Answer:
$480
Explanation:
Data provided in the question:
Machine Hours Repair Costs
2,400 $6,385
1,200 $3,480
2,000 $5,285
3,400 $8,980
Now,
Machine Hours Repair Costs
Highest 3,400 $8,980
Lowest 1,200 $3,480
Difference 2,200 $5,500
Unit variable cost = $5,500 ÷ 2,200
= $2.5
Total cost at high level = $8,980
Machine hours highest level = 3,400
Also,
Total cost at high level = Fixed cost + Variable cost at highest level
or
$8,980 = Fixed cost + [ $2.5 × 3,400 ]
or
Fixed cost = $8,980 - [ $2.5 × 3,400 ]
= $8,980 - $8,500
= $480
Drifting off the pavement will cause front tire traction loss. When you understeer on a slippery surface around a bend or curve, you lose front tire traction.
<h3 /><h3>What is tire traction?</h3>
Traction is described as "the capacity of a wheel or tire to maintain contact with the ground without slipping." This is especially critical while driving on slick terrain, such as snow.
<h3>What factors influence tire traction?</h3>
Traction is created when multiple forces push against one another at the same time, forming a strong grip between them.
In the instance of a car, we have the weight of the vehicle, the immovability of the road, the power of the engine, and the amount of flexibility a tire possesses.
Learn more about Tire traction:
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Answer:
Option A. There exist economies of scope between diversified business units
Explanation:
The reason is that diversification is lowering the industry risk of the business the company is in by investing in several other industries. This helps us to lower the risk and have a steady returns in the subsequent years. This means uncertainty related to cash flows is lowered and this has also increased the chances of cash surplus for subsequent years.
Furthermore, if the investments made in diversified business units possesses economies of scope, which means that we are in related diversification because we are manufacturing different but similar goods which are substitutes to each other from large to some extent. This brings economies of scope and would lower the total operating cost of company. Hence the <u>Option A</u> which says that economies of scope does add value to the company is the right option.
Option B is not preferable option as the option of investing in different businesses is choosen in the option A.
Option C is again the same as Option B and the difference is that it uses the word several unrelated businesses instead of comprehensive business portfolio which is the same thing. Hence <u>Option C</u> is also not preferable option here.
<u>Option D</u> is incorrect because when we acquire an organization it is the move of increase in risk portfolio because acquisitions are mostly not a sound investments and not a part of diversification strategy as the company is putting all the eggs in the single basket.
Answer:
$1,260,000
Explanation:
Given that,
Annual depreciation expense = $3.6 million
Marginal corporate tax rate = 35%
Average corporate tax rate = 30%
The reason to use marginal tax shield is that the firm would save additional amount it would have paid in taxes.
Value of the depreciation tax shield:
= Marginal corporate tax rate × Annual depreciation expense
= 35% × $3,600,000
= $1,260,000
Therefore, the value of the depreciation tax shield on the company's new project is $1,260,000.
