Price and short-term quantity that maximizes profit, as long as marginal revenue is less than marginal cost.
In economics, profit maximization is a short-term or long-term process that allows a company to determine the levels of prices, inputs, and outputs that make the most profit. Today, the mainstream approach to microeconomics, neoclassical economics, typically models businesses as profit maximization.
The marginal cost of production includes all costs that vary depending on the production level. For example, if a company needs to build an entirely new factory to produce more goods, the cost of building the factory is marginal revenue.
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Answer:
The weights to be assigned to each component in WACC calculation is are,
Debt = 25.17%
Preferred stock = 4.69%
Common Stock = 70.14%
Explanation:
The WACC or weighted average cost of capital is the cost to a firm of its capital structure which can contain the following components- debt, preferred stock and equity. To calculate the WACC, we use the market values of debt and equity in our calculation to assign weights to each component of the capital structure.
Market value of common shares = 49 * 5.8 million = $284.2 million
The total value of capital structure is = 284.2 + 102 + 19 = $405.2 million
<u>The weights to be used in WACC calculation is:</u>
Debt = 102 / 405.2 = 0.2517 or 25.17%
Preferred stock = 19 / 405.2 = 0.0469 or 4.69%
Common Stock = 284.2 / 405.2 = 0.7014 or 70.14%
Answer: C. . the efforts of a company's whole management team, not just a few senior managers
Explanation:
Planning, implementing and carrying out strategies requires a careful, collective and calculative decision to be made by all head of department and the board of an organization, because the decision taken will rub off through these departments for implementation. The decision or choice of decision should not be left to a few persons in the organization because when the ideas and plans are arranged the execution may fail as all the respective department were not involved by their heads.
Answer:
Allocated MOH= $128,000
Explanation:
Giving the following information:
Predetermined overhead rate= 160% of direct material cost.
Actual direct material= $80,000
<u>To allocate overhead, we need to use the following formula:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.6*80,000
Allocated MOH= $128,000
Answer:
<h3><u>Amount of 5-Year bond is equal to 1.6 million</u></h3><h3><u>Amount of 20-Year bond is equal to 22.2 million.</u></h3>
Explanation:
Step 1. Given information.
Amount of perpetual obligation =D/r =$ 2,500,000/0.105 =$23,809,524
Duration of perpetuity = (1+y)/y =(1+0.105)/0.105 = 1.105/0.105 = 10.5238 years
Let w be the weight of 5-year bond and (1-w) is the weight of 20-year bond in the bond portfolio.
Portfolio duration = weighted average duration of holdings
10.5238 = w*4 + (1-w)*11
10.5238 = 4w + 11 -11w
7w = 0.4762
w=0.0680
Step 2. Formulas needed to solve the exercise, and
Step 3. Calculation.
- Amount of 5-Year bond =0.068x23,809,524 = 1.6 million
- Amount of 20-Year bond =0.932x23,809,524 = 22.2 million
Step 4. Solution.
<h3><u>Amount of 5-Year bond is equal to 1.6 million</u></h3><h3><u>Amount of 20-Year bond is equal to 22.2 million.</u></h3>
