Answer:
$54,650
Explanation:
Total Net operating income from the two divisions is the difference between the total sales and the total expenses. The total expense is made up of the fixed cost and variable cost. Whilst the variable cost is measured and unique to each departments, the fixed cost is not attributable to a single department.
The variable cost and sales are dependent on the level of activities. The sales less the variable cost gives the contribution margin.
As such, contribution less fixed cost gives the net operating income.
Common fixed cost
= ($77,100 + $43,100 - $10,900)/2
= $54,650
This cost would have been subtracted from each department to get the net operating income hence the division by 2.
Answer:
TRUE
Explanation:
A financially responsible person has complete control of their finances. These people usually build a fund for unforeseen situations such as unemployment or an illness. Thus, responsible people have an ability to react quickly to problems. These people also know how to keep track of their investments. If a problem occurs in an investment, such as stocks, the financially responsible person will be able to reallocate their resources quickly to minimize their losses.
Answer:
The extra return above the risk-free rate adjusted for total risk
Explanation:
The Sharpe Ratio was developed by William Sharpe, and it is used by investors to guage the return in an investment against risk.
To calculate it we find the excess return above risk free rate And divide it by the total risk.
This isolates the returns that are attributed to risk taking activity.
A risk free transaction for example is the yield on government treasury bills.
We use only returns associated with risk to get a better picture of risk adjusted return. The higher the ratio the better.
Answer:
$3.72
Explanation:
in order to determine the price of the stock we use the dividend discount model:
P₀ = Div₁ / (Re - g)
- P₀ = $90
- Div₁ = ?
- Re = 9%
- g = 9% / 2 = 4.5%
Div₁ = P₀ x (Re - g)
Div₁ = $90 x (9% - 4.5%) = $90 x 4.5% = $4.05
now the current dividend (Div₀) = Div₁ / (1 + Re) = $4.05 / (1 + 9%) = $4.05 / 1.09 = $3.7156 = $3.72
Answer:
Productive (technical) inefficiency.
Explanation:
A market failure can be defined as a situation in which the market fails to produce an efficient level of productivity or output that is required to meet consumer demand.
This ultimately implies that, a market failure arises when there is inefficiency in the distribution or allocation of goods and services in a free market.
In Economics, there are two types of inefficiency associated with the production of goods and services, these includes;
1. Allocative inefficiency: it occurs when businesses do not maximise output from the given inputs. Thus, it arises when businesses fail to increase the level of their production or productivity from a number of given inputs.
In conclusion, allocative inefficiency typically occurs when the price of a good or service isn't equal to its marginal cost i.e P ≠ MC.
2. Productive (technical) inefficiency: it occurs when businesses produce goods and services that consumers do not want. This is typically as a result of the incorrect and inefficient allocation of scarce resources by a business firm or entity.
