Which pricing strategy assumes customers will switch to a new product because of the lower pricing and has the purpose of increasing its market share by taking advantage of economies of scale

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Answer 1

Businesses use penetration pricing to attract customers to a new product or service by initially offering a lower price. A lower price assists a new product or service in entering the market and luring customers away from competitors.

Penetration pricing occurs when a company introduces a low price for a new product or service. The initial price undercuts customers competitors, forcing them to match the offer or implement alternative strategies quickly. Customers of competitors may switch to the cheaper offer, and new customers may join as well. Penetration pricing: this strategy allows you to set a low initial price on a new product or service in order to gain a large sales or market share.

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Related Questions

Talia manages a business's accounts payable, accounts receivable, inventory, and cash. Talia is responsible for
Working capital management. An organization's finance function is responsible for managing the business's working capital and making capital investment decisions for the company. Working capital is the difference between a business's current assets and current liabilities. Working capital management focuses on the company's current balance of assets and liabilities and involves the management of accounts payable and receivable, inventory, and cash. Working capital management involves decisions made for the short-term/one year or less. Capital investment decisions determine which projects the business will invest in, how the investment(s) will be financed, and whether or not to pay dividends to the company's shareholders. The business's capital structure consists of the mix of debt and equity financing used to finance investments and projects. Market risk is the risk of financial loss due to the decreased value of an investment, and market risk management involves using financial instruments to manage exposure to market risk. Capital investment decisions, the business's capital structure, and market risk management are typically long-term in nature. Talia is not responsible for capital investment decisions, the business's capital structure, or market risk management.

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Talia is in charge of a company's accounts payable, receivable, inventory, and cash. Talia is in charge of Working Capital Administration

What exactly is working capital management?

When a company wants to launch a new product, it will conduct a cost-benefit analysis and make capital budgeting decisions.

When bonds, shares, or debentures are sold, it is about creating a source of capital, which is about making a capital structure decision.

Working capital decisions are made when decisions about current assets or current liabilities are made. Working capital decisions include decisions about current assets and current liabilities.

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The price of pizza at the county fair increases. What is the impact on hamburgers at the county fair

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Since pizza and hamburgers are comparable products, the price reduction of fast-food hamburgers will result in less demand for pizza.

the price that must be paid in order to purchase a specific product. Price is also a measure of value inasmuch as the sum of money people are willing to spend on a commodity symbolises its worth. According to the theory of prices, which is a branch of economics, the link between an item or service's supply and demand determines how much it costs. The price at which potential buyers may fairly consume all of the available goods is known as the optimal market price. The sum of money paid or the amount of compensation offered by one party to another in exchange for products or services is known as a price. The cost of manufacturing might take on numerous names depending on the circumstance.

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If the formula for the reorder point is lead time X maximum daily usage, and given the information below; what would be the reorder point

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The reorder point according to the given data will be 24,000 units. So, option (D) 24,000 is the appropriate response.

What is a reorder point?

A reorder point (ROP) is the amount at which you must reorder your products. It tells you when to place an order to make sure you don't run out. By using the reorder point to purchase replacement stock promptly, a business reduces the likelihood that customers will not receive their orders. As a result, stock shortages will not result in sales losses for the business.

The sum of lead time demand and safety stock is used to calculate the reorder point. Naturally, you must determine the amounts of your lead time demand and safety stock to make an accurate assessment.

Lead time = 30 Days ( 1 month)

Maximum dail requirement = 800 units

The formula for reorder point is given by lead time × maximum daily.

Reorder point = lead time × maximum daily requirement

Reorder point = 30 × 800

Reorder point = 24,000

Therefore, the reorder point is 24,000 units.

Therefore, option d) 24,000 units is the appropriate response.

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The complete question is:

If the formula for the reorder point is lead time X maximum daily usage, and given the information below; what would be the reorder point?

Maximum daily requirement:800 units Average daily requirement :700 units

Minimum daily requirement: 600 units

Time required for refresh supplies: One month (30 days)

a. 18,000 units

b. 21,000 units

c. 2,100 units

d. 24,000 units

The logging industry has had a very productive thirty years and as a result, the demand for labor has been increasing a little each year and equilibrium wages rose each year. If the logging industry productivity were to slow down, what is likely to happen to equilibrium wages

Answers

Even if there was no increase in demand for labor, wages would continue to rise, leading to an increase in the natural rate of unemployment.

What is inherent in the natural unemployment rate?

