Answer:
A. The value of the preferred stock is $77.78 per share
Answer:
c. Payback is the amount of time to recover the initial investment. No discounting occurs and all cash flows after the payback period are not accounted for. The rule is intuitive and used by small business owners
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested. The NPV does account for all cash flows as well as time value of money.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
. The IRR does account for all cash flows.
The discounted payback period discounts cash flows
Answer:
D) $29,600
Explanation:
The mixed cost formula gives the relationship between the cost and the level of activities. It shows the cost as a function of the activity level.
The formula also shows that the cost is made up of a fixed element ($16,000) and a variable element ($3,40X).
Hence at an activity level of 4000 units,
Y = $16,000 + $3.40(4000)
= $29,600
Answer:
C) The demand for analgesic drugs in the Terranian market is expected to remain stable.
Explanation:
The options were missing:
- A) Omni Healthcare often takes money from other strategic business units to support Cetaprin.
- B) A customer survey shows that Cetaprin users do not prefer it to other analgesics in the market.
- C) The demand for analgesic drugs in the Terranian market is expected to remain stable.
- D) Febex is rapidly gaining market share over Cetaprin due to aggressive marketing efforts.
- E) The Terranian market for healthcare products is expanding rapidly.
A cash cow is a mature product that is sold in a slow growth market, but holds a significant market share, and generate large and constant cash inflows to the company.
Answer:
C. the demand curve for a product.
Explanation:
Price elasticity of demand is a measure of the sensitivity of demand for a good or service to changes in the price of that product. We say that the price elasticity of demand is elastic when a percentage change in the price of this good has major impacts on demand. On the contrary, we say that the price elasticity of demand is inelastic when variations in the price of goods have little or no influence on demand.
Thus, to determine the value of elasticity, one must know what was the change in price and the change in quantity demanded. In a graph where price and quantity are the x and y axes, this can be obtained by observing changes in the demand curve points, which reflected the price change on one axis and the quantity change on another axis. Thus, it is sufficient to divide the percentage change in quantity demanded by the percentage change in price to find the price elasticity of demand.
