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3 years ago

8

Fred has good credit and can borrow at 5%. Bob has poor credit and can borrow at a rate of 11%. What is the amount of the risk p

remium that Bob will pay?

1 answer:

user100 [1]3 years ago

5 0

Answer:

6%

Explanation:

By subtracting 11% by 5% you will get 6%, which is the premium Bob is paying

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The newest version of a product like Crutchfield headphones is likely to use price skimming, while the new version of Monster Energy is likely to use penetration pricing

<h3>What is price skimming?</h3>

Price skimming is a pricing strategy that a company can use when launching a new product or service.

Electronic products, such as the Apple iPhone, frequently use a price-cutting strategy during the initial launch period. Then, after competitors launch competing products, such as the Samsung Galaxy, the price of the product drops to maintain the product's competitive advantage.

The pricing strategy will be influenced by the stage of the product's life cycle. The process of charging a relatively high price for a product is referred to as price skimming. Skimming is commonly used when a product is new to the market (in its introduction or growth phase) and has few competitors.

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1 year ago

Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(n) __________ d

kvasek [131]

Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(n)<u> inside </u>director.

A director is a person on the company's board of directors who acts as the governing body of the organization. The board of directors, often elected by the company's shareholders, creates policy for the company as a whole and oversees leadership positions in the organization. They guide, advise and run the organization.

Board members are part of the governing body of the organization. Committed to the long-term interests of the organization, they meet regularly to oversee and direct operations, set policy, approve business decisions, evaluate operating performance, and carry out fiduciary responsibilities.

The board membership application process includes several steps. In most corporate boards, a nominating committee interviews candidates and decides who should join the board. Board members then vote on whether to elect the candidate selected by the nominating committee.

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1 year ago

The pursuit of only a singular, substantive goal often tends to support the choice of a competitive strategy.

skad [1K]

The pursuit of only a singular<span>, </span>substantive goal often tends to support the choice of a competitive strategy<span>. True.</span>

4 0

3 years ago

Read 2 more answers

It is now January. The current interest rate is 3.8%. The June futures price for gold is $1490.60, while the December futures pr

liberstina [14]

Answer:

a. $4,322.74

b. Yes

Explanation:

a. The computation of December futures is shown below:-

December futures = June futures × (1 + 1.9%)

= $1490.60 × (1 + 1.9%)

= $1490.60 × 2.9 %

= $4,322.74

Since the current interest rate is 3.8% and the contract is expired in 6 months so we half the interest rate i.e 1.9%

b. Yes, there is an arbitration opportunity here due to the difference between the future price of December. The real futures price for December is $1,500 and the potential price for December's parity relationship is $4,322.74

6 0

3 years ago

Two currently owned machines are being considered for the production of a part. The capital investment associated with the machi

andrew11 [14]

Answer:

Machine A's output in a day = 100 × 7 = 700

Rejected output of machine A =0.03 × 700 = 21

Thus defect free output of machine A = 700 – 21 = 679

Revenue from Using Machine A = 679 × 12 = 8148

Cost of Using Machine A = 6 × (Defect free output) + 15 × 7 + 5 × 7 = 6 × 679 + 105 + 35 = 4214

Thus, profit from using machine A = 8148 – 4214 = 3934

Machine B's output in a day =130 × 6 = 780

Rejected output of machine B = 0.1 × 780 = 78

Thus, defect free output of machine B = 780 – 78 = 702

Revenue from Using Machine B = 702 × 12 = 8424

Cost of Using Machine B = 6 × 702 + 15 × 6 + 5 × 6 = + 105 + 35 = 4212 + 120 = 4332

Thus profit from using machine B = 8424 – 4332 = 4029

Since the profit from using machine B is higher, Machine B should be selected.

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4 years ago