Answer: E.When there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members
Explanation:
The more the number of players in an industry the more it gets congested and especially for the competing sellers. The decision for increasing or reducing price is met by follower firms to do the same thing. It gets less competitive because you know all the players in the industry would be following the same practices and doing the same thing.
Answer:
Intrinsic value: $ 45.19290274
The stock is undervalued as is selling for less.
Explanation:
We use the gordon model to solve for the intrinsic value of the share.
we must solve for the grow rate like it was an interest rate:
<u>grow rate: </u>
![2.00 \times (1+g)^{10} = 3.16\\\sqrt[10]{\frac{3.16}{2.00}} -1 = g](https://tex.z-dn.net/?f=2.00%20%5Ctimes%20%281%2Bg%29%5E%7B10%7D%20%3D%203.16%5C%5C%5Csqrt%5B10%5D%7B%5Cfrac%7B3.16%7D%7B2.00%7D%7D%20-1%20%3D%20g)
g = 0.046804808
<u>dividends one year from now:</u>
3.16 x (1 + 0.046804808) = 3.307903193
Now we calculate the instrinsic value:
Value: $ 45.19290274
The stock is undervalued as is selling for less.
Answer:
Volume variance $1,320 Favorable
Explanation:
The fixed overhead volume variance is the difference between the actual and budgeted production unit multiplied by the standard fixed production overhead cost per unit.
Standard fixed overhead cost per unit = $11×6 = 116
Units
Budgeted units 375
Actual units <u>395</u>
Volume variance 20
Standard fixed overhead cost <u>× $66
</u>
Volume variance <u> $1,320 Favorable</u>
Answer:
Donuts= 28,571
Explanation:
<u>First, we need to determine the sale proportion of each product:</u>
Other items= 2/5= 0.4
Coffe= 2/5= 0.4
Donut= 1/5= 0.2
<u>Now, we can calculate the break-even point in units for the company as a whole:</u>
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Break-even point (units)= 100,000 / (0.5*0.2 + 0.5*0.4 + 1*0.4)
Break-even point (units)= 100,000 / 0.7
Break-even point (units)= 142,857 units
<u>Now, the number of donuts:</u>
<u />
Donuts= 0.2*142,857
Donuts= 28,571
