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Alla [95]
3 years ago
8

Decision Point: Considering Alternatives Because of your inexperience, you don't know how many alternatives should be considered

in your search for a replacement product. Should you search for as many alternatives as you can, research a limited number, or simply choose one?
Business
1 answer:
Ber [7]3 years ago
5 0

Answer:

The answer is stated below:

Explanation:

Select a limited number of alternatives to consider: For example, considering the top 3 alternative suppliers.

Then generate or create a list of as many as possible of alternative suppliers.

Rely on the gut in order to make a decision regarding the right number of alternatives when you feel the time is right.

Deciding or choosing the limited number of alternatives , this concept is known as the bounded rationality. For most of the businesses, this is the most realistic approach for dealing with alternatives.

You might be interested in
5,000 7.5 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 105 percent of par; the bonds ma
vitfil [10]

Answer:

10.53%

Explanation:

WACC = wE*rE + wP*rP + wD*rD(1-tax)

<u>Market values;</u>

Debt = 1.05 *5,000*1000 = 5,250,000

Preferred stock = 15,500 *107 = 1,658,500

Common equity = 105,000 *63 = 6,615,000

Total market value = 13,523,500

wE = 6,615,000/ 13,523,500 = 0.4891

wP= 1,658,500/13,523,500 = 0.1226

wD = 5,250,000/13,523,500 = 0.3882

<u>Cost of capital;</u>

Cost of common equity, rE using CAPM;

rE = 0.06 + (1.13*0.09) = 0.1617

rE = 16.17%

Cost of preferred stock = 6%

Cost of debt

using a financial calculator, input the following; N= 38, PV = -1050, PMT = 37.5,

FV =1000, then CPT I/Y = 3.51% . So annual rate = 3.51% *2 = 7.02%

WACC = (0.4891*0.1617) +(0.1226* 0.06) + [0.3882 *0.0702(1-0.31)]

WACC = 0.0791 + 0.007356 + 0.0188

WACC = 0.1053 or 10.53%

4 0
3 years ago
The normal balances of sales, sales discounts, and sales returns and allowances are ________. debit, credit, and credit, respect
Y_Kistochka [10]
<h3><u>Answer;</u></h3>

credit, debit, and debit, respectively

<h3><u>Explanation</u>;</h3>

Normal balance of sales; Credit

Normal balance of sales discount; Debit

Normal balance of sale returns and allowances; Debit

  • A normal balance is the expectation that a particular type of account will have either a debit or a credit balance.
  • The normal balance of sales is credit.
  • The sales returns and allowances account is subtracted from sales because these accounts have the opposite effect on net income. Therefore, sales returns and allowances is considered a contra‐revenue account, which normally has a debit balance.
  • The account Sales Discounts is referred to as a contra-revenue account. Therefore;  its is debit balance.
5 0
3 years ago
Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserv
lapo4ka [179]

Answer:

a) First Main Street Bank's T-account (before the bank makes any new loans) will look as follows:

<u>                   Assets                         |                Liabilities                  </u>

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) The effect of a new deposit on excess and required reserves when the required reserve ratio is 25% are as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = $1,350,000

Change in Required Reserves (Dollars) = $450,000

Explanation:

a) Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans)

A deposit of $1,800,000 by Yakov into his checking account at First Main Street Bank will lead to the creation of both an asset and a liability for First Main Street Bank.

The reserves on the asset side of the T-account of First Main Street Bank will therefore increase by $1,800,000. This gives the bank the opportunity to able to give loan to its other customers from the additional reserves.

On the other hand, the deposit of $1,800,000 by Yakov will be recorded as a demand deposit on the liability side of the T-account of First Main Street Bank. This is because it is possible for Yakov to withdraw his deposit at any time.

This transaction will therefore be reflected as follows:

<u>                   Assets                         |                Liabilities                  </u>

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%.

Note: See the attached excel file to see how the table will actually look.

The required reserve ratio of 25% implies that First Main Street Bank is required by law to hold 25% of the new reserves which in this case is the initial deposits from Yakov.

By calculating this, 25% of $1,800,00 is $450,000 and it indicates an increase of $450,000 in the required reserve of First Main Street Bank.

After deducting 25% from 100%, we have 75% left. And 75% of $1,800,000 is $1,350,000. This $1,350,000 is the excess reserves that First Main Street Bank can use to give loans to other customers.

The breakdown is therefore as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = 75% * $1,800,000 = $1,350,000

Change in Required Reserves (Dollars) = 25% * $1,800,000 = $450,000

Download xlsx
5 0
3 years ago
Darin was promoted, but it meant leaving the bustling city life he loved and moving to a different state in a quiet part of the
Papessa [141]
A is The answer

Hopefully this help
4 0
2 years ago
If Best Buy chose to compete by introducing online sales direct to the consumer, this would be an example of ______ change
inna [77]

Answer:

If Best Buy chose to compete by introducing online sales direct to the consumer, this would be an example of marketing change.

Explanation:

If Best Buy decided to change its conditions of sale to be able to compete with its adversary companies, that change would imply a marketing change, since it would modify the way in which the products are offered to the public.

Marketing changes are changes in the conditions of advertising and sale of products, through which they seek to renew sales through innovative supply systems, which capture the attention of consumers.

4 0
2 years ago
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