<span>When production reflects consumer preferences, "a</span>llocative efficiency" occurs.
Allocative efficiency is a condition of the economy in which production shows customer inclinations; specifically, every good or services is delivered up to the point where the last unit gives a marginal advantage to buyers equivalent to the minor cost of production.
While a high share price discourages trading in the company's stock, it advertises the company's stellar performance to existing and potential investors.
A high share price also discourages corporate takeovers, assuring the jobs of senior management. Existing investors can realize some quick gains by selling their shares at high profits.
2. The drawback of having a high share price is that investors willing to sell off their shares cannot do so because potential buyers are discouraged. Another disadvantage is that it puts much pressure on the management to maintain the entrenched performance level. Any subsequent fall in prices will not meet favorable reviews.
Thus, there are pluses and minuses to having a high share price.
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Answer:
4 years
Explanation:
Payback period is the time in which a project returns back the initial investment in the form of net cash flow.
Initial Investment = $280,000
Net Income = $20,000
To calculate the net cash flows add bask the depreciation expense in Net income each year.
Depreciation = ($280,000 - $30,000) / 5 = $50,000
Net Cash Flow = $20,000 + $50,000 = $70,000
Payback period = Initial Investment / yearly cash flow = $280,000 / $70,000 = 4 years
<span>c. a discriminative stimulus for working hard. </span>
Answer: (C) Level production planning strategy
Explanation:
The level production planning is one of the type of strategy that is used for maintaining the steady rate of the production and also the level of the steady employment. This type of strategy helps for satisfying the demand of the customer.
The production planning strategy basically varying the inventory level for maintaining the production level in the given period of time. It is produced the constant output and also maintaining the stable work environment.
Therefore, Option (C) is correct.
