Answer:
The correct answer is letter "B": The differences between costs incurred under alternative courses of action.
Explanation:
Incremental Cost is the added cost of one more unit of production. Also referred to as marginal cost, is the cost incurred by the company when it makes one more unit. These costs would not have existed if production had not increased.
Incremental costs are usually lower than the average unit cost of production. <em>Incremental costs are always comprised of variable costs. The latter is the reason why incremental costs can also be described as the result of computing the differences of the alternative paths the firm could have chosen for its production process.</em>
Answer:
You should use the discount coupon to pay for the Chicago-Miami trip. Not considering the personal motivations for the trip, the coupon is worth $500. The cost of flying is $600, so you will only pay $100 yourself. You will be spending $900 + $1000 = $1,000 in total.
The opportunity cost of using the coupon is $350 (the cost of the round trip to Atlanta). Even if you add the $350 to the $1,000 expense, the total is $1,350, less than your $1,400 maximum budget.
Since the problem assumes annual compounding, then the
relationship of forward rate and spot rates is given in the equation:
f1,2 = ((s2^2 / s1) - 1)
Therefore,
f1,2 = ((1.069^2 / 1.063) - 1)
f1,2 = 0.075 = 7.5%
Forward rate is 7.5%.
Answer:
ROE = 20%
Explanation:
Given:
Common equity = $350,000
Net income = $70,000
Find:
ROE
Computation:
ROE = [Net income/Common equity]100
ROE = [$70,000/$350,000]100
ROE = 20%
