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Luba_88 [7]
3 years ago
12

At what point does buying in bulk stop being a wise spending choice? 1. when the consumer has a lot of space to store bulk items

2. when costs rise too quickly due to demand 3. when bulk items are not on sale anymore 4. when the consumer buys more than is needed
Business
2 answers:
ratelena [41]3 years ago
7 0

Answer:

Buying in bulk can stop being a wise spending choice;

4. when the consumer buys more than is needed

Explanation:

Buying in bulk as the name suggests is the purchase of a good in huge quantities for usage over a longer period of time. This is a strategy that is used because of the economical benefits that can be derived, examples are;

1. Reduced purchase cost: most goods that are bought in bulk usually have a discount. A discount is a reduction in the usual cost of a good when the buyer purchases the good in large quantities. Discounts usually save on long-term expenditure.

2. To handle fluctuating costs: when goods in a market have fluctuating costs due to demand and supply forces, the best option would be to purchase the good in bulk when they are relatively cheap to cover for the period when the cost will have risen.

Buying goods in bulk is a good practice when considered carefully especially when there is enough space to store the items. However, when the consumer buys more than is needed, it can lead to wastage, thus unwise spending.

Makovka662 [10]3 years ago
3 0

Answer:

when the consumer buys more than is needed

Explanation: edg 2020

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Which two regularly issued instruments are closely watched as economic indicators? (SELECT TWO answers.)
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The Dow Jones industrial average (stocks) and Retail Sales Report.

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3 years ago
ROI, Residual Income, and EVA with Different Bases Envision Company has a target return on capital of 12 percent. The following
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Answer:

a. ROI = income / Assets      

                                      Book Value       Current Value    

Software Division              0.175              0.13    

Consulting Division           0.164              0.182    

Venture Capital Division   0.093            0.088

<u>Workings:</u>

i. Book value

Software Division = 12,250/70,000=0.175

Consulting Division = 16,400/100,000=0.164  

Venture Capital Division = 56,730/610,000 =0.093

ii. Current value

Software Division = 11,700/90,000=0.13

Consulting Division = 20,020/110,000=0.182

Venture Capital Division= 51,920/ 590,000=0.088

b. Residual income = Income - {Asset x Return on capital 12% }

                                      Book Value       Current Value    

Software Division              3850              900    

Consulting Division           4400              6820    

Venture Capital Division   -16470           -18880

<u>Workings:</u>

i. Book value

Software Division = 12,250-(70,000*12%)=3850

Consulting Division = 16,400-(100,000*12%)=4400  

Venture Capital Division = 56,730-(610,000*12%) =-16470

ii. Current value

Software Division = 11,700-(90,000*12%)=900

Consulting Division = 20,020-(110,000*12%)=6820

Venture Capital Division= 51,920-(590,000*12%)=-18880

c. Economic Value Added ( EVA ) = Net Income After Tax - ( Amount of Capital x Weighted Average Cost of Capital [WACC] )

C.                     Software Division  

                            (Value Base)  

                                    Book            Current

Sales                           100,000          100,000

Income                          12,250           11,700

Assets                           70,000          90,000

Liabilities                      10,000           10,000

Capital invested           60,000          80,000

(Asset - Liabilities)

Tax on Income(30%)     3675            3510

Income after Tax            8,575           8,190

(Income - Tax on

income) (A)

Capital invested             6,000           8,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)                2,575            190

                       Consulting Division

                            (Value Base)

                                     Book            Current

Sales                         200,000        200,000

Income                        16,400           20,020

Assets                         100,000        110,000

Liabilities                      14,000         14,000

Capital invested           86,000       96,000

(Asset - Liabilities)

Tax on Income(30%)     4920            6006

Income after Tax           11,480           14,014

(Income - Tax on

income) (A)

Capital invested           8,600            9,600

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              2,880            4,414

                     Venture Capital Division

                           (Value Base)

                                   Book            Current

Sales                        800,000       800,000

Income                      56,730          51,920

Assets                       610,000        590,000

Liabilities                    40,000         40,000

Capital invested        570,000        550,000

(Asset - Liabilities)

Tax on Income(30%)    17019          15576

Income after Tax          39,711         36,344

(Income - Tax on

income) (A)

Capital invested           57,000       55,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              -17,289       -18,656

8 0
3 years ago
The market capitalization rate on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE is 12%, and its expected EPS
Shalnov [3]

The Price-earnings ratio of Aberdeen Wholesale Company equals to 14.29.

<h3>What is a P/E ratio?</h3>

Its means the Price-earnings ratio which is used to value a companies by comparing the company's share price to its earnings per share.

<u>Given data</u>

Market capitalization rate = 10%

Expected ROE = 12%

Expected EPS = $5

Plowback ratio is 60%

<h3>What is the Dividend payout ratio?</h3>

= 1 - 0.6

= 0.4

<h3>What is the Expected dividend?</h3>

= 0.4 × $5

= $2

<h3>What is the Growth rate?</h3>

= 0.6 * 12%

= 7.2%

<h3>What is the Firm Value?</h3>

= $2 / (0.10 - 0.072)

= $2 / 0.028

= $71.43

<h3>What is the P/E ratio?</h3>

= $71.43 / $5

= 14.286

= 14.29

Hence, the Price-earnings ratio of Aberdeen Wholesale Company equals to 12.5.

Therefore, the Option D is correct.

Read more about Price earnings ratio

<em>brainly.com/question/14690388</em>

5 0
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