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Nata [24]
3 years ago
15

Jose has accepted a sales position at Business Solutions Corporation. Prior to this job, Jose worked in the electronics departme

nt of a retail store selling personal computers to consumers. In his new job at Business Solutions, Jose will sell personal computers to businesses. Despite the fact that the products sold to these two customer groups are quite similar, Jose is likely to find that purchasing decisions by buyers in the two markets will be influenced by different factors.
A. True
B. False
Business
1 answer:
miv72 [106K]3 years ago
8 0

Answer:

Yes, it is true that Jose is likely to find that purchasing decisions by buyers in the two markets will be influenced by different factors.

Explanation:

Purchasing decisions is the set of organized thought that leads from intention to effective demand.

certain factors such as taste, preference, occupation, social status, gender, lifestyle, cultural or religious belief, etc can influence purchasing decisions.

Furthermore, the purchasing decision of an individual is different from that of a business entity because the objective of these two groups differ.

Consumers purchase personal computers for a number of reasons ranging from personal use to probably a mini business set up. This function might not require high specifications and the brand credibility might not matter except the individual has the purchasing power to buy premium PCs.

However, a business has a clear objective when purchasing a personal computer- for business transactions. They will opt for a durable brand, with high processing speed to save time and help service more customers, they will also prefer an affordable brand that is easy to maintain in order to maximize profit. And they usually make bulk purchases.

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As winner of a breakfast cereal competition, you can choose one of the following prizes: a. $180,000 at the end of five years. b
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Answer:

i. Discounted cashflow equations.

a.  $180,000 at the end of five years.

This is a lump sum present value/ discounted cashflow which can be calculated as;

Formula = 180,000 / ( 1 + r)^n

= 180,000/ ( 1 + 12%)^5

= $102,136.83

b. $11,400 a year forever

This is a perpetuity. The present value/ discounted cashflow of a perpetuity is calculated as;

Formula = Amount/rate

= 11,400/12%

= $95,000

c. $19,000 for each of 10 years.

This is an annuity. The formula for calculating the Present value/ discounted cashflow of an annuity is;

Formula = Annuity * [\frac{( 1 - (1 + i)^{-n} )}{i} ] where <em>i </em>is interest rate and <em>n</em> is number of periods

= 19,000 * [\frac{( 1 - (1 + 0.12)^{-10} )}{0.12} ]

= $107,354.24

d. $6,500 next year and increasing thereafter by 5% a year forever.

This is a growing perpetuity. The present value/ discounted cashflow formula is;

= Amount / ( discount rate - growth rate)

= 6,500 / ( 12% - 5%)

= $92,857.14

ii. Choose <u>$19,000 for each of 10 years</u> as it has the highest present value.

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Assume the following​ amounts: Total fixed costs Selling price per unit Variable costs per unit If sales revenue per unit increa
sineoko [7]

Answer:

The correct option is <u>c. 129,000</u>.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Assume the following amounts:

Total fixed costs. $15,000

selling price per unit. $19

variable costs per unit. $12

if sales revenue per unit increases to $21 and 16,000 units are sold what is the operating income?

a 159,000

b. 336,000

c. 129,000

d. 144,000

The explanation to the answer is now provided as follows:

Since sales revenue per unit increases to $21, we use it as the selling price and proceed as follows:

Computation of Operating Income

<u>Particular                                              Amount ($) </u>

Sales revenue (16,000 * $21)                336,000

Variable cost (16,000 * $12)                <u>  (195,000)  </u>

Contribution                                            144,000

Fixed cost                                             <u>   (15,000)  </u>

Operating income                             <u>    129,000    </u>

Therefore, the correct option is <u>c. 129,000</u>. That is, operatin income is $129,000.

5 0
4 years ago
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