Answer: D
Explanation:
Competing on cost is based on achieving maximum value as perceived by the customer.
Answer:
The target cost for one LittleLaser is $68
Explanation:
For computing the target cost, first we have to compute the profit per laser guns which is shown below:
Profit per gun = (Investment × ROI) ÷ (Number of laser guns sold)
= ($7,828,000 × 25%) ÷ (103,000 laser guns)
= ($1,957,000) ÷ (103,000 laser guns)
= $19
And, the cost price charged is $87
So, the target cost for one Little laser would be
= $87 - $19
= $68
El function complen por lost indicadores enonomicos=Bancos
Answer:
The horizon value is calculated by discounting the free cash flows beyond the horizon date and any tax savings at the WACC
Explanation:
Horizon value
This is simply known as the value of a security. It is regarded as present value usually at future point in time of all cash flows when we stable growth rate is anticipated forever. Its simply known also as present value of all free cash flows beyond the horizon date discounted back to the horizon date. It is also called the terminal value due to it being regarded as end of the explicit forecast period or the continuing value due to the fact that it is the value if operations continue to be used rather than be liquidated.
The growth in free cash flows is usually not constant so modification has to be made to the constant growth formula to find the value of free cash flows beyond the horizon date discounted back to the horizon Formula to calculate horizon value.
Mathematically;
HV = V option at time t =FCFt(1+g)
(WACC-g)
The formula for Terminal Value using the Gordon Growth method includes: Terminal Value = Final Year Free Cash Flow * (1 + Growth Rate) / (Discount Rate - Growth Rate)
Answer: False
Explanation:
The price elasticity of supply measures the change in quantity supplied when the price changes.
The basic trend is that when price increases, quantity supplied increases as well. The reverse is true.
Price elasticity of supply = %Change in quantity supplied / % change in price
0.5 = -6% / Change in price
0.5 * Change in price = -6%
Change in price = -6% / 0.5
= -12%
The statement above is therefore false because price should have reduced by 12% for quantity supplied to reduce by 6%
