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Gelneren [198K]
2 years ago
8

Dave operates his business out of a small storefront, so he does not have a lot of shelf space for his products. Recently, a sec

tion of shelf space became available because a product was discontinued. Dave is trying to decide which of his products to put in that space. Product 1 has a contribution margin per unit of space of $2,000 and is very large in size. Product 2 has a contribution margin per unit of space of $1,200 and is very small in size. Based on this information alone, what product would be best for the open space
Business
1 answer:
Verizon [17]2 years ago
3 0

Answer:

Hence , product 1 should be allocated the shelf space

Explanation:

<em>Whenever a company is faced with a situation of large  shortage in resources, To maximize the  use of the resource in short supply the business should allocate the resource to the product that maximizes the contribution per unit of the scare resource.</em>

For example, the resource in short supply here in the question is the shelf space , <em>hence the contribution per shelf should be used to decide how to allocate the available shelf space to the product.</em>

<em>Product 1 gives a contribution per unit of shelf space of $2000 which is higher by $800 that of product 1. </em>

Hence , product 1 should be allocated the shelf space

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If your risk-aversion coefficient is A = 4.4 and you believe that the entire 1926–2015 period is representative of future expect
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Answer:

=> fraction of the portfolio that should be allocated to T-bills = 0.4482 = 44.82%.

=> fraction to equity = 0.5518 = 55.18%.

Explanation:

So, in this question or problem we are given the following parameters or data or information which are; that the utility function is U = E(r) – 0.5 × Aσ2 and the risk-aversion coefficient is A = 4.4.

The fraction of the portfolio that should be allocated to T-bills and its equivalent fraction to equity can be calculated by using the formula below;

The first step is to determine or Calculate the value of fraction to equity.

Hence, the fraction to equity = risk premium/(market standard deviation)^2 - risk aversion.

= 8.10% ÷ [(20.48%)^2 × 3.5 = 0.5518.

Therefore, the value for fraction of the portfolio that should be allocated to T-bills = 1 - fraction to equity = 1 - 0.5518 =0.4482 .

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Q 1.22: coleman camping supplies decided to use cash to purchase a new tent sewing machine. it will effectively double their abi
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Omicron Technologies has $60 million in excess cash and no debt. The firm expects to generate additional free cash flows of $48
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The correct answer is $ 4.5714 which is not in the answer choice but is close to $432.00 million

Explanation:

Solution

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let us Assume that Omicron uses the entire $60 million to repurchase shares. The amount of the regular yearly dividends in the future is closest to is:

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