2 years ago

Which of the following is an common factor of failure for small businesses

1 answer:

6 0

A few of the following can be considered major factors in failure of small businesses:

-Lack of financial planning: when a business is born it needs to critically plan out the first few years of running. Small business often fail to plan out for the future and have less working capital at hand.

-Lack of expertise: small business cannot afford specialist managers and this may be a reason for failure

-no investment in marketing and research can also be a reason.

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Tom's Taxidermy has a monthly target operating income of $29,000. Variable expenses are 65% of sales and monthly fixed expense

HACTEHA [7]

Answer:

Leverage factor will be 1.344

Explanation:

We have given operating income = $29000

And variable expenses is 65 5 of the sales

And fixed expenses = $10000

So contribution margin = $29000+$10000 = $39000

We have to find the leverage factor

Leverage factor is given by

Leverage factor $=\frac{contribution\ margin}{operating\ income }=\frac{39000}{29000}=1.344$

So leverage factor will be 1.344

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LenaWriter [7]

Answer:

Explanation:

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1 year ago

according to the basic dcf stock valuation model, the value an investor should assign to a share of stock is dependent on the le

Temka [501]

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2 years ago

Gremlin Industries will pay a dividend of $ 1.55 per share this year. It is expected that this dividend will grow by 7% per yea

sasho [114]

Answer: 14%

Explanation:

We can calculate this using the Gordon Growth Model which looks like this,

P = D1 / r - g

P is the current stock price

D1 is the next dividend

r is the rate of return or the cost of capital

g is the growth rate.

We have all those figures except the cost of capital so making r the subject of the formula we can solve for it. Doing that will make the formula,

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r = 1.55 / 22.10 + 0.07

r = 0.1401

r = 14%

14% is the equity cost of capital.

If you need any clarification do react or comment.

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