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SVEN [57.7K]
3 years ago
5

A company sells digital music players and is introducing its latest player to the market. The company knows it can’t compete hea

d-to-head with Apple and its iPods at $100. It decides to choose a pricing strategy that will capture more of the market by charging a much lower price of $39. It decides to increase the demand for its digital music players in order to take advantage of economies of scale. What type of pricing strategy should the company choose? a. skim pricing b. penetration pricing c. break-even pricing
Business
1 answer:
Katyanochek1 [597]3 years ago
4 0

Answer:

b. penetration pricing

Explanation:

Market-penetration pricing is nothing but strategy where the price that is set low in order to gain market share. In price penetration, the product is not highly distinctive. Low cost attracts price sensitive customers and they will prefer to buy the product because of its low cost.

This helps in increasing the market share as more customers will be attracted towards the products or services. This pricing strategy helps in developing the economies of scale. This refers to business optimizing profits by lowering the operational cost and improving the efficiency.

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3 0
3 years ago
disadvantages of the structure include organizational complexity, increased administrative costs, slow decision making, and diff
Sophie [7]

A company's organizational structure is the hierarchy that defines its management and communications. The disadvantages of organizational structure include lopsided management lines, increased bureaucracy, slowed communications, and increased inflexibility.

<h3>What exactly is an organizational structure?</h3>

A system that defines how specific activities are directed in order to achieve an organization's goals is referred to as an organizational structure. Such activities include rules, roles, and responsibilities.

  • Many of the problems with using a simple organizational structure revolve around the workload of the owner or the person at the top. If the owner of a company is required to approve every decision, he may become overworked.
  • The three main organizational structures are hierarchical, sequential, and matrix.

Hence, the organizational structure of a company is the hierarchy that defines its management and communications. Organizational structure disadvantages include lopsided management lines, increased bureaucracy, slowed communications, and increased inflexibility.

To learn more about organizational structure refer to:

brainly.com/question/2636977

#SPJ4

8 0
1 year ago
Alexandria's Dance Studio is currently an all-equity firm with earnings before interest and taxes of $338,000 and a cost of equi
andreyandreev [35.5K]

Answer:

$1,306,986

Explanation:

Calculation to determine What is the levered value of the equity

First step is to calculate the VL

VL = {[$338,000 × (1 - .34)] / .142} + (.34 × $400,000)

VL= $1,706,986

Now let calculate the levered value of the equity (VE)

VE = $1,706,986 - $400,000

VE = $1,306,986

Therefore the levered value of the equity is $1,306,986

8 0
3 years ago
Valuation Using an Income Statement Multiple JAKKS Pacific Inc., a toy manufacturer, reports net income for the recent twelve mo
mash [69]

Answer:

$16.27

Explanation:

For computing the intrinsic value, first we have to compute the earning per share which is shown below:

Earning per share = (Net income) ÷ (Number of shares outstanding)

                              = ($14.73 million) ÷ (20.05 million shares)

                              = 0.734

Now the intrinsic value would be

= Earning per share × P/E ratio

= 0.734 × 22.17

= $16.27

5 0
3 years ago
Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.50 percent, a par value of $1,000 pe
katrin [286]

Answer:

2.9652%

Explanation:

to determine the cost of debt we must use the FMV of the bonds plus the YTM:

first bond:

FMV = 1.09 x $1,000 = $1,090 x 3,600 bonds = $3,924,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {17.5 + [(1000 - 1090)/16]} / [(1000 + 1090)/2] = (17.5 - 5.625) / 1045 = 1.136% x 2 = 2.27% annual

second bond:

FMV = 0.95 x $2,000 = $1,900 x 3,950 bonds = $7,505,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {59.4 + [(2000 - 1900)/42]} / [(2000 + 1900)/2] = (59.4 + 2.38) / 1950 = 3.168% x 2 = 6.34% annual

total debt = $3,924,000 + $7,505,000 = $11,429,000

weighted average after tax cost of debt:

{($3,924,000/$11,429,000 x 2.27%) + ($7,505,000/$11,429,000 x 6.34%)} x (1 - 0.40) = (0.779% + 4.163%) x 0.6 = 4.942% x 0.6 = 2.9652%

6 0
3 years ago
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