Suppose a producer charges $20 for a new toy. At this price, the producer supplies more toys than people demand, so there is an excess supply. The producer decides to lower the price to $15. At this new price, quantity supplied equals quantity demanded. So $15 is the equilibrium price.
Answer: Proposal C
Explanation:
The way to solve this is to calculate the Present Values of all these payments. The smallest present value is the best.
Proposal A.
Periodic payment of $2,000 makes this an annuity.
Present value of Annuity = Annuity * ( 1 - ( 1 + r ) ^ -n)/r
= 2,000 * (1 - (1 + 0.5%)⁻⁶⁰) / 0.5%
= $103,451.12
Proposal B
Present value = Down payment + present value of annuity
= 10,000 + [2,200 * ( 1 - ( 1 + 0.5%)⁻⁴⁸) / 0.5%]
= 10,000 + 93,676.70
= $103,676.70
Proposal C
Present value = Present value of annuity + Present value of future payment
= [500 * (1 - (1 + 0.5%)⁻³⁶) / 0.5%] + [116,000 / (1 + 0.5%)⁶⁰]
= 16,435.51 + 85,999.17
= $102,434.68
<em>Proposal C has the lowest present value and so is best. </em>
Answer:
cannibalization
Explanation:
Cannibalization of products refers to a situation where one product of the same company will "eat" (reduce) the sales of another product or products of the same company.
For example, Coke Zero cannibalized the sales of Diet Coke and regular Coke.
Answer:
The average beta of the new stocks would be 1.75 to achieve the target required rate of return
Explanation:
In order to calculate the average beta of the new stocks to achieve the target required rate of return we would have to calculate the following:
average beta of the new stocks = (Required Beta-(portfolio /total fund) *old beta)/(additional portfolio/total fund)
To calculate the Required Beta we would have to use the formula of Required rate of return as follows:
Required rate of return=Risk free return + (market risk premium)*beta
0.13=0.0425+(0.06*Required Beta)
Required Beta = (0.13-0.0425)/0.06
Required Beta = 1.45
Therefore, average beta of the new stocks =(1.45-($40/$100) *1)/($60/$100)
average beta of the new stocks =1.05/0.6
average beta of the new stocks =1.75
The average beta of the new stocks would be 1.75 to achieve the target required rate of return
Answer:
c. Critical Path Analysis
Explanation:
Quality management is a set of established business processes that ensure business actions comply with established quality standards. This is reflected in quality of products, the relationship between the entity and all stakeholders.
The tools of quality management are some statistical tools used to check the variability if any of actual output quality from set quality standard with view to effecting necessary control. There are basically 7 tools of quality management which are Scatter Diagram, Control Charts
, Flow-charting
, Histogram
, Pareto chart, Check Sheets, Cause-and-effect diagram
