Answer:
Exit the market.
Explanation:
Suppose there are X firms in a competitive market and they are all making normal profits. If the demand for their products decreases, some of the firms will start to sell less, which will result in lower profits or even losses. In the long run, those firms that experience lower sales resulting in lower profits or losses, will exit the market. Once these firms exit the market, the quantity supplied should decrease, which will result in a price increase.
Answer:
Q1) a. 6.60%
Q2) c. retaining a higher percentage of earning will result in a higher growth rate.
Explanation:
Q1.)
Use dividend discount model (DDM) to solve for the growth rate;
g = r- (D1/P0)
whereby;
g = dividend growth rate
r = required rate of return = 11.40% or 0.1140 as a decimal
D1 = next year's dividend = $1.14
P0 = Current stock price = $23.75
g = 0.1140 - (1.14/23.75)
g = 0.1140 - 0.048
g = 0.066 or 6.6%
Therefore, the growth rate is 6.60%, making choice A correct.
Q2.)
c. Retained earning is the proportion of total net profit that a company reinvests back into the business for the purpose of investing in other potentially profitable projects.The returns from these projects would increase the value of the company at a faster rate if a higher percentage e.g 90% is retained. On the other hand, if the company pays a larger portion of its retained earnings e.g 70% as dividends, it will experience a slower growth rate making choice C correct.
Answer:
The Gain of $700.
Explanation:
For the computation of gain or loss first we need to find out the book value which is shown below:-
Book value = Purchase cost - Accumulated Depreciation
= $36,000 - $26,500 = $9500
Gain or Loss = Selling Price - Book Value
= $10,200 - $9500
= $700
So, there is a
The Gain of $700 as selling price is more than the book value
Therefore for computing the gain or loss we simply applied the above formula.
They are referred to as a janitor or a cleaning service. They are the ones responsible of keeping a place in good condition and to make everything neat and dirt free as possible. It could be described above as removing physical dirt or food from the surface is their job description as they make sure that the place is clean, neat and dirt free.
Answer:
Product cost (Manufacturing cost) = $651
Period Cost (Selling and administrative cost)= $279
Explanation:
Calculation for What amounts should be considered product and period costs respectively for the first year of coverage
First step is to calculate the Total Insurance expense for the year
Total Insurance expense for the year = $2,790 / 3 year
Total Insurance expense for the year = $930
Now let calculate for the Product cost (Manufacturing cost) and Period Cost (Selling and administrative cost)
Product cost (Manufacturing cost) = $930 * 70% Product cost (Manufacturing cost) = $651
Period Cost (Selling and administrative cost) = $930*30%
Period Cost (Selling and administrative cost)= $279
Therefore the amounts that should be considered for product and period costs respectively for the first year of coverage are:
Product cost (Manufacturing cost) = $651
Period Cost (Selling and administrative cost)= $279
