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IRINA_888 [86]
2 years ago
3

David has been a star representative and has personally serviced and developed all his accounts. recently, however, david's firm

has grown steadily and the company's products and systems have become more and more complicated. in the past year or so, david and his sales colleagues have been changing their approach due to the sales growth and increasing product complexity. customer relationships are now being handled more and more by __________, which is typical of firms experiencing this kind of growth. manufacturer's representatives junior sales reps
Business
1 answer:
MAVERICK [17]2 years ago
5 0
<span>"Delegation", this answer is inferred from the mention of the manufactures "junior sales reps" mentioned in the following sentence. Also the assumption that with increased focus on sales you would have your senior representatives focus on sales and junior on filtering out what needs to be passed along.</span>
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Pendergast, Inc., has no debt outstanding, and has a total market value of $180,000. Earnings before interest and taxes (EBIT) a
satela [25.4K]

Answer:

See the explanation below:

Explanation:

a- Calculate ROE and EPS under each of the economic scenarios before any debt is issued.

Under an expansion

Earnings before interest and taxes (EBIT) = $23,000 * (100% + 20%) = $27,600

Earnings after taxes = $27,600 * (100% - 35%) = $17,940

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $17,940 / $180,000 =

0.0997, or 9.97%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $17,940 /

6,000 = $2.99 per share

Under a recession

Earnings before interest and taxes (EBIT) = $23,000 * (100% - 30%) = $16,100

Earnings after taxes = $16,100 * (100% - 35%) = $10,465

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $10,465 / $180,000 =

0.0581, or 5.81%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $10,465 /

6,000 = $1.74 per share

b- Repeat part a, assuming that the company goes through with the capitalization.

Under an expansion

Earnings before interest and taxes (EBIT) = $23,000 * (100% + 20%) = $27,600

Interest on debt = $75,000 * 7% = $5,250

Page 2 of 2

Earnings after interest = $27,600 - $5,250 = $22,350

Earnings after taxes = $22,350 * (100% - 35%) = $14,527.50

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $14,527.50/ $180,000 =

0.0807, or 8.07%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $14,527.50 /

6,000 = $2.42 per share

Under a recession

Earnings before interest and taxes (EBIT) = $23,000 * (100% - 30%) = $16,100

Interest on debt = $75,000 * 7% = $5,250

Earnings after interest = $16,100 - $5,250 = $10,850

Earnings after taxes = $10,850 * (100% - 35%) = $7,052.50

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $7,052.50 / $180,000 =

0.0392, or 3.92%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $7,052.50 /

6,000 = $1.18 per share

c- Calculate the percentage changes in EPS when the economy expands or enters a recession.

Percentage change under expansion = ($2.42 - $2.99)/$2.99 = 0.1902 decrease, or 19.02% decrease.

Percentage change under recession = ($1.18 - $1.74)/ $1.74 = 0.3218 decrease, or 32.18% decrease

5 0
2 years ago
Security M has expected return of 17% and standard deviation of 32%. Security S has expected return of 13% and standard deviatio
Murljashka [212]

Answer:

0.047424

Explanation:

Given that

Expected return of security M = 17%

Standard deviation of Security M = 32%

Expected return of security S = 13%

Standard deviation of security S = 19%

And, the correlation coefficient = 0.78

So, by considering the above information the co variance is

=  Correlation coefficient × Standard deviation of Security M × Standard deviation of security S

= 0.78 × 0.32 × 0.19

= 0.047424

5 0
2 years ago
If a more efficient technology was discovered by a firm, there would be Multiple Choice a downward shift in the AFC curve. an up
Pavlova-9 [17]

Answer:

a) a downward shift in the AFC curve

Explanation:

AFC = Average Fixed Cost, AVC = Average Variable Cost, MC = Marginal Cost

Average Fixed Cost is defined as the fixed cost of production divided by the quantity produced. Mathematically given as:

Average Fixed Cost = Fixed Cost ÷ Quantity

AVC = FC ÷ Q

Average Variable Cost is defined as the variable cost of production divided by the quantity produced. Mathematically given as:

AFC = VC ÷ Q

Marginal Cost is defined as the cost incurred for an additional unit to be produced. Mathematically given as:

MC = ΔC ÷ ΔQ

The firm discovered a more efficient technology implies that the cost of production is reduced. The result of this is that the fixed cost (FC) is reduced and consequently, the AFC is reduced as well. Hence, the AFC curve shifts downward. We therefore see that a reduction in fixed costs (due to the discovery of a more efficient technology) results in the AFC curve shifting downwards

<u>Hence, Option A (a downward shift in the AFC curve) is the correct answer </u>

8 0
2 years ago
On December 31, Year 4, Mith Co. was a defendant in a pending lawsuit. The suit arose from the alleged defect of a product that
kifflom [539]

Answer:

C) An accrued liability of $50,000 and would disclose a contingent liability for an additional $10,000.

Explanation:

Since it is probable that Mith will lose the case, hen it must report an accrued liability of $50,000 which represent the most likely outcome of the lawsuit. But since it is also possible that they have to pay $10,000 more, they should report that amount as contingent liability.

Contingent liabilities are those events that can result in a loss and have more than 50% chance of occurring. Since it is not certain that it will happen, they are considered contingent (or just in case).

Since the first $50,000 are probable, they must be recorded as accrued liabilities, since the last $10,000 are possible, they must be recorded as contingent liabilities.

8 0
2 years ago
The following inventory was available for sale during the year for Tower Tools: Beginning inventory 10 units at $160 First purch
Veronika [31]

Answer:

The dollar amount of inventory at the end of the year according to the First-in, First-out method of inventory valuation is:

$6,600.

Explanation:

a) Data and Calculations:

Beginning inventory 10 units at $160   $1,600

First purchase          15 units at $220    3,300

Second purchase    30 units at $280    8,400

Third purchase        20 units at $260   5,200

Total                         75 units              $18,500

Ending inventory     25 units

Cost of goods sold  50 units

Ending inventory under First-in, First-out method:

20 units at $260 = $5,200

 5 units at $280 =     1,400

25 units               = $6,600

Cost of goods sold = Cost of goods available for sale minus ending inventory = $18,500 - 6,600 = $11,900

3 0
1 year ago
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