Answer:
$5
Explanation:
Average total cost = total costs / total output
Total costs = variable costs + fixed costs
So we plug the amounts into the formula:
Average total cost = 57 + 143 / 40
= 5
So the average total cost for this ferm (per unit of output) is $5
Let the additional number of units, babymart need to sell be x, then
Revenue = $315(400 + x)
New fixed cost = $50,000 - $5,000 = $45,000
Thus, Total cost = $115(400 + x) + $45,000
Net income = Revenue - Total cost = 315(400 + x) - 115(400 + x) - 45,000 = 40,000
⇒ 200(400 + x) = 40,000 + 45,000
⇒ 80,000 + 200x = 85,000
⇒ 200x = 85,000 - 80,000 = 5,000
⇒ x = 5,000 / 200 = 25
Therefore, the additional number of units babymart needs to sell to maintain the same level of income is 25 units.
Answer: Option B
Explanation: Marketing plan refers to the plan made by the senior managers of an organisation that depicts the marketing strategy to be used by the company in the coming period. This is a flexible plan and is made for generally a period of 12 months.
This, plan consist of of all the factors that are essential for positive marketing. It outlines the execution procedure and the various analysis required. It also includes the financial and controlling procedures to be used.
Hence, we can conclude that the right answer is option B.
Answer:
Positive ROI
Explanation:
A positive ROI or positive rate of return occurs when the benefits realized from a project are much more than the costs incurred. Positive implies that a net effect of a number greater than zero.
Anna did not incur a lot of debts while in college. It suggests she controlled her expenses well. Since Anna has a well-paying job, her income and the cost incurred in college compare favorable. Her benefits are more compared to the cost of education.
Answer:
a. The best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends is 10.91%
a. The best estimate of the company’s cost of equity capital using the geometric average growth rate is 10.88%
Explanation:
a.
Time Dividend per share ($) Growth
-4 1.80
-3 1.98 10.00%
-2 2.05 3.54%
-1 2.16 5.37%
0 2.24 3.70%
Average 5.65%
D0 = $ 2.24 / share
g = 5.65%
D1 = D0 x (1 + g)
= 2.24 x (1 + 5.65%)
= $ 2.37
Current share price = P = $ 45 = D1 / (Ke - g)
The cost of equity = D1 / P + g
= 2.37 / 45 + 5.65%
= 10.91%
Therefore, The best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends is 10.91%
a. What if you use the geometric average growth rate?
A DPS of $ 1.80 / share 4 years back has given way to a DPS of $ 2.24 today.
CAGR, g = (2.24 / 1.80)1/4 - 1
= 5.62%
D1 = 2.24 x (1 + g)
= 2.24 x (1 + 5,62%)
= $ 2.37
cost of equity = D1 / P + g
= 2.37 / 45 + 5.62%
= 10.88%
Therefore, The best estimate of the company’s cost of equity capital using the geometric average growth rate is 10.88%
