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3 years ago

Why is it important for a manager or decision maker to have a good understanding of both of these approaches to decision making?

Business

1 answer:

Zigmanuir [339]3 years ago

8 0

Answer:

It is important for a manager/decision maker to have a good understanding of both of these approaches, because it is more beneficial if the manager/decision maker can combine the two approaches to the situation.

Explanation:

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Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery ba

Brilliant_brown [7]

Answer:

5.14%

Explanation:

Determining the pretax cost of debt is the first to do prior to ascertaining after tax cost of debt.

Pretax cost of debt can be computed using the rate formula in excel.

=rate(nper,pmt,-pv,fv)

nper is the number of times the bond would coupon interest,hence paying coupon every six months for 20 years means 40 coupon payments

pmt is the semiannual coupon bondholders would received from the bond i.e $1000*7.25%*6/12=$36.25

pv is the current market price at $875

fv is the face value of $1000

=rate(40,36.25,-875,1000)=4.28% semiannually

=4.28% *2=8.56% annually

after tax cost of debt=8.56%*(1-t),where t is the tax rate of 40% or 0.40

after tax cost of debt=8.56%*(1-0.4)=5.14%

8 0

3 years ago

After conducting a market research study, Ed Manufacturing decided to produce a new interior door to complement its exterior doo

hram777 [196]

The target cost for each interior door is $96.

<h3>What is manufacturing?</h3>

Manufacturing is the process of creating or producing items with the aid of resources such as machinery, manpower, tools, chemicals, or biological formulations.
It is the core of the economy's secondary sector.

<h3>What is operating cost?</h3>

Operating costs, often known as operating costs, are the costs associated with running a company, or with running a machine, part, piece of equipment, or facility.
They represent the cost of the resources an organization uses just to stay in business.

<h3>Solution -</h3>

Total revenue of the year (sales) = $120 × 20,000 = 24,00,000

Operating cost = 20% of sales = 4,80,000

Target cost of each door = 4,80,000 ÷ 20,000 = $24

120 - 24 = $96

Therefore, the target cost for each interior door is $96.

Know more about a business here:

brainly.com/question/24553900

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5 0

2 years ago

1. (20 total points) Suppose the demand for a product is given by QD = 50 – (1/2)P.a) (10 points) Calculate the Price Elasticity

Nataly_w [17]

Answer:

a) PED = 0.5

b) Total revenue is maximized at $50

c) PED is elastic beyond price $50

Explanation:

a) QD = 50 - (1/2)P

Price = $40

When substituted,

QD = 50 - (0.5 x 40)

QD = 30 units

Price elasticity of demand is the responsiveness of quantity demanded to a change in price. It is calculated by dividing the % change in quantity demanded by a % change in price. For this we require the quantity demanded for two different prices.

As an example, at price $30

QD = 50 - 0.5 x 30 = 35 units

Assume that price reduced from $40 to $30

% change in QD = Change in Qd / original Qd x 100

= (30-35)/30 x 100 = - 16.67%

% change in price = Change in price / original price x 100

= (40-30) / 40 x 100 = 33.33%

PED = 16.67 / 33.33 = 0.5

b) A PED that is less than 1 suggests that it is inelastic. This means that the percentage change in quantity demanded is lower than the percentage change in price. When PED is inelastic, firms can maximize its revenue by charging higher prices because a % change in quantity demanded is less than a % change in price.

For example, at price $30 sales would be = $30 x 35 = $1050

At price $40, sales would be = $40 x 30 = $1200

At price $50, sales would be = $50 x 25 = $1250

At price $60, sales would be = $60 x 20 = $1200

The price charged should be $50, since after this, TR starts to gradually decrease.For example, at price $51, sales is $51 x 24.5 = $1249.5

c) PED is price elastic if it is higher than 1. This means that the percentage change in quantity demanded is higher than the percentage change in price. This is common for products that are non-essentials or have a lot of substitutes.

When price changes from $50 to $51, quantity demanded falls from 25 units to 24.5 units.

Hence PED = [(25-24.5)/25] / [(50-51) /50)] = 1

PED is elastic after $50 which also explains why total revenue begins to fall as price increases beyond $50.

7 0

4 years ago

The system that provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure

julia-pushkina [17]

Answer:

North American Industry Classification System (NAICS)

Explanation:

North American Industry Classification System (NAICS): It is a system or standard code been used in classifying business by the type of economic activity. These data been used by government and business of United sates, Mexico and Canada. This system make the measurement of industrial, reseller, and government markets easier. NAICS provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA). NAIC has replaced standard industrial classification (SIC) system, which was in place for 50 years.

6 0

3 years ago

Here are some important figures from the budget of Crenshaw, Inc., for the second quarter of 2019:

STALIN [3.7K]

Answer:

Crenshaw, Inc.

Cash Budget for the months of April, May, and June:

April May June

Beginning cash balance $109,000 $325,000 $419,950

Cash receipts 140,700 122,850 153,650

Cash collections from credit sales 197,400 241,200 210,600

Total cash available $447,100 $689,050 $784,200

Cash disbursements:

Wages, taxes, and expenses 79,700 75,200 103,900

Interest 9,400 9,400 9,400

Equipment purchases 33,000 5,500 147,000

Purchases of goods 179,000 167,000

Total cash disbursements 122,100 269,100 427,300

Ending balance $325,000 $419,950 $356,900

Explanation:

a) Data and Calculations:

Budget for the second quarter of 2019:

April May June

Credit sales $402,000 $351,000 $439,000

Credit purchases 179,000 167,000 200,000

Cash disbursements:

Wages, taxes, ^ expenses 79,700 75,200 103,900

Interest 9,400 9,400 9,400

Equipment purchases 33,000 5,500 147,000

Predictions:

Uncollectibles 20,100 17,550 21,950

Collections 381,900 333,450 417,050

Total credit sales $402,000 $351,000 $439,000

Cash Collections:

Month of sales 35% 140,700 122,850 153,650

Following month 60% 197,400 241,200 210,600

Total cash collections 338,100 364,050 364,250

4 0

3 years ago