Answer:
True
Explanation:
Profit function would be maximised.
Profit = Revenue - Cost
Let units of both goods be = A ,B
Revenue per unit good A = 100
Revenue per unit good B = 90
Variable Cost per unit good A = 30
Variable Cost per unit good B = 25
Profit Function = (100 - 30)A + (90 - 35)B
= 60A + 65B
{The function is right without including 'average fixed cost' part of 'total cost' in the function because : average fixed cost is a constant & constant figure doesn't effect optimisation (via differentiation , ∵ d (c) = 0)
Part of question attached
Answer and Explanation:
Please find answer and explanation attached
Answer:
C) The threat of new entrants.
Explanation:
Porter's Five Forces: It's an analysis helpful for the industries to get the understanding of the loopholes and their weaknesses. Porter suggested that anytime a company goes down, there would be one force involved among the following five forces.
- Threat of new entrants.
- Bargaining power of buyers.
- Threat of substitutes.
- Rivalry among existing competitors.
- Bargaining power of suppliers.
In our case:
- Threat of new entrants force is involved: There is always a threat to the existing companies of the new company entering the market. Some companies doesn't take them seriously and ends up getting damaged. And, as the Goldman suggests that new supplies of the rooms in coming years will hurt the existing companies. So they must act on this information and make a decision to change the event for their own better.
Based on the base-case analysis of the firm's variable cost and the upper bounds anticipated, the worst case for variable cost per unit is $52.50.
<h3>What is the worst case for variable costs?</h3>
The worst case scenario for expenses would be a situation where they are higher instead of lower.
This means that the upper bound of the variable cost will be applied to find the worst case scenario:
= Base case analysis amount x (1 + upper bound)
= 50 x (1 + 5%)
= $52.50.
Find out more on variable costs at brainly.com/question/5965421.
Answer:
WACC = 0.079 and firm value = 12,658.23.
Explanation:
WACC is equal to
Where debt cost is 0.05, debt weight is 0.3, tax rate is 0.4, equity cost is 0.1 and equity weight is 1-0.3 = 0.7
So, WACC = 0.05*0.3*0.6 + 0.1*0.7 = 0.079 or 7.9%.
The value of the fir is calculated FCF/WACC, in this case 1,000/0.079 = 12,658.23.
