The relationship-specific investments are investments that are worth more in the context of a specific business relationship.
<h3>What are relationship-specific assets?</h3>
The defining characteristic of relationship-specific assets is that they are more valuable when used in a relationship than when used alone. An example of this is when an upstream supplier invests in her product to make it more suited to the needs of the downstream consumer. By facilitating investment between purchasers and suppliers of intermediate goods that is relationship-specific, banks help the economy flourish.
Relationship investments are described by Williamson's transaction cost theory of 1985 as the extent to which assets are devoted to a specific relationship producing a lock-in scenario for the investing party in inter-organizational relationships. Meanwhile, the relationship-specific investments, in Crawford's words, are those "whose rewards depend on the continuation of the relationship."
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Answer:
should be equal to their marginal revenue product.
Explanation:
This applies to basically all employees that work in competitive markets, their salaries should equal their marginal revenue product.
An employee's salary = the market value of hiring the employee = marginal revenue product
The formula for calculating marginal revenue product = marginal physical product x marginal revenue
where:
- marginal physical product = extra units produced by the employee
- marginal revenue = price of the units produced
For example, a new employee can produce 100 units per day and each unit is sold at $0.75, therefore the employee's marginal revenue product = 100 units x $0.75 per unit = $75 per day
Answer:
Explanation:
Annnual Interest Income = 60 million * (1+3%) - 7million
= 1.8million
Annual Interest Expense = 70 million * (1+1%) - 70 million
= 0.6 million
Profit = 1.8 million - 0.6 million
= 0.2million
If all interest rates were to rise by 1 percent, that essentially means the spread between Treasury note interest and CD interest remains the same as both the interest rates are increasing by 1 percent equally. Therefore, there won't be any effect on the profit of the bank.
If interest rate rise 1 percent, bank's profit in the second year falls to = 60 million *(3%-2%)
= 0.6 million
Companies often set target for themselves. The reasons why it is difficult for this firm to make money is that;
- As a result of poor demand for the products
- It can be also be like due to the power or prestige gained over the years by the supermarkets is depreciating.
- This can be due to the small price margin or the price competition from other manufacturers.
- Losses encountered via the issue of Private Label
- Poor marketing and advertisement strategy and poor budget allocation for it.
Kayem Foods is a very popular brand. It is known to be a 4th generation family owned business. It has it headquartered in Chelsea, MA.
It is commonly known in the world to be the biggest processed meat company that is found in New England. They are based on natural casing, fully cooked and fresh sausage etc.
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Answer:
expected year-end dividend is 2.44
Explanation:
given data
rate of return = 10.25% = 0.1025
sells price = $57.50 per share
constant rate = 6.00% per year = 0.06
to find out
What is the expected year-end dividend, D1
solution
we will apply here sells price formula that is express as
sells price = Dividend in 1 year ÷ ( cost of equity - growth rate ) ................1
put here value we get
57.5 =
solve it we get
D1 = 2.44
so expected year-end dividend is 2.44