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3 years ago

1. Choose a real or made up example of a company, and describe at least three variable costs the

Business

1 answer:

Softa [21]3 years ago

4 0

Answer:

Let Sanguine Wines Ltd. refer to a hypothetical company for the purpose. Following would constitute Sanguine Wines Ltd's variable costs:

Raw Material or input prices: The raw material or inputs of sanguine wines limited purchases from suppliers such as dried grapes, sugar and the likes. The price of such inputs is prone to seasonal fluctuation and thus variable
The performance related incentive for employees for number of bottles of wine created, would be variable cost as it would vary with the no of bottles produced.
Discount allowed to distributors which varies based upon the number of bottles purchased by them.
Commission paid to wine salesperson which varies with respect to bottles sold.

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The term crowding-out effect refers to a situation in which a government _______________ results in ______________ interest rate

Allisa [31]

Answer: Deficit; higher; a decrease

Explanation:

The term crowding-out effect refers to a situation in which a government deficit results in higher interest rates, causing a decrease in private spending on investment and consumer durables.

The Crowding-out effect is what happens when a Government increases its spending past its revenues and gets a budget deficit. In other to balance its books therefore it will borrow heavily.

If the Government is such a large one like the American Government or the British Government, the borrowing might be so large that it will have the effect of reducing the amount of loanable funds in the market thereby increasing the interest rates due to a reduced supply of loanable funds.

As there are now increased interest rates, it will be more expensive for companies to borrow to spend on investment or for consumers to spend on durables. It will have the effect of crowding out the private sector.

6 0

2 years ago

How should an organization design its structure and culture to obtain a core competence in manufacturing and in research and dev

nekit [7.7K]

Answer and Explanation:

core competency of an organization comprise it's multiple resource, capabilities and skills that gives it a competitive advantage in the market. It was originated in management theory by C. K. Prahalad and Gary Hamel.

For an organization to have core competencies in manufacturing and also research and development putting it's organizational structure and culture to use, it has to:

create a flexible and somewhat independent structure for it's research and development department such that innovation is easy. Control must be decentralized and the team must come first

For the manufacturing department, an organic and participative approach should be encouraged. This would allow inclusive management such that workers are included in decision making processes. Managers should also be given more independence while workers should increasingly be empowered

the organization should also take stringent measures in employing the right people for the research and development as well as the manufacturing department such that these individuals are qualified and possess the needed expertise for their areas. Staff should equally be empowered through constant education and new skill acquisitions and be allowed to impart this knowledge on other staff by encouraging transfers in global expansion.

6 0

3 years ago

Wendell’s Donut Shoppe is investigating the purchase of a new $18,600 donut-making machine. The new machine would permit the com

sertanlavr [38]

Answer:

1. Total Annual Cash Inflows = 5000

2. Discount Factor = 3.72

3. New Machine's internal rate of return = 16%

Explanation:

Note: the question is incomplete and it lacks essential data to be used in part 4. Without the exhibits mentioned in the questions, it is not possible to solve this question completely. We will be solving it till part 3.

1) What would be the total annual cash inflows associated with the new machine for capital budgeting purposes?

Answer:

In this we have to calculate the total annual cash inflows and the formula to calculate it is mentioned below:

Total Annual Cash Inflows = Savings in Part Time help annually + Additional contribution Margin from Expected Sales.

Total Annual Cash Inflows = 3800 + ( 1000 x 1.20)

Total Annual Cash Inflows = 3800 + 1200

Total Annual Cash Inflows = 5000

2. What discount factor should be used to compute the new machine’s internal rate of return?

Answer:

Formula to calculate the Discount factor:

Discount Factor = Price of new machine/ annual cash inflow

Price of new machine = 18600 USD

Annual cash inflow = 5000

Discount Factor = 18600 /5000

Discount Factor = 3.72

3. What is the new machine’s internal rate of return?

Answer:

As, it can be seen from the exhibits (which are missing from this question) that the discount factor for 6 years is nearly closest to 16%, hence the new machine's internal rate of return = 16%

Note: the question is incomplete and it lacks essential data to be used in part 4. without the exhibits mentioned in the questions. It is impossible to solve further.

7 0

3 years ago

Headland Co. has a held-to-maturity investment in the bonds of Schuyler Corp. with a carrying value of $79,200. Headland determi

Allisa [31]

Answer:

The Journal Entry is as follows:

Loss on Impairment $8,400

Debt Investment ($8,400)

Explanation:

Given.

Carrying Value = $79,200

Decreased Value = $70,800

Differences = $79,200 - $70,800

Differences = $8,400

Since the loss in value is determined, uncollectible.

The required entry on the journal entry are the amount loss on impairment and the amount invested on debt.

The Journal Entry is as follows:

Loss on Impairment $8,400

Debt Investment ($8,400)

7 0

3 years ago

Good Firm is highly profitable and will grow rapidly in the future. Bad Firm faces the same risks but barely makes a profit and

RideAnS [48]

Answer: B.both stocks are equally good investments

Explanation:

The options are;

A.it is better to buy shares in Bad Firm

B.both stocks are equally good investments

C.it is better to buy shares in Good Firm

D.both stock prices react equally to the same information

From the question, we are informed that Good Firm is highly profitable and will grow rapidly in the future while Bad Firm faces the same risks but barely makes a profit and will not grow at all. It should be noted that In an efficient market, both stocks are equally good investments.

3 0

3 years ago