Answer:
The correct answer is a. menu costs
.
Explanation:
Menu costs are those that arise from changes in product prices. In order to implement any sudden change of this type, it is necessary to carry out a very thorough analysis in order to determine if it is profitable for an organization to make changes in prices, this action determines if said increase is enough to cover the costs of that change.
Service Revenue.................................65000
Rent Revenue..........................................6000
To Income Summary.....................................................71000
Income Summary..........................78900
To Depreciation Expense..............................................7000
To Salaries Expense.......................................................56400
To Utilitites Expense.........................................................15500
Retained Earnings.....................................................................7900
To Income Summary...............................................................................7900
Answer: 1. Large
2. Abnormal
3. True
Explanation:
1. At any level, a market’s informational efficiency is likely to be stronger when there is a <u>Large</u> number of market participants.
When there is a larger number of participants, this means that there is a large number of people able to acquire and analyse information about securities and the financial markets.
As a result of this, information is more wide ranging and easily available such that they market has very good information efficiency.
2. The potential for a security to generate <u>Abnormal</u> returns is what generates a profitable investment.
When a security is potentially able to generate abnormal returns, there is a chance of making very profitable returns if those returns are higher or lower than estimated. When returns are estimated, these are usually reflected in the market price already because they are expected, when the returns are better or worse than expected though, this means that the prices were wrong therefore giving a chance of a positive gain on the security.
3. True.
Information efficiency is very important in the market. It can mean the difference between the market being manipulated and used for unfair gains and the market being used fairly by all. Information efficiency gives every market player the same Opportunity to find out about a security and act accordingly instead of select people taking advantage of hidden Opportunities.
Answer:
Vera Incorporated
Change in annual operating income from discontinued business:
Annual Operating Income would reduce by $78,000.
Explanation:
a) Calculation of the Net Income Lost:
Loss of Contribution ($99,000)
Avoidable fixed cost $21,000
Reduction of Income ($78,000)
b) The line of purses contributes $80,000 towards the company's fixed cost. Therefore, discontinuing this line of business would lead to the loss of this steam of income. The amount of reduced operating income will be $78,000 ($80,000 - 2,000).
Answer: The correct answer is "a. decisions under risk.".
Explanation: The decision situations wherein the decision-maker chooses to consider several possible outcomes and the probabilities of their occurrence can be stated are called <u>decisions under risk.</u>
Decision-making under risk is one of the three possible decision-making scenarios based on the available information, this scenario presents an intermediate situation between decision-making under certainty or under uncertainty: each alternative, strategy or course of action has several possible consequences, but the person in charge of making the decision knows the probability of each of them.
