Answer:
Explanation:
If these two companies were to behave as individual profit maximizers, both company will advertise regardless of whether the other company advertises or not because their goal primary goal is to increase the profit and domination of the market.
Answer: location economies
Explanation:
location economies are economies which are birthed through performing a value creation activity in an optimal location for that activity wherever in the world it may be. It is used by firms to determine the competition in an environment when locating to do business
The entry to record this transaction would include:
Dr. Inventory $20,000
Cr. Accounts payable $20,000
What does it mean to purchase inventory on account?
Purchasing the inventory on account for $20,000 means that Ferguson corp. did not make payment for the inventory immediately, it rather purchased the inventory on credit with a promise to pay later.
As a result, the liability of Ferguson corp. has increased, specifically, the company would credit accounts payable with $20,000 such that inventory, which is the receiving account is debited with the same amount
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Answer:
The correct option is (b)
Explanation:
According to the scenario, the foreign currency that original sold at the market is shown below:
= (Forward rate to Jan 15 - Spot rate) × paymen made
= ($0.00089 - $0.00082 ) × 20 million
= $0.00007 × 20,000,000
= $1,400 premium
hence, the foreign currency that originally sold at the market is $1,400 premium
Therefore the correct option is (b)
Answer:
10%
Explanation:
Given that,
Interest at last year debt = 8%
Current year cost of debt = 25% higher
Firms paid for debt last year = 10%
Firms paid for debt in current year = 12.50%
Kd - cost of debt
Yield = Interest at last year debt × (1 + increase in cost of debt)
= 8% × (1 + 0.25)
= 8% × 1.25
= 10%
Kd = Yield (1 – T)
Kd = 10% (1 – 0)
= 10% (1)
= 10%
Therefore, after tax cost of debt would be 10%.
