Answer:
15.8%.
Explanation:
Calculation for XYZ's cost of equity using the CAPM
Using this formula
Cost of equity = Rrf + βi[E(Rm) - Rrf]
Let plug in the formula
Cost of equity= 6% + 1.06×[15.25% - 6%]
Cost of equity= 6% + 1.06×9.25%
Cost of equity= 15.8%
Therefore the Cost of equity will be 15.8%
The amount of $130,000 in Expenses will be the least likely to be budgeted for while building a budgetary slack.
<h3>What is a budgetary slack?</h3>
This is a special consideration in a budget that seeks to increase the chances of the actual performance being better than the budget.
Joan will likely budget for $110,000 of expenses, $210,000 of revenue and $80,000 of income.
Therefore, the amount of $130,000 in Expenses will be the least likely to be budgeted for
Read more about budgetary slack
<em>brainly.com/question/15327518</em>
Answer:
The question is incomplete. However, kindly find below the complete version of the question:
Question
Jack and Diane own Enviromax, a monopolistically competitive firm that recycles paper products. (1.)If Enviromax wants to maximize profit, what price would they charge? (2).What is their profit per unit if they are operating at the profit maximizing output?
Answer / Explanation
(1) First before we continue to answer this question, let us define what a monopoly is: This is a kind of market situation where the sole production or manufacturing of a product have been given to a single entity.
The graph attached below will give us a proper understanding and illustration of the answer.
Where: MR in the graph is defined as the additional revenue obtained when producers produce 1 more unit of good and the AR refers to the total revenue divided by the amount of output produced which is essentially the price of one unit of good.
MC refers to the additional cost incurred by producers when they produce 1 more unit of good and is upwards sloping due to increasing opportunity costs of production.
Noting that since the firm is a monopolistic type, the MR curve is lower than the AR curve because if the firm wants to sell an additional unit of output it will have to lower the successive price. This is unlike the case of a firm operating in a PC where it takes the price as given and hence has no ability to set prices. it should also be noted that profit maximizing for all firms (whether PC or non-PC) occurs at MC=MR. This is because if MC>MR this means the additional cost of producing this unit of good > additional revenue obtained from selling this unit of good and is hence not profit maximizing. If MC<MR, this implies that the firm should not stop at producing this unit of good because it will be forgoing the additional net revenue (profit) should it do so. Hence all firms will produce at the point where MC=MR.
(2) Now referring back to the graph, the profit-maximising point where MC intersects MR hence occurs at output Q. The firm will hence produce Q and hence price at P according to the AR (DD) curve.
In the graph below, since AR > AC at the profit maximizing level, this implies that per unit revenue >
per unit costs and the firm makes a supernormal profit (defined as what excess profit above what is needed to keep firms in production which is normal profit) of the shaded area. If the firm was operating in a perfectly competitive market however, then the profit maximizing point would occur at AR =MC (since AR=MR in a PC market) and the firm would be producing at Qpc and Ppc