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3 years ago

15

A change in demand is represented by a the demand curve while a change in quantity demanded is represented by a _ t

he demand curve

1 answer:

Phoenix [80]3 years ago

8 0

Answer: shift of; movement along

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The following information applies to the questions displayed below.] In each of the cases below, assume Division X has a product

Dmitry [639]

Answer:

$12

Explanation:

Calculation to determine the lowest acceptable transfer price from the perspective of selling division

Using this formula

Lowest Transfer Price = Variable Costs per unit - Internal Savings + Opportunity Cost

Where,

Variable Costs per unit = $12

Internal Savings = $0

Opportunity Cost = $0

Let plug in the formula

Lowest Transfer Price = $12-$0+$0

Lowest Transfer Price = $12

Therefore the lowest acceptable transfer price from the perspective of selling division is $12

7 0

3 years ago

Coed Scents, a national producer of young adult perfumes and colognes, needs to determine if it would be cheaper to produce 100,

melisa1 [442]

Answer:

Coed Scents

1. The alternatives for Coed Scents are to reduce cost of internal production or to renegotiate the external purchase price.

2. Relevant costs Internal External

Total Cost Unit Cost

Direct materials $2,000,000 $20.00

Direct labor 350,000 3.50

Variable manufacturing overhead 150,000 1.50

Total cost $2,500,000 $25.00 $2,500,000 $25.00

3. No alternative is more cost-effective. However, Coed Scents can reduce cost of internal production (materials, labor, and variable overhead).

4. Internal production becomes more cost-effective with this additional costs from outsourced production.

The cost-effectiveness amounts to $350,000.

Explanation:

a) Data and Calculations:

Production units of Two AM = 100,000 bottles

Purchase price of outside supplier = $25

Total Cost Unit Cost

Direct materials $2,000,000 $ 20.00

Direct labor 350,000 3.50

Variable manufacturing overhead 150,000 1.50

Variable marketing overhead 250,000 2.50

Fixed plant overhead 300,000 3.00

Total $3,050,000 $30.50

Relevant costs Internal External

Total Cost Unit Cost

Direct materials $2,000,000 $20.00

Direct labor 350,000 3.50

Variable manufacturing overhead 150,000 1.50

Total cost $2,500,000 $25.00 $2,500,000 $25.00

5 0

3 years ago

The total market value of the equity of ITM is $6 million, and the total value of its debt is $4

timofeeve [1]

Answer:

a. The required rate of return on Okefenokee stock is 16%.

b. WACC = 10.56%.

c. Estimate the discount rate for an expansion of the company's present business.

It should be the same as the WACC = 10.56%

d. The required rate of return on Okefenokee's new venture is Ke = 18 %.

Explanation:

Here the given is,

E = $6 million, D = $4 million, Beta = 1.2,

Rmp = the expected risk premium on the market =10%.

Rf = The Treasury bill rate = 4%

a. The required rate of return on Okefenokee stock,

$Ke = Rf + Beta \times Rmp = 4 + 1.2 \times 10 = 16%$ %.

b. Tax rate, T = 40%

The proportion of debt = $Wd = D / (D + E) = 4 / (6 + 4) = 0.4$

Proportion of equity, We = 1 - Wd = 1 - 0.4 = 0.6

Cost of debt, Kd = Risk-free rate as debt is free of default = 4%

$WACC = Wd \times Kd \times (1 - T) + We\times Ke\\\\ = 0.4 \times4\times (1 - 40) + 0.6 \times 16\\\\ = 10.56%$

WACC = 10.56%.

c. Estimate the discount rate for an expansion of the company's present business.

It should be the same as the WACC = 10.56%

d. Suppose the company wants to diversify into the manufacture of rose-colored glasses. The beta of optical manufacturers with no debt outstanding is 1.4. What is the required rate of return on Okefenokee's new venture? (You should assume that the risky project will not enable the firm to issue an additional debt)

$Ke = Rf + Beta \times Rmp\\\\Ke = 4 + 1.4 \times 10 = 18%$

Ke = 18 %.

5 0

3 years ago

A financial instrument whose value is derived from the value of an underlying asset is called a.

lana66690 [7]

Answer:

This is called A derivative

3 0

2 years ago

How do the entry and exit of firms in a purely competitive industry affect resource flows and long-run profits and losses?

Irina18 [472]

Answer:

The fact that in a purely competitive industry there are neither barriers to entry nor barriers to exit is what makes economic profit, in this type of industry, impossible in the long-run.

This is because when there is economic profit in the industry, firms are lured to enter, saturating the market, and lowering economic profit to zero in the process. When this happens, some firms opt out of the industry, bringing economic profit back to positive territory, causing the cycle to repeat itself.

5 0

3 years ago