A healthy economy can only maintain the natural rate of unemployment at its lowest point without creating inflation. There are three types of natural unemployment: structural, surplus, and frictional unemployment all exist. Because employers would first raise wages, zero unemployment cannot be achieved.

What factors alter the natural unemployment rate?

The natural rate of unemployment (NRU) can fluctuate over time as a result of things like shifts in the characteristics of the labor force. Changes in structural and frictional unemployment can alter the NRU.

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If a borrower wishes to borrow 90% of the $250,000 purchase price, which of the following equals one discount point?
A) $3,000
B) $2,500
C) $2,250
D) $2,000

Answers

If a borrower wishes to borrow 90% of the $250,000 purchase price, then the $2,250 equals one discount point.

Given,

Borrower wishes to borrow = 90%

Purchase price = $250,000

So, one discount point is calculated below-

A discount point is considered to be 1% of the loan amount.

So, however in this case:

= $250,000 − $25,000 (10% down payment)

= $225,000 (loan amount)

= $225,000 × 1% = $2,250

However, the borrower tends to represents, covenants, and warrants that it currently has no interest and shall not acquire any interest, which can be direct or indirect. Thus, which would conflict in any manner or degree with the performance.

Hence, option C is correct.

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Which of the following is the core component within a database that control data storage and access requests from client applications?
A) replication server
B) query handler
C) control module
D) database engine

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Database engine is the core component within a database that control data storage and access requests from client applications.

What is database engine?A database management system employs a database engine as its primary piece of software to generate, read, update, and remove data from databases.A database management system (DBMS) employs a database engine (also known as a storage engine) as the underlying software component to generate, read, update, and delete (CRUD) data from a database.The primary service for storing, processing, and protecting data is provided by the Database Engine component of SQL Server. For the most demanding data-consuming applications in your company, the Database Engine offers regulated access and quick transaction processing.The SQL Server Database Engine, which manages data storage, processing, and security, is the main part of Microsoft SQL Server. It consists of a storage engine that controls database files, tables, pages, indexes, data buffers, and transactions, as well as a relational engine that handles instructions and queries.

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A customer orders a product in March but is expected to receive the product in May. How long is the lead time

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A customer orders a product in March but is expected to receive the product in May. the lead time is 3 months.

Lead time is the amount of time from the start of a process to its end. Businesses assess lead times during the manufacturing, supply chain, and project management pre-processing, processing, and post-processing phases. By comparing findings to established criteria, they can spot inefficiencies. Productivity improvements and process simplification can raise output and revenue. The manufacturing and sales processes, however, are negatively impacted by longer lead times. The term "lead time" refers to the whole amount of time required to complete a task. In manufacturing, the term "lead time" is widely used to describe the time it takes to make a product and deliver it to a consumer. Add any number of the days it takes to buy something to get the lead time.

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Which of the following headlines deal with what, how, and for whom questions? A. Coach earns more than Prof!
B. Smoking is on the decline C. Health food craze takes off A. Statement A deals with how, B deals with what, and C deals with what B. Statement A deals with for whom, B deals with what, and C deals with how. c. Statement A deals with what, B deals with how, and C deals with how. D. Statement A deals with how, B deals with what, and C deals with for whom. E. Statement A deals with for whom, B deals with what, and C deals with what.

Answers

For a Coach earns more than Prof! headlines deal with Statement A deals with for whom, B deals with what, and C deals with what.so correct option is E.

Coach: Still a luxury company?

Even though Coach's items are of good quality, they lack the luxury of brands like Louis Vuitton or Hermes. Coach fits comfortably in the middle of the range when comparing prices. Despite being more expensive than genuine luxury labels, it is still more inexpensive than Michael Kors or Kate Spade New York. Bags designed particularly for the outlet stores (of inferior quality) and Coach store overflow are two different types of merchandise available at Coach Factory Outlets. At Coach Factory Outlets, made-for-outlet bags make up about 90% of the inventory, meaning they are of poorer quality but are also less expensive.

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When employees initiate a turnover, when the organization would prefer to keep them, it is called __________ turnover. (LO 11.1) reflective involuntary voluntary dysfunctional

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when employees initiate a turnover, when the organization would prefer to keep them, it is called voluntary turnover.

Voluntary Turnover is a normal circumstance, as workers seek new openings or leave because they're unsatisfied with the current part for a multitude of reasons. still, it's still an precious exertion. Consider relocation costs, advertising of a new part, the costs of having a vacant part, the recruiting costs, onboarding, training of the new hand – you can understand why it’s essential to have a establishment grip on what voluntary development means.

