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3 years ago

What is the economic process of withdrawing investments from low profit sectors and investing in new activities?

Business

1 answer:

frozen [14]3 years ago

8 0

Answer:

Creative destruction.

Explanation:

In 1942, the term creative destruction was first to be used by the notable Austrian economist known as Schumpeter Joseph.

Creative destruction is the economic process of withdrawing investments from low profit sectors and investing in new activities.

This ultimately implies that, creative destruction is a concerted effort towards the deliberate destruction or dismantling of long standing products, processes, practices, procedures or services in order to give room for innovative ideas and an improved technique for the production (manufacturing) of goods and services. Thus, the old technology or methods of production are dismantled so as to pave way for new technologies, procedures, goods and services.

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Investing in stocks and bonds is risky because it is possible to lose all or part of your principal.

Aneli [31]

It's true investing in stocks and bonds is risky because it is possible to lose all or part of your principal.

Investors are unlikely to demand the same returns on their stock investments year after year. Market yields can be expressed as the sum of government bond yields and market risk premiums.

Yes. If you sell bonds before their maturity date, you may incur a loss as the sale price may be lower than the purchase price. Also, if an investor purchases a bond and the company faces financial difficulties, the company may not be able to return all or part of the original investment to the bondholders.

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8 0

2 years ago

Pinnocle Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total

Lostsunrise [7]

Answer:

Product margin= $9,607.5

Explanation:

First, we need to calculate the allocation rates:

Assembly= 1,533,840 / 77,000= $19.92 per machine-hour

Processing orders= 91,065 / 1,950= $46.7 per order

Inspection= 139,788 / 1,980= $70.6 per inspection-hour

Now, we need to allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Assembly= 19.92*660= 13,147.2

Processing orders= 46.7*50= 2,335

Inspection= 70.6*10= 706

Total= $16,188.2

Finally, the product margin for product S78N:

Product margin= 430* (124.3 - 51.25 - 13.06) - 16,188.2

Product margin= $9,607.5

4 0

2 years ago

Astin Company has current assets of $82,530, total assets of $242,050, total net income of $58,240, current liabilities of $72,1

Firdavs [7]

Answer:

a. 1.14

Explanation:

The current ratio is a financial measure that shows how many times the current assets of an entity may be used (covers) the current obligations (liabilities) of the entity.

It is given as current assets divided by current liabilities.

Astin Company’s current ratio

= $82530/$72120

= 1.14

This means that the current assets will settle the current liabilities 1.14 times.

6 0

3 years ago

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order

AleksandrR [38]

Answer:

1. Throughput Time = 9.2 days

2. Manufacturing Cycle Efficiency = 29%

3. 71% throughput time was spent in non value added activities.

4. Delivery Cycle Time = 25.8 days

5. New MCE = 57%

Explanation:

Given

Inspection time 0.7 days

Wait time 16.6 days

Process time 2.7 days

Move time 1.3 days

Queue time 4.5 days

1. The throughput time is calculated by adding all time except the wait time.

I.e.

Throughput time = Inspection time + Process time + Move time + Queue time

Throughput Time = 0.7 days + 2.7 days + 1.3 days + 4.5 days

Throughput Time = 9.2 days

2. Calculating the manufacturing cycle efficiency.

Manufacturing Cycle Efficiency is calculated by dividing value added time by throughput time.

Where the value added time = the process time = 2.7 days

And throughput time = 9.2 days (calculated in (a) above)

Manufacturing Cycle Efficiency = 2.7 days ÷ 9.2 days

Manufacturing Cycle Efficiency = 0.2934782609

Manufacturing Cycle Efficiency = 29.34782609%

Manufacturing Cycle Efficiency = 29%

3. Calculating the percentage of the throughput time was spent in non–value-added activities.

This is calculated by subtracting MCE calculated above from 100%

% throughput time = 100% - 29%

% throughput time = 71%

So, if 29% throughput time was spent in value added activities, 71% throughput time was spent in non value added activities.

4. Calculating the delivery cycle time.

This is calculated by adding the wait time to throughput time.

i.e.

Delivery Cycle Time = Wait Time + Throughput Time

Where Wait Time = 16.6 days and Throughput Time = 9.2 days

Delivery Cycle Time = 16.6 days + 9.2 days

Delivery Cycle Time = 25.8 days

5. Calculating new MCE.

Here, we'll used the same formula used in (2) above

i.e

Manufacturing Cycle Efficiency is calculated by dividing value added time by throughput time.

Where the value added time = the process time = 2.7 days

But throughput time will be calculated as

Throughput time = Inspection time + Process time + Move time (because of the elimination of all queue time)

Throughput Time = 0.7 days + 2.7 days + 1.3 days

Throughput Time = 4.7 days

So, New MCE = 2.7 days ÷ 4.7 days

New MCE = 0.5744680851

New MCE = 57.44680861%

New MCE = 57%

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3 years ago

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Sergeeva-Olga [200]

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3 years ago