Answer:
B. 9.84%
Explanation:
Given that
D1 = 1.25
P0 = 27.50
g = 5%
F = 6%
Recall that
Cost of equity raised = (D1/P0 - [F × P0]) + g
Thus,
= 1.25/27.50 - [0.06 × 27.50] + 0.05
= 1.25/ 25.85 + 0.05
= 0.04835 + 0.05
= 0.09835
= 0.0984
=9.84%
Answer:
a higher price and produce a smaller output than a competitive firm
Explanation:
A monpolistically competitive firm is a firm that :
1. Sells differentiated products from other firms in the industry.
2. Has many buyers and sellers
3. Is a price maker
4. Has no barrier to entry or exist of firms
An example of a monpolistically competitive firm is a resturant.
A competitive firm is a firm that:
1. Sells identical goods with other firms in the industry.
2. Is a price taker . Prices are set by forces of demand and supply
3. Has many buyers and sellers
4. There are no barriers to entry or exist of firms.
When a monopolistic and competition firm are faced with the same unit cost, a monopolistic firm would aim to earn profit by increasing its price and reducing the quantity produced.
While a perfect competition would sell at the price set by the forces of demand and supply. The firm can increase the quantity produced in order to increase revenue.
A monopolistic firm is able to charge a higher price for its products while a perfect competition isn't.
Answer:
A monopolistically competitive industry is characterized by
a. many firms selling products that are similar but not identical.
Explanation:
A monopolistic competition is a form of imperfect competition with many firms operating in the industry. For such an industry, the goods or services are differentiated, such that one firm's goods or services can easily be associated with the producer. This is mostly achieved through branding and the use of trademarks. Each firm, therefore, competes with many other competitors, but they limit their competition by differentiating their products so that consumers would have preference for one against the other, depending on their perceived value.
Answer:
It will increase expense, thereby reducing the profit mentioned in the income statement and decrease the current asset (debtor) recorded in the balance sheet.
Explanation:
Bad Debt is an expense that is recorded when it is expected that the customer, who owes a debt to the business, might default in clearing their dues.
As such when the bad debt amount is increased it will result in a rise in expense and therefore the profit, as stated in the profit and loss (income statement) of the sole trader would decrease.
Moreover, it will also decrease the value of trade receivables (current assets) mentioned in the balance sheet. The following entry would be recorded:
Bad Debts (Dr) xxxxx
Trade Receivables (Cr) xxxxxx
Hence, the expenses will increase while the current asset will decrease.
,Answer: $285,000
Explanation:
The Contribution margin of a product refers to its selling price less that of the variable costs incurred to make and sell the good.
It can be used to calculate the breakeven point in sales along with the fixed costs.
To calculate a company's break-even point in dollar sales, the formula is:
= Fixed costs / Contribution margin ratio
= 94,050 / 33%
= $285,000
