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4 years ago

What is the difference between sole proprietor and self employed

Business

1 answer:

Kitty [74]4 years ago

5 0

Answer:

Self Employed is the person working in a self owned business. Sole Proprietor is a person solely owning, managing a business.

Explanation:

Self Employment is the term used to depict economic activity of working for self owned organisation, rather than working for someone else. The self owned organisation could be entirely (solely) self owned - sole proprietorship, or co-owned by partners in a limited liability partnership

Sole Proprietor is a business entity owned, managed, run by a single entrepreneur. It is a business legal term given to an economic organisation. In this case, the proprietor necessarily has unlimited liability towards firm's claims. However, its not so always in case of self employment in LLC

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A firm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. Because interest is tax deductible, t

gayaneshka [121]

Answer:

The blank spaces are not easy to spot here but I found a similar question with their correct locations. The answers for each blank will be as follows respectively;

new; new ; after-tax cost of debt ; after-tax cost of debt ; after-tax cashflows; new debt; not outstanding debt ; irrelevant ;new capital; yield to maturity; coupon rate; yield to maturity; long term debt ; long-term projects.

Explanation:

The cost of new debt is the before-tax cost of debt and does not reflect the cost of outstanding debt. Interest paid on the new debt is tax-deductible and that's why you calculate the after-tax cost of debt to use in the firms WACC formula. Since the main goal of a business managers is to increase a firm value, you use the after tax cashflows to valuate the business. Additionally, the cost at which the firm borrowed in the past is irrelevant in WACC calculation because the cost we need to know is of the new capital.

7 0

3 years ago

A number of factors contribute to the pricing strategies for a product.

quester [9]

Answer:

Explanation:

1. Competitive level - Most entrepreneurs love the concept of selling their products at a very high margin. This idea can only be true if you have a monopoly on the market. However, you can't sell at the profit margin you want without having to suffer from competition. Competition is one of the most effective factors when it comes to adopting a product's pricing strategy or setting a price that suits your product. The stronger the competition in your industry, the more priced the strategy and policy of your product should be.

Here is the point I am trying to emphasize; If your competitor sells the same product you sell, but at a lower price, it could have a negative impact on your business. Therefore, a feasibility study or a work plan always includes a section of opposition or competition analysis. First, never follow the pricing strategy of your product without considering your competition. Evaluating your product without ignoring your competitor's product pricing strategy is a surefire way to fail; it is not.

2. Acceptable value of your product - This is another factor that you should consider before setting a price for your product. Your first step is to ask: What is the value of my product in a customer's heart? Before you set a price for your product, you should try to find a good and clear answer to this question. That is, if your product is very valuable, customers will feel that the materials used to make the goods are inferior and therefore the product is of poor quality. Therefore, before you set a price for your product, make sure that you balance the value of your product with its perceived value.

3. Product Development Cost - This is definitely a factor you can't see. The costs incurred as a result of research and practice are the costs incurred in bringing innovative products to market. If you are a business owner, you should know that new products are often highly regarded.

4. Economic Trends - This is another inevitable factor that can affect the price of your product. I don't even need to stress this much. As an entrepreneur, you should know that economic factors such as tax rates, labor costs, inflation rates, exchange rates, government's fiscal and monetary policies will have a positive or negative impact on the product's pricing strategy.

5. Market Demand Level - This is the fifth factor that can have a significant impact on your product's pricing strategy. As an economic factor, I think this is self-explanatory. If demand in the business economy surpasses supply, there is a mad rush for a few products available, so the price of the product is inflated and vice versa. Some companies are even going to create artificial scarcity to get a stronger grip on industrial prices.

6. Demographics - Demographic characteristics of the target customers will undoubtedly affect the price of your product. Demographic factors to consider before joining your product price:

Age of the target customers

- Your place of work and client's location

- The educational status of your target market

7. Target customer class - The target customer class has a great impact on the value of your product. There are three classes of people in the community. Rich, middle class and poor or more preferably "low-income", which is always overwhelming in terms of population.

3 0

3 years ago

Jean Clark is the manager of the Midtown Safeway Grocery Store. She now needs to replenish her supply of strawberries. Her regul

alina1380 [7]

Answer:

Part 1: As a store manager, Jean Clark has to take decision regarding how many cases of strawberries should be purchased. Let Ai represents course of actions regarding how many cases to be purchased, where i = 10, 11, 12, or 13 cases.Jean has identified state of nature or circumstances for the demand of the strawberries per cases in future. Let Sj represents various demand in future, where i = 10, 11, 12, and 13 cases.

Part 2: The payoff table is attached.

Part 3: As the alternative of purchasing maximizes the minimum payoff among all events, Jane should select alternative of purchasing 10 cases of strawberries for tomorrow.

Part 4: According to the equal likelihood Principle, the alternative of purchasing 12 cases gives maximum expected value, thus Jane should purchase 12 cases of strawberries.

