Answer:
The elasticity of Diet Pepsi rose, and its ability to raise revenues through price increases fell.
Explanation:
When a good has very close substitutes, like Diet Pepsi does with respect to Diet Coke, said good has a elastic price elasticity of demand, because the quantity demanded of it falls proportionally more than an increase in price since consumers turn to the substitute good when said good becomes more expensive.
If the price of Diet Pepsi rises, people can simply buy Diet Coke, potentially reducing revenue for Pepsi even more, despite the price increases.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
A).Present Value of the Cash Flow for the Lump Sum Payout
= Prize of Lottery Amount × (1 -Tax Rate)
= $506,300 × (1 - 0.46)
= $506,300 × 0.54
= $273,402
B).Present Value of the Cash Flows for Annuity Payout is
= Annuity Payment × (1 - Tax Rate) × PVIFA 8%,20 Years × (1 + Rate of Return)
= $37,000 × (1 - 0.26) × 9.8181 × (1 + .08)
= $37,000 × 0.74 × 9.8181 × 1.08
= $290,325
c). According to the analysis, $290,325 is more than the $273,402, So he should be chooses option (b) $290,325 as a payout option.
Answer:
$6.25 per ton of coal
Explanation:
the depletion base = purchase cost + restoration costs
- purchase cost = $20 million
- restoration costs = $6 million
depletion base = $26,000,000
depletion rate per ton of coal = (depletion base - salvage value) / estimated reserves = ($26,000,000 - $1,000,000) / 4,000,000 = $6.25 per ton of coal
The depletion rate follows the same concepts as depreciation of fixed assets, but instead of using a fixed asset, you are extracting materials and decreasing the value of the deposits.
