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3 years ago

The strategy of convincing a customer to buy a higher-priced item than he or she had originally intended is called

1 answer:

5 0

It's called an upselling

It's a common technique that a salesman/ marketing team use to increase profit with promise that the customer will get a better product or service

The example of an upselling is when you want to buy a cheap house, but the salesman manage to convinced you that buying another expensive house is good for your investment, and you buy the expensive one instead.

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Problem 16-17 Firm Value [LO2] Change Corporation expects an EBIT of $25,000 every year forever. The company currently has no de

PolarNik [594]

Answer and Explanation:

The computation is shown below:

a. The current value of the company is

As it is mentioned that the company has no debt that means it is unlevered firm that is equivalent to unlevered value of the company

Unlevered value of the firm = Vu

Vu = EBIT × (1 - tax rate ) ÷ unlevered Cost of Equity

= EBIT × (1 - tax rate ) ÷ R0

= $25,000 × (1 - 0.22 ) ÷ 12%

= $162,500

b-1.

The computation of the value of the firm in the case when the value of the firm is equivalent to 50% of unlevered value

VL = Vu + Borrowing × tax rate

where,

Debt = borrowing = 50% × unlevered value of company

Debt = borrowing = 50% x Vu

So,

VL = Vu + Borrowing x tax rate

VL = $162,500 + ($162,500 × 50%) × 22%

= $162,500 + $17,875

= $180,375

b-2.

The computation of the value of the firm in the case when the value of the firm is equivalent to 100% of unlevered value

Levered value of the firm VL

VL = Vu + Borrowing × tax rate

Debt = borrowing = 100% × unlevered value of company

Debt = borrowing = 100% × Vu

So,

VL = Vu + Borrowing x tax rate

= $162,500 + ($162,500 × 100%) × 22%

= $162,500 + 35,750

= $198,250

C.1.

The computation of the value of the firm in the case when the value of the firm is equivalent to 50% of the levered value

VL = Vu + Borrowing × tax rate

= Vu + (VL × 50%) × tax rate

VL = Vu + (VL × 50%) × 22%

VL = Vu + 0.11 VL

VL - 0.11 VL = 162,500

0.89 VL = 162,500

VL= 182,584.27

C.2.

The computation of the value of the firm in the case when the value of the firm is equivalent to 100% of the levered value

Levered value of the firm VL

VL = Vu + Borrowing x tax rate

VL = Vu + (VL × 100%) × tax rate

= Vu + (VL × 100%) × 22%

= Vu + 0.22 VL

VL - 0.22 VL = 162,500

0.78 VL = 162,500

VL= $208,333.33

6 0

3 years ago

Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is ×120 = $1, and the New York yen/dollar exchange rate a

Viefleur [7K]

Answer:

This question lacks answers

A. currency swap.

B. arbitrage.

C. backwardation.

D. straddle.

The answer is b.

Explanation:

Arbitrage is a common practice used to gain profits from inefficient markets. Since most financial markets are inefficient by nature, dealers and similar business entities that have an interest in this kind of business practice.

The profit in arbitrage is based on the imbalance in the two prices on each market respectively. The term is mainly used for financial markets and various financial instruments (securities, bonds, currencies).

In the example above, the dealer becomes an arbitrageur by making a profit from the difference in the yen/dollar exchange rate in two markets (NY and London.)

8 0

3 years ago

Kim is the sales representative for a major textbook publisher. When she calls on the business faculty at General University, sh

Juli2301 [7.4K]

Answer:

Users

Explanation:

The users be the ones to use the product, initiate the purchase process, generate purchase specs and evaluate product performance after the purchase.

5 0

3 years ago

Read 2 more answers

If the credit to record the purchase of supplies on account is not posted