Answer:
Free cash for first year is $98.75
Explanation:
Sales = $250 million
Less: Costs = $125 million
Less: Depreciation = <u>$50 million</u>
Earning before Tax = $75 million
Less: Tax 35% (75 x 35%) = <u>$26.25 million</u>
Net Income = <u>$ 48.75 million</u>
Free cash flow = Net Income + Non cash Expenses - Increase in working capital - Capital Expenditure
Free cash flow = 48.75 million + 50 million - 0 - 0
Free cash flow = 98.75 million
Answer:
Comparative Advertising
Explanation:
Comparative advertising is a form of advertising war in which manufacturers compare their products directly or indirectly with competing products. This technique involves comparing product that are similar with the aim of showing the public that the opposite or competing products are inferior to yours. It is done only when the business is at maturity stage. A new start up business cannot go into this form of advertising. Also, it is ill-advised for companies or organizations whose brand are leaders in the markets to go for this kind of marketing, even at maturity stage. The aim of such marketing is usually to put pressure on the leaders of the brand, claiming your products are more superior to theirs.
Answer:
a) Net income of $35,800
b) Net income of $45,000
c) Net loss of $23,000
d) Net income of $23,950
Explanation:
Net income is the difference between the revenue and expense.
Where revenue is more than expense, we have a net income otherwise, a net loss.
a) Net income = $71,300 - $35,500
= $35,800
b) Net income = $220,500 - $175,500
= $45,000
c) Net loss = $149,000 - $172,000
= - $23,000
d) Net income = $198,150 - $174,200
= $23,950
When a 1 percent decrease in price produces more than a 1 percent increase in quantity sold, the product or service is an Elastic Demand.
<h3>
What is an Elastic Demand?</h3>
- Elastic demand is measured by its percent of change in demand divided by its percent of change in price, provided all other factors remain the same.
- If the change in price and change in demand is proportionate, the item is neither elastic nor inelastic.
- An item has elastic demand if its demand changes more than its price changes.
- For example, if two stores sell identical products of the same amount for different prices, incase of a perfectly elastic demand nobody would buy from the seller with higher priced product.
Learn more about Elastic Demand here:
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Answer:
Decrease; Less
Explanation:
The producer surplus is the difference between the minimum price that a producer is willing to accept for a product and the price he actually receives.
When the market price of a product falls, the producer surplus will decrease as well.
The lower market price implies that there will be less area between the supply curve and the market price of the product.
