What are the consequences of traditional law of production

Which of the following statements is CORRECT? a. If two firms differ only in their use of debt-i.e., they have identical assets,

djverab [1.8K]

Answer:

E) If two firms differ only in their use of debt-i.e., they have identical assets, sales, operating costs, interest rates on their debt, and tax rates-but one firm has a higher debt ratio, the firm that uses more debt will have a lower profit margin on sales.

Explanation:

Firms that are highly leveraged, i.e. have a lot of debt, have higher costs due to interests that must be paid, so their profit margins are smaller, and their return on assets is also lower, and their risk is much higher also.

But the benefit is that the return on equity is much higher. A greater amount of debt means lower amount of equity, so any profits made must be divided by a smaller amount of stocks or smaller amount of capital invested.

5 0

3 years ago

Most attributes and benefits in many product categories can be whittled down to a. success and failure. b. price and quality. c.

grigory [225]

Answer:

b. price and quality.

Explanation:

Most attributes and benefits in many product categories can be whittled down to price and quality.

This ultimately implies that, the two fundamental factors to consider when designing a product is its price and quality. The price of a product can be defined as the monetary value or amount of money which must be paid by a customer for the acquisition of such products. The relationship between demand and supply of goods (products) affects or influences the price of a product; if the supply of a product is short, its price would rise and vice-versa.

The quality of a product is subjective, it is a measure of excellence and being free from any defect or deficiency when producing and supplying products that meet the needs or demands of customers.

8 0

3 years ago

Explain the typical shapes of the marginal-benefit and marginal-cost curves. The marginal-benefit curve is

IgorC [24]

Answer: The marginal benefit curve is downward.

The marginal cost curve is upward

Explanation:

Unlike the marginal cost curve, whose slope is often upwards, the marginal profit curve is generally known by its downward slope.

The optimum allocation of resources to a given product will take place when these curves are used. MB = MC always.

5 0

3 years ago

Equipment was purchased for $50,000 plus $2,500 in freight charges. Installation costs were $1,500 and sales tax totaled $1,000.

Lelechka [254]

It would be A!
Explanation: $50,000(equipment)+$2,500(freight charges)+$1,500(installation cost)+$1,000(sales tax)+3000(cost to hire special consultant=58,000

7 0

4 years ago

Noric Cruises Inc. began the month of October with the following balances: Common Stock, $150,000; Additional Paid-In Capital, $

Art [367]

Answer:

The statement of stockholders’ equity for the month ended October 31 is $18,450,000.

Explanation:

Noric Cruises Inc.

Statement of stockholders’ equity for the month ended October 31

Common stock Paid-In Capital Retained Earnings

Opening balance $150,000 $3,225,000 $12,400,000

Addition 800,000 - -

Net income - - $2,350,000

Cash dividends - - (475,000)

Balance at Oct 31 $950,000 $3,225,000 $14,275,000

4 0

3 years ago