Budgeting is much more difficult for an established business than it is for a new business.

If the margin of safety is 0, then a.the margin of safety cannot be less than or equal to 0; it must be positive. b.the company

sdas [7]

Answer:

d.the company is precisely breaking even.

Explanation:

Margin of safety is referred to current sales - Break even sales ratio to current sales as a percentage.

Basically it is quoted as follows:

$\frac{Current\ sales\ -\ Break-even\ Sales}{Current\ Sales} \times 100$

Therefore, when the current sales = Break even sales then only the company will have margin of safety = 0

Thus, at 0 margin of safety the company basically is at no profit no loss situation, that is break even.

3 0

3 years ago

just paid its annual dividend of $1.15 per share. The required return is 12.3 percent and the dividend growth rate is 0.75 perce

IceJOKER [234]

Answer:

P5 = 10.41

Explanation:

To calculate the stock value with dividends for the fifth year the following formula would be used:

$P5 = \frac{Div_{0} * (1 + g)^{6} }{(r-g)}$

Where:

$Div_{0} =$ The first Dividend Paid.
G = Growth Rate.
R = Required Return.

Given Data:

$Div_{0} =$ $1.15

Growth Rate = 12.3%

R = 0.75%

P5 = ?

Substituting the values in the formula

$P5 = \frac{1.15 * (1 + .0075)^{6} }{(12.3-.0075)} = 10.41$

7 0

3 years ago

One of the more important business applications of demand elasticity is the relationship between price and total revenue. For ea

user100 [1]

Answer:

Part 1. inelastic.

Part 2. inelastic.

Part 3. inelastic.

Explanation:

When the coefficient of elasticity of demand is less than 1, demand is inelastic, when it is equal to 1, demand is unitary elastic, when it is greater than 1, demand is elastic, and when it is equal to zero demand is perfectly inelastic.

Part 1

Price Elasticity of demand = (dQ/dP) x P/Q

Where : dQ = Change in Quantity

dP = Change in Price

P = Initial or Old price

Q = Initial of Old Quantity

dQ = $35,000 - $40,000 = - $5,000

dP = $10 - $8 = $2

P = $8

Q = $40,000

Price Elasticity of demand = (-$5,000/$2) * $8/ $40,000

= 2,500 * 1/5000 = -0.5

Disregard the minus sign, since elasticity of demand is less than 1, demand is inelastic.

Part 2

Price Elasticity of demand = (dQ/dP) x P/Q

dQ = $1,800 - $2,000 = - $200

dP = $50 - $40 = $10

P = $40

Q = $2,000

Price Elasticity of demand = (-$200/$10) * $40/ $2,000

= 20 * 0.02 = -0.4

Disregard the minus sign, since elasticity of demand is less than 1, demand is inelastic.

Part 3

Price Elasticity of demand = (dQ/dP) x P/Q

dQ = $120 - $150 = - $30

dP = $5 - $4 = $1

P = $4

Q = $150

Price Elasticity of demand = (-$30/$1) * $4/ $150

= 30 * 2/75 = - 0.8

Disregard the minus sign since elasticity of demand is less than 1, demand is inelastic.

5 0

3 years ago

Which of the following is not a reason why it is important for parties to memorialize their agreements in writing?

Vika [28.1K]

Answer:

B. singing a writing communicates the seriousness of the occasion to the singer

8 0

3 years ago

Consider a zero-coupon bond with a $1,000 face value and 15 years left until maturity. If the bond is currently trading for $46

nordsb [41]

Answer:

D. 5.19

Explanation:

Zero coupon bond is the bond which does not offer any interest payment. It is issued on deep discount price and Traded in the market on discounted price.

According to given data

Face value = F = $1,000

Year to maturity = n = 15 Years

Current price = P = $468

Yield to maturity = [ ( F / P )^(1/15) ] - 1

Yield to maturity = [ ( $1,000 / 468 )^(1/15) ] - 1

Yield to maturity = 1.0519 - 1

Yield to maturity = 0.0519 = 5.19%

7 0

3 years ago

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