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zlopas [31]
3 years ago
11

Stephen runs a pet salon. He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he wi

ll add $65.65 to his costs and $65.65 to his revenues. What will be the effect on his profits of grooming 121 dogs instead of 120 dogs? Stephen's profits will change by $ (Enter your response rounded to two decimal places.)
Business
1 answer:
aniked [119]3 years ago
6 0

Answer:

Effect on income= $0

Explanation:

Giving the following information:

He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he will add $65.65 to his costs and $65.65 to his revenues.

Contribution margin per dog= selling price - unitary variable cost

Contribution margin per dog= 65.65 - 65.65= 0

Effect on income= 0*1= $0

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Crisp Cookware's common stock is expected to pay a dividend of $1.75 a share at the end of this year (D1 = $1.75); its beta is 0
DedPeter [7]

Answer:

P3 = $96.9425 rounded off to $96.94

Explanation:

To calculate the market price of the stock three years from today (P3), we will use the constant growth model of DDM. The constant growth model calculates the values of the stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D1)  /  (r - g)

Where,

  • D1 is the dividend expected for the next period
  • g is the constant growth rate
  • r is the required rate of return on the stock

To calculate the price of the stock today (P0), we use the dividend expected for the next period (D1). So, to calculate the price at the end of 3 years (P3) we will use D4.

We first need to calculate r using the CAPM equation. The equation is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the market risk premium

r = 0.058 + 0.6 * 0.05  

r = 0.088 or 8.8%

Using the price formula for DDM above and the values for P0, D1 and r, we can calculate the g to be,

 

80 = 1.75 / (0.088 - g)

80 * (0.088 - g) = 1.75

7.04 - 80g = 1.75

7.04 - 1.75 = 80g

5.29/80 = g

g = 0.066125 or 6.6125%

We first need to calculate D4.

D4 = D1 * (1+g)^3

D4 = 1.75 * (1+0.066125)^3

D4 = 2.12061793907

Using the formula from DDM for P3, we can calculate P3 to be,

P3 =  2.12061793907 / (0.088 - 0.066125)

P3 = $96.9425 rounded off to $96.94

4 0
3 years ago
The following information is available for Trinkle Company for the month of June:
klemol [59]

Answer:

the  true cash balance as on June 30 is  $79,039

Explanation:

The computation of the true cash balance as on June 30 is given below:

Unadjusted Balance as Per Bank Statement on Jun 30  $81,500

Add: Deposit in Transit Jun   $3,150

Less: Outstanding Check Jun30 $(5,611)

True Cash Balance As on Jun 30 $79,039

hence, the  true cash balance as on June 30 is  $79,039

8 0
3 years ago
You are comparing spatial ability scores for four groups. you find that the f statistic for your test is 4.01, and the cutoff va
7nadin3 [17]
<span>Reject the null hypothesis since your F statistic is beyond the cutoff, and perform a post-hoc test to determine between which groups the significant difference occurs.</span>
3 0
3 years ago
Here is some price information on Fincorp stock. Suppose that Fincorp trades in a dealer market. Bid Ask 55.25 55.50 a. Suppose
kobusy [5.1K]

Answer:

$55.50

Explanation:

The bid price is $55,25 is the price applicable to investors would intend to sell their investment.

The ask price is $55.50 is the price applicable to investors who wish to acquire the Fincorp stock.

The prices have been computed in such a  way that the broker will always gain, whether an investor is buying or selling his/her stake.

Conclusively, the order given to the broker to buy at market would be executed at the ask price of $55.50, not the other way round.

8 0
3 years ago
Which of the following statements is correct? a. Monopolistic competition is similar to monopoly because both market structures
Alborosie

Answer:

Letter a is correct. <em>Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers.</em>

Explanation:

<u> A monopoly</u> is an economic situation whose main characteristic is imperfect competition, that is, only one company owns a market for a particular good or service and for this reason is able to influence the price of that good or service for its own benefit.

<u>Monopolistic competition</u> resembles monopoly in that it is characterized by business competition for similar but not equal products, so they are also capable of making the price, since similar products sold on the market cannot be considered perfect substitutes.

6 0
3 years ago
Read 2 more answers
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