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2 years ago

4. Profit maximization and loss minimization

Business

1 answer:

Stella [2.4K]2 years ago

6 0

Jake is incorrect with his assertion that the BYOB should charge 2.25 per can.

<h3>What is Profit maximization and Loss minimization?</h3>

The process of Profit maximization ensures that favorable output and price are achieved to maximize its return while the process of Loss minimization ensures there is lower loss on return in the longer-run.

Price QD T*R(P*Q) Total cost(ATC*Q) Profit(TR-TC)

2 1000 2000 2750 -750

2.25 750 1687.5 2625 -937.5

Given that loss realized is lower in $2 per unit than $2.25 per unit, then, Jake is not correct with his assertion that the BYOB should charge 2.25 per can.

Note: The point has been placed on the graph to indicate the profit-maximizing price and quantity for BYOB.

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ConAgra Foods is a global manufacturer of processed and packaged foods with revenues of $11 billion annually. It recently acquir

mojhsa [17]

Answer:

wholly owned subsidiary

Explanation:

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It is also characterized by having control over its resources and specific mission, also operates independently.

Hence, in this case, the right answer is a wholly owned subsidiary

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3 years ago

Suppose that stricter emissions standards would reduce health-care costs by $70 million but increase the costs of fuel and emi

serious [3.7K]

This is asking for a cost-benefit analysis. This simply means look at the cost of the change and see if the benefit is greater than the cost.

In this case, the cost would be $40 million but there is a benefit (cost savings) of $70 million.

Since the benefit outweighs the cost, it is a good idea.

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3 years ago

Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold

stepan [7]

Answer:

Net increase in cash = $650

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf for the complete question.

Also note: See the attached excel file for the statement of cash flows using the indirect method.

From the attached excel file, we have:

Net cash flow from operating activities = $830

Net cash flow from investing activities = $30

Net cash from financing activities = -$210

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Download xlsx

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3 years ago

Robert gillman, an equity research analyst at Gillman Advisors, believes in efficient markets, He has been following the mining

antoniya [11.8K]

Answer:

Q1) a. 6.60%

Q2) c. retaining a higher percentage of earning will result in a higher growth rate.

Explanation:

Q1.)

Use dividend discount model (DDM) to solve for the growth rate;

g = r- (D1/P0)

whereby;

g = dividend growth rate

r = required rate of return = 11.40% or 0.1140 as a decimal

D1 = next year's dividend = $1.14

P0 = Current stock price = $23.75

g = 0.1140 - (1.14/23.75)

g = 0.1140 - 0.048

g = 0.066 or 6.6%

Therefore, the growth rate is 6.60%, making choice A correct.

Q2.)

c. Retained earning is the proportion of total net profit that a company reinvests back into the business for the purpose of investing in other potentially profitable projects.The returns from these projects would increase the value of the company at a faster rate if a higher percentage e.g 90% is retained. On the other hand, if the company pays a larger portion of its retained earnings e.g 70% as dividends, it will experience a slower growth rate making choice C correct.

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3 years ago

Fred and Anna are married and file a joint return for 2018. Fred is over age 65 and Anna is legally blind. They have AGI for the

Allisa [31]

Answer:

Option "B" is the correct answer to the following statement.

Explanation:

Given:

Total Adjusted Gross Income of Fred and Anna = $50,000.

In this situation, Fred and Anna should either choose a standard deduction or a comprehensive deduction.

Amount of Standard Deduction

Married File a joint return = $24,000

If an applicant is jointly taxing coupled and partner is over 65 years of age, they may raise the deduction by $1,300.

If an applicant is jointly taxing coupled and one partner is blind, they may Also raise the deduction by $1,300.

So, Total standard deduction = $24,000 + $1,300 + $1,300 = $26,600

Amount of Comprehensive Deduction

Given:

Interest = $13,000

Charitable contribution = $1,500

Property Deduction = $11,000 (Maximum of $10,000 is allowed) = $10,000

Total deduction = $13,000 + $1,500 + $10,000 = $24,500

So , Fred and Anna choose Standard Deduction

Total taxable income = $50,000 - $26,600 = $23,400

4 0

4 years ago