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scZoUnD [109]
3 years ago
9

Scenario

Business
1 answer:
ankoles [38]3 years ago
8 0

Answer:

Better Beans Coffee Company

1. Two markets that have the highest net revenue increases when adding a second store are:

B. Los Angeles and Orlando

2. The two markets that should be choose for a second market are:

E. Los Angeles and Houston

Explanation:

a) Data and Calculations:

Existing     Revenue    Second   Cannibalization  Revenue    Net Revenue                           Store                              Store         Estimate         Drop Due  Increase from

                                    Estimate                            Cannibali-       Market

                                                                                                   (Second Store

                                                                                                      Revenue

                                                                                                Cannibalization)

Los Angeles 4,050,000 $2,677,500      5%       $202,500          2,475,000

Houston        1,950,000    1,522,500      5%           97,500           1,425,000

Orlando        2,800,000    2,175,000    25%        700,000            1,475,000

Atlanta          2,240,000   1,695,000     30%        720,000             975,000

Chicago         2,150,000   1,735,000     40%        860,000             875,000

San Diego     1,900,000   1,505,000     20%        380,000           1,125,000

Portland        1,500,000   1,050,000     20%        300,000            750,000

Dallas           2,450,000   1,702,500     45%       1,102,500            600,000

Boston          3,150,000   2,177,500      35%      1,102,500           1,075,000

b) Cannibalization results from the reduction in sales revenue when a company introduces another similar product or store in an existing market.  Before making decisions based on cannibalization, management should study the market dynamics and set measurable criteria for making the choice to go for cannibalization or preservation of an existing market.  One of the best criteria for deciding on cannibalization is the net revenue from the second product or store after cannibalization.

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Visit each of the three credit reporting agencies and find an example of a credit report. For each, describe a different portion
Orlov [11]

Answer:

Equifax – An Equifax report shows Inquiry Information. This portion of the credit reports indicates how many parties have requested a copy of the credit report. There are two types of inquiries. A “soft” inquiry is a company that sends me an offer for a credit card or other kind of preapproved products based on my credit. I did not apply for this product. A “hard” inquiry is what happens when I apply for a loan or credit card. Soft inquiries have no effect on credit worthiness, but hard inquires do. They stay on a report of two years, and so people should not shop around for credit cards or loans as this can affect credit worthiness.

Experian – On Experian, there is a section for Public Records. These are financial transactions where some type of legal action has taken place. This might include a bankruptcy, tax lien or wage garnishments. These types of records on a credit report would hinder a person’s credit worthiness. They stay on the credit report for seven years.

TransUnion – TransUnion lists all accounts and specifies information on each account that includes the type of lender (KOB or Kind of Business), the dollar amount the person has been delinquent in the past, the amount past due today, and the payment pattern over the past 12 or 24 months. Each of these pieces of information indicates a person’s credit worthiness. For example, KOB of a mortgage is a high-quality kind of loan, while a KOB for a finance company is a lower-quality kind of loan, which may hinder a person’s credit worthiness.

Explanation:

6 0
3 years ago
Even Better Products has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will mai
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Answer:

Explanation:

a.)

First, find the growth rate using the ROE and the retention rate;

<em>g = ROE + retention rate</em>

g = 0.20 * 0.30

g = 0.06 or 6%

Next, find price using Dividend discount model (DDM);

<em>Price = Div/ (r-g)</em>

where Div = next year's dividend

r = required return

g = growth rate ,

Div = earnings * (1- plowback rate)

Div = $2* 0.70 = $1.4

Next, plug in the numbers to the formula above;

Price = 1.4/ (0.14 - 0.06)

Price = $17.50

Price earnings ratio; PE = Price/ earnings per share

PE = 17.50/ 2 = 8.75

b.) Present value of growth opportunities (PVGO)

Use PVGO formula to find the answer. It is as follows;

PVGO = Price - (E/r)

whereby, E= earnings per share = $2

r = investors required rate of return = 14%

Price = $17.50

PVGO = 17.50 + (2/0.14)

= 17.50 + 14.2857

= 31.7857

Therefore, Present value of growth opportunities is $31.79

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3 years ago
The summarized balance sheets of Wildhorse Company and Blossom Company as of December 31, 2021 are as follows: Wildhorse Company
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Answer:

$520,000

Explanation:

Under the fair value method of accounting, the investment is recorded at cost paid to acquire such investment. So, the Debit to Equity Investments (Blossom) would have been $520,000

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3 years ago
Challenge question: Home mortgages use amortization schedules, but the principal balance might be 10 or 100 times larger than Ja
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The Amortization Schedule is a table that lists the computations of a mortgage payment and enables the visualization of the details of each payment.

  • Typically, an Amortization Schedule will indicate the dates on which transactions are recorded or captured into the company's accounting records.

  • The repayments of the Amortization Schedule occupies three columns, with one indicating the amount of principal repaid while the second column indicates the portion of repayments due to interests on the mortgage. The other column shows the equal periodic payments already settled on the loan.

Thus, the amortization schedule offers an acceptable way to determine the amount of interest paid, the payments made on a mortgage, and the ending balance of the mortgage at the end of the accounting period.

Read more: brainly.com/question/14511778

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Which metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquirin
exis [7]

Answer:

2) CLTV

Explanation:

Customer lifetime value (CLTV) is simply how much profit do you expect to earn from a specific customer, or group of customers. There are several ways of calculating CLTV, but I believe this is the easiest one.

CLV = T x AOV x AGM x ALT

  • T = average transactions per month
  • AOV = average order value
  • AGM = average gross margin
  • ALT = average life span

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