This statement is false. The notes receivable account should
only include those notes which can still be collected. Notes that have not
matured yet is still included in the notes receivable account because there is
still the probability of collection. Dishonored notes should not anymore be
included because there is no more probability of collection.
Cost of equity capital is closest to: 16 percent
Solution:
WACC is covered on page 120 Corporate Finance, under Capital Structure.
Using the standard equation for WACC = %wt Equity x cost of equity (re) + %wt Debt x cost of debt (rd).
Since there is a 20% tax rate for the firm, the cost of borrowing is reduced by that amount. So the cost of debt is 4%, not 5%.
Plug the formula: 10% = 50% x re + 50% x 4%
The formula ( i.e. 0.1+(0.1-0.05)(1)(1-0.2)) in CFAI reading is questionable.
The calculation is 0.1+(0.1-0.05*(1-0.2))*(1)=16%
Elastic.
This is
the formula for elasticity:
Elasticity
= (Quantity variation/Quantity)/(Price variation/Price)
Inelastic
demand is the one in which a variation in price doesn’t lead to an important
variation in the quantity bought by consumers. So, in the formula, numerator is
much smaller than denominator, so the fraction is lower than 1. That happens
with necessary goods (typically, food).
On the
contrary, elastic demand is the one in which a variation in the price leads to
an important variation in the quantity bought by consumers, and that means the
fraction is higher than 1. So if I sell the product at a lower price, I will
sell much more product.
Considering the formula:
R = P*Q, when demand is elastic,
I will
have much more sold quantity with just a little lower price, which leads to a higher
revenue.
Answer:
The correct answer is when to buy.
Explanation:
When a consumer has checked all the alternatives and has made the purchase decision of what to buy, he still needs to decide from whom to buy and at what time or when to buy. This is because the price of assets or goods keeps changing with the passage of time. The change in price depends on market situations at that time.
There are a number of factors that affect the price level in the market. For instance,
- Income level
- Business cycle
- Interest rates
Changes in these factors cause a change in the price of goods and services and other assets.
The trust trick for making sales using terms like "limited edition" or putting countdowns of time and remaining items for an offer is called the scarcity technique.
Scarcity marketing can be understood as a way to activate psychological triggers to generate purchase desire in consumers through product shortages, as people tend to perceive limited quantities as more valuable.
This strategy to drive sales will be effective if it meets three criteria:
- It is useful
- It is transferable between people
- It has the potential to be possessed
Therefore, companies can gain significant advantages by implementing the scarcity technique, increasing sales and generating greater value for the consumer.
This strategy needs to be used sparingly so as not to create too much pressure on the consumer to make a purchase and not to generate an image of poor inventory management.
Find out more information about scarcity here:
brainly.com/question/20254934
