Answer:
The answer is B.) Cost, revenue, and assets invested in the center
Explanation:
An investment center is a responsibility center in which the department manager is responsible for costs, revenues and assets for the department.
An investment center is also a business unit in a firm that can utilize capital to contribute directly to a company's profitability.
Examples of departments that make up the cost center are the human resource and marketing departments, units that falls under a profit center include the manufacturing and sales department.
Answer:
Enterprise value of Heavy Metal= $1,080.766
Share price = $18.945 per unit
Explanation:
<em>The value of a firm is the present value of the free cash flow discounted at the weighted average cost of capital</em>
Year PV
1 52.1 × 1.14^(-1) = 45.70175439
2 68.6 × 1.14^(-2) = 52.40073869
3 78.6 × 1.14^(-3) = 53.05276117
4 74.4× 1.14^(-4) = 44.05077264
5 81.1 × 1.14^(-5) = 42.12079868
Year and beyond
81.1 × 1.04/(0.14-0.04) = 843.44
Total value = 45.70+ 52.40+53.052
+ 44.050
+42.120+ 843.44
= 1080.766826
Enterprise value of Heavy Metal= $1,080.766
Share price = Total value - Debt value / number of shares
= (1,080.766 - 304 )/ 41 million units= $18.945 per unit
Share price = $18.945 per unit
Question:
A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true?
A. The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.
B. The manufacturer has enhanced utilisation by allowing depreciation and other fixed costs to be spread over a larger unit volume.
C. The manufacturer has sacrificed quality by using a lower-cost input.
D. The manufacturer has efficiently capitalised on the experience and learning-curve effects within the company.
E. The manufacturer has effectively reduced its operating costs by outsourcing its activities.
Answer:
A. the Manufacturer has effectively used vertical integration to increase it's bargaining position and reduce transaction costs.
Explanation:
Vertical integration is a business strategy whereby a business acquires ownership or controls its suppliers, distributors, or retail locations to control its value or supply chain.
It may also be said that vertical integration has to do with the purchase of a part of all of the production or sales process that was previously outsourced, to have it done in-house.
An example of companies who have done this are:
1. Apple
2. Netflix
3. Comcast (Which acquired NBC)
Businesses can integrate by
- purchasing their suppliers to reduce the costs of manufacturing or
- controlling the distribution process that is, owning and controlling the warehousing and delivery of their products etc.
Answer:
C) False consensus
Explanation:
False consensus refers to the trust what one feel regarding other and think as similar for other person as he thinks. Also in this the opinions of the other persons would not be considered
Since in the question it is mentioned that the majority of the other store managers would feel the same way so here the false consensus would be applied
hence, the correct option is c.
