Answer:
The correct answer is (d)
Explanation:
Better quality can help to reduce many costs such as customer’s dissatisfaction cost, inspection cost and warrant and service cost. When customers don't like the quality of the product they are likely to buy the same product from somewhere else that is the dissatisfaction cost. Still, maintenance cost is likely to incur no matter how good the quality is. Maintenance cost helps to keep the product clean and fresh for long-term use.
Answer:
a) 12.87%
b) 11.03%
Explanation:
EBIT with no debt = $111,000
net income = $111,000 x (1 - 22%) = $86,580
total value of the firm with no debt = $86,580 / 12% = $721,500
value of the firm after debt is taken = $721,500 + ($165,000 x 22%) = $757,800
debt to equity ratio after debt is taken = $165,000 / ($757,800 - $165,000) = 27.834%
new cost of equity (Re) = 12% + [(12% - 8%) x 27.834% x (1 - 22%)] = 12.87%
WACC = (0.72166 x 12.87%) + (0.27834 x 8% x 0.78) = 9.288% + 1.737% = 11.025$ = 11.03%
Answer and Explanation:
The computation is shown below:
a. The standard cost is
Fo material
= $1,243,000 ÷ 565,000 units
= $2.20 per unit
And, for labor it is
= $1,638,500 ÷ 565,000 units
= $2.90 per unit
b. The budgeted cost would be remian the same as the total cost i.e. $1,243,000 and $1,638,500
Hence, the same would be considered and relevant
Answer:
fixed income
Explanation:
During the expansion business cycle, economic activities are on the increase. Key economic indicators such as employment, incomes, business earnings, demand, and supply of goods and services show positive and progressive numbers. During expansion, the GDP growth rate is healthy, and the level of investment is high.
The expansion phase brings along inflationary pressure. At the peak or near the end of the expansion cycle, the inflation rate is always above the optimal level and sometimes in double digits. A high rate of inflation weakens the purchases power of the local currency. Employees on a fixed income will be disadvantaged. Their income will afford them fewer goods and services compared to the period before expansion.
