the formula, we can decide whether the variance is favorable or adverse. If the actual labor hours worked are more than the budget (standard hours for actual production) then the variance (difference) is adverse because greater the hours worked for same level of activity (Production Units) the greater is the labor cost. Hence the variance would be adverse and vice versa.
Here
Actual Hours Worked for actual production are 1,000 Hours
Actual total labor cost is $16,500
Standard Hours Worked for actual production are 500 Hours
Standard rate per hour is $15.9 per Hour (Step 1)
By putting values, we have:
Direct Labor Efficiency Variance = (1000 Hrs - 500 Hrs) * $15.9 per hour
= (1000 - 500) * $15.9 per share
= $7,950 Unfavorable
Step1: Find Standard Labor RateWe can find the standard labor rate using the following labor rate variance formula:
Labor Rate Variance = (Standard Rate per Hour * Actual Hours Worked) − (Actual Rate per Hour * Actual Hours Worked)
Here
(Actual Rate per Hour * Actual Hours Worked) is total labor cost which is $16,500
Actual Hours Worked is 1000 Hours
Labor Rate Variance is ($600)
By putting values, we have:
($600) = (1000 Hours * Standard Labor Rate) - $16,500
($600) + $16,500 = 1000 Hours * Standard Labor Rate
$15,900 = 1000 Hours * Standard Labor Rate
Standard Labor Rate = $15,900 / 1000 Hours = $15.9 per hour
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $368,900; materials of $407,000 and direct labor of $217,000. During the year Adams incurred $415,000 in materials costs, $412,900 in overhead costs and $221,000 in direct labor costs. Compute the amount of overhead applied to jobs during the year.
a. $375,700.
b. $412,900.
c. $368,900.
d. $412,890.
e. $424,150.
Answer:
Allocated MOH= $375,700
Explanation:
Giving the following information:
Estimated total overhead= $368,900
Estimated direct labor= $217,000
Actual direct labor= $221,000
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 368,900/217,000
Predetermined manufacturing overhead rate= $1.7 per direct labor dollar
Now, we can allocate overhead based on actual labor costs:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.7*221,000
Allocated MOH= $375,700
A 12-year capital lease specifies equal minimum annual lease payments. Part of this payment represents interest and part represents a reduction in the net lease liability. The portion of the minimum lease payment applicable to interest expense should:
Answer: Less than in year 8
Explanation:
Here is the complete question:
A 12-year capital lease specifies equal minimum annual lease payments. Part of this payment represents interest and part represents a reduction in the net lease liability. The portion of the minimum lease payment in Year 10 applicable to interest expense should be:
a. Less than in Year 8
b. More than in Year 8
c. The same as in Year 12
d. Less than in Year 12
A capital lease is a type of lease whereby the leader asset are financed by the lessor while the lessee gets all other ownership rights.
Based on the scenario explained in the question, the portion of the minimum lease payment in Year 10 applicable to interest expense should be less than in Year 8.
An individual purchased a taxable corporate bond at a premium. The bond has a remaining ten year maturity period. For federal income tax purposes, amortization of the premium:________
Available Options Are:
A. Increases investment interest expense
B. Is required
C. Reduces interest income
D. Increases interest income
E. Increases the basis of the bond
Answer:
Option C. Reduces Interest Income
Explanation:
The reason is that when we amortize the premium the carrying value of the bond decreases which decreases the principal amount and thus the interest calculated will also be decreased. The decrease in principal amount is because of the difference between the coupon rate of the bond and the firm's required rate of return.
Hence the amortization of the premium reduces the interest income.
If a bushel of wheat costs $3.20 in the US and costs 40 pesos in Mexico and the nominal exchange rate is 10 pesos per dollar, then the real exchange from the US perspective is 0.80. The US will…
Answer:
If a bushel of wheat costs $3.20 in the US and costs 40 pesos in Mexico and the nominal exchange rate is 10 pesos per dollar, then the real exchange from the US perspective is 0.80. The US will…
increase exports of wheat to Mexico.
Explanation:
As the US increases exports of wheat to Mexico, it will receive more income per bushel since a bushel of wheat costs more in Mexico than in the US. While a bushel of wheat costs $3.20 in the US, it costs $4.00 per bushel in Mexico. Exports of wheat to Mexico will yield income in excess of $0.80 per bushel.
The $0.80 excess is computed from the difference between the dollar cost in Mexico and the dollar cost in US. With the exchange rate of 10 pesos per dollar, 40 pesos will be equal to $4.00. So, if it costs $3.20 in US and $4.00 in Mexico, the best option would be to export more to Mexico and reap in the extra $0.80 ($4.00 - $3.20) per bushel.
Which federally supported credit agency was established to trade student loan debt?
A. Fannie Mae.
B. Freddie Mac.
C. Farmer Mac.
D. Sallie Mae.
Answer:
D. Sallie Mae.
Explanation:
Sallie Mae was established to trade students loan debt. The association provided debt management services. Initially it was known as the Student Loan Marketing Association and it was first set up in 1973. The association used to be if the government because it was used to give federal education loans. It became private later on and was used to finance private loans for education.
Considering the communication process, an advertisement of a particular copier machine model would be considered:
Answer: encoding
Explanation:
Considering the communication process, an advertisement of a particular copier machine model would be considered encoding.
Encoding simply helps in the translatation of the idea relgarding a message into symbols or words which should be easily understood by the receiver. The copier machine is sending tothe sender.
Assume company can produce any amount above 3.4 units. Naploc purchased the equipment for $12,000 and did not start production yet. Market price is $400. Tebit Inc, another company that operates in the same industry desperately needs equipment and makes an offer to Naples. Debit already knows Naples cost structure. What is the lowest price that Tebit should offer for the equipment
Answer: $12,000
Explanation:
As no production has been started yet, no other costs have been incurred by Naples for the equipment other than the $12,000.
The lowest price that Tebit should offer therefore should be the price that the equipment was purchased for as the equipment has not not been used to produce anything and so has not incurred any variable costs or donated any incremental value that would decrease or increase its value.
Should companies hire only people who represent the company image based on how they look?