1. The initial journal entry to record the purchase of equipment will be:
Equipment $300,000
Cash $300,000
2. Straight-line depreciation will be calculated as follows:
Annual Depreciation Expense = (Equipment Cost – Salvage Value) / Useful Life
$300,000 - $10,000 = $290,000
$290,000 ÷ 60 months = $4,833.33 per month
Depreciation Expense $4,833.33
Accumulated Depreciation $4,833.33
3. The initial journal entry to record the purchase of the compressor with a loan will be:
Compressor $100,000
Loan Payable $100,000
4. Units of production depreciation will be calculated as follows:
Depreciation per unit = (Equipment Cost – Salvage Value) / Total Units of Production
Depreciation Expense = Depreciation per unit x Units used
$100,000 - $5,000 = $95,000
$95,000 ÷ 2,000 hours = $47.50 per hour
$47.50 x 300 hours = $14,250
Depreciation Expense $14,250
Accumulated Depreciation $14,250
5. The initial journal entry to record the purchase of the press with cash will be:
Press $25,000
Cash $25,000
Double-declining balance depreciation will be calculated as follows:
Depreciation Rate = 2 ÷ Useful Life
Double-Declining Balance Depreciation Rate = Depreciation Rate x 2
Depreciation Expense for the First Year = (Equipment Cost – Accumulated Depreciation) x Double-Declining Balance Depreciation Rate
$25,000 x 40% = $10,000
Depreciation Expense $10,000
Accumulated Depreciation $10,000
6. Revenue for the month of $120,000 is recorded as follows:
Cash $120,000
Revenue $120,000
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The financial statements for Castile Products, Incorporated, are given below: Account balances at the beginning of the year were: accounts receivable, \( \$ 25,000 \); and inventory, \( \$ 60,000 \).
The balance sheet presents the company's assets, liabilities, and equity as of a certain date.
The total assets of the company are $300,000 as of December 31, 2021
Castile Products, Incorporated Financial Statement Year Ending December 31, 2021 ($ in thousands) Cash $20 Accounts Receivable 30 Inventory 65 Prepaid Expenses 5 Buildings and Equipment 240 Less:
Accumulated Depreciation 60 Net Buildings and Equipment 180 Total Assets $300 Accounts Payable $30 Accrued Liabilities 10 Mortgage Payable 100 Common Stock 140 Retained Earnings 20 Total Liabilities and Equity $300
Given the account balances at the beginning of the year (accounts receivable of $25,000 and inventory of $60,000), the company recorded a total asset value of $300,000 as of December 31, 2021.
The balance sheet shows the company's assets, liabilities, and equity as of a particular date.
The given financial statement shows that at the beginning of the year, Castile Products, Incorporated has account receivable of $25,000 and an inventory of $60,000.
These account balances help to calculate the total assets of the company. The total assets of the company are $300,000 as of December 31, 2021.
The balance sheet presents the company's assets, liabilities, and equity as of a certain date.
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Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations:
Provided $84,000 of services on account.
Collected $50,400 cash from accounts receivable.
Paid $30,000 of salaries expense for the year.
Adjusted the accounts using the following information from an accounts receivable aging schedule:
Number of Days
Past Due Amount Percent Likely to
Be Uncollectible Allowance
Balance
Current $ 24,864 .01 0-30 1,680 .05 31-60 2,352 .10 61-90 2,016 .30 Over 90 days 2,688 .50 Required
a. Record the above transactions in general journal form and post to T-accounts.
b. Prepare the income statement for Vulcan Service Co. for Year 1.
c. What is the net realizable value of the accounts receivable at December 31, Year 1?
Vulcan Service Co. is a service company that had the following transactions during the first year of operations. It provided $84,000 of services on account, collected $50,400 cash from accounts receivable, and paid $30,000 of salaries expense for the year.
The accounts receivable aging schedule provided information to adjust the accounts as shown below
:Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance Current$24,864.01 0-301,680.05 31-602,352.10 61-902,016.30 Over 90 days2,688.50 a) The above transactions can be recorded in the following general journal entries:
Total operating expenses (30,466.80) Net Income $53,533.20 Therefore, the income statement of Vulcan Service Co. for Year 1 reveals that its net income is $53,533.20. c) The net realizable value of accounts receivable at December 31, Year 1 is calculated as shown.
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. last year, neal invested $5,000 in tattler's stock, $5,000 in long-term government bonds, and $5,000 in u.s. treasury bills. over the course of the year, he earned returns of 9.7 percent, 5.4 percent, and 3.8 percent, respectively. what was the risk premium on tattler's stock for the
The risk premium on Tattler's stock for the last year was 4.3 per cent. This means that by investing in Tattler's stock, Neal earned an additional 4.3 per cent return compared to a risk-free investment.
