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Dmitrij [34]
3 years ago
7

Currently, GH Co. sells 42,600 handbags annually at an average price of $149 each. It is considering adding a lower-priced line

of handbags that sell for $79 each. The firm estimates it can sell 21,000 of the lower-priced handbags but expects to sell 7,200 less of the higher-priced handbags by doing so. What is the amount of the annual sales that should be used when evaluating the addition of the lower-priced handbags?
Business
1 answer:
kondor19780726 [428]3 years ago
3 0

Answer:

Incremental sales= $586,100

Explanation:

Giving the following information:

It is considering adding a lower-priced line of handbags that sell for $79 each. The firm estimates it can sell 21,000 of the lower-priced handbags but expects to sell 7,200 less of the higher-priced handbags by doing so.

We need to consider not only the incremental sales of the lower-priced but also the decrease in the higher-priced handbags.

Low-priced= 21,000*79= $1,659,000

Canibalized sales= 7,200*149=(1,072,900)

Incremental sales= $586,100

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Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda and yet they sell almos
777dan777 [17]

Answer:

These are the answer choices for the question:

Students do not have good nutritional information.

Soda purchases represent a large fraction of students' budgets.

There are few other places to purchase soda on campus.

The price elasticity of demand for soda is equal to 1.

And this is the correct answer choice:

There are few other places to purchase soda on campus.

Explanation:

If vending machines raise the price of soda by two, by the still sell almost the same amount, this means that they have a monopoly over the selling of soda in campus, and that students continue to buy there because they do not have any other feasible alternatives.

This is the problem with monopolies: they can charge very high prices and still make a profit because they will always have demand, but this very act makes consumers worse off, and reduces general social welfare.

5 0
3 years ago
A major distinction between a conventional bank and an Islamic bank is that Islamic banks Group of answer choices are supposed t
yuradex [85]

Answer:

cannot pay or charge interest

Explanation:

Islamic banks do not charge interest. The banks are based on Sharia law. Islamic banks make a profit through equity participation.

I hope my answer helps you

5 0
3 years ago
Roundwell, Inc. purchases a manufacturing plant for $15 million, by paying $5 million in cash as down payment, and borrowing the
djverab [1.8K]

Answer:

A Mortgage

Explanation:

A mortgage is a contract between two parties borrower and lender. In this agreement a bank or any other institution issues a loan against taking an title of an asset as a collateral that will become void if the mortgage is fully paid back with interest. The asset is taken as a security of the mortgage loan. The collateral should a specific asset that can be identifiable. Actual possession may not be transferred to lender only the ownership is transferred in many cases.

In this question the bank is taking a plant as a collateral from Roundwell Inc. against a mortgage loan of $10 million.

8 0
3 years ago
Suppose Visa Inc.​ (V) has no debt and an equity cost of capital of 9.2 %9.2%. The average​ debt-to-value ratio for the credit s
DedPeter [7]

Answer:

9.68%

Explanation:

The cost of equity :

Using this formula

rE=rU+D/E *(rU-rD)

Let plug in the above formula:

rU=0.092

D=0.13

E=(100%-13%)

=0.87

rD=0.06

rE=0.092+ 0.13/0.87*(0.092-0.06)

rE=0.092+0.1494*0.032

rE=0.092+0.004781

= 0.0968 ×100

=9.68%

8 0
3 years ago
A competitive market is one in which there a. is only one seller, but there are many buyers. b. are many sellers, and each selle
Ivahew [28]

Answer:

The right answer is, D. Are so many buyers and so many sellers that each has a negligible impact on the price of the product.

Explanation:

In a competitive market there are many sellers and many buyers, so each one has an insignificant influence on the market, that is, each seller controls a price limit since there are other sellers that offer the same products, and if it goes up The price buyers will go to where they find the products at cheaper prices. Therefore the price and quantity sold are not determined by a single buyer and seller, but by many buyers and sellers when they interact in the market.

6 0
3 years ago
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