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LenaWriter [7]
3 years ago
15

A 10 ounce bottle of soap costs $2.00. You can buy a 20 ounce bottle for $5.00. What is TRUE about your soap purchasing options?

Business
1 answer:
ddd [48]3 years ago
8 0

Answer:

The TRUTH about the soap purchasing options is:

d) it is better to but the 10-ounce bottle because the price per ounce is cheaper.

Explanation:

a) Data and Calculations:

Cost of 10 ounce bottle of soap = $2.00

The per ounce cost of the 10-ounce bottle of soap = $0.20 ($2/10)

Cost of 20 ounce bottle of soap = $5.00

The per ounce cost of the 20-ounce bottle of soap = $0.25 ($5/20)

Therefore, the 10 ounce bottle of soap is cheaper and better.

b) It is more cost-effective to buy the 10 ounce bottle of soap.  With $4.00, one can buy 2 of 10 ounce bottle of soap unlike $5.00 spent for 20 ounce bottle.

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How much should you pay for a share of stock that offers a constant growth rate of 10%, requires a 16% rate of return, and is ex
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