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Answer:
a. re > rs > WACC > rd.
Explanation:
Re represents cost of equity
Rs represents cost of retained earnings
WACC represents Weighted average cost of capital
Rd represents cost of debt
Basically the cost of equity is highest as there is no assured return on such equity investment.
Cost of retained earnings is less than cost of equity because amount invested is already in hands of company, although belonging to equity holders, thus is higher than total weighted cost of capital.
WACC is the cost after providing weights to every source of capital it is lower then equity, higher than debt because of average.
Cost of debt is lowest because of tax benefit from it.
Answer:
The answer is:
More accounts have been written off than had been estimated
Explanation:
Doubtful debt or bad debt is an expense. According to the rule of accounting, debit increases an expense while debit decreases an expense.
So the debit balance balance in allowance for doubtful accounts tells us that there is an increase in expense which means that more accounts(bad debt) have been written off.
So we can infer from the debit balance that more accounts have been written off than had been estimated
Answer:
Increase quantity to where AC = MC = D=AR=MR
Explanation:
A perfectly competitive market is where there are many firms in the industry producing homogeneous products. There is ease of entry and exit into and out of the market. They are price takers and earn normal profits in the long-run. In order to maximize profits, a firm in a perfectly competitive industry should produce an the quantity where its average cost is equal to marginal cost when AR = MR = D. In other words, when the AC and MC curves intersect with AR = MR = D curve.
<em><u>Please refer diagram</u></em>
The firm is currently producing at a point where AC > MC at quantity 1000. In order to reach AC = MC, the firm has to increase its quantity to Qe. As it increases quantity, although marginal cost increases, average cost falls because now fixed costs are spread over a larger quantity of output.
At Qe, the three curves intersect and is the point where this firm can maximize its revenue (Price = Pe). At a price higher than this, it would lose customers since there are many others producing the same product and customers can easily shift to another.
Answer: See on how dependent on advertising a publication is.
Explanation: