Answer:
d. $72.41 per setup
Explanation:
The computation of the activity rate for the machine setup activity pool is as follows;
The Activity rate for the Machine setups activity cost pool is
= Estimated overhead cost ÷ Total machine setup
= $50,687 ÷ 700
= $72.41 per setups
Hence, the activity rate for the machine setup activity pool is $72.41 per setup
Therefore the option d is correct
Answer:
- The core competence of a firm’s competitive advantage is based on control over proprietary technological and innovation know-how, licensing and joint venture arrangements should be avoided when necessary so as to avoid and minimize the risk of losing control over that technology. For firms with a competitive advantage based on management effectiveness, the risk of losing control over the management skills to franchisees or joint venture partners is not that welcomed or encouraged. However, many service firms favor a combination of franchising and subsidiaries to control the franchises within particular countries or regions. The subsidiaries may be wholly owned or joint ventures, but most service firms have believed that joint ventures with local partners works best for controlling subsidiaries.
Answer:
The dollar value that the stock must reach before investors would consider converting to common stock is $33.
Explanation:
stock price for conversion = $1000/30.303
= $33
Therefore, The dollar value that the stock must reach before investors would consider converting to common stock is $33.
Answer:
If the firm uses less leverage, its ROE will decrease since the cost of equity is much higher than the cost of debt. If all debt is eliminated, then ROE will decrease to 7.764% from 10.83%.
Explanation:
net income = $9.75 million
capital structure:
- $90 million equity
- $60 million debt
interest rate = 4% and tax rate = 21%
current return on equity (ROE) = $9.75 / $90 = 10.83%
current return of assets (ROA) = $9.75 / $150 = 6.5%
cost of debt = 4% x (1 - 21%) = 3.16%
if the company issues more equity to lower debt to 0, then:
net income = $9.75 + [$60 million x 4% x (1 - 21%)] = $9.75 + $1.896 = $11.646 million
return on equity (ROE) = $11.646 / $150 = 7.764%
return of assets (ROA) = $11.646 / $150 = 7.764%
Answer:
The correct answer is option A.
Explanation:
The demand for cantaloupes is unitary elastic at price level $2.50. The demand curve here is linear and downward sloping. The elasticity of demand is 1.
In this linear demand curve the lower portion will represent inelastic demand.
When the price level is reduced to $2 the demand will move to the lower portion of the curve, with fall in price and increase in demand.
So, at $2 price the demand will be inelastic, which means it will be between 0 and 1.
