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Mrrafil [7]
3 years ago
9

In order to remain competitive, Big Bus Lines must reduce its average ticket price by 15%. However, the firm still wants to rema

in profitable. Which of the following options would allow Big Bus Lines to remain profitable while dropping its ticket prices?
A : decreasing its variable costs by at least 15%
B : increasing its variable cost per ticket by at least 15%
C : decreasing its number of passengers by at least 15%
D : decreasing its total fixed costs by at least 15%
Business
1 answer:
Elza [17]3 years ago
8 0

Answer:

A : decreasing its variable costs by at least 15%

Explanation:

Variable costs depend on the number of passengers they transport as there will be a decrease of the 15 %in the income received by each passenger. Then, it must be an equal reduction on the expenses generated by each passenger in order to remain competitive.

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NARA [144]

Answer:

detects potential problems early to prevent their occurrence.

Explanation:

Six Sigma is a quality business management strategy which helps business organizations to improve the quality of processes, products and services by discovering and eliminating defects, variations or errors. It is a strategic business concept that was developed in 1986 by Motorola.

This ultimately implies that, the six sigma approach to quality control detects potential problems early to prevent their occurrence.

Under the six sigma approach, any process that doesn't provide customer satisfaction or causes challenges in an organisation's process should be eliminated from the system in order to produce quality products and services. It allows only 3.4 defective features for every million opportunities and as such expects processes to be defect free 99.99966 percent of the time.

<em>Generally, there are two (2) main methods of achieving the six sigma approach;</em>

<em>1. DMAIC: define, measure, analyze, improve and control.</em>

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8 0
3 years ago
Suppose you started a new all-equity financed company that is expected to generate an ROE of 15% indefinitely. The current book
Luda [366]

Answer:

The value of the stock at start-up = $67.5

Explanation:

According to the dividend valuation model , the current price of a stock is the present value of the expected future dividends discounted at the required rate of return  

This principle can be applied as follows:  

The value of stock today is the present value of the future return discounted at the required rate of return

The return can be computed as the ROE × Book value of share

Return = 15%× 30 =4.5

Price of stock today = D× (1+g)/r-g

D= current return, g- growth rate, r-required rate of return

DATA: D= 4.5, g= 5%, r= 12%

PV  = 4.5× (1.05)/(0.12-0.05)

= 67.5

The value of the stock at start-up = $67.5

7 0
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Answer:

false, these two can be related

Explanation:

false

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