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alekssr [168]
3 years ago
8

In order to achieve a competitive advantage, Coastal Haven Hotels, a chain of luxury beach resorts, wants to increase its market

share. Which of the following strategies is most likely to do so?
a. Lower prices but eliminate several of the features that have come to define Coastal Haven properties for consumers, such as complimentary meals and in-room massages
b. Take advantage of economies of scale and scope by opening a chain of lower-priced economy hotels that leverage the Coastal Haven brand image.
c. Raise prices without increasing spending on customer service or resort features
d. Maintain prices but significantly increase spending on customer service and other amenities.
Business
1 answer:
Anna11 [10]3 years ago
8 0

Answer:

The correct answer is b. Take advantage of economies of scale and scope by opening a chain of lower priced economy hotels that leverage the Coastal Haven brand image.

Explanation:

The economy of scale refers to the power that a company has when it reaches an optimum level of production to produce more at a lower cost, that is, as production in a company grows, its costs per unit produced are reduced. The more it produces, the less it costs to produce each unit.

In other words, it means that if in a production function the quantity of all inputs used is increased by one percentage, the output produced can increase by that same percentage or increase by greater or lesser amount than the same percentage. If it increases by the same percentage, we would be faced with constant economies of scale, if it were in more, they would be growing economies of scale, if it were in less, in decreasing economies of scale.

In microeconomics, economy of scale is understood as the advantages in terms of costs that a company obtains thanks to the expansion and good synergies that it has applied to its competitive environment .

The concept of "economies of scale" serves for the long term, and refers to reductions in unit cost as the size of an installation and the levels of input utilization increase. The usual sources of economies of scale are the inventory (large-scale purchase of materials through long-term contracts), management and logistics (increasing the specialization of managers), financial (obtaining lower interest costs in bank financing), marketing and technology (benefiting of the scale yields in the production function).

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Plush Corporation purchased 100 percent of Common Corporation’s common stock on January 1, 20X3, and paid $450,000. The fair val
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Answer:

Please refer the detail answer in the memo below

Explanation:

Date: 24 January 20XX

Subject: Review of Impairment of Goodwill

From: External Auditors

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Upon review of the investment made by your company in Common Corporation, we believe that there are possible indications of the impairment of the goodwill initially recognized in the books upon acquisition.

At the time of Acquisition:

Consideration = $450,000

Fair Value of Net Assets = $430,000

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The new guidance issued by FASB, requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value.

However, if we follow the previous guidance of FASB, we have to test the impairment with the following three steps:

Step 1: We will compare the carrying amount of the net assets with the Fair value of Reporting Unit, and if the carrying amount exceeds the fair value, we will record the impairment.

Step 1: We will compute, implied value of goodwill by comparing the fair value of the reporting unit with the fair value of the identifiable net assets, if FV of net assets are higher, then there is no impairment, otherwise we will jump to Step 3.

Step 3: If the calculated implied value of the goodwill is lower than the actual goodwill at acquisition, than the difference is the impairment loss, however in case the implied value of the goodwill is higher than the actual goodwill at acquisition, no impairment shall be recorded.

Apparently, since the fair value of Common had increased to $485,000, there is no need to recognize the impairment loss on goodwill; however we believe that the estimated fair value of Common is less than the $430,000 and therefore impairment should be recorded.

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Answer:

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Ward and June are in the 32% tax bracket. A bond of Dell Computer Corporation with a face value of $10,000 is included in their
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Answer:

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Explanation:

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