Collusion occurs when companies agree to drop prices and increase production.

WinterDreams operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. In

Kitty [74]

Answer:

a. Would Mountain Point emphasize target pricing or cost-plus pricing? Why?

They emphasize cost plus pricing because the investors are seeking a desired rate of return on their investment and they do it by adding the desired profit margin to their costs.

b. If other resorts in the area charge $66 per day, what price should Mount Snow charge?

$75.50 in order for them to generate the required ROI. Since the resort has a very good reputation, it can charge a higher price than its competitors.

Explanation:

company's assets = $115,000,000

expected return on investment = 16%

fixed costs = $35,600,000

number of customers = 800,000

variable costs = $8 per customer x 800,000 = $6,400,000

total costs = $42,000,000

total cost per client = $42,000,000 / 800,000 = $52.50

desired profit = $115,000,000 x 16% = $18,400,000

desired profit per client = $18,400,000 / 800,000 = $23

price per ticket = $75.50

8 0

3 years ago

A manufacturing company producing medical devices reported $59 million in sales over the last year. At the end of the same year,

kaheart [24]

Answer:

The inventory TO is 3.6875

Explanation:

$\frac{Sales}{Average Inventory} = $Inventory Turnover$

where:

$$$Average Inventory=(Beginning Inventory + Ending Inventory)/2$

Considering there is not sufficient information to calculate the begining inventory <u>we are going to work only with the ending inventory </u>so:

$\frac{59,000,000}{16,000,000} = 3.6875$

The inventory TO is 3.6875 This means the company sales their inventory almost 4 times per year.

4 0

3 years ago

On January 1, 2013, Craig Company paid the premium on a four-year insurance policy in the amount of $12,000. At that time, the f

Dima020 [189]

Answer:

option (C) $3,000

Explanation:

Data provided:

Policy duration = 4 years

Policy amount = $12,000

Date on which premium is paid = January 1, 2013

Date on which entry is adjusted = December 31, 2015

Now,

The time passed between January 1, 2013 to December 31, 2015 = 3 years

Therefore,

Amount to be recognized as insurance exp. on December 31, 2015

= $\$12,000\times\frac{\textup{Time elapsed}}{\textup{Total policy duration}}$

= $\$12,000\times\frac{\textup{3}}{\textup{4}}$

= $9,000

Thus,

The balance in the prepaid insurance account = $12,000 - $9,000 = $3,000

Hence,

The correct answer is option (C) $3,000

3 0

3 years ago

Which financial leverage ratio is used with two other ratios to mathematically produce the return on equity ratio?

ipn [44]

Answer: c. Total Assets/ Equity

Explanation:

To measure the Return on Equity with 3 ratios, the <em>DuPont Analysis</em> can be used. This is a technique of deconstructing the Return on Equity ratio into various constituent ratios so that their effect on Return on Equity is better know.

The basic DuPont Analysis is;

Return on Equity = $\frac{Net Income}{Revenue} * \frac{Sales}{Total Assets} * \frac{Total Assets}{Equity}$

Total Assets/ Equity or the Assets to Shareholder Equity ratio is the answer.

5 0

3 years ago

What are some of the troubles that could occur in the economy if inflation rate got as high as 8% or 10% per year?

andrezito [222]

Answer:

Some of the troubles that could occur in the economy if inflation rate get as high as 8% or 10% per year are:

1) Foreign investors will avoid the country.

2) Money losses value very fast causing an increase in the prices of goods and services.

3) The economy becomes unstable making the the government leaders to loose credibility.

Explanation:

The type of inflation that gets as high as 8% or 10% is called Galloping inflation.

Some of the troubles that could occur in the economy if inflation rate get as high as 8% or 10% per year are:

1) Foreign investors will avoid the country.

2) Money losses value very fast causing an increase in the prices of goods and services.

3) The economy becomes unstable making the the government leaders to loose credibility.

4 0

3 years ago