Answer:
Threat of substitutes.
Explanation:
In this case, the buyer tries to obtain the same benefit at a lower cost and does so through a substitute product. This is a classic example of: Threat of substitutes.
Answer:
The initial margin is $5,950
Explanation:
To calculate for the initial margin, we have to decide from two options. After making the calculations, the initial margin would be the one with a greater outcome.
Given:
Option price = $3.50
Strike price = $60
Stock price = $57
Stock price - Strike price = $60- $57 = $3
Option 1:


Option 2:


Since we got $5,950 in our first calculation, we will take that as our initial margin as it is greater than the second option. It can be provided in part with initial sum of $500 * 3 = $1,750
Answer: A $250,000 gain should be in the "discontinued operations" section of the income statement.
Explanation:
Since there was a loss of $600,000 for the period from January through the sale date while there was a gain of $850,000 on the actual sales, then the situation should be reported in the financial statements of Family Fashions for 2009 as a gain of ($850,000 - $600,000) = $250,000 should be in the "discontinued operations" section of the income statement.
Discontinued operations refers to the part of the business which has been shut down or divested. They're separated from the continuing operations when reported.