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3 years ago

Explain the difference between an absolute minimum and a local minimum.

Business

1 answer:

Crank3 years ago

5 0

Answer: An absolute minimum occurs at the x value where the function is the smallest, while a local minimum occurs at an x value if the function is smaller there than points around it (i.e. an open interval around it)

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DAR Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P

Eddi Din [679]

Answer:

a) Share price of company is $28.20.

b) So value of unlevered firm is $4.512 million.

Explanation:

Share price = Value of debt / (160,000 - 110,000)

= $1,410,000 / 50,000

= $28.20

Share price of company is $28.20.

VAlue of all equity firm = Number of share outstanding × Price per share

= 160,000 × $28.20

= $4.512 million

Value of levered firm is $4.512 million.

Since tax rate is zero, so value of levered firm equal to value of unlevered firm.

So value of unlevered firm is $4.512 million.

6 0

3 years ago

1. On June 30, 2018, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $21,000 on t

Mumz [18]

Answer:

$58,002.60

Explanation:

First, it is clear to include the $21,000 as part of the value of the equipment.

Now, the $9,000 annual payment after every year for six years need to be presented in its present value, meaning what is the value of those future amounts of $9,000 on June 30, 2018.

To calculate the present value of annuity (annuity means constant and equal payments) for those 6 payments of $9,000, we would need the Present Value Factor which is supplied from the Present Value Table.

Looking at 12% for 6 periods ("six annual installments") on the table, it gives the PV factor of 4.1114.

Just multiply $9,000 by 4.1114 and we get 37,002.60

Finally add the downpayment of $21,000 with the present value $37,002.60 and we would get the total value of the equipment of 58,002.60

5 0

3 years ago

Harris Company manufactures and sells a single product. A partially completed schedule of the company’s total costs and costs pe

irga5000 [103]

Answer:

1. 67,000 87,000 107,000

Total costs:

Variable costs 261,300 339.300 417.300

Fixed costs 360,000 360,000 360,000

Total costs $621,300 $699,300 $777,300

Cost per unit:

Variable costs $3.9 $3.9 $3.9

Fixed costs $5.37 $4.14 $3.36

Total cost $9.27 $8.04 $7.26

2. Particulars Amount($)

Sales(97,000*8.08) $783,760

Variable costs(97,000*3.9) $378,300

Contribution margin $405,460

Fixed costs $360,000

Net operating income $45,460

Explanation:

1. The schedule of the company’s total costs and costs per unit would be as follows:

67,000 87,000 107,000

Total costs:

Variable costs 261,300 339.300 417.300

Fixed costs 360,000 360,000 360,000

Total costs $621,300 $699,300 $777,300

Cost per unit:

Variable costs $3.9 $3.9 $3.9

=(261300/67000)

Fixed costs $5.37 $4.14 $3.36

=(360,000/67000) =(360,000/87000) =(360,000/107,000)

Total cost $9.27 $8.04 $7.26

2. The contribution format income statement for the year would be as follows:

Particulars Amount($)

Sales(97,000*8.08) $783,760

Variable costs(97,000*3.9) $378,300

Contribution margin $405,460

Fixed costs $360,000

Net operating income $45,460

6 0

3 years ago

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On

pychu [463]

Answer:

The correct answer is C

Explanation:

The amount of cash paid on July 8 is computed as:

Amount of goods worth = Purchased amount - Returned goods worth Amount of goods worth = $1,800 - $200

Amount of goods worth = $1,600

As the amount is paid within the terms of 10 days, so the amount is eligible for the discount of 2%, it is as:

Amount to be paid in cash = Amounts of goods worth - ( Amounts of goods worth × Discount)

where

Amounts of goods worth is $1,600

Discount is of 2%

Putting the values above:

Amount to be paid in cash = $1,600 - ($1,600 × 2%)

Amount to be paid in cash = $1,600 - 32

Amount to be paid in cash = $1,568

8 0

3 years ago

In which one of the following instances is rivalry among competing sellers notmore intense?

dimaraw [331]

Answer: E.When there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members

Explanation:

The more the number of players in an industry the more it gets congested and especially for the competing sellers. The decision for increasing or reducing price is met by follower firms to do the same thing. It gets less competitive because you know all the players in the industry would be following the same practices and doing the same thing.

7 0

3 years ago