Answer:
$24,000
Explanation:
Product A Product B Product C
sales 70,000 97000
Variable cost 37000 51000
Contribution margin 33000 46000
Avoidable cost 10,000 20000
Unavoidable cost 7000 12000 9400
Operating income 16000 14000
Total operating income if product C is dropped is (16000+14000 +3400-9400)
=$24000
Please note that Giant company with still incur the unavoidable cost even if the product is dropped. This is assumed to be a portion of the fixed overhead expenses allocated to the product in the course of normal operation.However , the loss made of 3400 will be avoided as well
Answer:
Geoff's target service level is 0.76
Explanation:
Doing so would expand his expense from $0.99 to $1.59 and could very well give him the sustenance he expected to endure the second 50% of his day at the workplace. Obviously, in the event that he completed his cheeseburger and the typical measure of fries, he would essentially discard the additional ones. In any case, on the off chance that he neglected to supersize his request, he would need to take a confection break mid-evening and they weren't actually offering them away in the reprieve room candy machines. He would probably require two pieces of candy, which sold for $0.95 each.
Answer: $22.22
Explanation:
We can use the dividend discount model to solve for this.
The formula is,
P = D1 / r - g
Where,
D1 = the next dividend
r = the expected return
g = the growth rate.
We do not have the expected return but we can calculate for it using the old stock price and growth rate. Making it x we have,
28.5 = 0.5 / x - 0.075
28.5 (x - 0.075) = 0.5
x = 0.5 / 28.5 + 0.075
x = 0.09254385964
x = 9.25 %
Now that we have the expected return we can calculate the new stock price with the new growth rate,
P = 0.5 / 9.25% - 7%
P = 22.2222222222
P = $22.22
The new stock price is $22.22
Answer:
2.0%
Explanation:
Coupon received annually = $500*2% = $10
We have the cash flow from year 0 to year 6 as below:
Year 0 ($500)
Year 1 $10
Year 2 $10
Year 3 $10
Year 4 $10
Year 5 $10
Year 6 $510 (Principal $500 & coupon $10)
IRR (internal rate of return) whereas the present value of all cash flow is nil
It is very difficult to calculate IRR manually, but easily in excel = IRR(-500,10,10,10,10,10,510) = 2%
Please see excel attached
Answer:
The question is incomplete:
<em>The analysts were concerned because not only was Porsche a late entry into the market, but also the introduction of the Cayenne might damage Porsche's reputation as a maker of high-performance automobile. In evaluating the Cayenne, would you consider the possible damage to Porsche's reputation as erosion? </em>
In marketing, brand erosion means that customers will value the brand less and their perceived value will decrease. Luckily for Porsche, they did not listen to them. The Cayenne is by far Porsche's largest source of revenue and profits.
Porsche is a brand that most people associate with luxury sports car, and their most famous model, the 911, has barely been modified during the last 50 years. But as the SUV market increased in size, their profits profits started to shrink. Many Porsche purists despise Cayennes and Macans, but the fact is that they increased the total number of units sold way beyond anyone's expectations.
Nowadays, more people view Porsche as a luxury car manufacturer and more people want to buy their products. A small number of consumers felt disappointed, but a vast majority were pleased.
