Between the 1920s and the 1950s, businesses had a strong SALES orientation. This happened because, production caught up with and exceed demand and producers now have to direct their efforts toward marketing their products. The sales orientation was characterized by increased advertising, increased sales forces and high pressure selling methods.
Answer:
The economic profit=-$3,000, there is incentive to exit market
Explanation:
The economic profit can be defined as the difference between the revenue from sales and the total cost including opportunity cost. This can be expressed as;
P=R-(C+O)
where;
P=economic profit
R=total revenue
C=total input costs
O=opportunity cost
In our case;
R=$6,500
C=(2,100+3,100+100)=$5,300
O=$3,200
replacing;
P=6,500-(5,300+3,200)
P=6,500-8,500=-3,000
The economic profit=-$3,000, there is incentive to exit market
The answer is: A. Equity financing
In most cases, companies choose to do this if they want to expand their operation.
Corporations do this by selling the shares of their company to the public or a select group of investors. When the partial ownership is traded with capital, the corporations would have an obligation to share their profit to the shareholders in the form of dividend.
Answer:
1. 3
2. $382,400
Explanation:
The computation is shown below:
The computation of the degree of operating leverage is shown below:
= (Contribution margin) ÷ (Contribution margin - Fixed costs)
= ($717,000) ÷ ($717,000 - $478,000)
= $717,000 ÷ $239,000
= 3
Now the increase in percentage of income
= 20% × 3
= 60%
So, the expected of income is
= $239,000 × 100 + 60%
= $239,000 × 160%
= $382,400