Status

Cosmeticon, a U.S.-based firm, has recently started exporting cosmetics to India. Cosmeticon has introduced a new range of miner

NikAS [45]

Answer:

Price skimming.

Explanation:

Price skimming is a pricing strategy in which an organization gradually lowers it's selling price after initially charging it's customers a high price in order to attract more price-sensitive customers. It is mostly used by a first-mover who faces lesser competition in business.

In this scenario, Cosmeticon had no competitors in that segment of the Indian cosmetics market, so it set a very high price for its products in order to reach the premium, price-insensitive segment of the market.

6 0

3 years ago

Read 2 more answers

Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facilit

ludmilkaskok [199]

Answer: Please refer to Explanation

Explanation:

When Evaluating a country's attractiveness for investment, there are several factors that should be evaluated. Key amongst them are, Benefits, Costs and Risks.

Under Benefits, the economy is evaluated based on the benefits it brings to the table. It's strengths and Opportunities. The goal is to see if these benefits present the company with adequate enough incentives to want to invest.

Under Costs, the cost of setting up and thriving is evaluated. What does the company have to pay and who do they have to pay it to in order to set up properly.

Under Threats, the factors that could adversely affect the company as a result of Investing in the country are evaluated. This is very important to know so that if need be, contingencies can be established.

Classifying the above.

1. Middle-class population growth potential. EVALUATE BENEFITS.

The middle class are the main purchasers of goods and services in the economy. In evaluating benefits the potential growth rate of the middle class should be evaluated.

2. First-mover advantages. EVALUATE BENEFITS.

Evaluating the potential benefits to be had from investing first in a country is part of Benefits Evaluation.

3. Bribe payments. EVALUATE COSTS.

Bribery payments are a cost when it comes to setting up in corrupt nations. They need to be evaluated as costs.

4. Unexpected political change. EVALUATE RISKS.

Under the evaluation of risks, this should be evaluated because a new Political leadership could have a different attitude to the company and this is a threat.

5. Infrastructure issues. EVALUATE COSTS.

Under the evaluation of cost there must be an evaluation of infrastructural issues in the country. If there are infrastructural challenges, the cost of setting up will be higher because depending on the infrastructure you'd have to bring in infrastructure from other areas and that would be expensive.

6. Resolving contract disputes. EVALUATE COSTS.

What are the costs of resolving contract disputes in the country. If they are favourable then the country is fine.

7. Free market economy. EVALUATE BENEFITS.

A free Market Economy is very useful to Entreprise. The type of economy needs to be evaluated therefore to see if it is a Free Market Economy that can benefit the company.

8. Economic uncertainty. EVALUATE RISKS.

How stable is the economy of the country in question. A country with an unstable Economy is one with a lot of Uncertainty and any company going in there will have to risk suffering losses if the Economy goes through peril.

7 0

3 years ago

Mr. Wise is retiring In 25 years He would like to accumulate $1,000.000 for his retirement fund by then He plans make equal mont

Montano1993 [528]

Answer:

$532.24

Explanation:

Since Mr. Wise will be making monthly payments for the period of 25 years in order to accumulated the $1,000,000 at the end of 25 years, therefore, the future value of annuity shall be used to determine the monthly payments to be deposited by Mr Wise. The formula of future value of annuity is given as follows:

Future value of annuity=R[((1+i)^n-1)/i]

In the given scenario:

Future value of annuity=amount after 25 years=$1,000.000

R=monthly payments to be deposited by Mr Wise=?

i=interest rate per month=12/12=1%

n=number of payments involved=25*12=300

$1,000,000=R[((1+1%)^300-1)/1%]

R=$532.24

7 0

3 years ago

Bond J has a coupon of 7.6 percent. Bond K has a coupon of 11.6 percent. Both bonds have 12 years to maturity and have a YTM of

elena55 [62]

Answer:

Bond J has a coupon of 7.6%

Bond K has a coupon of 11.6%

12 years to maturity and YTM of 8.2%

first we must determine the current market price of both bonds using the yield to maturity formula:

YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

YTM = 8.2%
C = coupon payment = $76 and $116
FV = face value or value at maturity = $1,000
PV = present value or current market value = ???
n = 12 years

current market value of Bond J:

0.082 = {76 + [(1,000 - PV) / 12]} / [(1,000 + PV) / 2]

[(1,000 + PV) / 2] x 0.082 = 76 + [(1,000 - PV) / 12]

41 + 0.041PV = 76 + 83.33 - 0.083PV

0.124PV = 118.33

PV = 118.33 / 0.124 = $954.27

current market value of Bond K:

41 + 0.041PV = 116 + 83.33 - 0.083PV

0.124PV = 158.33

PV = 158.33 / 0.124 = $1,276.85

a. If interest rates suddenly rise by 2.2 percent, what is the percentage price change of these bonds?

YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

YTM = 8.2% + 2.2% = 10.4%
C = coupon payment = $76 and $116
FV = face value or value at maturity = $1,000
PV = present value or current market value = ???
n = 12 years

market value of Bond J:

0.102 = {76 + [(1,000 - PV) / 12]} / [(1,000 + PV) / 2]

[(1,000 + PV) / 2] x 0.102 = 76 + [(1,000 - PV) / 12]

102 + 0.051PV = 76 + 83.33 - 0.083PV

0.134PV = 157.33

PV = 57.33 / 0.134 = $427.84

market value of Bond K:

102 + 0.051PV = 116 + 83.33 - 0.083PV

0.134PV = 97.33

PV = 97.33 / 0.134 = $726.34

Bond J's market price will decrease by ($427.84 - $954.27) / $954.27 = -55.17%

Bond K's market price will decrease by ($726.34 - $1,276.85) / $1,276.85 = -43.11%

b. If interest rates suddenly fall by 2.2 percent, what is the percentage price change of these bonds?

YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

YTM = 6%
C = coupon payment = $76 and $116
FV = face value or value at maturity = $1,000
PV = present value or current market value = ???
n = 12 years

current market value of Bond J:

0.06 = {76 + [(1,000 - PV) / 12]} / [(1,000 + PV) / 2]

[(1,000 + PV) / 2] x 0.06 = 76 + [(1,000 - PV) / 12]

30 + 0.030PV = 76 + 83.33 - 0.083PV

0.113PV = 129.33

PV = 129.33 / 0.113 = $1,144.51

current market value of Bond K:

30 + 0.030PV = 116 + 83.33 - 0.083PV

0.113PV = 169.33

PV = 169.33 / 0.113 = $1,498.50

Bond J's market price will increase by ($1,144.51 - $954.27) / $954.27 = 19.94%

Bond K's market price will increase by ($1,498.50 - $1,276.85) / $1,276.85 = 17.36%

8 0

3 years ago

Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,800 units (solar panels) in July a

azamat

Answer and Explanation:

The preparation of the factory overhead budget for August month is shown below:

Total budgeted direct labor $286,000

(5,500 × 4 hours × $13)

variable factory overhead 70%

Budgeted overhead $200,200 ($286,000 × 70%)

Add: Fixed overhead $179,000

Budgeted total factory overhead $379,200

Hence, the budgeted total factory overhead is $379,200

4 0

3 years ago