Answer:
See explaination for the details of the answer.
Explanation:
1) Increase
As business is optimistic about its future, such business will start capacity expansion to cater for consumer demand.
2) Decrease
Higher real interest rate simply means borrowing cost is higher for the firms and so that they will reduce the investment in respose to that.
3) Decrease
A lower tax means higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and to the government with tax on profit. However, if the rate of tax itself has been increased then in that case corporates will see higher tax as a dampener in sentiments and they might curtail investment plans.
4) Decrease
A recession means there will be lesser economic activity overall and demand will be lower so as the consumption. In such case, planned investment will be reduced.
Answer:
$1.01 billion
Explanation:
The computation of the amount for advertising based on projected sales is shown below:
= Advertising expense ÷ sales × projected sales in next year
= $0.8 billion ÷ $15 billion × $19 billion
= $1.01 billion
First we find out the advertise to sales ratio after than we multiplied it with the projected sales in next year in order to find out the advertising based on projected sales
Food because income is money you take in.
Answer: Degree of Operating Leverage
A Tech = 2.75
Z Tech = 3
Explanation:
As defined in question itself,
Degree of Operating Leverage = 
As here, it is provided that profit for both the companies are same amounting $4 million.
Although the fixed cost differ by $1 million.
A Tech Degree of operating Leverage = 1 + 
= 2.75
Z Tech Degree of Operating Leverage = 1 + 
= 3
This clearly demonstrates that A Tech will reach its break even faster than the Z Tech as the ratio of fixed cost to variable cost is lower in A tech in comparison to Z Tech.
