Answer:
13%
Explanation:
Given that,
Investment (100% equity) = $700,000
EBIT = $140,000
Tax rate = 35%
Earnings after tax:
= Investment (100% equity) + Earnings before interest and taxes - Tax (35%)
= $700,000 + $140,000 - ($140,000 × 0.35)
= $840,000 - $49,000
= $91,000
ROE = Earnings after tax ÷ Investment
= $91,000 ÷ $700,000
= 13%
Answer:
It is an undifferentiated marketing
Explanation:
Under undifferentiated marketing strategy, seller is not focusing on any segment of the market as its target customers. This product is produced without having a particular segment of customer in mind i.e a one size fits all type of product.
This type of strategy is not sustainable and it is probably going to get stalk in the middle because according to Michael Porter, you can either compete using cost-leadership , differentiated or focused strategy.
As a producer of undifferentiated product, you are neither using cost-leadership strategy nor differentiated strategy.
Answer:
annual profit per insurance policy 107.4 dollars
Explanation:
for every 1,000 insurance policy:
revenue 1,000 x 120 = 120,000
outpatient cost: 5 x 900 = 3,600
overnight cost: 3 x 3,000 = 9,000
Profit: 107,400
We now divide over 1,000 policies:
107,400 / 1,000 = 107.4
Each policy is expected to generate a gross profit of 107.4 dollars