Answer: A) supply increases and demand stays the same
Check out the diagram below. The curves S1 and D1 are the original supply and demand curves for some product. If we shift S1 to the right, we get some new curve S2. This is increasing supply. Keeping D1 the same means that the equilibrium price slides down and the quantity goes up.
In short, we have more stuff in the market, and each of those items is cheaper.
Answer:
Duration of liability (perpetual) = (1 + y) / y
= (1 + 17.5%) / 17.5%
= 6.71
Value of liability = Cash Flow / yield
= $3.5 million / 17.5%
= $20 million
a. Assume you invest w in 5-year bond and 1-w in 25-year bond such that the duration of the portfolio is 6.71
6.71 = w x 4 + (1 - w) x 16
w = (16 - 6.71) / (16 - 4)
w = 77% in 5-year bond
1 - w = 28% in 25 year bond
Market Value of 5 year bond = 77% * $20 million = $15.4 million
Market Value of 20 year bond = 23% * $20 million = $4.6 million
b. Market Price of 20 year bond can be calculated using PV function on a calculator
N = 25, I/Y = 17.5%, PMT = 9, FV = 100
Price = Present Value (25,17.5%, 9 ,100)
Price = 52.29042644
Price = $52.30
Par Value of 25 year bond = Market Value /% Price
Par Value of 25 year bond = $4.6 million / 50.83%
Par Value of 25 year bond = $9,049,774
Answer:
=$46,500
Explanation:
Retained earning = beginning retained earning+ earnings - dividends.
For Pierson Industries
Beginning retained earnings is $42,000
revenues are $104,800
expenses $97,300
Dividends paid out $3,500
Earning for the period will be revenue minus expenses
=$104,800 - $97,300=$7,500
retained earnings are the end of the year will be
= $42,500+$7,500 -$3,500
=$50,000 -$3,500
=$46,500
Answer:
31
Explanation:
The calculation of indifferent between your current mode of operation and the new option is shown below:-
Current Operation
Contribution Margin = Monthly Fees - Variable Cost
= $734.00 - $91.00
= $643.00
Total Fixed Cost = Rent and Utilities + Salaries + Insurance
= $5,435.00 + $6,171.00 + $1,545.00
= $13,151.00
New Operation
Contribution Margin = Monthly Fees - Variable Cost
= $1,054.00 - $158.00
= $896.00
Total Fixed Cost = Rent and Utilities + Salaries + Insurance
= $11,679.00 + $6,974.00 + $2,408.00
= $21,061.00
Here we will assume the indifferent number of students will be X
So,
Income under current option = Income under new option
$643.00 × X - $13,151.00 = $896.00 × X - $21,061.00
$253X = $7,910
X = $7,910 ÷ $253
= 31.26
or
= 31
Back in 2015, McDonald’s was struggling. In Europe, sales were down 1.4% across the previous 6 years; 3.3% down in the US and almost 10% down across Africa and the Middle East. There were a myriad of challenges to overcome. Rising expectations of customer experience, new standards of convenience, weak in-store technology, a sprawling menu, a PR-bruised brand and questionable ingredients to name but a few.
McDonald’s are the original fast-food innovators; creating a level of standardisation that is quite frankly, remarkable. Buy a Big Mac in Beijing and it’ll taste the same as in Stratford-Upon Avon.
So when you’ve optimised product delivery, supply chain and flavour experience to such an incredible degree — how do you increase bottom line growth? It’s not going to come from making the Big Mac cheaper to produce — you’ve already turned those stones over (multiple times).
The answer of course, is to drive purchase frequency and increase margins through new products.
Numerous studies have shown that no matter what options are available, people tend to stick with the default options and choices they’ve made habitually. This is even more true when someone faces a broad selection of choices. We try to mitigate the risk of buyers remorse by sticking with the choices we know are ‘safe’.
McDonald’s has a uniquely pervasive presence in modern life with many of us having developed a pattern of ordering behaviour over the course of our lives (from Happy Meals to hangover cures). This creates a unique, and less cited, challenge for McDonald’s’ reinvention: how do you break people out of the default buying behaviours they’ve developed over decades?
In its simplest sense, the new format is designed to improve customer experience, which will in turn drive frequency and a shift in buying behaviour (for some) towards higher margin items. The most important shift in buying patterns is to drive reappraisal of the Signature range to make sure they maximise potential spend from those customers who can afford, and want, a more premium experience.
I hope this was helpful