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According to the Field book, in 2010, Hispanic workers made up ___ percent of the California labor force. Group of answer choices 44.9 33.5 5.3 16.3

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The correct answer is 16.3 percent of the California labor force.

16.2% of the workforce in the United States is made up of Hispanic people, who represent a diverse range of socioeconomic origins. Mexican-born employees make up the vast majority of the Hispanic workforce (62.1%), by far (14.9 million). Latinos make up 13.6% of the working population nationwide. Current Population Survey, U.S. Department of Labor, Bureau of Labor Statistics Table 3. There are no comprehensive statistics by industry or occupation for 1915, although the decennial censuses provided data for 1910 and 1920. Less than 1% of persons who are now employed work in farm vocations, compared to 31% of "gainful employees" in 1910 and 27% in 1920. In table 2,

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There are two types of bad drivers: Speeders and Unaware Unaware and Angry Aggressive and Unaware Sunday afternoon drivers and Speeders

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There are two types of drivers:n Aggressive and Unaware

In order to avoid these dangerous drivers and road hazards, we should avoid driving while intoxicated.

Who are Aggressive and Unaware drivers?

A variety of unsafe driving behaviors are covered by the term "aggressive driving." Aggressive driving typically includes speeding, tailgating, weaving in and out of traffic, running red lights, and any combination of these behaviors.

A driver who is not paying attention can quickly turn in front of you, leaving you with no choice but to hit them. Also, if an ambulance or fire truck enters at the same time as you do, they might think they have a clear path when in fact they don't.

Eight warning signs that you drive aggressively You frequently exceed the speed limit or attempt to avoid red lights:

You frequently honk your horn.You make rude gestures or yell at other drivers.You don't give way to the right.

Drivers typically fall into three groups: defensive, aggressive, or unaware. People who drive as though they are unaware that other drivers are on the road with them make up the third category, which may be the largest of the three. We will focus on all three because it is frequently the third group that initiates our defensive or aggressive behavior.

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A person assumes all risks associated with any activity in which he or she participates
True/False

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A person assumes all risks associated with any activity in which he or she participates. The given statement is True.

What do you mean by activity?

Activity is a task or something that is done or performed, especially on a regular basis. It is a dynamic process, involving the conversion of resources into a product or service that satisfies an individual's needs or wants. Activities can be physical, mental, or social, and can involve both work and leisure. They can involve physical effort, such as running, playing sports, or doing exercises. Mental activities include reading books, doing puzzles, and playing video games. Social activities involve interacting with others such as talking, playing games, or attending events. Activities can also involve creative endeavors such as painting, writing, or music. They can be done with friends, family, or alone. Ultimately, activities are important for physical, mental, and social health, and for a person's overall wellbeing.

So, the required answer is True.

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Suppose that consumers become more pessimistic about the economy. This causes the price level to decrease as represented by the GDP deflator dropping to 98. Nominal GDP also decreases to $28,000. What is real GDP

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Real GDP would be $28,600.The decrease in the price level would lead to a decrease in nominal GDP. When the price level decreases, each dollar of nominal GDP buys fewer goods and services.

The percentage change in the GDP deflator from one period to the next is the inflation rate. We may define it mathematically as GDP deflator of year 2 minus GDP deflator of year 1, divided by GDP deflator of year 1, and then multiplied by 100.

We know that the formula for GDP Deflator is :

GDP Deflator = (Nominal GDP/Real GDP) × 100

We have , 98 = (28,000/ Real GDP) ×100

Or, 28,000 / Real GDP = 98 / 100

Or, Real GDP / 28,000 = 100 / 98

Or, Real GDP = (100/98) × 28,000

= 28,571.429 which is approximately equal to 28,600.

Real GDP is $28,600.

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A forecast with a time horizon of about 3 months to 3 years is typically called a: A)short-range forecast. B)medium-range forecast. C)long-range forecast D)weather forecast. E)strategic forecast.

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A forecast with a time horizon of about 3 months to 3 years is typically called a A)short-range forecast.

Short-term forecasting is the process of projecting what will happen in the near future (usually hour by hour) and then using that information to construct a strategy to fulfill those demands.

Let's use your support crew as an example. You may already have forecasts on a monthly, weekly, or even daily basis. However, Short Term Forecasting goes much farther in order to assist you manage a staff that is as efficient and productive as possible.

