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3 years ago

Average fixed cost

Business

2 answers:

QveST [7]3 years ago

5 0

Answer:

d. declines continually as output increases.

MrRa [10]3 years ago

3 0

Answer:

d. declines continually as output increases.

Explanation:

Fixed costs remain constant throughout a period regardless of output level. Average fixed costs are obtained by dividing fixed costs by the total output. Because fixed costs do not change, average fixed costs will be influenced mostly by the production level.

A large output means that fixed costs will be spread in many units. The result is a reduction in average fixed costs. When the output is large, a firm enjoys economies of scale. A small output will result in high fixed average costs. A Fixed amount will be shared among a fewer number of units.

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Assume both Atlantis and Zanadu produce helmets and baseballs. Using equal amounts of resources, Atlantis can produce 100 helmet

jeka57 [31]

Answer:

a) see attached image

b) Atlantis's opportunity cost of producing one helmet = 200 / 100 = 2 baseballs

c and d) Atlantis's opportunity cost of producing one baseball = 100 / 200 = 0.5 helmets

Zanadu's opportunity cost of producing one baseball = 100 / 400 = 0.25 helmets ⇒ Zanadu has a comparative and absolute advantage in the production of baseballs

e) yes, Atlantis would produce 100 helmets, and if it trades 50 to Zanadu, it will get 150 baseballs in return. So it will gain from trade. If Zanadu produces 400 baseballs and trades 150 of them for 50 helmets, it will also benefit.

Explanation:

3 0

2 years ago

The risk-free rate is 5%; Stock A has a beta of 2.0; Stock B has a beta of 1.0; and the market risk premiumis positive. Which of

butalik [34]

Answer:

C) If Stock B's required return is 11%, then the market risk premium is 6%.

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

The (Market rate of return - Risk-free rate of return) is also known as the market risk premium

If we take the required return is 11%, so the market risk premium would be for stock B

11% = 5% + 1 × Market risk premium

11% - 5% = Market risk premium

So, the market risk premium would be 6%

If we take the required return is 11%, so the market risk premium would be for stock A

11% = 5% + 2 × Market risk premium

11% - 5% = Market risk premium

So, the market risk premium would be 3%

Hence, the correct option is C

3 0

3 years ago

Calculate the required rate of return for an asset that has a beta of 1.73, given a risk-free rate of 5.3% and a market retur

Mumz [18]

Answer:

(a) 13,3%

(b) 18,1%

Explanation:

To calculate the required rate of return for an assets it's necessary to use the CAPM (Capital Asset Pricing Model) model which considers these variables to estimate the required return of an assets, the model states the next:

ER = Rf + Bix( ERm - Rf )

ER : Expected Return of Investment

Rf : Risk-Free Rate

Bi : Beta of the Investment

ERm : Expected Return of the Market

(Erm-Rf) : Market Risk Premium

It tries to explain the relationship between the systematic risk ((Erm-Rf Market Risk Premium) of the market and the expected returns for assets.

5 0

3 years ago

For incentive pay to motivate employees to contribute to the organization's success, the pay plans must be well designed. Which

olga nikolaevna [1]

Answer:

C. Employees value the rewards or incentives that are being offered

Explanation:

Let's see the different options for answer...

A. Performance measures are to be linked to the individual's goals

No. Even if the performance measures should be linked to the individual's goals, just the mere existence of such KPI is not sufficient to motivate employees. There has to be some performance reward attached to it.

B. Employees are given very broad performance goals

No. To get a good performance and motivate employees, they must be given clear goals and objectives.

C. Employees value the rewards or incentives that are being offered

Yes. Even if you have good performance measurements, with realistic goals, the employees won't be motivated to reach those goals if the reward doesn't worth the effort.

D. Employees are given limited resources to meet their goals

No. They won't be motivated if they don't think they have the means to achieve those goals.

6 0

3 years ago

Jumpin Corporation uses the percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to

Zinaida [17]

Answer:

$101,500

Explanation:

Net Sales $2,030,000

Allowance for uncollectible Accounts ($2,030,000*5%)=$101,500

The amount of uncollectible accounts to be reported in income statement shall be $101,500

7 0

3 years ago