In a decision to either sell as is or process a product further, joint costs are considered irrelevant and process further costs are considered relevant.
The decision of whether to sell the product right away or wait to sell it in order to earn more money. Although we think that growing the business's income is great, we also need to make sure that the costs associated with the growth will be met. We must contrast the profit margin between selling now and selling later because additional processes will demand more resources and expenses.
Additionally, we need to make an effort to maximise the return on our investment. Additional processes might need more money spent on equipment. These factors require us to apply the sell or process further technique in order to choose the best course of action.
Typically, this scenario occurs in a joint product where one or more outputs can be generated and produce additional revenue. The joint products are produced at the same cost up until the point where they are divided and further sold or processed. Although the products can be sold at the split point, there are instances when continuing developing them is more profitable.
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Answer:
After cost of debt for a floatation cost of 2% is 6.62%
Explanation:
After tax cost of debt = Market interest × (1- tax rate)
We will get the cost of debt using the time value of money principle.
PV = -$1,000
Pmt = $1,000 × 9%
=$90
P/yr = 1
N = 20
FV =1,000
Tax rate = 25%
YTM
The market interest rate is 9% using financial calculator hence;
After-tax cost of debt = Market interest × (1-tax rate)
= 0.09 × (1 - 0.25)
= 0.0675 or 6.75%
If floatation cost is 2%, then
Net receipts after floatation cost = Cost × (1 - floatation rate)
= 0.0675 × (1- 0.02)
= 0.06615 or 6.62%
Answer:
A set of business plans has to be established for Craig not to be totally broke in December
Explanation:
Below are sets of plan to take on for an effective business plan to yield growth
- Establish a results-driven planning process with prompts and definition of specific business terms and procedures.
- Organize the distinct business ideas possessed into an attractive yet concise visual format.
- Develop and monitor forecasts and budgets to see if there is a potential of the business to yield money.
- Work on convincing targeted investors with a proven and strategic format that should impress them.
- Seek professional advice and real life examples while working on yours.
- Consistently monitor the business you started using a unique dashboard and see how progressive you have been, the hurdles being encountered, and facilitating ways to better improve the said business.
With strict adherence to the above outlined plans, Craig does stand a chance of making profits and not being broke at December
Answer:
The correct answer is installment credit
Explanation:
Installment credit is a credit that involves paying a specific amount of the total credit taken in a particular period till the total credit amount is paid off.
For instance,if a consumer buys a refrigerator on credit ,that is without paying cash immediately instead giving the grace by the seller to pay for the gadget over a period of twelve months by paying $200 a month until the 12th month when total amount owed would have been paid
Answer: Framing effects
Explanation:
The framing effect is referred to as or known as a cognitive bias under which an individual tends to decide upon the options that are mostly based on the fact whether the given options are also represented with negative or positive connotations, i.e. as a gain or as a loss. Individual usually avoid risk while a positive frame is being presented but tend to seek risks while a negative frame is being presented.
