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NEW QUESTION 40
Discuss whether the demand for OLI's new business English course is elastic and explain how OLI can use this information in determining the product price.
Essay
Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country.
It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is €300 per student, and the total fixed cost of the new course is
€300.000 per year OLI spent €200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI's highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.
Answer:
Explanation:
See the explanation for the answer.
Explanation
it's in elastic and me percentage change in price is greater than the percentage change in the demand. A profile maximizing price where the marginal revenue is equal to marginal cost would be recommendable in this scenario.
NEW QUESTION 41
Calculate QDDs financial leverage ratio show your calculations
Essay
Quality Digital Design (QDD) Inc is a public-traded technology company Selected financial data of QDD for the prior year are as follows
QDD's stock was trading at $160 per share at the beginning of the yea: and at $176 per share by the end of the year. The company paid dividends of S5 per share. The company "s stock had a beta of 1 4 The stock market provided a total return of 12% last year, well above the 3% risk free rate of return QDD is considering the issuance of $200 million of bonds to fund the repurchase of $200 million of its stock.
QDD is evaluating the bond, including its term structure, maturity, and whether it should be callable obtaining the lowest coupon interest is an important objective of QDD. The CFO has estimated that sales for the current year would remain the same as last year and the new bond would add S12 million in annual interest payments.
Answer:
Explanation:
See the explanation for the answer.
Explanation
NEW QUESTION 42
Studler's Restaurant is considering a contract to supply the weal senior citizen center with 10,000 meals.
Regular sales at regular prices would be unaffected. The food cost for each meal s S3 Additional costs incurred as a result of the contract would De variable overhead of S 50 and variable selling general and administrative costs of S SO per meal sold. The selling price per meal would be $5, A total of $20,000 in fixed costs would be allocated at $2 per meal. The fixed costs are part of an overall total of $500,000 in annual fixed costs incurred regardless of the contract. What will be the effect on pretax income if Studiers takes the special order?
- A. $10.000 decrease
- B. $10, 000 increase
- C. $20.000 decrease
- D. $20, 000 increase
Answer: B
NEW QUESTION 43
Which one of the following moral philosophies states that the morality of an action is inherent and not based on the consequences of the action?
- A. Deontology
- B. Utilitarianism
- C. Teleology
- D. Relativism
Answer: A
NEW QUESTION 44
A company has incurred $2,500 to produce its four products. These products can either be sold as is or processed further. The selling prices and additional costs necessary to finish these products ace shown below
- A. Products A
- B. Product D
- C. Product C
- D. Products B
Answer: B
NEW QUESTION 45
L&H Sports owns and operates several stadiums used for baseball and soccer games Management is considering installing machines that would be used to roast peanuts on the premises. This equipment would allow L&H to sell freshly roasted peanuts rather than the pre-roasted peanuts that are currently sold Marketing studies suggest that this feature would increase peanut sales.
The roasters can be purchased in several sizes, and the annual rental fees and operating costs vary with the size of the roaster Information about the roasters is shown below.
L&H currently sells pre-roasted peanuts for $0 60 pet bag. Management plans to sell the freshly roasted peanuts for a higher price but at no more than a 10% increase. The demand for freshly roasted peanuts is estimated to be 250, 000 bags pet year. Which roaster should L&H purchase to maximize its profit?
- A. Regular
- B. Economy
- C. Super
Answer: A
NEW QUESTION 46
A capital budgeting analysis involves an initial investment of $500. The expected cash inflow in Year 1 is
$300, and the expected cash inflow in Year 2 is $350. Which one of the following equations can get the correct internal rate of return (IRR) of this project?
- A. -$500 = $300'(1 + IRR) + 5350/(1 + IRR)2
- B. $500 = $300/(1 + IRR) + $350/(1 + IRR)2
- C. $0 = $300/(1 + IRR) + $350/11 + IRR)2
- D. $500 = $300/(1 + IRR) + $350/(1 + IRR)
Answer: A
NEW QUESTION 47
Which one of the following statements with respect to ethics is correct?
- A. One may act legally and still be acting unethically
- B. Good ethics stems from formal education
- C. Ethics and laws are not closely related
- D. Every organization that follows the law is ethical
Answer: A
NEW QUESTION 48
Sigma industries is considering purchasing Lambda Products in a cash transaction Sigma financial analysts Dave conducted an extensive amount of negotiation and due diligence and nave summarized the following financial information for management.
* Assets having a 10-year remaining life can be acquired for $22 million
* Assets are to De depreciated over their remaining life on a straight-line basis for Doth book and tax purposes
* Current liabilities of Lambda amounting to S3 million must be assumed by Sigma
* Lambda operations are expected to produce annual pre-tax cash Don of S7 million for the remaining 10 years of operation
* A16% return on investment is required by Sigma for acquisitions of this type
* Sigma's marginal Income tax rate is 35%
What is the net present value to Sigma of the Lambda acquisition rounded to the nearest thousand?
- A. $3,712,000
- B. $712,000
- C. $6, 921,000)
Answer: B
NEW QUESTION 49
A corporation's financial analyst has identified four potential protects that ate mutually exclusive. Each protect will produce a constant annual cash flow for years 1 through 4, and have an initial investment at time 0 shown below. If the corporation has a weighted average cost of capital of 10%, which project should be selected?
- A. Protect 1
- B. Protect 4
- C. Protect 3
- D. Protect 2
Answer: B
NEW QUESTION 50
Custom Ceramics produces two hand-painted items a large bowl and a large platter. Relevant information for each of these items is shown below
- A. The company should produce only bowls because the sales price per Bowl is higher
- B. The company should produce only platters because the contribution margin per painting hour is higher
- C. The company should produce only platters because the variable cost per platter is lower
- D. The company should produce only bowls because the contribution margin per bowl is higher.
Answer: B
NEW QUESTION 51
Employee performance review and development systems must be fully aligned with the requirements for ethical conduct Ethical expectations should be included in
- A. competencies and job descriptions only
- B. competencies, only
- C. job descriptions only
- D. compliances, job descriptions and objectives
Answer: C
NEW QUESTION 52
Javier makes hand-looted learner dog collars. The materials cost $10 per collar and the collars are sold for $50 each. Javier sells me collars at a local farmer's market mat charges S100 per month for space rental if Javier's income tax rate is 30%, how many collars must Javier sell each year to earn $1,000 net income?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
NEW QUESTION 53
A retail company sells numerous products m its one department store. The income statements tot two of these products are shown below
After reviewing the income statements, the president is considering drooping one or both products. Which produces), if any should the company discontinue?
- A. Product A only
- B. Product B only
- C. Both Product A and Product B
- D. Neither Product A nor Product B
Answer: A
NEW QUESTION 54
FreeRide inc is considering replacing its existing shuttle bus win a new one. The new bus can offer considerable savings in operating costs Information about the existing bus and the new bus is shown below.
- A. current salvage value of the existing bus
- B. accumulated depreciation of the existing bus
- C. annual operating cost of the new bus
- D. original cost of the new bus.
Answer: B
NEW QUESTION 55
London Corporation has in the following cost structure for two of its product.
Assume that me current sales level is 15,000 units of Product A and 5,000 units of Product B Using cost-volume-profit analysis which of the following courses of action would maximize profit in the short term?
Assume that fixed costs are sunk costs in the short term.
- A. Discontinue making and selling Doth products
- B. Continue to make and sell Product A only.
- C. Continue to make and sell Product B only
- D. Continue to make and sell both Product A and Product B
Answer: B
NEW QUESTION 56
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