Answer:
a) $0.5145 million
b) $7.35 million
Explanation:
Given:
Permanent debt outstanding = $35,000,000
Expected marginal tax rate = 21%
a) Suppose they pay an interest of 7% per year on debt. Find the annual interest tax shield.
To find annual interes tax shield use the formula below:
Annual interest tax shield =Total par value of Debt × interest rate × tax rate
= $35,000,000 × 7% × 21%
= $35,000,000 × 0.07 × 0.21
= $514,500
Annual interest tax shield = $0.5145 million
b) What is the present value of the interest tax shield, assuming its risk is the same as the loan?
Use the formula:
Present value of the interest tax shield = Annual interest tax shield /loan interest rate
= $514,500 / 7%
= $7,350,000
present value of the interest tax shield = $7.35 million
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The answer that best fits the blank provided above is this: A COMPETITIVE ADVANTAGE. When we say competitive advantage, this is when this fast food restaurant gains that position that is ahead of the rest. This is because of their low prices for larger quantities. Hope this helps.
B. To help determine how much inventory to keep in stock of each item in the outlet, I would consider two factors. The first one is the <u>certain amount of each item type </u>in the first week - determining the number of each items input in the stock to be the original data to compare. The second is the <u>number of items sold and still on stock</u>. This would help determine invetory to keep in stock.
B. If I was running a store, I would prefer to use the pick up at store buying method. There would be cashier at the register to check the products and bills as well as receive money from the customers. This is the traditional and still always the most common methods. As the fact that people nowadays still like shopping in physical store, this is definitely the most effective method.
C. The inventory control method I would use when operating a store is to adopt modern technology like bar code to control the inventory stock. By using this technology, I would need to consider the <u>bar code</u> for each type and establishing <u>software</u> to automatically input the information about the number of items sold and in stock. With inputting the number of total items at the beginning and giving each item its corresponding bar code, the sales or number of stock would be tracked by the software.
D. An example of two commodities to be displayed together at store is <u>pencil and rubber</u>. Pencil and rubber undoubtedly are complementary products of each other. Complementary products are made to be used together. Each item requires the other for their complete uses. This is also the case of Rubber and Pencil and each item would not be fully used without the presence of the other.
Answer: Relationship Marketing
Explanation:
Relationship marketing is a form of marketing where a business tries to create a lasting bond with their customers, done by constant communication with their customers to get feedback of their products/ services.
Phat International is making use of dialogue with their customers to create more loyal customers which is a form of relationship marketing.
