All categories

3 years ago

Having fewer customers in business markets in comparison with consumer markets:

1 answer:

8 0

<span>Having fewer customers in a business market can be a positive, since it allows for the business to get to know those customers they do serve more closely and allows them to better cater to their needs. However, it can also be a negative because it makes every transaction with a customer vital to the overall bottom line and the vitality of the business.</span>

You might be interested in

You have won the NY State Lottery. The prize is $100,000,000, which is determined by 20 annual payments of $5,000,000. You can e

katen-ka-za [31]

Answer:

The annual payment have a better present value. It is $40,770,979 to $36,000,000.

After tax-basis we are $40,770,979 more richier

IRR for the prize 5.45%

Explanation:

<u>we will use the NY state discount rate:</u>

60,000,000 x (1- 40%) = 36,000,000 after-tax

second option:

5,000,000 x (1-40%) = 3,000,000 after-tax

we calculate the present value of a 20 year annuity for 5,000,000 dollars with a 4% discount rate.

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 3,000,000

time 20

rate 0.04

$3000000 \times \frac{1-(1+0.04)^{-20} }{0.04} = PV\\$

PV $40,770,979.0349

As this option is better than the upfront payment, it is better to take the annual payment.

We can determinate the real rate of return

We consider 60,000,000 upfront against 20 payment of 5,000,000 the rate will be calcualte with goal seek excel tool or trial and error manually:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 5,000,000

time 20

PV $60,000,000.0000

$5000000 \times \frac{1-(1+r)^{-20} }{r} = PV\\$

rate = 0.05450114 = 5.45%

<u>notice:</u><u> that with this rate if we apply the tax rate we got the same rate:</u>

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 3,000,000

time 20

PV $36,000,000.0000

$5000000 \times \frac{1-(1+r)^{-20} }{r} = PV\\$

rate = 0.05450114 = 5.45%

7 0

3 years ago

Yesterday, you entered into a futures contract to buy euro at $1.50/€. Your initial margin was 45% and your maintenance margin i

Marat540 [252]

Answer:

$1.1786

Explanation:

Given

Initial purchase price = $1.50

Initial margin = 45%

maintenance margin is 30%

Margin call price = InitiaL purchase price × [1 - InitiaL margin / 1- maintenance margin]

= $1.50 × [1-45% / 1-30%]

=$1.50 × [0.55/0.70]

=$1.1786

6 0

3 years ago

Read 2 more answers

Which of the following statements are inconsistent with the efficient market hypothesis?a. The average annual return on stocks i

koban [17]

Answer:

b. Stocks that outperform the index in March always underperform it in April.

d. Stocks that outperform the index in March always outperform it in April.

Explanation:

The Efficient market hypothesis states that in an efficient market, all the available information in the market are reflected in the prices of the stocks being traded. As such, all stock are fairly priced.

Stocks that perform in a certain way in March and then in another way in April are violations of the hypothesis. This is because if indeed the market was efficient, the prices would adjust to reflect the different performances by month such that there would be no more fluctuations.

6 0

3 years ago

Society suffers a deadweight loss in a pure-monopoly market because

nekit [7.7K]

A pure-monoply means that a company does not have to compete with other producers within the market. Since they aren't competing with a good or service, they aren't competing with each others customers either. When a company does not have to compete on price/customers they may end up being greedy and have market failure.

8 0

4 years ago

Which idea is inconsistent with perfect competition?.

kupik [55]

The idea that is not consistent with perfect competition is product differentiation.

<h3>What is a perfect competition?</h3>

A perfect competition is a market where there are many buyers and sellers of identical goods and services. Market prices are set by the forces of demand and supply. This, they are price takers. There are no barriers to entry or exit of firms into the industry.

Here are the opti0ns to this question:

product differentiation

freedom of entry or exit for firms

a large number of buyers and sellers

price-taking behavior

To learn more about perfect competition, please check: brainly.com/question/17110476s

7 0

2 years ago