Answer:
a. the advertisements wasted money and time because they were not targeted properly
Explanation:
The advertisement is not well targeted, with the increased unemployment in this region and the fact that the major source of economic wealth ( the beer manufacturer) has been bought and relocated, means the economy is not well profiled for the luxury cars that are advertised.
The company should first of all do it's research to gauge how well profiled the residents of the economy is to their products.
Ideally the target if the advertisement should be a thriving economy where there is excess cash to purchase luxury goods.
Answer:
$24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Explanation:
Calculation for what how much income will Percy report for the year and what is its character
Calculation for Percy Ordinary income: 120,000 - 40,000 - 20,000
= 60,000 x 40%
= 24,000.
Calculation for Percy Interest income:
4,000 x 40%
= 1,600
Guaranteed Payment: 20,000
Therefore what Percy will report will be: $24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Answer:
Centralize decision making
Explanation:
From the question we are informed about Rockwood International who needs to make risky decisions on a daily basis. Therefore, its managers are likely to Centralize decision making.
Centralization can be regarded as setup whereby decision-making powers are been concentrated or given to few leaders that are on top of the organizational structure. Decisions making are been carried out at the top then communicated to lower-level managers so that implementation can take place.
Answer:
The transaction price is $68,400
Explanation:
The computation of the transaction price is shown below:
= Flat fee of contract + Additional amount × estimated percentage
= $62,000 + $32,000 × 20%
= $62,000 + $6,400
= $68,400
For computing the accurate transaction price, we have to add the flat fee with the estimated percentage and the additional amount.
Answer:
a. <u>Calculation of the firm's cost of equity using CAPM</u>
Required rate of return (Cost of equity) = Risk free rate + Beta*Market risk premium
Cost of equity = 2.80% + 1.32*14%
Cost of equity = 2.80% + 18.38%
Cost of equity = 21.28%
b) <u>Calculation of the cost of equity using constant growth model:</u>
Cost of equity = Dividend yield + Growth rate(Capital gain yield)
Cost of equity = 8.00% + 36.00%
Cost of equity = 44.00%
