Segmented pricing is a situation, when seller or a company establishes different prices (two or more), for one the same product.
Price segmentation, to put it simply, is the process of differentiating pricing based on willingness to pay. It is motivated by the reality that customers' price sensitivity might differ greatly from one another, from one product to another, and throughout all the environments in which they use your product.
With price segmentation, you may set different prices for various consumer types according to their willingness and ability to pay. Price segmentation allows you to profit more from consumers who spend the most and less from those who pay the least.
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Answer:
Cost of Equity =11.56%
Explanation:
The cost of equity can be determined using any of the following methods:
- The Dividend Valuation Model(DVM)
- Capital Asset Pricing Model (CAPM)
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset.
According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
Price = D/Kp
D- Dividend payable
Kp- cost of preferred stock
The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c
This CAPM is considered superior to DVM because it incorporates risk. Hence, we will use the CAPM
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 2.90%, Rm-Rf- 7.10% β- 1.22
E(r) = 2.90% + 1.22×(7.10)% = 11.562 %
Cost of Equity =11.56%
Answer:
The correct word for the blank space is: expense recognition principle.
Explanation:
The expense recognition principle establishes when expenses and revenues must be recorded in the accounting books of a company. Under the accrual basis of accounting method, revenues are recognized when earned and expenses whenever consumed. While using the cash basis accounting method, revenues are recognized when earned and expenses when they are paid to suppliers not when invoices are sent.
In both cases, <em>expenses and revenues are recognized during the same period when they take place. That is the reason why the direct write-off method fails to fulfill the expense recognition principle because bad debt can be recognized as an uncollectible account not necessarily in the same period where the debt instrument was issued.</em>
Answer:
a. Materials, 100%; labor, 100%; overhead cost, 40%.
Explanation:
The work in Process have already passed the mark at which Materials and Labor are added, that is the start of its production process so these are both 100% complete. Overheads are 40 % complete, which is the extent of work done on them since they occur evenly.
