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Vinil7 [7]
3 years ago
10

Part of the decision to accept additional business should be based on a comparison of the incremental (differential) costs of th

e added production with the additional revenues to be received.
True or False
Business
1 answer:
postnew [5]3 years ago
6 0

Answer:

TRUE

Explanation:

Marginal Benefit is addition to total benefit due to a business decision.

Marginal Cost is addition to total cost due to a business decision.

Marginal Benefit & Marginal Costs are determinants while considering a business decision. A decision will be taken if : Marginal Benefit ≥ Marginal Cost, as entrepreneurial decision maker would be better off or at least neutral while taking decision. If MB < MC , it is loss making for the entrepreneur to take that decision & hence is discouraged to take that.

You might be interested in
How physical asset valuation (PAV) and research and
stellarik [79]

Answer:

We'll take this one after the other.

A. First Physical Asset Valuation (PAV) refers to the act of writing up or writing down the carrying value of an organisations assets in its balance sheet.

In simple terms, it refers to increasing upwards or downwards the value of an organisations asset in its balance sheet.

When assets are written down, the following are likely to occur:

Critical changes to an organization’s business model or strategy, such as termination of the business and  loss of a regulatory licence;

A significant reduction in the cash flow or bottom line of the business;

when the long term growth rates, interest rates or other financial factors such as prices or value of currencies, upon which a business valuation based decline, this impacts the valuation of an asset negatively.

   

B. Research and  Development (R&D)

R&D refers to all the studies, scientific investigations and experiments carried out to enable the discovery and creation of a new or innovative product or service that is more efficient and effective.  

       

The reason there is a risk associated with R&D is that there are usually many elements of uncertainty.  

The ideas being tested are usually novel and have not been tried before.  

Some of the risks associated with R&D are:

the possibility that the new product will fail in the market;

a new product or service that is does not work

the possibility of cost creep. That is a situation where the cost of the R&D outweighs the potential profit from the product or service.

Cheers!

6 0
3 years ago
A stock has a required return of 11%; the risk-free rate is 7%; and the market risk premium is 4%.
kotegsom [21]

Answer:

The Beta is 1

The required return increases to 13%

Explanation:

The formula for required return is given below:

Required Return = Risk-Free Rate of Return + β(Market Return – Risk-Free Rate of Return)

required return is 11%

risk-free rate of return=7%

Beta is unknown

market return-risk free rate of return is market risk premium is 4%

11%=7%+beta(4%)

11%-7%=beta*4%

4%=beta*4%

beta=4%/4%

beta=1

If the market risk premium increased to 6%,required return is calculated thus:

required return=7%+1(6%)

required return =13%

This implies that the riskier the stock, the higher the market risk premium, the higher the required return to investors.

6 0
3 years ago
Bonnie austin, age 30, used to work part time in a local restaurant. this year she quit her job to take care of her five-month-o
AlekseyPX

As Bonnie is not currently looking for a job after she quit and take care of her daughter, the survey conducted by the bureau of labor statistics that Bonnie will now be counted as an individual who is not part of the labor force because she is not working at the moment.

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6 0
3 years ago
Javier computer services began operations in July 2017. At the end of the company prepares monthly financial statements. It has
defon

Answer and Explanation:

The adjusting entries are shown below:

a. Salaries expense Dr $1,400

        To Salaries payable $1,400

(being salaries expense is recorded)

b. Interest expense ($40,000 × 12% × 1 ÷12) $400

     To interest payable $400

(being interest expense is recorded)

c. Account receivable Dr $3,000

         To Service revenue $3,000

(being revenue is recorded)

These 3 entries should be recorded

5 0
3 years ago
If the government uses tax money to pay for long-term investments such as roads or other infrastructure, what happens to the eco
coldgirl [10]

Is this a theory type of question?

If it is and if it took place under president Calvin Coolidge then taxes likely would have gone up.

If you are talking about now, then investment might go up but in order to pay for it, the government will just print more money, so that taxes shouldn't go up.

I'd pick C.

4 0
3 years ago
Read 2 more answers
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