Points

3- As we can see the company would loss 0.52 cent per 1 kg if it decides to sell at 6.85 price and allocates the fixed expenses at 1.20 per 1 kg.

We use Capital Asset Pricing Model (CAPM) approach to calculate the cost of equity. The formula of CAPM is re = rf + β × (E[RMkt] – rf).

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

From this sprang forth the popularization of CEOs and different departments to increase efficiency. Vertical integration because many of big businessmen of the time had a large capital to start out, so buying all the means of production was an easy and sound investment. Horizontal integration calls for buying out the competition. In these cases, the largest company would often times drive down their prices so low that the smaller company would attempt to compete, but end belly up and sell the business for a smaller

A local surf store estimates that their average customer 's demand per year is  P = 3.5 - 0.5Q, and knows that the marginal cost of each rental is $0.5.

Management has decided that the suggested retail price for the 8-ounce can to the consumer will be $1.00. The only unit variable costs for the product are $0.36 for materials and $0.12 for labor. The

Imposition of the price ceiling of $0.50 will lead to a quantity demanded of 8,000. The company will be at its break even since it will make zero profit. The price is equivalent to the average total cost (Lehdonvirta, & Castronova,

A customer order usually involves multiple line items. For example, a personal computer (PC) dealer may order printers, computers, accessories, and software in one order. As the dealer is merely replenishing its own stock, which will be sold to end users, the supplier can ship individual items separately, depending on the availability of these products, without adversely affecting the dealer’s business. Line item fill rate would be a good indicator of customer service. Other customers demand a single shipment of all items, such as customers who need service parts to complete a repair job. In these cases, it is important to measure the fill rate in terms of completed orders.

The three components of the cost of capital are debt, preferred stock, and common stock.

The cost of issuing common shares for your company was found by adding the following expenses (APPENDIX ONE):

The owners of the lemonade stand place a value of $50.00 for each season toward being their own and thus have the freedom and flexibility that they would otherwise not experience while working another person or company. This form of revenue can be found in the stand’s implicit revenue on the stand’s balance sheet and is added to the value of learning how to run the business; $25.00 for Season One; as well as gaining more information and/or education on increasing profits and learning how to better manage the stand.

Cost of Equity is the return that stockholders require for a company. A company’s cost of equity represents the compensation that the market demands in exchange for owning the assets and bearing the risk of ownership. Based on capital markets the cost of equity varies in direct relation to the assumed risk in that specific market. The distinctive of the firm is the sensitivity to market risk (β) which depends on everything from management to its business and capital structure. Therefore past performances and present conditions have a direct effect on the overall value. Applying calculations at a divisional level allows specified markets to be analysis based on present market conditions for that service or product. The formula used to calculate Cost of Equity is:

To illustrate this utilizing standard demand and supply, the graph at the end of this assignment can be viewed. The red line, noted as S1, indicates

When price is $20.6, the quantity is 1,242,425 and profit is $101, we come near to break even point.

customer's financial condition, usually without requiring collateral. Should any of our larger customers experience financial difficulties, we could curtail business with such