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3 years ago

A competitive firm maximizes profit by choosing a level of output where the world price is equal to the firm's

Business

1 answer:

klemol [59]3 years ago

6 0

Answer: c. Marginal Cost

Explanation:

A Competitive firm operates in a market where they are price takers. This means that the price they charge is equal to both their average revenue and their Marginal Revenue.

P = MR = AR

Companies maximise profit at a point where Marginal Revenue equals Marginal Cost because at this point, resources are being fully utilized.

If the Competitive firm's Price is the same as its Marginal Revenue this means that to maximise profits, the firm should choose an output level where the price is equal to the marginal cost.

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Exercise 11-1 Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oil company, provi

vaieri [72.5K]

Answer:

1. Margin = 0.32 or 32%

2. Turnover = $19,000,000 or Operating Asset Turnover = 0.52 or 52%

3. Return on Investment = 0.17 or 17%

Explanation:

Firstly, list out the parameters we were given:

Sales = $19,000,000, Net Operating Income = $6,100,000,

Average Operating Assets = $36,500,000

1. Operating Margin = Net Operating Income / Sales

Operating Margin = 6,100,000 ÷ 19,000,000 = 0.32

Operating Margin = 0.32 (to 2 decimal places)

Operating Margin = 32%

2. Turnover refers to sales or revenue made during a particular period. In which case turnover is $19,000,000

However, if the turnover referred to is the Operating Asset Turnover, that is calculated below:

Operating Asset Turnover = Sales / Average Operating Assets

Operating Asset Turnover = 19,000,000 ÷ 36,500,000

Operating Asset Turnover = 0.52 (to 2 decimal places)

Operating Asset Turnover = 52%

3. Return on Investment (ROI) = Net Operating Income / Average Operating Assets

Return on Investment (ROI) = 6,100,000 ÷ 36,500,000

Return on Investment (ROI) = 0.17 (to 2 decimal places)

Return on Investment (ROI) = 17%

8 0

3 years ago

Suppose that the quantity of DVD players sold increased from 200 to 400 when the price fell from $225 to $175. Over this price r

Nataly_w [17]

Answer:

Option D.

Explanation:

Given information:

$Q_1=200, Q_2=400$

$P_1=225, P_2=175$

Formula for price elasticity of demand is

$E_d=\frac{Q_2-Q_1}{P_2-P_1}\times \frac{P_1+P_2}{Q_1+Q_2}$

Substitute the given values in the above formula.

$E_d=\frac{400-200}{175-225}\times \frac{225+175}{200+400}$

$E_d=\frac{200}{-50}\times \frac{400}{600}$

$E_d=-\frac{8}{3}$

$E_d\approx -2.67$

Absolute value is

$|E_d|= |-2.67|=2.67$

The absolute value of the price elasticity of demand for DVD players is 2.67.

Therefore, the correct option is D.

6 0

3 years ago

In May of 2021, Raymond Financial Services became involved in a penalty dispute with the EPA. At December 31, 2021, the environm

Naily [24]

Answer:

$914,000

Explanation:

Based on the information given we were told that Raymond accepted an EPA which is fully known as Environmental Protection Agency settlement offer of the amount of $914,000 which means that the amount that Raymond should have reported as the ACCRUED LIABILITY on its December 31, 2021, balance sheet should have been EPA settlement offer of the amount of $914,000.

5 0

3 years ago

On january 1, 2017, holland corporation paid $9 per share to a group of zeeland corporation shareholders to acquire 60,000 share

Illusion [34]

Answer:

Explanation:

a Consideration transferred by $540,000

Holland ($9.00 x 60,000 shares)

Fair value of the non-controlling 320,000

interest ($6.50 x 40,000 shares)

Total Zeeland fair value at January 1, 2017 $860,000

Zeeland book value at January 1, 2017 320,000

Excess acquisition-date fair over book value $540,000

To equipment (5-year remaining life) $50,000

To patent (10-year remaining life) 420,100 470,100

Goodwill $69,900

Goodwill allocation: Holland NCI

Acquisition-date fair value $540,000 $320,000

Share (60% and 40%) of identifiable * 474,060 316,040

net assets

Goodwill allocation $65,940 $3,960

*Zeeland identifiable net assets at acquisition-date fair value:

Current assets $15,700

Property and equipment ($329,700 + $50,000) 379,700

Patents ($212,100 + $420,100) 632,200

Liabilities (237,500)

Total fair value of net identifiable assets $790,100

b Investment in Zeeland

Initial value $540,000

Change in Zeeland’s RE × 60%

($439,400 – $220,000) × 60% 131,640

Excess amortization ($52,010 × 60% × 2 yrs.) (62,412)

Investment in Zeeland 12/31/18 609,228

HOLLAND CORPORATION AND ZEELAND CORPORATION

Consolidation Worksheet

For Year Ending December 31, 2018

Consolidation Entries Noncontrolling Consolidated

Accounts Holland Zeeland Debit Credit Interest Totals

Sales ($582,600) ($445,500) ($1,028,100)

Cost of 295,400 208,500 $503,900

goods sold

Depreciation 73,000 32,300 E 10000 115,300

expense

Amortization 15,700 19,300 E 42010 77,010

expense

Other operating 58,800 58,400 117,200

expenses

Equity in Zeeland -44,994 0 I 44994 0

earnings

Separate company ($184,694) ($127,000)

net income

Consolidated net income ($214,690)

Noncontrolling interest in CNI (29,996) 29,996

Controlling interest net income ($184,694)

Retained earnings ($821,900) ($342,400) S 342400 ($821,900)

, 1/1/18

Net income -184,694 -127,000 ($184,694)

Dividends declared 50,000 30,000 D 18000 12000 50000

Retained earnings, ($956,594) ($439,400) ($956,594)

12/31

Current assets $126,700 $98,500 $225,200

Investment in 609,228 0 D 18000 S 265,440

Zeeland, Inc

A1 250854

A2 65940

I 44994

Property and 854,000 276,000 A1 40000 E 10000 1,160,000

equipment (net)

Patents 152,400 168,500 A1 378090 E 42010 656,980

Goodwill 0 0 69900 69,900

Total assets $1,742,328 $543,000 $2,112,080

Liabilities -465,734 -3,600 -469,334

Common stock -320,000 -100,000 S 100000 -320000

Noncontrolling S 176960

interest

A1 167236

A2 3960 -348156 -366152

Retained earnings -956,594 -439,400 -956594

, 12/31

Total ($1,742,328) ($543,000) $1,045,394 $1,045,394 ($2,112,080)

liabilities and equities

6 0

3 years ago

Consider the market for mobile applications, smartphones, and conventional phones. Each pair are they complements or substitutes

madam [21]

Explanation:

Complements and Substitutes are basically the goods or services. Complements are the goods which are used with one another, and with the increase of price of one good, the demand of other good falls. On the other hand, substitutes are the goods which are used in place of other goods and with the increase in the price of one good, the demand of other product increases.

In this question, Mobile Applications and Smart Phones are Complements, and Smart Phones and Conventional Phones are Substitutes, and Mobile Applications and Conventional Phones are substitutes.

5 0

3 years ago