Answer:
CPI at the beginning of the year = 192.52
Explanation:
given data
nominal interest rate = 7 percent
real interest rate = 4 percent
CPI = 198.3
to find out
CPI at the beginning of the year
solution
we know that according to fisher equation
1 + r = 
....................1
and for smaller values is equivalent to r
r = n - i .....................2
here r is real interest rate and n is nominal interest rate and i is inflation rate
so from equation 2
4 = 7 - inflation rate
inflation rate = 3 percent
so
Rate of inflation = (CPI at the end of the year - CPI at the beginning of the year) × 100 ÷ CPI at the beginning of the year
put here value
3% = (198.3 - CPI at the beginning of the year) × 100 ÷ CPI at the beginning of the year
CPI at the beginning of the year = 
CPI at the beginning of the year = 192.52
Answer:
a. The price that the company should sell the new toy at if it prices at cost plus profit at 100% profit markup is:
= $20.
b. The price that the company should sell the new toy at if it prices using competitive pricing is:
= $22.50 (average of competitors' prices)
c. The price that the company should sell the new toy at if it prices using penetration pricing is:
= $20 (lowest market price)
d. The price that the company should sell the new toy at if it prices using price skimming is:
= $25.
Explanation:
a) Data and Calculations:
Cost of producing a new toy = $10
Competitors' prices are:
Product A – $25
Product B – $20
Product C – $23
Product D– $22
Total = $90
Average price = $22.50 ($90/4)
Cost = $10
Markup 10 ($10 * 100%)
Price = $20
b) An important consideration in the pricing of products is customers' and competitors' reactions to the firm's selling price. The purpose of considering customers is to ensure that enough demand is generated to cover production cost and make profits. Competitors can wage price wars to discourage new entrants into their markets. Many pricing methods are in use, depending on the prevailing market realities.
Answer:
c. 2.30 years
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
In year 0 = $1,150 (Initial investment)
In year 1 = $500
In year 2 = $500
In year 3 = $500
If we sum the first 2 year cash inflows than it would be $1,000
Now we deduct the $1,000 from the $1,150 , so the amount would be $150 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $500
So, the payback period equal to
= 2 years + ($150 ÷ $500)
= 2.30 years
In 2.30 yeas, the invested amount is recovered.
Answer:
The correct answer is: Most people wish to avoid responsibility, have little ambition, and want security.
Explanation:
This type of management thinking responds to the early theories of management, more especially to the classical theories of organization. These theories were devoted to the superior's authority, objectives, rules and, economic activities. They organized men and materials for achieving objectives for their benefits, characterized by a large and complex atmosphere with impersonal detachment from human resources.
The motivation of workers were purely by bonus and monetary benefits. The general idea was that workers were inspired to perform the job if they are paid according to their contributions. Workers are considered economic beings. Man was considered a rational and not an emotional being. It assumes that man wants only money, and this assumption provides the maximum opportunity to exploit employees. The idea that people avoid responsibility is due to the hierarchy and chain of command, the responsibility of the work rests on the superior.
