Answer: Independent variable
Explanation: In simple words, independent variables refers to the variables whose variations do not depend on some other related factor.
In the given case, when the price of the premium brand decreases then the sales of brand decreases and vice -versa. However there is nothing mentioned about how the price changes.
Thus, the sales of brand depends on price but the price does not depend on the sales of the brand.
Hence from the above we can conclude that the changes in price represents the independent variables.
Answer: a) a commitment to the owner and are standardized.
Explanation:
Futures are generally traded through Exchanges as opposed to Forwards which are not.
Futures are a commitment to the owner to buy or sell an underlying asset and as they are sold at Exchanges, they are standardized to allow for easier trading. The prices that the sellers are to get are certain as the Exchange protects the transaction.
Unlike Forwards that can be tailor made to the specifications of the owner, Futures come as already made and standardized and so are not tailor made. This is to enable as many participants as possible.
This is why option A is correct because Futures contain a commitment to the owner and are standadized as well.
Answer:
Inferior.
Explanation:
A price elasticity of demand can be defined as a measure of the responsiveness of the quantity of a product demanded with respect to a change in price of the product, all things being equal.
Mathematically, the price elasticity of demand is given by the formula;
A good for which an inverse relationship exists between the demand for the good and income is an inferior good.
Answer: C) automatically considered because the after-tax cost of debt is included within the WACC formula.
Explanation:
When calculating the Weighted Average Cost of Capital (WACC) for a levered firm, the interest tax shield is included because the cost of debt used is adjusted for tax as shown below:
<em>= (Weight of debt * </em><em>Cost of debt( 1 - tax rate) )</em><em> + (Weight of equity * cost of equity)</em>
As shown above, the interest tax shield is already implicit in the formula so there is no need to adjust the levered firm for an interest tax shield as this would lead to double-counting.
Answer:
EOQ = √ 2DCo/H
D = Annual demand
Co = Ordering cost per order
H = Holding cost per item per annum
TEGDIWS
D = 11,000 units
C0 = $110
H = 10% x $15 = $1.5
EOQ = √2 x 11,000 x $110
$1.5
EOQ = 1,270 units
WIDGET
D = 8,000 units
Co = $10
H = 20% x $8 = $1.6
EOQ =√ 2 x 8,000 x $10
$1.6
EOQ = 316 units
Explanation:
EOQ is equal to the square root of 2 multiplied by annual demand and ordering cost divided by holding cost.