A firm experiences diseconomies of scale when it: grows so large that the cost per unit has to increase.
<h3>What is referred to as diseconomies of scale?</h3>
This has to do with the fact that a business has become so large. When it grows to be so big, the cost for every unit would then have to raise.
Limited resources and infrastructure could be the reasons why there may be diseconomies of scale.
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Answer:
B)do not vary based on how many customers the company serves
Explanation:
Fixed costs are defined as expenses that do not change as a function of the activity of a business, within the relevant period. For example, a retailer must pay rent and utility bills irrespective of sales. Some examples of fixed costs include rent, insurance premiums, or loan payments. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.
Answer:
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Explanation:
Try not to be rude
Answer:
b. 7.35%
Explanation:
Calculation for What is the best estimate of the after-tax cost of debt
First step is to use financial calculator to find I/Y
FV= 1,000
N=20 years *2 = 40
PMT=9%*1,000/2 = 45
PV = -930.41
I/Y=?
Hence,
I/Y = 4.9%
Second step is to calculate YTM
YTM=4.9%*2
YTM= 9.8%
Now let Calculate the best estimate of the after-tax cost of debt
Using this formula
After tax cost of debt = YTM*(1-tax rate)
Let plug in the formula
After tax cost of debt =9.8%*(1-25%)
After tax cost of debt =9.8*75%
After tax cost of debt =0.0735*100
After tax cost of debt == 7.35%
Therefore the best estimate of the after-tax cost of debt will be 7.35%
