Suppose that the profit for firms that are already present in an industry is $200, the cost of entry into the market is $800, and all firms use the same discount rate of 8%. If each new firm reduces profit by $68, how many firms will enter this market?
Q: The manager of Coowie, Inc. is considering raising its current price of $30 per unit by 10%. If she…
A: Break even point in units = Fixed costs / Contribution margin per unit Where,…
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A: Break-Even Point: It refers to a point of production at which there is no profit no loss.
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A: Answer a. Contribution = Sales - Variable costs Contribution = $18,169.3 - ($6129.7 + $4756 + 40% of…
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A: Since you have a question with multiple subparts we will solve the first three subparts for you. If…
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A: The change in income can be calculated by calculating the difference between original net income and…
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A: Increase in Profit = Additional units sold * (Sales price per unit -variable price per unit)
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A: 1. The computation of the additional profit contribution as follows: The formula used for the…
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A: Given: Selling price = P50 Variable cost = P30 Additional units sold = 500 Fixed cost = P80,000
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A: Margin of safety: The margin of safety indicates how much a company’s sales level can drop before it…
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A: The amount of revenue at which a company makes a profit of zero is known as break-even sales. This…
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A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
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A: In Cost , The. variable . cost and fixed cost and incurred. this is eaten under marginal costing .…
Q: (Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $140,000 and net…
A: Formulas:
Q: Suppose a monopolist's profit-maximizing output is 500 units per week and that the firm sells its…
A: We get economic profit as below - Economic profit = Sales - All explit &…
Q: The Weaver Watch Company sells watches for $25, the fixed costs are $140,000, and variable costs are…
A: Contribution per unit = Sales - variable cost Profit/Loss = (no. of units * contribution per unit) -…
Q: A local company assembling stereo radio cassette produces 300 units per month at a cost of 800 per…
A: Break even point is the situation where there is no profit or loss for the company Break even…
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Q: total contribution margin
A: We know that as per Marginal Costing Contribution Margin = Sales Revenue - Total Variable Cost It…
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A: Inventory turnover ratio is the ratio which measures the number of times inventory is consumed or…
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A: Break-even analysis is a technique used widely by the management for decision-making. It helps to…
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A: Break even sales = Fixed cost/contribution ratio
Q: OceanGate sells external hard drives for $200 each. Its total fixed costs are $30 million, and its…
A: Given information in question Selling price = $200 Fixed cost…
Q: Determine the market potential for a product that has 20 million prospective buyers who purchase an…
A: Given that: Prospective buyers = 20 million Per buyer = 2 items per year Price = €50
Q: A company is presently ordering on the basis of an EOQ. The demand is 10,000units a year, unit cost…
A: EOQ (Economic Order Quantity):-EOQ is the minimum order quantity that one should order to minimize…
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Q: Berries Salad has current sales of RM10,000 and a profit margin of 5%. The firm estimates that sales…
A: Current sales = RM 10,000 Profit margin = 5% Growth rate = 4%
Q: a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of…
A: Contribution Margin is Sales minus Variable Cost and Contribution Margin Ratio is Contribution…
Q: Assume that Cane expects to produce and sell 80,000 Alphas during the current year. One of…
A: Since the costing information is not given, my answer would be based on revenue.
Q: a. what is the EOQ for a firm that sells 5,000 units when the cost of placing an order is $5 and the…
A: a.Calculation of EOQ:
Q: Last year, Flynn Company reported a profit of $70,000 when sales totaled $520,000 and the…
A:
Q: AZ Humanade, Inc. expects to earn P150,000 next year after taxes on sales of P2,200,000. Stanley…
A: We know that under marginal costing Profit = Sales Revenue - Total Variable cost - Total Fixed…
Q: The Warren Watch Company sells watches for $26, fixed costs are$155,000, and variable costs are $13…
A: “Hey, since there are multiple sub-parts posted, we will answer first three sub-parts. If you want…
Q: The Warren Watch Company sells watches for $29, fixed costs are $180,000, and variable costs are $10…
A: Calculate the gain or loss for 7,000 watches as follows: Gain or (loss) = Total contribution - Fixed…
Q: Minden Company introduced a new product last year for which it is trying to find an optimal selling…
A:
Q: If a company wishes to extend credit standards in order to increase its sales and generate…
A: The question is related Management of Receivables and is related to evaluation of credit policy. The…
Q: (Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $140,000 and net…
A: Given, Fixed cost = 140,000 Net operating income =$28,000
Q: If the objective of the firm is to get 25% profit, how many units does the firm need to sell if the…
