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1 year ago

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?

1 answer:

7 0

Status quo pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry. Status quo—seeks to maintain a consistent level of profit made from a certain product by keeping your product pricing comparable to those of the same or similar items sold by your competitors in order to avoid beginning a price war.

The soft drink industry is an often used illustration of status quo pricing. Be it a Pepsi or a Coca-Cola product, the cost of a bottle of soda tends to be quite constant. Coca-Cola and Pepsi often represent the status quo in terms of pricing.

To learn more about quo pricing, click here.

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This morning, Mary bought a ten-year, $1000 par value bond with a 7.0% coupon rate and annual payments. She paid $994 for the bo

rodikova [14]

Answer:

e. $70.00

Explanation:

The coupon payment is the amount received by the bondholder on a periodic basis during the life of the bond which is based on the bond's face value which in this case is $1000

Note that the coupon payments are expected to be made once a year.

Coupon payment=bond face value*coupon rate

bond face value=$1000

coupon rate=7%

annual coupon payment=$1000*7%

annua coupon payment=$70.00

6 0

3 years ago

For most high-income countries of the world, GDP _________________ over time.

Gwar [14]

Answer:

For most high-income countries of the world, GDP <u>HAS INCREASED GRADUALLY</u> over time.

Explanation:

Both GDP and GDP per capita has increased for almost all high income countries. Actually the only country in the world that was once rich and had a very high GDP and GDP per capita that turned into a developing country (AKA poor country) is Argentina. It is a unique case in all the world, since Argentina had the highest GDP per capita for 2 years (1895 and 1896) and continued to have a relatively high GDP per capita more than 60 years. Then political turmoil and corruption resulting in it falling from number one spot to number 73.

8 0

3 years ago

Ted Corporation expects to generate free-cash flows of $200,000 per year for the next five years. Beyond that time, free cash fl

wariber [46]

Answer:

The value of Ted stock is $2.43

Explanation:

Free cash flow From Year 1 to 5 = $200000

Cash Flow Year 6 = 200000*1.05

= $210000

This cash flow is expected to grow forever, so the terminal value can be caluclated at Year 5 of the above perptuity by Gordon Growth model

Terminal Cash FLow Value at Year 5 = 210000/(15% - 5%)

= $2100000

Present Value of above stream

= 200000*PVIFA(5 yr, 15%) + 2100000*PVIF(5 yr, 15%)

= $200000*3.352 + $2100000*0.497

= $1714100

Value of equity = Present Value of Firm - Value of debt

= $1714100 - $500000

= $1214100

Number of shares = 500000

Value per share = $1214100/500000

= $2.43

Therefore, The value of Ted stock is $2.43

7 0

4 years ago

Lee Sun's has sales of $3,900, total assets of $3,600, and a profit margin of 5 percent. The firm has a total debt ratio of 41 p

sasho [114]

Answer:

The answer is 9.18 percent.

Explanation:

Return on equity = Net income(profit) / Total equity.

We need to find net profit and equity.

1. To find net income:

Profit margin = profit/sales

So profit = 0.05 x $3,900

= $195

2. To find asset:

Total debt ratio = total debt(liabilities)/ assets

Total debt = 0.41 x $3,600

Total debt(liabilities) = $1,476

Equity = Assets - liabilities

$3,600 - $1,476

= $2,124.

Therefore, return on equity is:

$195 /$2,124

0.0918

Expressed as a percentage

9.18 percent.

7 0

4 years ago

Al is a medical doctor who conducts his practice as a sole proprietor. During 2014, he received cash of $280,000 for medical ser

Vinvika [58]

Answer:

Al should use the cash method of accounting so that he will not have to pay income taxes on uncollected accounts receivable

gross income = $292,000

gross income computed by the accrual method = $300000

Explanation:

given data

received cash = $280,000

services provided = $40,000

accounts receivable = $60,000

advance payment = $12,000

solution

as we know that Al's gross income on the cash basis is

gross income = ($280,000 + $12,000) = $292,000

and

Al gross income computed by the accrual method is as following

as we know here Cash received $292,000

gross income computed by the accrual method = Cash received - advance payment - services provided + accounts receivable

gross income computed by the accrual method = 292,000 - 12,000 - 40,000 + 60,000

gross income computed by the accrual method = $300000

Al should use the cash method of accounting so that he will not have to pay income taxes on uncollected accounts receivable

3 0

3 years ago