Answer:
Harlose Suits owns more equipment than required for manufacturing goods during periods of regular demand in order to tackle sudden demand surges. It also has a certain reserve of produced goods to tackle material shortages. In this case, the reserve of equipment and produced goods are examples of <u>the</u> <u>capacity cushion</u>.
Explanation:
The capacity cushion is the amount of reserve capacity that a business keeps to manage sudden increases of demand or momentarily losses of production capacity.
Answer:
a. Wholesale division.
Explanation:
The formula to compute for return on investment is shown below:
Return on investment = Operating Income ÷ Operating Assets
For Retail Division, it would be
= $2,500,000 ÷ $16,000,0000
= 15.625%
For Wholesale Division, it would be
= $6,000,000 ÷ $36,000,0000
= 16.67%
Based on the calculation, the wholesale division perform better
Answer:
$7073.68
Explanation:
Data provided in the question:
Worth of portfolio = $15,000
Amount invested in stock A = $6,000
Beta of stock A = 1.63
Beta of stock B = 0.95
Beta of portfolio = 1.10
Now,
Beta portfolio = ∑(Weight × Beta)
let the amount invested in Stock B be 'x'
thus,
1.10 = [($6,000 ÷ $15,000 ) × 1.63] + [( x ÷ $15,000 ) × 0.95 ]
or
1.10 = 0.652 + [( x ÷ $15,000 ) × 0.95 ]
or
0.448 = [( x ÷ $15,000 ) × 0.95 ]
or
x = ( 0.448 × $15,000 ) ÷ 0.95
or
x = $7073.68
Answer:
the expected rate of return of the junk bond = 17%
Explanation:
the expected rate of return of the junk bond = (return if the company makes a profit x probability of the company making a profit) + (return if the company makes goes bankrupt x probability of the company going bankrupt) + (return if the company breaks even x probability of the company breaking even)
the expected rate of return of the junk bond = (40% x 0.3) + (0 x 0.2) + (10% x 0.5) = 12% + 0 + 5% = 17%
Answer:
d. other things being equal
Explanation:
"Ceteris Paribus" refers to a latin phrase which means other things remaining equal.
The term is used to convey the constancy of other variables while establishing a relation between factors.
For instance, in the law of demand, ceteris paribus is used to convey factors other than price being constant.
The term is often used to convey cause- effect relationship between parameters.
In economic context, the term conveys the effect one variable casts over another.