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4 years ago

Which events could cause the increase in demand shown on this graph? Check all that apply.

1 answer:

7 0

Answers:
A product becomes more popular
A company offers a better product than its competition

The second one would not be a valid answer because this would cause a decrease in demand, as would if a company's competitor lowered their prices and if the price of a product goes down.

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3. Suppose that a firm can produce a part it uses for $875 per unit, with a fixed cost of $75,000. The company has been offered

Dvinal [7]

Answer: for manufacturing total cost is $1387500

For outsourcing total cost is $1380000

It is wiser for the company to outsource and save $7500

Explanation:

Cost for manufacturing 1500 units at $875 per unit is 1500x875

= $1312500

Fixed cost of production is $75000

Total production cost becomes,

1312500 + 75000 = $1387500

Cost for outsourcing;

1500 units at $929 will cost

1500x920 = 1380000

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4 years ago

OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $4 million,

Deffense [45]

Answer:

Requirement 1: $257,000 Positive

Requirement 2: IRR is higher than 10%

Explanation:

Requirement 1:

We can use the following formula, to calculate the net present value of the project:

Net Present Value = Annual Cash Inflows * Annuity Factor - Investment

Here

Annual Cash Inflow is $500,000

r is 10%

n is the life of the project which is 20 years

Annuity factor = (1- (1+r)^-n) / r = (1 - (1 + 10%)^-20) / 10% = 8.514

Investment is $4,000,000

By putting values in the above equation, we have:

Net Present Value = $500,000 * 8.514 - $4,000,000

NPV = $257,000 Positive

Requirement 2:

Internal rate of return gives the required rate at which NPV is zero.

Since NPV is positive at 10%, IRR will be higher than 10%.

Always remember that, increase in the discount rate decreases the NPV and vice versa.

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4 years ago

Jumbuck Exploration has a current stock price of $2.00 and is expected to sell for $2.10 in one year's time, immediately after i

fiasKO [112]

The equity cost of capital for the Jumbuck Exploration is 22%

Explanation:

Equity cost refers to the return offered to the customers in place of their investment in the organisation stocks. It is calculated by the formula

Rₐ = (D₁/P₀)+g

Where Rₐ= cost of equity

D₁= dividends announced

P₀=share price (current)

g= growth rate

Now given details-

Dividend announced (D₁)- $ 0.26

Current market price (P₀) - $ 2.00

Expected price= $ 2.10

growth rate= expected price- current price

growth rate (g) =$ 0.10

Putting the values to find Rₐ

Rₐ=(0.26/2.00)+0.10

Rₐ=0.23 or 23%

Nearest answer is 22%

Hence the equity cost of the capital is 22%

4 0

4 years ago

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

nignag [31]

Aug. 1 Inventory On Hand—2,000 Units; Cost $5.70 Each.

Second sales assumed to be 7,000 units at a price of $11.40 each.

Answer:

Altira Corporation

August 2021 Ending Inventory & Cost of Goods Sold:

1. Ending Inventory = 9,000 units at $5.88 per unit = $52,920

2. Cost of goods sold =

9,600 x $5.87 = $56,352

7,000 x $5.95 = $41,650

16,600 units = $98,002

Explanation:

a) Calculations:

Units Unit Cost Total Cost

Beginning Inventory 2,000 $5.70 $11,400

Purchases 12,000 $5.90 $70,800

Weighted average cost = ($11,400 + $70,800) / 14,000 = $5.87

Sales (9,600) $12.00 $115,200

Units remaining 4,400 $5.87 $25,828

Purchases 7,200 $6.00 $43,200

Weighted average cost = ($25,828 + $43,200) / 11,600 = $5.95

Sales (7,000) $11.40 $79,800

Units remaining 4,600 $5.95 $27,370

Purchases 4,400 $5.80 $25,520

Weighted average cost = ($27,370 + $25,520) / 9,000 = $5.88

Ending Inventory 9,000 $5.88 $52,920

b) The 'Average Cost Method' or the Weighted Average Cost Method assumes that the cost of inventory is based on the average cost of the goods available for sale during the period. To compute the average cost, divide the total cost of goods available for sale by the total units available for sale.

6 0

4 years ago

Continued losses in an industry will cause some firms to reduce output or eventually leave the industry.

Oliga [24]

The statement " Continued losses in an industry will cause some firms to reduce output or eventually leave the industry " is True

Explanation:

The goal of all businesses is to reduced risk and reduce expenses while retaining productivity and deliver a good product at a consistent rate and cost.

Although company owners know how much they can deliver under optimum organisational and financial conditions, this volume is seldom consistently produced by most firms. Unexpected events inevitably lead to less than the expected amount.

For example, a computer may stop working, and employees can stop producing while waiting for machine repairs. In other situations, production is slowed down or halted by planned events.

5 0

3 years ago