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Anna11 [10]
3 years ago
15

Diversified Industries is a multi-product firm operating in a number of industries. Assume the firm is analyzing a new project t

hat has risks unrelated to those of the current firm's product. When computing the net present value of the new project the cash flows should be discounted using: the risk-free rate of return. the market rate of return. a rate commensurate with the risk level of the project. a rate based on a beta of one since the firm is well diversified. a rate based on the firm's current beta.
Business
1 answer:
KatRina [158]3 years ago
3 0

Answer: a rate commensurate with the risk level of the project.

Explanation:

When computing the net present value of the new project, we should note that the cash flows should be discounted using a rate that is commensurate with the risk level of the project.

Since it is a new project and it possesses risks that are unrelated to those of the current firm's product, the risk that pertains to the project level should be used in the discounting to get the net present value.

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A customer, who needs to drive to work in a Wisconsin winter, has a critical need to use the product Ice Melt. For him as a cons
Blizzard [7]

Answer:

Urgency / Postponement leads to customer inelastic demand of ice melt.

Explanation:

Elasticity of demand is responsive change in demand of good, due to change in price. Formula = % change in demand / % change in price

Factors Affecting Price Elasticity of Demand : Nature of commodity, Income, substitutes availability, time period, urgency / postponement, share in total expenditure,

Inelastic Demand is when demand responds proportionately less to price change. % change in demand < % change in price

Case 'Customer critically needs ice melt to drive to work' : This has inelastic demand i.e demand less respondent to price changes (he will buy that at high price too). Such because of the urgency of this demand & less scope of its postponement.

5 0
3 years ago
True or False. The standminus−alone cost allocation method ranks the individual users of a cost object in order of users most re
Reptile [31]

Answer:

False

Explanation:

It is 'Incremental cost allocation method' that ranks the individual users of a cost object in order of users most responsible for a common cost (the most responsible will be primary user) and then uses these rankings to allocate the costs among the users (incremental users).

Stand-alone cost allocation method allocates cost proportionately among all users based on a basis which relates to each users proportion of the total. For example the basis could be proportion of sales of responsibility centers to total sales of organization.

6 0
3 years ago
Contribution Income Statement and Cost-Volume-Profit Graph Kopi Company produces dog cages that are sold for $38 per unit. The c
Marrrta [24]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the total unitary variable cost:</u>

Direct materials= 10

Manufacturing overhead= 5

Direct labor= 2

Selling and administrative= 5

Total unitary variable cost= $22

<u>Now, the contribution margin income statement:</u>

Sales= 5,000*38= 190,000

Total variable cost= 22*5,000= (110,000)

Total contribution margin= 80,000

Fixed Manufacturing overhead= (35,000)

Fixed Selling and administrative= (15,000)

Net operating income= 30,000

7 0
3 years ago
Q. A country's comparative advantage in the extraction of commodities most likely stems from its: A. high labour to capital rati
Andru [333]

Answer:

B. large amount of natural resources

Explanation:

Comparative advantage is a country's ability to produce a product or service for a lower opportunity cost than rival countries.  Opportunity costs are the benefits given up in the extraction process. If a  country has a large amount of natural resources, it will use fewer resources in the extraction process than other countries. The trade-off costs will be so little compared to the benefits.

Other countries will find it cheaper to import from a country with large natural resources. For example, oil-rich nations have a comparative advantage in the extraction and processing of oil and oil by-products.

4 0
3 years ago
Many entire vocations in the United States have disappeared in the last few decades. Which of the following is a possible explan
neonofarm [45]

Answer:

C,D

Explanation:

I guess..

btw not sure :)

6 0
2 years ago
Read 2 more answers
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