Answer:
The WACC change if the new tax rate was adopted is - 0.35%
Explanation:
For computing the WACC change, first we have to determine the after tax cost of debt by applying the 40% and 45% tax rate which is shown below:
After tax Cost of debt = Cost of debt × ( 1- tax rate)
For 40% tax rate, it would be
= 7% × ( 1 - 40%)
= 4.2%
For 45% tax rate, it would be
= 7% × ( 1 - 45%)
= 3.85%
The change in WACC would be
= 3.85% - 4.2%
= - 0.35%
Answer:
1) The cupcakes are being sold below their equilibrium price
3) The customers who receive cupcakes are the customers with the highest willingness to pay for cupcakes.
4) The bakery is not using price as the only means of allocating cupcakes to its customers.
.Explanation:
at equilibrium price, quantity demanded equals quantity supplied and there would be no excess demand as in the case of the bakery.
The customers who receive cupcakes are the customers with the highest willingness to pay for cupcakes because these consumers are willing to lineup for these cupcakes.
the bakery also allocates the cupcakes by time. the cupcakes are usually only available within a specific time
B, because monopolistic market sells homogeneous goods.When a firm raises its price,it loses all of the customers
Answer:
The question is missing the direct and indirect costs, however I will let you know how to calculate.
The costs will be given total for material, labor and overheads, along with this data a ratio in the form of a percentage will also be given for example material used in preparation of fresh bakery goods.
The amount of material will be multiplied by the percentage of material used in preparation of fresh bakery goods, the result amount will be the cost incurred for material used for the preparation of fresh bakery goods.
Explanation:
The question is missing the direct and indirect costs, however I will let you know how to calculate.
The costs will be given total for material, labor and overheads, along with this data a ratio in the form of a percentage will also be given for example material used in preparation of fresh bakery goods.
The amount of material will be multiplied by the percentage of material used in preparation of fresh bakery goods, the result amount will be the cost incurred for material used for the preparation of fresh bakery goods.
Follow this for all the cost heads provided.
