Answer: $75,000
Explanation:
To answer this question we can multiply the difference between the Selling Price and the cost per client by the number of customers.
This is because that is the figure that gives us the Break-Even Point and spending anything past this point is a loss.
= 15,000 * (15 - 10)
= 15,000 * 5
= $75,000
The most a company could spend on annual fixed costs to acquire and maintain the equipment is $75,000.
rrf = 9%
rm = 14%
and bi= 1.3
a.what is ri, the required
rate of return on stock i?
The answer is “15.5%”.
This is how we
calculate and find the value of ri;
<span>Ri= (rrf + (rm– rrf)bi</span>
<span>
Now put the values of rrf,rm
and bi;
= (9% + (14% -09%)1.3
<span>
= 15.5%
b.now suppose that rrf (1)
increases to 10% or (2) decreases to 8%. the slope of the sml remains constant.
how would this affect rm and ri?
<span>
1) Ri = (rrf + (rm – rrf)bi</span>
<span>
<span>
rm increases by 1% from 14 to15% Rm</span>
<span>
<span>
rrf increases to10%</span>
<span> = 10% + (15% - 10%)(1.3)
<span>
Ri = 16.5%
2) Ri = (rrf + (rm – rrf)bi
<span>
<span>
Rm decreases to 1% from 14 to13%Rm
</span><span><span>
rrf decreases to 8% from 10 to8%
</span><span>
= 10% + (13% - 8%)(1.3)
<span>
Ri = 14.5%
c.now assume that rrf
remains at 9% but rm (1) increases to 16% or (2) falls to 13%. the slope of the
sml does not remain constant. how would these changes affect ri?
1) ri = rrf +(rm – rrf)bi
Rm increases to16%
= 9% + (16% - 9%)(1.3)
Ri = 18.10% 2) ri = rrf +(rm– rrf)bi
Rm decreases to13%
= 9% + (13% - 9%)(1.3)
Ri = 14.2%
<span> </span></span></span></span></span></span></span></span></span></span></span>
If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should increase its output.
<h3>What is competitive market?</h3>
In response to customer demand for products and services, a competitive market develops. Due to the competition created by this market system, businesses must assess their costs of production, pricing policies, and product output.
Some key points of the competitive market are-
- Perfect competition, as well as competitive markets, aim to factor in both the buyer and the supplier equally and develop strategies based on the market's current supply and demand.
- We define competitive marketplaces, describe their traits, and explain their functions and distinctions in this article.
- No single consumer or producer can control the market in an environment where there is competition.
- A market that is totally competitive has many knowledgeable buyers and sellers, no obstacles to entrance, and no potential for monopolies.
- Among the ten characteristics of a competitive market are profit, diminishing supply, competition, and exclusion.
To know more about competitive market, here
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Answer:
d. $2,676
Explanation:
The computation of the horizontal value is shown below:
FCF1 = (100 × 1.06) = 106
FCF2 = (106 × 1.06) = 112.36
FCF3 = (112.36 × 1.06) = 119.1016
FCF4 = (119.1016 × 1.06) = 126.247696
FCF5 = (126.247696 × 1.06) = 133.8225578
Now
Horizon value is
= FCF5 ÷ (Cost of capital - Growth rate)
= 133.8225578 ÷ (0.08 - 0.03)
= $2,676
Hence, the correct option is d.