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Alexandra [31]
3 years ago
13

A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25. In

the long run, the firm should a. ​Shut-down because it is cost effective to pay off the remaining fixed costs b. ​Continue operating as the firm is covering all the variable costs and some of the fixed costs c. ​Shut-down as the firm is making a loss of $10,000 per week d. ​Shut-down as price is lower than average cost
Business
1 answer:
erik [133]3 years ago
7 0

Answer:

b. ​Continue operating as the firm is covering all the variable costs and some of the fixed costs

Explanation:

A firm should shutdown operations if its price is less than average variable cost.

The price the firm sells is $15

Average variable cost is $10.

Price is greater than average variable cost in excess of $5.

The $5 covers some of the average fixed cost.

I hope my answer helps you

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Akwamba made this statement ‘organisations cannot be successful if managers fail to pay attention to the forces in the external
WARRIOR [948]

Answer:

Yes, I agree.

Find explanation below.

Explanation:

The external environment of a business simply refers to the factors found outside the business which can have a profound effect on it. There are basically two types of external environments, namely;

1. The directly interactive which has a direct impact on the business. Examples include, business owners, the customers, contractors, and competitors.  

2. Indirectly interactive whose impact on the business is not immediate. Examples include, the political , socio-cultural, economic influences among others.

Practical Examples:

1. Customers play a crucial role to the running of businesses. Managers must take care to listen to the concerns of the customers and attend to their needs urgently. For example, if a customer complains about his dissatisfaction with a style of service, managers should endeavor to address the concern to avoid losing the customer.

2.Political: Government rules and regulations have an impact on businesses because, not adhering to them could lead to sanctions and even closure of the business. Managers must ensure that they heed to and comply with governmental instructions, such as tax payment.

3 0
3 years ago
Electronic audio and video devices are never used by terrorists for surveillance purposes. true or false
hammer [34]

The answer would be false. Since they are terrorists, they would likely scheme and plot in ways where they won’t get caught so it is likely that they will use devices in monitoring their surroundings in a way of helping them carry out their plans, devices they use may be electronic audio and video devices which could be seen in the statement above.

5 0
3 years ago
Frankenstein Electric has a capital structure that consists of 60 percent equity and 40 percent debt. The company's long-term bo
Alexeev081 [22]

Answer:

Kd = 7%

Ke =      D1      +  g

        Po(1 - FC)

Ke =      $2            + 0.09

        $40(1 - 0.15)

Ke =       $2      +  0.09

              $34

Ke = 0.1488 = 14.88%

WACC = Ke(E/V) + Kd(D/V)(1-T)

WACC = 14.88(60/100) + 7(40/100)(1 - 0.40)

WACC = 8.928 + 1.68

WACC = 10.6%

Explanation:

In this case before-tax cost of debt is given. Cost of equity is expected dividend divided by current market price after flotation cost plus growth rate. WACC is calculated as cost of equity multiplied by the proportion of equity in the capital structure plus after-tax cost of debt multiplied by proportion of debt in the capital structure.

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3 years ago
On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note requir
lisov135 [29]

Answer:

1. Debit Interest Expense $7,000; debit Notes Payable $7,238; credit Cash $14,238.

Explanation:

The journal entry is shown below:

Note payable A/c Dr $7,238

Interest expense A/c Dr $7,000

  To Cash A/c $14,238

(Being the first payment on the note is recorded)

The computation of the interest expense is shown below:

= Borrowed amount × rate of interest

= $100,000 × 7%

= $7,000

And, the remaining balance left is reported in the note payable account

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