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3 years ago

Which of the following is a risk (or potential pitfall) of cost leadership?

Business

1 answer:

Lapatulllka [165]3 years ago

7 0

Answer:

a. Cost cutting may lead to the loss of desirable features

Explanation:

In the business market, sometimes there occurs a price war between the various companies regarding the same type product and each company reduces the price to as minimum as possible to take the cost leadership in the market. Some drawbacks that occur in such a strategy of companies are listed here -

There is a tight control on the expenses during the manufacturing of products which often results in loss of desirable features in the products
No new innovations are made as companies focus mainly of the current product
The feedback of customers seem to be of no importance in such conditions
This strategy promotes the lower quality products in the market

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Casey nelson is a divisional manager for pigeon company. his annual pay raises are largely determined by his division's return o

sweet-ann [11.9K]

Answer:

1. Net Present Value

Annual Cash flow = Net operating income + depreciation

= 550000+800000 = 1,350,0000

Present value annuity factor at 19% for 5 years = 3.058

NPV = (3.058x 1,350,000 ) - 3500000 = 628300

2. IRR

IRR is the rate at which NPV will become zero

hence PVAF at R % ,5 years x 1,350,000= 3500000

PVAF at R %, 5 years = 2.59

From the Present value annuity factor table in 5 year raw at 20% we will get 2.991

NPV at 20% = 2.991 x 13,50,000-40,00,000 = 37850

Now take PVAF at 21% from table (We want to get lesser NPV, so taking the next highest percentage from the table)

NPV at 21 % = 2.926 x 1350000-40,00,000=49900

So, IRR = 20% + (37850/37850+49900) x 1%

= 20.43%

3. Simple rate of return

Rate of return = Average net operating income / average investment

= 550000/4000000

= 13.75%

3 0

3 years ago

Read 2 more answers

A business student conjectures that the Internet caused companies to become more profitable, since many transactions previously

Tanzania [10]

Answer: This is an observational study. The reason being that in an observational study , the subject in the study are put into treatment groups or control groups either by their own action or by someone else who is not involved in the research study but in a controlled experiment, researcher take control by randomly assigning subjects to control or treatment group.

Whereas,

Experimental studies are ones where researchers introduce an intervention and study the effects. Experimental studies are usually randomized, meaning the subjects are grouped by chance.

If indeed profitability increased, she cannot conclude the Internet was the cause, this is due to the redundancies i.e. the results of observational studies are, by their nature, open to dispute. They run the risk of containing confounding biases.

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3 years ago

To limit your risk during the first six months of unsupervised driving, you should avoid:

Ivenika [448]

Answer:

carrying passengers

Explanation:

trust

3 0

2 years ago

Read 2 more answers

Scarlett Corp. uses no debt. The weighted average cost of capital is 8.4 percent. If the current market value of the equity is $

prohojiy [21]

Answer:

EBIT $2,100,000

Explanation:

WACC=EBIT/(V+D)

8.4%=EBIT/$25,000,000

EBIT=25,000,000*8.4%

EBIT=$2,100,000

5 0

3 years ago

Kojo, a LifeCare Medical Supplies salesperson, follows Malin, a salesperson for National Medco Products, a LifeCare competitor,

Tasya [4]

Answer: the options are given below:

A. no tort.

B. wrongful interference with a business relationship.

C. conversion.

D. trade libel.

The correct option is B.

Explanation: From the question above, we can see that LifeCare Medical Supplies and National Medco Products are business rivals or competitors in the same industry, and Kojo works for LifeCare, while Malin works for National Medco.

The actions of Kojo will therefore be counted as a wrongful interference with a business relationship, this is because Kojo is specifically targeting the exact customers that Malin has sold to, thereby interfering with the relationship that Malin already has with the customers.

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4 years ago