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2 years ago

In the short-run, the firm will operate (not shut down) as long as revenue is more than enough to cover ________.

Business

1 answer:

Sholpan [36]2 years ago

5 0

In the short run, if the firm's total revenue is less than variable costs, the firm should shut down.

<h3>Can firms shut down in the short run?</h3>

In the short run, when a firm cannot rescue its fixed costs, the firm will decide to shut down temporarily if the expense of the good is less than moderate variable cost. In the long run, when the firm can regain both fixed and variable costs, it will choose to leave if the price is less than average total cost.

The fact that the firm can pay its varying costs is all that matters because in the short‐run, the firm's fixed costs are sunk; the firm must deliver its fixed costs regardless of whether or not it decides to shut down. Of course, the firm will not resume to incur losings indefinitely.

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Current profit Blank______ and target Blank______ are two strategies used by firms that are pursuing a profit pricing objective.

prohojiy [21]

Current profit maximization and target return are two strategies used by firms that are pursuing a profit pricing objective.

A profit-oriented pricing objective means that a company tried to earn maximum profit with every sale or service provided, and achieve long term business profits.

Current profit maximisation is a price setting objective in which organisation set a price for a product that will give maximum profits, cash flow or return in short term without considering long term.

Target return pricing is a method where the firm determines the price on the basis of a target rate of return on the investment.

The two strategies that a firm use while pursuing a profit pricing objective is current profit maximization and target return pricing.

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8 0

2 years ago

To provide better service for their customers, America Online purchased office space in India for their online customer service

jekas [21]

Answer:

Foreign Direct Investment

Explanation:

For an investment to be called a foreign direct investment, a business in one country must purchase a form of controlling ownership in another business which is located in another country. Mergers and acquisitions, opening a new facility in another country, or purchasing properties in another country for the purpose of doing business is called FDI. In the question, America Online purchases office space in India; this is purely an example of Foreign Direct Investment.

4 0

3 years ago

What quantity will the sellers be able to sell after the imposition of the price floor?

Ray Of Light [21]

If a price control makes production unprofitable or only slightly more lucrative than average, the amount supplied declines. A price limitation does not necessarily make output unprofitable or insufficiently profitable for all producers in a field.

Effects of a pricing floor. The government imposes a price floor to force consumers to pay manufacturers a minimum amount. In cases where the government feels that producers are obtaining an unjust amount, a price floor is created. With the sole purpose of aiding producers, price floors are imposed. Price floors do have certain negative market implications, though.

Price floor and pricing ceiling are both governmental measures of price regulation. But there is a limit or constraint on how low a price can be set for any good. Government-set minimum prices for specific goods and services are required by law in order to protect producers from receiving extremely low prices.

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7 0

2 years ago

Torch Industries can issue perpetual preferred stock at a price of $71.00 a share. The stock would pay a constant annual dividen

kodGreya [7K]

Answer:

the company's cost of preferred stock, rp is = 9.15%

Explanation:

step 1. Consider the following formula.

Cost of preferred stock = annual dividend / Price *100

Step 2. Set the values of the variables.

= $ 6.5/$ 71*100

step 3. Solve.

= 9.15%

Answer : 9.15 %

6 0

3 years ago

Pendant Publishing is considering a new product line that has expected sales of $1,100,000 per year for each of the next 5 years

Katyanochek1 [597]

Answer:

The operating cash flow of year 1 for the company is $368,500

Explanation:

In order to calculate the operating cash flow of year 1 for the company first we need to calculate the Cashflow before tax and depreciation as follows:

Cashflow before tax=Sales-Variable cost-fixed cost

Cashflow before tax=$1,100,000-$450,000-$180,000

Cashflow before tax=$470,000

Depreciation = Original cost - Salvage / fixed Cost

Depreciation= $1,200,000 - $300,000 / 5

= $180,000

Therefore, to calculate the operating cash flow of year 1 for the company we would have to make the following calculation:

Operating Cash Flow=(CFBT×65%)+Depreciation×35%

Operating Cash Flow=($470,000×65%)+($180,000×35%)

Operating Cash Flow=$368,500

The operating cash flow of year 1 for the company is $368,500

5 0

3 years ago