Answer:
The fact that Becky Bongos sales are falling continually even though they keep decreasing the price shows that <em>the underlying problem is not as a result of the customers' dissatisfaction with price</em>. The underlying problem can be any <em>other factors like not paying attention to customers' needs, poor quality of the commodity, lack of proper marketing, and the presence of a superior competition</em>. The solution is not the reduction of price but rather, a closer look should be paid to these other factors.
Answer:
The firm's cash flow to creditors during 2016 was -$131,000.
Explanation:
Cash flow to creditors
= Interest expense - (Ending LT Debt - Beginning LT Debt)
= $99,000 - ($1,680,000 - $1,450,000)
= -$131,000
Therefore, The firm's cash flow to creditors during 2016 was -$131,000.
Answer:
The portfolio’s new beta will be 1.125
Explanation:
In this question, we are interested in calculating the portfolio’s new beta given the value of the beta of the stock which is used in replacing it.
We apply a mathematical approach here.
Mathematically;
Portfolio beta=Respective beta * Respective investment weight
=(50,000/200,000*1.5)+(50,000/200,000*0.8)+(50,000/200,000*1)+(50,000/200,000*1.2)
= 0.375 + 0.2 + 0.25 + 0.3 = 1.125