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aleksley [76]
4 years ago
5

PureRinse Inc. is a brand reputed for its wide variants of body wash that introduced its range of shampoos and skin moisturizers

a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, what value and cost drivers is PureRinse applying?
Business
1 answer:
klemol [59]4 years ago
6 0

Answer:

Economics of scope.

Explanation:

Economies of scope can easily described to be situations in which the long-run average and marginal cost of a company, organization, or economy decreases, due to the production of some complementary goods and services. An economy of scope means that the production of one good reduces the cost of producing another related good.

Economies of scope differ from economies of scale, in that the former means producing a variety of different products together to reduce costs while the latter means producing more of the same good in order to reduce costs by increasing efficiency.

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This desire to reduce internal tension is a crucial aspect of the drive-reduction theory.

<h3 /><h3>What is drive-reduction theory?</h3>

It corresponds to a psychological theory developed by Clark Hull, who believed that individuals are motivated to meet their basic needs, which are psychological and physiological needs.

Therefore, a behavior to reduce the unpleasant sensation of cold would be a physiological motivation proposed by the drive-reduction theory.

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4 0
2 years ago
Assume that a one-year CD purchased for $1000 pays an APR of 10% that is compounded semi-annually. How much is in the account at
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Answer:

<u><em></em></u>

  • <em>At the end of the first compounding period: </em><u>$1,050.00</u>
  • <em>At the end of the second compounding period: </em><u>$1,102.50</u>

Explanation:

<u />

<u>1. First period:</u>

  • Investment: $1,000

  • <em>APR =  10%</em> = 0.1 compounded semi-annually.

  • <em>Semi-annually compound interest</em>: 0.1 / 2 = 0.05

  • Interest earned at the end of the first period: $1,000 × 0.05 = $50.00

  • Amount in the accoun at the end of the first period:

                                                        $1,000.00 + $50.00 = $1,050.00

<u>2. Second period</u>

  • Amount in the account beginning the second period: $1,050.00

  • Semi-annually compound interest: 0.1 / 2 = 0.05

  • Interest earned in the second period:

                                                      $1,050.00  × 0.05 = $50.00 = $52.50

  • Amount in the account at the end of the second period:

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6 0
3 years ago
You are considering the purchase of a common stock that paid a dividend of $3.00 yesterday. You expect this stock to have a grow
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Answer:

$50.8

Explanation:

As per given Data

Dividend Paid = $3

Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Formula for PV of dividend

PV of Dividend = Dividend x ( 1 + growth rate )^n x ( 1 + r )^-n

1st year

PV of Dividend = $3 x ( 1 + 20%)^1 x ( 1 + 14% )^-1 = $3.16

2nd year

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3rd year

PV of Dividend = $3 x ( 1 + 20%)^3 x ( 1 + 14% )^-3 = $3.50

After three years the dividend will grow at a constant rate of 5%, so we will use the following formula to calculate the present value

PV of Dividend = [ $3 x ( 1 + 20%)^3 x ( 1 + 5%) / ( 14% - 5% ) ] x [ ( 1 + 14% )^-3 ]

PV of Dividend = $40.82

Value of Stock = $3.16 + $3.32 + $3.50 + $40.82 = $50.8

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4 0
1 year ago
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