For example, your current prediction shows that next week will have a high volume of client engagement. That's a good place to start, but it's still not enough information to properly staff.

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Which of these might workers' compensation provide in at least some circumstances?

payments to the family of a worker who died.

medical treatment for injuries caused by a car crash that occurred while an employee was on vacation

payments to a worker after they retire

training to prepare an employee who was disabled by a workplace accident



D. training to prepare an employee who was disabled by a workplace accident is the answer

Answers

The workers' compensation must provide training to prepare an employee who was disabled by a workplace accident. Thus, option D is the correct answer.

What is workers' compensation?

Workers' compensation is a type of insurance that provides wage replacement and medical benefits to employees who are injured on the job in exchange for a mandatory waiver of the employee's right to sue his or her employer for negligence.

Employers are strictly liable for the costs of any employee injuries resulting from any employment-related injury, regardless of fault, under workers compensation law.

Therefore, proper training must be provided to prepare an employee who was disabled by a workplace accident.

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Answer:

1.  a 401(k) plan

2.  training to prepare an employee who was disabled by a work place accident

3. . if you withdraw the saved money after retirement, you will most likely pay a lower tax rate on it

4.  you will get 363.44 refund from the government

5.  to provide medical coverage for people over the age of 65

Explanation:

these are the answers to the employment benefits and deductions quick check.

i got a 100 on it

If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by 3/8 percent, what is the amount of interest after refinancing

Answers

D) The interest rate that remained after the refinancing was 4 7/8 percent.

What is the current interest rate?

Trends in current national 30-year mortgage rates On January 12, 2023, the average rate for a 30-year fixed mortgage is 6.46 percent, which is a 6 basis point decrease from this time last week. The average 30-year refinance rate for homeowners looking to refinance is 6.50 percent, down 11 basis points in the past week.

What is an example of an interest rate?

For instance, if you borrow $100 at a rate of 5%, you will have to repay the lender $105 in full. The lender will turn a profit of $5. Throughout your life, you may develop a variety of interests. The true amount you owe will be determined by the interest rate on each loan.

By borrowing, 5 1/4 = 5 2/8 = 42/8 42/8 - 3/8 = 39/8 = 4 7/8 8/8 comes from 5.

5 2/8 - 3/8 = 4 10/8 - 3/8 = 4 7/8.

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Full Question = If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by 3/8 percent, what is the amount of interest after refinancing?

A) 4 ½ percent

B) 5 percent

C) 4 ¾ percent

D) 4 7/8 percent

how are cells strengthened in the brain

Answers

Answer:

Explanation:

when a neuron is active, the activity causes it to release netrin. The netrin acts to strengthen the connection between the neuron and a neighbouring neuron at the activated synaptic junction. Netrin's essential signal to the two neurons is 'Make the synapse stronger.

The chief difference between a low-cost leader strategy and a focused low-cost strategy is
A. the size of the buyer group that a company is trying to appeal to
B. the production methods being used to achieve a low-cost competitive advantage
C. the number of upscale attributes incorporated into the product offering
D. the degree of bargaining power that buyers have
E. whether the product is strongly differentiated or weakly differentiated from rivals

Answers

The correct answer to the difference between a low-cost leader strategy and a focused low-cost strategy is option A) "  the size of the buyer group that a company is trying to appeal to."

When a company concentrates on a certain consumer group and offers inexpensive services and goods, it is said to have a targeted low-cost strategy. They can reduce their costs by concentrating on a small market. They may offer inexpensive prices because they can rely on experience and predictability. A low-cost provider seeks to offer its items at the lowest price while still making a profit in order to draw customers to the market. This is a broad interpretation of the low-cost strategy because these companies want to appeal to a sizable market. Examples of low-cost strategy come to mind very quickly. For instance, Walmart promotes itself as a low-cost supplier. Walmart's catchphrase is "Save money. Live better."

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A health insurance company wants the opportunity to cover the accounts of all county employees. In order to land this account, they must get the approval of the county board of directors. The board members mention that they are taking some time off to prepare for the holidays and say that the company might stay on their minds if they were given some holiday spending cash. What kind of crime is this an example of

Answers

This is an example of bribery. Bribery is the act of offering something of value, such as money, goods, services, or other benefits, in exchange for influence or power. In this case, the health insurance company offers the regional board of directors money in exchange for agreeing to their services.

Bribery is a serious crime in many countries and can lead to civil and criminal penalties, including fines, imprisonment or even loss of public office. This kind of behavior undermines public confidence in the integrity of elected officials and can have long-term consequences for the reputation of the company concerned.

