Answer:
Product A $7.80
Explanation:
Calculation to Determine the most profitable product assuming the machine hours are the constraint.
PRODUCT A PRODUCT B
Contribution margin per unit $85.80 $107.80
÷Machine hours 11 14
=Contribution margin per bottle neck hour
$7.80 $7.70
Based on the above calculation Product A is the most profitable because product A profit Amount of $7.80 is higher than that of product B.
Answer:
Interest rate on debt is 12.40%
Explanation:
Since break-even EBIT $41,650 , the equation of the two capital structure can be written as below:
EPS under the first capital structure=EPS under the second capital structure
Generally EPS =EBIT/weighted average number of shares in an all equity financed structure like the first one
EPS=EBIT-(debt*interest rate)/weighted average number of shares in a mixed capital structure
$41,650/15,500=$41,650-($65000*interest rate)/12,500
by cross multiplication
41,650/15,500*12,500=41650-(65000*interest rate)
33588.71=41650-(65000*interest rate)
65000*interest rate=41650-33588.71
interest rate=(41650-33588.71)/65000
interest rate=12.40%
Answer: The answers are given below
Explanation:
a. What is its percentage rate of return?
From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:
= $5.50/$50 × 100%
= 0.11 × 100%
= 11%
b. Is the firm earning an economic profit? If so, how large?
The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:
= 11% - 5%
= 6%
The firm is earning economic profit of 6%.
c. Will this industry see entry or exit?
There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.
Pluralistic ignorance effect is a practice in which no ones believes but everyone thinks they believes. This is very particular to a business administration environment. I'll give you an example,
You are the kind of person that wants cleanliness and you notice that your friend is so messy, supposed to be you will tell her about her messiness but you noticed that no one cares about her, thus you stopped yourself from speaking,
Answer:
a value exchange
Explanation: Hope this help:)