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Umnica [9.8K]
3 years ago
15

Suppose you are the owner of a picture frame store and your current fixed costs total $50,000 (real estate taxes, interest on a

bank loan, etc.). In addition, your current unit variable cost for a picture is $50 (which includes labor, glass, frame and matting). Calculate the price necessary to break-even by selling a quantity of 1,000 frames.
Business
1 answer:
yanalaym [24]3 years ago
4 0

Answer:

Break-even is at a price of $100

Explanation:

Break even is when the incomes are equal to the outcomes.

In this case,  the sales are our incomes and the variable and fixed cost are the outcomes.  

So,

Sales =variable cost-fixed cost

Sales=price *x

Variable cost= $50x

Fixed cost=$50,000

units= 1000

price *1000=$50*1000+50000

Price =(50000+50000)/1000

Price =100000/1000

Price =$100

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Stock R has a beta of 1.8, Stock S has a beta of 0.75, the expected rate of return on an average stock is 9%, and the risk-free
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Stock R more beta than Stock S = 4.2%

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solution

we get here Required Return

Required Return (Re) = risk-free rate + ( expected rate of return - risk-free rate ) beta  ...........1

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