Lcm requires to value inventory at the lower of acquisition cost or net realizable value.
Net realizable value = $27 - $1 = $26
Cost = $30
Therefore, it would be valued at $26
Answer:
a. 10.04%
b. $82.78
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
a. Expected rate of return or market capitalization = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 5% + 0.72 × (12% - 5%)
= 5% + 0.72 × 7%
= 5% + 5.04%
= 10.04%
The Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is applied.
b. Now the intrinsic value would be
= Expected dividend ÷ (Required rate of return - growth rate)
= $5 ÷ (10.04% - 4%)
= $5 ÷ 6.04%
= $82.78
Answer:
b. Managers from headquarters staff key positions.
Explanation:
In an international organisation when only managers from the headquarters are allowed to staff key positions, it is an indication of ethnocentric policy on staffing.
This usually occurs when the management of the organisation feels more comfortable working with a particular ethnic group they share the same culture with, and so understand easily. This is a way to avoid culture shock.
Answer:
For Dan, the demand is price inelastic
Explanation:
One of the factors tat affect the quantity demand for a product is the price of the product. According to the law of demand, at lower price more quantity of a product would be purchased than at a higer price, all other this being being equal.
Price elasticity of Demand (PED)
The extent to which a change in price will cause a change in the quantity demand for a product is called the price elasticity of demand. It measures the degree of responsiveness of quantity demand to a change in price.
It is calculated as
PED =% change in quantity demand / % change in price.
For Dan Newspaper , the price elasticity of demand
= 4%/8%
= 0.5
If the PED is greater than 1, the demand is price elastic
If the PED is less than 1 , demand is price inelastic
For Dan, the demand is price inelastic
Answer:
10,900 units
Explanation:
The applicable formula is the formula for calculating the cost of goods sold, COGS.
COGS = The applicable formula is the formula for calculating the cost of goods sold, COGS.
COGS = Beginning inventory + purchases - closing inventory
In this case, COGS will be 11,000 units: Beginning balance 1100 and ending balance of 1000.
11,000 = 1100 + P -1000
11,000 = 1100-1000 +P
11,000 = 100 + P
P= 11,000 -100
P= 10,900
Productions should be 10,900
