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NeTakaya
3 years ago
6

Although Mountaintop Electronics still sells its DVD players, a product in its decline stage, the investments made by the compan

y on improving or marketing the product are very low. The company has allocated the least amount of human and financial capital to this department. which of the following strategies has Mountaintop Electronics adopted in this scenario? a. harvest strategy b. differentiation strategy c. maintain strategy d. consolidation strategy
Business
1 answer:
yawa3891 [41]3 years ago
5 0

Answer:

a. harvest strategy

Explanation:

Although Mountaintop Electronics eliminate the investment on DVD players. As new investment will not boost product revenue.

A harvest strategy involves this course of acction to maximize profits towards the end of a product's life cycle.

It is suitable for outdated products to reinvest profit in newer models or newer technologies.

The harving strategy is a normal business strategy as all products have a life cycle and when it is near the end the firm wisely decreases his investment on it and dedicates capital into more new and profitable product which benefit from the cash inflow

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Variable cost refers to the costs of production that fluctuate depending on the number of units​ produced.

<h3><u>Explanation:</u></h3>

The cost of any product that changes based on the quantity of goods that are produced. The volume that is produced decides the fluctuations in the variable cost. Fixed cost is the cost that will not change based on the number of units of the goods that is produced. Rent of a building can be considered as a fixed cost.

Example for variable cost may be raw materials cost, packaging cost,etc. Variable cost can be calculated by adding up the cost of labor and raw materials that are used in the production of one unit of a good. The total variable cost can be calculated by multiplying   variable cost per unit with the number of units produced.

3 0
3 years ago
What is the value of a firm with initial dividend Div 1​, growing for n years​ (i.e., until year n plus 1​) at rate g 1 and afte
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Answer:

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Explanation:

since the company will first grow at g1 for n years, and then at g2 forever, we need to first determine the present value of the dividends growing at g1 for n years:

present value of the dividends during n = (Div 1 / r - g1) x {1 - [(1 + g1) / (1 + r)]ⁿ}

e.g. div = $2, n = 5 years, g1 = 8%, r = 12%

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now we find the formula to calculate the present value for the growing perpetuity g2 at n - 1 years:

= (Div 1 / r - g2) x [(1 + g1) / (1 + r)]ⁿ⁻¹

following the same example but changing g1 for g2, and g2 = 5%

= (2 / 12% - 5%) x [(1 + 5%) / (1 + 12%)]⁵⁻¹ = 28.5714 x 0.772476 = $22.07

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