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2 years ago

Stock splits:

1 answer:

3 0

Answer: a. Allow management to conserve cash, give stockholders more shares, and cause no change in total assets, liabilities, or stockholders' equity.

Explanation:

Stock Splits increase the number of shares a company without actually changing their market capitalization by simply dividing the shares available.

There are a bunch of reasons to do this but one of them is to conserve cash. By splitting stock, managers can conserve cash by not paying dividends but still proving that the company can still pay dividends. The Shareholders getting MORE stock would be the reward.

Since Stock splits don't change the Market Capitalization, they don't have an effect on Equity either and by extension Assets and Liabilities.

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A producer of felt-tip pens has received a forecast of demand of 31,000 pens for the coming month from its marketing department.

atroni [7]

Answer:

a. Break-even quantity: 28,000 pens

b. Price: $1.51 per pen

Explanation:

1. Break-even quantity

a) Revenue, R(x)

The monthly revenue is the product of the price by the number of units sold in the month.

Naming x the number of pens sold in the month:

R(x) = $1 × x = x

b) Cost, C(x)

The monthly cost is the sum of the fixed cost per month plus the variable costs:

C(x) = $21,000 + 0.25 × x = 21,000 + 0.25x

c) Break-even

Break-even is the point when the revenue and the total costs are equal, this is, when the profit is zero. Write the equation and solve:

x = 21,000 + 0.25x

x - 0.25x = 21,000

0.75x = 21,000

x = 21,000 / 0.75

x = 28,000

Hence, the break-even quantity is 28,000 pens.

2. Price pens must be sold to obtain a monthly profit of $18,000

Profit = Revenue - Total cost

P(x) = R(x) - C(x)

P(x) = x.p - [ 0.25x + 21,000]

Where p is the price.

P(x) = x.p - 0.25x - 21,000

Substitute the quantity demanded, x, with 31,000, and the profit, P(x) with 18,000:

18,000 = 31,000p - 0.25(31,000) - 21,000

Solve for p and compute:

31,000p = 18,000 + 7,750 + 21,000

31,000 p = 46,750

p = 1.51

That is $1.51 per pen.

4 0

2 years ago

What basic economic question helps determine the career path of individuals?

Vlada [557]

Any option available ?

5 0

2 years ago

Absolute v. comparative advantage activity this chart shows how many units of tractors and cotton workers can produce in the uni

goldenfox [79]

Answer: a). Spain

b). none

c). 2.4

Explanation: a). Absolute advantage occurs when a country produces more of a good than the other country. In this case, Spain produces 50 units of Tractors while, Bolivia produces only 30 units of Tractors. Thus, Since Spain is producing more it has an absolute advantage in Tractors.

b). Both the countries are producing equal units of Cotton. Thus, we can say that none of them has an absolute advantage in cotton production.

c. Opportunity cost is the cost of the lost alternative. When Spain produces Tractors it is sacrificing production of Cotton. So, opportunity cost on 1 unit of Tractor will be,

$Opportunity cost = \frac{120}{50} =2.4$

Thus, 2.4 units of cotton which is given up is the opportunity cost of Spain for producing 1 unit of Tractor.

4 0

3 years ago

A new project would require an immediate increase in raw materials in the amount of $17,000. The firm expects that accounts paya

RUDIKE [14]

Answer:

C.) $10,000

Explanation:

Working capital is the net of current asset and current liabilities. it is a financial measure that gives insight into how liquid a company is.

Raw materials also known as Inventory and accounts payable are both current assets and current liabilities respectively hence, Incremental investment in working capital if the project is accepted

= $17,000 - $7,000

= $10,000

5 0

3 years ago

Read 2 more answers

If an individual investor uses the services of a broker to buy and sell stocks that are currently being traded in the stock mark

sergejj [24]

Answer:

a. False

Explanation:

A "primary transaction" refers to the selling of new stocks and bonds for the first time towards the public. A great example of this is the "Initial Public Offering" (IPO) which allows "public share issuance."

On the other hand, a "secondary transaction" refers to the trading of investors among themselves. There is no involvement of the issuing companies here. So, this means that if an investor uses the services of a broker to buy and sell stocks that are currently being traded in the stock market, the transaction doesn't directly involve the issuing company. This kind of transaction is then called "secondary."

So, this explains the answer.

8 0

2 years ago