Part 5: The maximum EP is $53.6 for the alternative of purchasing 12 cases, thus Jane should purchase 12 cases of strawberries.

Part 6: Jean should spend $3 to get more information about how many cases of strawberries she might be able to sell tomorrow.

Explanation:

Part 1

As a store manager, Jean Clark has to take decision regarding how many cases of strawberries should be purchased. Let Ai represents course of actions regarding how many cases to be purchased, where i = 10, 11, 12, or 13 cases.

Jean has identified state of nature or circumstances for the demand of the strawberries per cases in future. Let Sj represents various demand in future, where i = 10, 11, 12, and 13 cases.

Part 2:

$Price_{purchase\, per \,case} = \$3\\Price_{selling\, per \,case} = \$8\\ Value_{salvage} = \$0\\$

Payoff in terms of profit or loss function is determined as follows:

$Payoff = Profit_{ per case} \times cases_{ sold }-Price_{purchase} \times cases_{ unsold}\\Payoff = \$5 \times cases_{ sold} -\ $3 \times cases_{unsold}$

The payoff table is obtained using the above formulas and is attached.

Part 3:

Maximin Decision Rule:

This approach selects the alternative which maximizes the minimum payoff among all events.

Minimum payoffs of purchasing 10, 11, 12, 13 cases are $50, $47, $44, and $41 respectively.

Maximum payoff among the alternative minimum payoffs is $50 for the alternative of purchasing 10 cases.

As the alternative of purchasing maximizes the minimum payoff among all events, Jane should select alternative of purchasing 10 cases of strawberries for tomorrow.

Part 4:

Equal Likelihood Principle

This principle is based on a simple philosophy that if there is uncertainty about various events, then treat them as equally probable to occur, that is, each state of nature or chance event is assigned an equal probability. It is also known as equal probabilities criterion. In this assumption, the expected value (EV) or average payoff for each course of action or strategy is determined and the strategy with the highest mean value is adopted.

$EV_{10 cases} = [(0.5 \times \$50) + (0.5 \times \$50) + (0.5 \times \$50) + (0.5\times \$50) = \$50\\EV_{11 cases} = [(0.5 \times \$47) + (0.5 \times \$55) + (0.5\times \$55) + (0.5 \times \$55) = \$53$

Similarly,

EV of purchasing 12 cases = $54

EV of purchasing 13 cases = $53

Maximum EV = maximize [$50, $53, $54, $53] = $54

According to the equal likelihood Principle, the alternative of purchasing 12 cases gives maximum expected value, thus Jane should purchase 12 cases of strawberries.

Part 5:

Bayes’ Decision rule

This rule considers the prior probabilities for the state of natures and selects the alternative with the maximum expected payoff. Expected payoff is calculated as sum of product of probabilities and payoff of each alternative.

Expected payoff pd purchasing 10 cases are as follows:

$EP _{10 cases} = 0.2 \times \$ 50 + 0.4 \times \$ 50 +0.3 \times \$ 50 + 0.1 \times \$ 50 = \$50\\EP_{11 cases} = (0.2 \times \$47) + (0.4 \times \$55) + (0.3 \times \$55) + (0.1 \times \$55) = \$53.4$

EP (12 cases) = $53.6

EP (13 cases) = $51.4

The maximum EP is $53.6 for the alternative of purchasing 12 cases, thus Jane should purchase 12 cases of strawberries.

Part 6:

To determine the cost Jane should determine Expected value of perfect information (EVPI), as follows:

First determine Expected value with perfect information (EVwPI) as follows:

Maximum payoff when demand is exactly 10 cases is $50, Expected payoff = 0.2 x 50 = $10

Maximum payoff when demand is exactly 11 cases is $55, Expected payoff = 0.4 x 55 = $22

Maximum payoff when demand is exactly 12 cases is $60, Expected payoff = 0.3 x 60 = $18

Maximum payoff when demand is exactly 13 cases is $65, Expected payoff = 0.1 x 65 = $6.5

EVwPI = $10 + $22 + $18 + $6.5 = $56.5

Expected value without perfect information (EVwoPI) = Maximum expected value by Baye’s rule = $53.6

EVPI = EVwPI – EVwoPI = $56.5 – $53.5 = $3

Jean should spend $3 to get more information about how many cases of strawberries she might be able to sell tomorrow.

3 0

3 years ago

In Free Market Environmentalism, economists Terry Anderson and Donald Leal write, "Subsidized irrigation encourages farmers to b

Soloha48 [4]

Answer:

Explanation:

7 0

3 years ago

Stubbs Company uses the perpetual inventory method. On January 1, Year 1, Stubbs purchased 400 units of inventory that cost $8.0

Sonja [21]

Answer:

A. USD 5,180/-

Explanation:

In the actual method of inventory valuation, the inventory reaming and the COGS (Cost Of Goods Sold) is measured after each purchase or sale of a transaction. So the COGS and the remaining value of the inventory is known all the time.

Formula:

Gross margin is equal to Sales minus COGS

3 0

3 years ago