A: Unit Contribution margin = Unit selling price x Contribution margin ratio
Q: a. What is the break-even point in units? b. What is the break-even point in dollars? c. If Weber…
A: Break-even analysis is one of the most important quantitative techniques that is used in the…
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Q: A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in…
A: Hey, since there are multiple subpart questions posted, we will answer the first three questions. If…
Q: eakeven sales in units will decrease by 4,000 units, how much will be the increase/decrease in…
A: The breakeven point is where the firm makes no profit or loss . In other words , the contribution…
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A: Cost-volume-profit (CVP) analysis is an important and systematic method which provides useful…
Q: An organization's break-even point is 6,000 units at a sales price of P50 per unit, variable cost of…
A: Break even point = Fixed costs /Contribution margin per unit where, Contribution margin per unit =…
Q: Suppose Stanley's Office Supply purchases 50,000 boxes of pens every year. Ordering costs are $100…
A: Calculate the EOQ: EOQ = √((2x Annual demand x ordering cost)/ carrying cost per unit EOQ =…
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- Consider a company that pays out all its earnings (i.e., the payout ratio = 1 or plowback/retention ratio=0). The required return for the firm is 13%. Compute the intrinsic P/E if its ROE is 15%. Compute the intrinsic P/E if its ROE is 20%. Discuss why your answers to parts (a) and (b) differ or do not differ from one another. Suppose that the company’s ROE is 13%. Compute its intrinsic P/E value. Would the answer to part (d) change if the company retained half of its earnings instead of paying all of them out? Discuss why or why not.You are considering a new supplier that you estimate would reduce your costs 0.025, increasing overall EBIT margin the same amount, or 250 basis points. Tax burden 0.79 Interest burden 0.8 Operating margin Asset turnover 2.1 Leverage ratio 1.2 Equity 56 Before the changes are made the firm was intrinsically valued at 45.54 After the changes, what would the new value be assuming the new ROE, growth, and EPS1. The firm pays dividends as 0.61 of EPS. The discount rate is 0.15" O 64.88 O 70.24 62.35 O 67.36 0.08 O 73.13Suppose Firm X decides to decrease the price of Good A by 4%. Calculate the change in the quantity demanded (in units) of Good B, assuming that Firm X currently sells 5000 units of Good B.Change in Qd = if Ed = -2.5 and Ec = 1.5 for Good A, and Sales increased by 12% for Good B
- A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. This firm is earning $5.50 on every $50 invested by its founders. What is its percentage rate of return? Is the firm earning an economic profit? If so, how large? Will this industry see entry or exit? What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?An unlevered firm perceives its optimal dividend policy to be a 40 percent payout ratio. Asset turnover is sales/assets = 80%, the profit margin is 10 percent, and the firm has a target growth rate of 5%. a. Is the firm's target growth rate consistent with it other goals? b. If not, how much does it need to increase asset turnover to achieve it goals? c. How much would it need to increase the profit margin instead?Requirement 1. If SnowDreams cannot reduce its costs, what profit will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Complete the following table to calculate SnowDreams' projected income. Revenue at market price Less: Total costs Operating income
- Calculate the P/E ratio Baxter has a retention ratio of 63%, a ROE of 15%, and a discount rate of 12%. What is its P/E ratio (assuming the market correctly values the company)? Hint: Remember the earlier class material (also on slide 43 --> ROE retention = growth. Not that this says what the retention ratio is... do you need the retention ratio or something else that can be calculated knowing the retention ratio in the numerator of the P/E equation? Note: Enter your answer with two decimals.8. Demand for a product is q = 100 – p and industry marginal cost is 40. Firms set competitive prices. One firm wishes to buy up its competition and become a monopoly, arguing that its costs would go down to a marginal cost of 20. Would the mergers-to-monopoly improve efficiency?You are trying to value Lucid Motors using comparables analysis. You believe Lucid Motors should be valued similarly to TSLA and that TSLA is the only reasonable comparison. TSLA is currently trading at 10.7x Enterprise Value/Revenue. Lucid is expected to generate $2.2bn in revenues this year. How mucb should you be willing to value Lucid in terms of enterprise Value (assuming market is correct)? $20.6bn $23.5bn $15.4 bn $21.7 bn
- Sun Pharma Company earns Rs 10 per share, is capitalized at a rate of 12 per cent and has a rate of return on investment of 20 per cent. What should be the price per share at 70 per cent dividend pay-out ratio according to Walter and Gordon model respectively ? Is this the optimum pay-out ratio according to Walter Model ? Justify your answer showing relevant calculations. What are the similarities and dissimilarities between Walter and Gordon ModelCalculate the ROE for a firm if it has a profit margin of 20%, an asset turnover of 2, and an equity multiplier of 1.4. For this calcualtion, if you multiply the numbers as they appear, you do NOT have to convert your final answer and cansimply type it in. So if you were multiplying 10%*1.5*5 = 75, you would simply enter 75 for 75% into BB.Suppose that division R can sell any quantity of Ranbax in a perfectly competitive market for $0.33 a pound. To maximize Letang’s income, how many pounds of Ranbax should division R transfer to divisions S and T, and how much should it sell in the external market?
