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3 years ago

Would a firm with low degree of operating leverage need to sell more units of products to reach break-even point or less? Why?

Business

1 answer:

Leokris [45]3 years ago

6 0

Answer:

The company would need to sell less units of product.

Explanation:

Operating leverage measures the relationship between variable and fixed costs. Those companies with low operating leverage have a larger proportion of variable costs in its total costs structure and need to sell smaller amount of units in order to cover its fixed costs. Since breaking point is the point were profit is equal to zero and where sales income is equal to the total costs, consisting of both fixed and variable costs, it needs to sell less products, as its variable costs increase with the number of units sold.

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A company had 6,950,000 net income for the year. Is net sales were 14,700,000 for the same period. Calculate its profit margin.

kobusy [5.1K]

0.46 or 46% hope this helps

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2 years ago

A financial planner is examining the portfolios held by several of her clients. Identify which of the following portfolios is li

Stolb23 [73]

Answer: A portfolio containing 30 randomly selected stocks will have the smallest standard deviation.

Explanation:

A portfolio containing 30 randomly selected stocks tend to have a lesser covariance between the security returns. Also, there will be increased diversification. This increased diversification lowers the risk of portfolio thereby resulting in a lower standard deviation.

Other options are not correct. A portfolio consisting of 30 energy stocks will have a higher level of covariance between the security returns. Therefore, the standard deviation is lower.

A coefficient of variance greater than one will have a high level of variance while a coefficient variance less than 1 has a lower level of variance. A lesser covariance will result to a lower standard deviation and vice-versa.

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3 years ago

For each of the following, state whether you expect the distribution to be symmetric, right skewed, or left skewed. Also specify

olga2289 [7]

Answer:

I have solved part a) because question contains only part a) however it has 3 more parts as well but that are not mentioned in the question. Part a) is explained below.

Explanation:

a) The distribution should be right skewed as most of the numbers lies at that side while using the median to correctly represent an observation in the distribution.

To represent the variability of the observations, interquartile range could be used. Since, there is a good number of expensive houses and this would increase the mean and standard deviation. So, it is better to use interquartile range to represent it, i.e. upper quartile for expensive houses, and lower quartile for less expensive houses and middle quartile for mid-range priced houses.

8 0

3 years ago

Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption

Veronika [31]

The price of the water needs to be raised by 40% when the consumption of water reduces by 10% and the price elasticity of demand results to 25%.

<h3>What is meant by the price of elasticity of demand?</h3>

The price elasticity of demand is determined as the proportionate variation in quantity with respect to variation in the price of a good.

Given values:

Change in water consumption (fall): 10%

Price elasticity of demand: 25%

Computation of percentage change in the price of water:

$\rm\ Change \rm\ in \rm\ price \rm\ of \rm\ water=\frac{\rm\ Change \rm\ in \rm\ water \rm\ consumption}{\rm\ Price \rm\ elasticity \rm\ of \rm\ demand} \\\rm\ Change \rm\ in \rm\ price \rm\ of \rm\ water=\frac{10\%}{25\%} \\\rm\ Change \rm\ in \rm\ price \rm\ of \rm\ water=40\%$

Therefore, there is an increase in water price by 40%.

Learn more about the price elasticity of demand here:

brainly.com/question/15010897

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6 0

1 year ago

A country in which most economic decisions are made by individuals or private companies has a system that falls in the main cate

astraxan [27]

Answer: Market Economy

Explanation:

A country in which the economic decisions are majorly controlled by individuals or private companies is a market economy.

A market economy is an economic system where there is very little government interference which is in the form of regulations, the economy is controlled mainly by private individuals and production is determined by the forces of demand and supply.

4 0

2 years ago