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jolli1 [7]
3 years ago
14

Coca-Cola acquired its bottlers and created a national vertically integrated business operation in 2010. After spending 12.3 bil

lion USD to acquire Coca-Cola Enterprises, its largest bottling partner, it reversed course in 2015 and sold off all its bottling operations. This is an example of a failed diversification effort.True / False.
Business
2 answers:
Cloud [144]3 years ago
8 0

Answer:

False

Explanation:

This is an example of a failed vertical integration, not failed diversification. Coca Cola generally doesn't produce any Coke itself, it mostly licenses it Coke production. It started to vertically integrate bottlers during the 2008-2010 financial crisis, since the largest Coke bottler in the world operated in Greece (it supplied Coke to most of Europe). After Greece collapsed, Coca Cola purchased the bottler and relocated its headquarters to Switzerland.

Since the bottlers themselves only sell Coke and related products (diet Coke, Coke zero, Fanta, Sprite, etc.) it cannot be considered a product diversification because no new product was added to Coca Cola's product line and no new market was served.

Svet_ta [14]3 years ago
7 0

Answer:

True

Explanation:

Coke tried to diversify into the bottling industry by acquiring their bottlers and in the process creating a vertically integrated business. However, 5 years later, they did find out how difficult it was and it led to a failed diversification effort when sold off their bottling operations. This was majorly due to the fact that the bottling business required too much capital investment and time. Capital investment and time that an already large enterprise like coca cola couldn't afford at that period. The initial aim was to have control over the whole production process, but soon after the diversification failed, they went back to producing just the concentrates.

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Sheffield Corp. is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were
valentina_108 [34]

Answer:

$8,495,833

Explanation:

<u>Calculation of weighted-average accumulated expenditures</u>

Date     Payments    Funds used        Annualized               Amount

Mar 1    $6450000       10/12             $6450000*10/12       $5,375,000

Jun 1    $5350000        7/12              $5350000*7/12         $3,120,833

Dec 31  $8250000       0/12              $$8250000*0/12      <u>$0                </u>

Weighted Average Expenditures                                        <u>$8,495,833</u>

6 0
3 years ago
Sales (19,500 units at $30 per unit) $585,000 Variable expenses 409,500 Contribution margin 175,500 Fixed expenses 180,000 Net o
vichka [17]

Answer:

                                                                                                   Automated

Sales (19,500 units at $30 per unit)            $585,000            $585,000

Variable expenses                                        409,500               351,000

Contribution margin                                       175,500              234,000

Fixed expenses                                              180,000              252,000

Net operating loss                                          $(4,500)           $( 18,000)

New Cm ratio=  Contribution Margin/ Sales Revenue

                      = $ 234,000 $ 585,000 = 0.4

Break-even point in  dollars=  Fixed Costs/ 1- (variable Cost/ Sales)

                                            =  252,000/ 1- (351,000/ 585,000)

                                             = 252,000/ 1-0.6

                                               = 252,000/0.4= $ 630,000

The resulting $ 630,000 is the break even point at which neither a loss nor a profit is incurred.This can be checked as follows.

Sales                                                                         $ 630,000

Variable Costs  ( 60 % $ 630,000)                          $ 378,000

Contribution Margin                                                   $ 252,000

Less Fixed Expense                                                   <u>$ 252,000</u>

Profit                                                                           <u>       0            </u>

Break even point in units =  Fixed Costs/ Contribution Margin in units

                                         = $ 252,000/ (30-18)

                                          =$ 252,000/ $ 12= 21,000 units

Two Contribution format Income Statements:

                                                                                                   Automated

Sales (26,000 units at $30 per unit)           $780,000            $780,000

Variable expenses                                        546,000               468,000

Contribution margin                                       234,000                312,000

Fixed expenses                                              180,000              252,000

Net operating Profit                                     $ 54,000                $ 60,000

Working:

Variable Costs per unit = $ 409500/19500=  $ 21

After reduction variable costs = $ 21- $3= $ 18

4 0
3 years ago
Investors are willing to purchase stocks having high P/E ratios because:
skelet666 [1.2K]

Answer:

D. They expect these shares to have greater growth opportunities.

Explanation: P/E(price to earning) ratio is a ratio used in the stocks and other marketable securities to determine the price of the shares of a particular Company in relationship with the annual net income of the company per share.

A HIGHER PRICE TO EARNING RATIO INDICATES THAT THE COMPANY INVOLVED IS EFFICIENTLY UTILIZING ITS RESOURCES IN ORDER TO GENERATE PROFIT,IT ALSO SHOWS THAT THEIR IS HIGH DEMAND FOR THE COMPANY'S SHARES BECAUSE INVESTORS TRUST IN THE COMPANY'S ABILITY TO GROW AND MAKE PROFIT.

4 0
3 years ago
Following is Stanley Black &amp; Decker’s income statement for 2016 (in millions): STANLEY BLACK &amp; DECKER, INC. Income State
LekaFEV [45]

Answer:

Gross profit Margin  37.41%

Explanation:

The gross profit margin is the quotient between the gross profit and the sales:

\frac{gross \: profit}{sales} = $gross profit margin

\frac{11,406.9 - 7,139.7}{11,406.9} =\\\frac{4,267.2}{11,406.9}

Gross profit Margin 0,374089 = 37.41%

4 0
3 years ago
A(n) ____________________ is a contractual provision that says a seller of a business will not engage in a similar business with
Marysya12 [62]

Answer: licensing clause

Explanation:

8 0
2 years ago
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