Investors at Penny's candies have low expectations from the company since it has a very low P/E ratio. Either the company is not performing well or investors have discounted some bad news in future cash flows.
Whereas Donna's confections has a P/E of 6.7 which is much better than that of Penny's. So here the company is performing well and investors are positive on future good news and they expect the cash flows to improve and hence the stock rules at a higher P/E ratio
Elastic demand means that consumers are sensitive to price and that increased prices can lead to lower sales. There isn't enough information to fully answer this question. We don't know how elastic the demand is. If the demand is only slightly elastic, the increased price and lower demand could still equal higher profits.
Answer:
Office building
Explanation:
The formula to compute the return on investment is shown below:
Return on investment = Operating Income ÷ Average Operating Assets
It is a mix of operating income and the average operating assets through the return on investment could be computed
Since the return on investment is already given in the question
And, the higher return on investment is the best one for property use
So the office building has a higher return on investment i.e 13.5% which reflects the best for property usage.
Answer:
Option A. It will lower its costs through economies of scale.
Explanation:
The reason is that the sales of both of the companies will increase and cost can be controlled by integration of departments like finance department, distribution department, etc. This will decrease the cost of the product which will be because of higher sales and cost benefits due to integration of department and this higher sales increases the production which reduces the cost. So the option A is correct.
