Answer: 27%
Explanation:
The Average rate of return is calculated by;
= Estimated Average Annual income / Average Investment
Estimated Average annual income = Total income/ years income is accrued
= 402,300/5
= $80,460
Average Investment = (Initial cost + Residual value) / 2
= (524,500 + 71,500) / 2
= $298,000
Average rate of return = 80,460/298,000
= 0.27
= 27%
Answer:
C. lower, higher
The reason for this is that when growth rates are lower investors will be willing to pay less for the stock is because low growth rate mean that the capital gains will be less as stock price is less likely to increase in the future and dividend growth is also less. Also the DDM model D*(1+G)/1-R shows that mathematically a lower growth rate would mean lower stock price
Also Higher required returns mean that the investor requires higher returns to buy the stock, because he may view the stock as risky and requires higher returns for the risk he is taking or he may have a higher opportunity cost (for eg interest rates may be high) with other investments. Mathematically the DDM model D*(1+G)/R-G shows us that a higher R would mean lower stock price.
Explanation:
The cost of making that the component should be compared to the price of buying the component is $15.55.
<h3 /><h3>What is cost of making?</h3>
First step
Relevant manufacturing cost
Direct materials $7.90
Direct labor 2.10
Variable manufacturing overhead 1.10
Fixed manufacturing overhead 0.4
(10% × $4.00 is avoidable)
Total $11.50
Second step
Cost of making=11.5+[($8.10 per unit ÷ 6 minutes per unit)×3 minutes]
Cost of making=$11.5+$4.07
Cost of making=$15.55
Therefore the cost of making that the component should be compared to the price of buying the component is $15.55.
Learn more about cost of making here:brainly.com/question/16107431?referrer=searchResults
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1)No Minimum Capital.
2)Separate Legal Entity.
3)Limited Liability.
4)Free & Easy transfer of shares.
5)FDI Allowed.
Answer:
If sales fall by 20% AFC raises 38 cents per paper, i.e. a 25% increase in AFC.
Explanation:
To find the average fixed cost (AFC), we have to sum all fixed costs and divide it by the amount of units produced. Fixed costs are those that don't depend on how much is produced, in this case, rental and labor cost don't depend on output, as you can neither move to a cheaper place nor decrease labor obligations even if the factory had no output (newspapers printed).
We can see that as the output reduced, AFC rose 38 cents per paper or a 25% increase in AFC.
