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lutik1710 [3]
3 years ago
10

CC’s is analyzing a proposed project with anticipated sales of 3,620 units, give or take 5 percent at a sales price of $24, plus

or minus 2 percent.. The variable cost per unit is $14.60, plus or minus 4 percent, and the fixed costs are $12,900, plus or minus 1 percent. The depreciation expense is $8,100. If the company conducts a sensitivity analysis using a variable cost of $16, the total variable cost estimate will be:
Business
1 answer:
eimsori [14]3 years ago
5 0

Answer:

The total variable cost will be $ 16 * 3620= $ 57920

Explanation:

CC

Analyzing Proposed Project

<u>                                           Given                1                     2                3</u>

Variable Increase            ----                   10%                 9.125%      9.125%

<u>Fixed Decreased                                                                                6.97%   </u>            

Sales price per unit        $24           $24                    $24             $24

Variable price per unit    $ 14.6       $16.06               $ 16             $ 16

Fixed Costs                    $ 12900      12900               $ 12900      $ 12000

Sales Volume               3620            3620                   3620          3620

We have taken the sale prices constant and changed the variable costs and fixed costs.

CC

Sensitivity Analysis Report

                              Given              1                       2                   3

Sales                   86880             86880         86880        86880    

Variable Costs    52852            58137.2      57920          57920

Contribution Margin 34028      28742.8      28960          28960

<u>Fixed Costs              12900        12900         12900            12000   </u>

<u>Operating Profit       21128          15482.8      16060          16960</u>

Dollar Change in

<u>Variable Expenses                        5645.2       5068         5068     </u>

<u />

<u>The total variable cost will be $ 16 * 3620= $ 57920</u>

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Answer:

Nash equilibrium will occur at the following conditions P1 = P2 = 10 and x1 = x2 = 0.

Explanation:

The term or concept known as the Nash equilibria is very important and it is often used in the determination of the kind of price strategies companies that are competing against one another will use in order to acquire more customers than the others.

So, in this question/problem we are given that there are two manufacturer that is manufacturer 1 and manufacturer 2. Also, the total number of customers both manufacturers are competing for is equal to 100.

Kindly note that we are given from the question that ''Each manufacturer chooses both the price and quality of its product, where each variable can take any non-negative real number''

If each of the manufacturer has 50 customers each that is symmetric condition.

Assuming we have a condition or situation where p1 is less than p2 for manufacturer 1, it means that manufacture 1 lessens its price, therefore manufacturer 1 will have all all the profit = 100(p1 - 10 - 5x1).

Assuming manufacturer 1 reduces both the quality and the price this time around to the point that it is justifiable to lower the price because of the quality , it means that we will have 1000 + (x1 = 0) + (p1 - compensation m).

For any of the manufacturer, If  m> x'  and we  have that  x1 = x'>0[ which is for the quality], then, the profit will be 100(10 + 5x'- m -10).

Also, For any of the manufacturer, if we have  x'<m<5x' and x1 for the representation of quality, then, Customers will buy from both manufacturer making  m<5x'.

Therefore, Nash equilibrium will occur at the following conditions: P1 = P2 = 10 and x1 = x2 = 0.

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3 years ago
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Answer:

B

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It is expressed in years and fraction of years.

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Under dividend growth model a stock is overvalued or undervalued assuming that the firm’s expected dividends grow at a value g forever, which is subtracted from the required rate of return or k.

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