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3 years ago

In general, prices should not be based on costs because

Business

1 answer:

SOVA2 [1]3 years ago

5 0

Answer:

C. consumers make their purchase decisions based on perceived value.

Explanation:

Consumer perceived value is the benefit of a product that the consumer receives by buying any specific goods or services. Perceived value is the satisfaction level of consumer that customer look in the product, rather than just paying for the product, therefore, the company need to work and develop their brand and value in the market. Cost does not define the value of the product, rather it is a satisfactory level of consumer that defines the value and price of product. Example; Customer does not pay for the software, however, they pay for the solution.

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Horford Co. has no debt. Its cost of capital is 8.9 percent. Suppose the company

blsea [12.9K]

Answer:

A. 12.1%

B. 8.9%

Explanation:

a. Calculation for What is the company's new cost of equity

Using this formula

New cost of equity=Cost of capital+[(Cost of capital- Debt interest rate ) *(Debt-equity ratio)*(1)]

Let plug in the formula

New cost of equity=[0.089+[(0.089-0.057)*(1)*1]

New cost of equity=[0.089+0.032*(1)*1]

New cost of equity=[0.121*(1)*1]

New cost of equity=0.121*100

New cost of equity=12.1%

Therefore the company's new cost of equity will be 12.1%

b. Calculation for What is its new WACC

Particular Weight Cost Weighted cost

Equity 0.5000 *12.1% = 0.0605

Debt 0.5000 * 5.7% =0.0285

WACC =0.089*100

WACC =8.9%

(0.0605+0.0285)

Therefore the new WACC will be 8.9%

4 0

2 years ago

Cindy Medavoy will invest $7,990 a year for 19 years in a fund that will earn 10% annual interest. Click here to view factor tab

Rudik [331]

Answer:

The correct answer for future value if first payment occur today is $449,645.24 and if first payment occur at the end of year is $408,761.13.

Explanation:

According to the scenario, the given data are as follows:

Payment (pmt) = $7,990

Rate of interest (r) = 10%

Time (n) = 19 years

So, we can calculate the future value by using following formula:

Future Value ( if payment occurs today) :

FV = Pmt (((1+r)^n - 1) ÷ r) x (1+r)

By putting the value:

= $7,990 ((( 1+ 0.10)^19 -1) ÷ .10) × ( 1 + 0.10)

= $7,990 ( 51.16) × ( 1.10)

= $449,645.24

Future Value ( if payment occurs at the end of year):

FV = Pmt x ((1+r)^n -1)) ÷ r)

= $7,990 ((1 + 0.10)^19 -1) ÷ 0.10)

= $7,990 × 51.16

= $408,761.13

4 0

3 years ago

Bolivia has about 50% of the world's reserves of lithium. It is also a major producer of zinc. Suppose that Bolivia produced onl

frosja888 [35]

Answer: attainable and efficient

Explanation:

3 0

2 years ago

Palace Company has two service departments and two user departments. The number of employees in each department is:Personnel 10C

joja [24]

Answer:

$3,483.17

Explanation:

Calculation for the amount of cost allocated to the Cafeteria under the step method

Using this formula

Allocation to Cafeteria=[Cafeteria/(Cafeteria+Producing Department A+Producing Department B)]×Budgeted costs

Let plug in the formula

Allocation to Cafeteria=[25/(25 + 308 + 287)] x $72,450

Allocation to Cafeteria=(25/520)×$72,450

Allocation to Cafeteria=0.0480769231×$72,450

Allocation to Cafeteria=$3,483.17

Therefore the amount of cost allocated to the Cafeteria under the step method would be $3,483.17

8 0

2 years ago

After an hour on the expressway, your passengers need to use the restroom and they want to get some food. As you approach the ne

Gre4nikov [31]

The sign will be blue and it will have food places on it like Mc Donalds and Subway. Those food places will have a restroom so you would just follow the signs direction to that food place.

Hoped I helped!

5 0

3 years ago