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Place the following effects of a long-run binding price ceiling in the order they will occur. Start by clicking the first item in the sequence or dragging it here Drag the items below into the box above in the correct order, starting with the first item in the sequence. O A binding price ceiling is imposed, forcing the open-market price below the natural equilibrium point. O Quantity demanded increases, while quantity supplied decreases. O The shortage becomes so acute that consumers will choose substitutes. O The market is at natural equilibrium where the supply and demand curves cross. O Consumers see they can save on each unit, while producers realize they will earn less.
I

Answers

The graph below shows a price ceiling that is binding in both the long and short terms. As can be seen, the binding price ceiling causes a scarcity that is longer-lasting than it is momentary. The establishment of a black market is another consequence of fixed price limitations. the cost of the item in

The supply and s demand curvecross at equilibrium on a graph of the two curves. At this time, the amount that consumers and companies are willing to buy matches the quantity that producers are willing to supply. By excluding individuals who are solely interested in acquiring the item at a lower price than the market would otherwise allow, establishing a contractual price floor causes an unbalanced market. Thus, a surplus is produced.

When the government imposes a necessary price on an item or group of goods at a price higher than equilibrium, some report the price as a binding price floor.

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Pressures for a global integration strategy for all markets are increased by the presence of

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global competition and the interconnectivity of economies and businesses. As companies and industries become more interconnected and reliant on international trade, it becomes increasingly important for them to have a cohesive strategy for operating in all markets.

Additionally, as global competition intensifies, companies may need to adapt their strategies in order to remain competitive. This can include developing new products or services, entering new markets, or changing their marketing or distribution methods. Overall, the presence of global competition and interconnectivity can drive the need for a comprehensive global integration strategy, when competition on a global scale increases, businesses may need to modify their tactics to be competitive. This might involve creating new goods or services, breaking into untapped markets, or altering their advertising or distribution strategies. Overall, the requirement for a thorough global integration plan may be prompted by the presence of international competitiveness and connection.

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effectiveness and efficiency in this order can be measured by?
O Asset turnover and profit margin
O return on equity and return on assets
O liabilities and equity
O all of the above

Answers

All of the above is the correct answer.

All of those answers are correct when measuring effectiveness and efficiency.

Hope this helps have an excellent day!

Marlena is putting together a focus group to obtain feedback on the new juice product her company plans to launch next year. A focus group is a type of research. (Qualitative or Quantitative)

Answers

A focus group is a type of qualitative research. Qualitative research is used to understand underlying motives, opinions and attitudes. It serves to explore and gain a deeper understanding of the given issue.

Focus groups are conducted with a small group of people who meet to discuss a specific topic. In Marlena's case, the target audience will provide her company with invaluable feedback about her new juice product. This type of research will give them an inside look at the thoughts and opinions of the people most likely to be interested in the product, which can help them make decisions about the design, marketing and pricing of the product.

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Which three functions are necessary between channel partners for an efficient flow of title and product to a customer and for payment back to the product producer

Answers

Transactional, logistical, and enabling functions make up the three categories.

What is Transactional functions?

One of the three categories of tasks carried out by intermediary in a marketing channel; transactional tasks include purchasing and selling items, as well as the risks involved in maintaining them in stock.

A business technique known as "point of sale" interactions is called transactional marketing. Instead than focusing on forging a relationship with the customer, individual sales are being optimized for efficiency and volume. Payment of bills, money transfers to family members anywhere in the world, payment of government fees, and online purchases are all made simple, inexpensive, and convenient with a transaction account.

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2. Luke borrowed $15,000 to pay his college tuition. After he graduates, he will repay the loan along with simple interest. After 2 years, Luke will owe a total of $17,250. What is the simple interest rate on Luke's loan

Answers

Answer:

7.5%

Explanation:

Given: Principal amount = $15,000

Time =- 2 years

Final Amount (Principal + interest)= $17,250

Interest = Final Amount - Principal amount

= $ ( 17250 - 15000  )

= $ 2250

Formula for interest : principal x rate x time

[tex]2250 = 15000 X rateX2[/tex]

→ [tex]rate = \frac{2250}{15000X2}[/tex]

⇒ [tex]0.075[/tex]

⇒ [tex]rate = 0.075 X 100[/tex]‰[tex]= 7.5[/tex]‰

Hence, the simplest interest rate on lukes loan =7.5%

Which of the following questions will NOT help you develop a solid communication​ strategy?
A. What is my​ goal?
B. What medium will work​ best?
C. Who is my​ audience?
D. What content will I​ need?
E. What do I want to accomplish with this​ communication?

