Answer:
The advertising spend would reduce income taxes by $2.8 million
Explanation:
The advertising expense since it is allowable expense from profits made in the year would reduce income taxes next year by $2.8 million ($8 million *35%)
This means that because of its tax deductibility,it would make a business sense to incur the advertising cost of $8 million coupled with the fact the it has the potential to increase sales revenue over and above the current level of $280 million
Answer:
A promotional plan of a company refers to the promotional mix. This mix contains decisions regarding the company which would put them on the path of growth and lead them towards success.
This consists of decisions regarding the manufacturing procedures, marketing decisions, market niche decisions, customer care services if required, promotional decisions, planing and strategic organizational decisions and etc.
Answer:
B
Explanation:
Systemic risk are risk that are inherent in the economy. They cannot be diversified away. They are also known as market risk. examples of this risk include recession, inflation, and high interest rates. Investors should seek compensation for systemic risk. Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
Market index fund is riskless and would have a beta of 1
by investing half in a riskless and half in a risky asset. beta would be equal to 1
The information given regarding the marginal revenue is illustrated below.
<h3>How to illustrate the information?</h3>
Marginal revenue is the increase in revenue that results from the sale of one additional unit of output.
While marginal revenue can remain constant over a certain level of output, it follows from the law of diminishing returns and will slow down when the output level increases.
Here, the price effect dominates the quantity effect so he cannot increase the production from 7 units to 8 units.
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Answer:
Tom and Jerry's
The weight used for common stock in the computation of Tom and Jerry's WACC is:
= 45.22%
Explanation:
a) Data and Calculations:
Common Preferred Bonds
Stock Stock
Outstanding number 2.4 m 2.4 m 14,000
Market price per share $13.40 $10.40 $999.6
Total value $32.16 m $24.96 m $13,994,400
Total value of stock and bonds = $71,114,400
Weight of common stock = $32.16/$71.1144 * 100 = 45.22%
