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Brilliant_brown [7]
3 years ago
6

At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg’s was quoted as saying,

" . . . for the past several years, our individual company growth has come out of the other fellow’s hide." Kellogg’s has been producing cereal since 1906 and continues to implement strategies that make it a leader in the cereal industry. Suppose that when Kellogg’s and its largest rival advertise, each company earns $0 billion in profits. When neither company advertises, each company earns profits of $10 billion. For what range of interest rates could these firms use trigger strategies to support the collusive level of advertising?
Business
1 answer:
Evgen [1.6K]3 years ago
6 0

Answer:

23 percent

Explanation:

Base on the scenario been described in the question, the normal form game looks like this:Kellogg’sRivalAdvertiseNoYesNo$8, $8$-4, $43Yes$43,$-4$0, $0Collusion is profitable under the usual trigger strategies if (πCheat- πCoop) / (πCoop- πN) ≤ (1 / i), or ($43 - $8) / ($8 - 0) = 4.38 ≤ (1 / i). Thus, one requirement is for the interest rate to be lessthan 23 percent. As our answer

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Answer:

12

Explanation:

At the price of $24, the demand is 36

At the price of $30, the demand is 24

change in quantity demanded

= 36-24

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3 0
3 years ago
IMB Corporation recently reported an EBITDA of $22.5 million and $5.4 million of net income. The company has $6 million interest
Mandarinka [93]

Answer:

$8.2 million

Explanation:

As per given data

EBITDA         $22.5

Net Income    $5.4 Million

Interest Expense = $6 million

Tax rate = 35%

As we know the Tax is deducted from the income before tax to calculate the net income. We will calculate the Earning before tax first.

EBT = Net Income x 100% / ( 100% - 35% )

EBT = 5.4 million x 100% / 65%

EBT = $8.3 million

Now we need to calculate the Earning Before interest and Tax

EBIT = EBT + Tax Expense = $8.3 million + $6 million = $14.3 million

The Difference between EBIT and EBITDA is depreciation and amortization expense.

Depreciation and Amortization expense = EBITDA - EBIT = $22.5 million - $14.3 million = $8.2 million

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3 years ago
What is The appearance of text called?
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6 0
3 years ago
How are random events taken into consideration during both hindsight bias and overconfidence?
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The hindsight bias and overconfidence, plus our eagerness to perceive patterns in random events, can cause tendencies that may lead us to overestimate our intuition. Intuition and intellect are not always accurate, therefore these factors are not trustworthy compared to scientific facts or scientific inquiry which can help us overcome our intuition’s biases and shortcomings.
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4 years ago
Your investment has a 20% chance of earning a 30% rate of return, a 50% chance of earning a 10% rate of return, and a 30% chance
stellarik [79]

Answer:

9.2%

Explanation:

expected return of the investment = potential return x chance of each return happening

Expected return of the investment:

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  • 50% chance of occurring x 10% potential return = 0.5 x 10% = 5%
  • 30% chance of occurring x -6% potential return = 0.3 x -6% = -1.8%
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6 0
3 years ago
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