Answers

What content will I​ need? will NOT help you develop a solid communication​ strategy.

Hence, Option D is correct

Speaking, listening, observing, and empathizing are all essential communication skills. Understanding the variations in how to communicate during in-person contacts, phone calls, and digital communications, such as email and social media, is also beneficial.Most people mistakenly believe that good communication skills just come from being a great speaker, but they also include the ability to listen, observe body language, and interpret silences in a conversation.Writing, reading, math, and the ability to utilize computer programs are examples of hard skills, which are measurable and teachable. Soft skills, on the other hand, are character attributes like manners, communication and listening skills, and interpersonal relations that make you a good employee.

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According to the liquidity preference model, if the interest rate rises above its equilibrium value, the quantity demanded of nonmonetary interest-bearing financial assets ________ and this leads to a ________ in the interest rate.

Answers

According to the liquidity preference model, if the interest rate rises above its equilibrium value, the quantity demanded of nonmonetary interest-bearing financial assets increases and this leads to a fall in the interest rate.

According to the Liquidity Preference model, investors should expect a higher interest rate or premium for riskier securities with extended maturities because, when all other things are equal, they favour cash or other highly liquid investments. Macroeconomic theory defines liquidity preference as the demand for money taken into account as liquidity. It demonstrates the connection between interest rates and the amount of money that the population wants to hold. According to the Liquidity Preference Theory, the interest rate is the cost of borrowing money.

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A registered representative opens a new account for a customer by telephone and receives an order to sell 300 shares of ABC at the market, regular way. Under FINRA Rules, the registered representative must do which of the following before executing the transaction?
[A] Have the stock in its possession
[B] Nothing, there are no restrictions on accepting the order
[C] Receive reasonable assurance from the customer that the stock will be delivered in good deliverable form within two business days from trade date.
[D] Receive reasonable assurance from the customer that the stock will be delivered in good deliverable form within four business days from trade date.

Answers

Receive reasonable assurance from the customer that the stock will be delivered in good deliverable form within two business days from trade date must do before executing the transaction.

What is transaction?
Transaction
is the transfer of goods, services, or resources between two or more parties. In business, a transaction occurs when money is exchanged for goods or services. Transactions can also be made between individuals, companies, or other entities. Transactions are typically recorded in the form of a ledger, which is a comprehensive record of all the transactions that occur over a certain period of time. Transactions can be made in a variety of ways, including through cash, check, credit card, or online payment platforms. Transactions are critical to the success of any business, as they are the lifeblood of the organization and enable it to function.

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If a company increases its sales price per unit for Product A the new breakeven point will O A remain the same O B. decrease O C. increase O D. More information is needed

Answers

If a company increases its sales price per unit for product A new breakeven point will remain the same.

What is a breakeven point?

The breakeven point (breakeven price) for a trade or investment can be calculated by comparing an asset's market price to its purchase price. When both prices are the same, the breakeven point is attained. By dividing the entire fixed costs associated with production by the revenue per unit less the variable expenses per unit, the breakeven point (BEP) formula in corporate accounting is calculated. The costs that remain constant regardless of the number of units sold are referred to in this sense as fixed costs. In many circumstances, breakeven points (BEPs) are helpful. At that price, the homeowner would make exactly break even and would not lose money.

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Phillip purchased a single family home 10 years ago for $235,000. Since then, he has accrued $85,455 is deducted depreciation. If Phillip were to sell his property today, what would be his adjusted basis

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If Phillip were to sell his property today, his adjusted basis is $149,545.

In accountancy, depreciation is a time period that refers to 2 elements of the identical idea: first, the actual lower truthful price of an asset, together with the lower fee of manufacturing unit gadget each yr as its miles used and put on, and 2nd, the allocation in accounting statements of the unique fee of the assets to durations wherein the assets are used (depreciation with the matching precept).

Depreciation is for that reason the decrease within the fee of belongings and the technique used to reallocate, or "write down" the value of a tangible asset (including device) over its beneficial existence span. corporations depreciate long-term assets for each accounting and tax purposes.

The lower in the price of the asset impacts the stability sheet of a business or entity, and the method of depreciating the asset, accounting-clever, impacts the internet income, and accordingly the income announcement that they record. normally, the fee is allocated as depreciation cost for a few of the durations wherein the asset is predicted for use.

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