To calculate the risk premium on Tattler's stock, we need to find the difference between the return on Tattler's stock and the risk-free rate.
In this case, Neal invested $5,000 in Tattler's stock, which earned a return of 9.7 per cent. The risk-free investments include $5,000 in long-term government bonds with a return of 5.4 per cent and $5,000 in U.S. Treasury bills with a return of 3.8 per cent.
To calculate the risk premium on Tattler's stock, we subtract the risk-free rate from the return on Tattler's stock:
Risk Premium = Return on Tattler's stock - Risk-free rate
Risk Premium = 9.7% - 5.4%
Risk Premium = 4.3%
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Fill in the missing words. (Seroll through the dropdown to see all potential answers) For a bicycle manufacturer, a vendor who provides three models of padded seats would be a providing a Another company providing rubber to the wendor that makes wheels for the bicycle mancifacturer would be a 2nd tier suppliet Other parts of the bicycle supply chain include the distribution cenfer and a retail stere. both providing a If a customer can pick the seat model, frame color. and handlebar style, the design is and
The bicycle supply chain encompasses a variety of different elements, including manufacturers, vendors, distributors, and retail outlets. The relationship between each of these entities is crucial for ensuring that bicycles are produced and delivered efficiently.
For a bicycle manufacturer, a vendor who provides three models of padded seats would be providing a component. This is because padded seats are one of many individual parts that are used to build a complete bicycle. Other common components include wheels, handlebars, and frames.
Another company providing rubber to the vendor that makes wheels for the bicycle manufacturer would be a second-tier supplier. This is because the company is not directly involved in the production of the bicycle, but rather provides materials that are used to create one of its components.
Other parts of the bicycle supply chain include the distribution center and a retail store. Both of these entities play a crucial role in getting the bicycle from the manufacturer to the end consumer.
The distribution center is responsible for storing and transporting bicycles and components, while the retail store is responsible for selling the bicycles to customers. If a customer can pick the seat model, frame color, and handlebar style, the design is customizable.
This means that the customer has the ability to choose from a variety of different options to create a bike that meets their specific needs and preferences.
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Select ALL of the INPUTS for the following scenario. You have been tasked to build a program to calculate the employee weekly wages based on their hourly rate and the number of hours worked. the program should return the weekly wages by multiplying the hourly rate by the number of hours worked.
Question: you have to select inputs only
A- weekly_wages
B- hourly_rate
C- hours_worked
D- Multiply hourly_rate by hours_worked
The inputs for the following scenario are: Hourly rate, and the number of hours worked. The program will calculate employee's weekly wages by multiplying these two values together. Here is a detailed explanation of the inputs: Explanation: The inputs for this scenario are what the user will enter into the program.
In this case, there are two inputs: hourly rate and number of hours worked. Hourly rate: The hourly rate is the amount that the employee earns per hour. This value will be entered into the program by the user. It could be any value, depending on the employee's salary, and it is typically expressed in dollars per hour.
Number of hours worked: The number of hours worked is the amount of time that the employee has worked during the week. This value will also be entered into the program by the user, and it is typically expressed in hours. By multiplying these two values together, the program can calculate the employee's weekly wages.
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Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] York's outstanding stock consists of 80,000 shares of 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends: Exercise 11-9 Dividends on common and cumulative preferred stock LO C2 Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)
Exercise 11-9: Dividends on common and cumulative preferred stock Given Information: York's outstanding stock consists of 80,000 shares of 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value.
During its first four years of operation, the corporation declared and paid the following total cash dividends: Calculation:
Part A: Calculation of the dividends paid each year to each of the two classes of stockholders Year 1: Dividend paid to preferred stockholders = $ 300,000 × 7.5% × $ 5 = $ 112,500.
Dividend paid to common stockholders = $ 300,000 - $ 112,500 = $ 187,500.
Year 2: Dividend paid to preferred stockholders = $ 350,000 × 7.5% × $ 5 = $ 131,250Dividend paid to common stockholders = $ 350,000 - $ 131,250 = $ 218,750.
Year 3: Dividend paid to preferred stockholders = $ 400,000 × 7.5% × $ 5 = $ 150,000Dividend paid to common stockholders = $ 400,000 - $ 150,000 = $ 250,000.
Year 4:Dividend paid to preferred stockholders = $ 450,000 × 7.5% × $ 5 = $ 168,750Dividend paid to common stockholders = $ 450,000 - $ 168,750 = $ 281,250.
Part B: Calculation of the total dividends paid to each class for the four years combined. Total dividend paid to preferred stockholders = $ 112,500 + $ 131,250 + $ 150,000 + $ 168,750 = $ 562,500.
Total dividend paid to common stockholders = $ 187,500 + $ 218,750 + $ 250,000 + $ 281,250 = $ 937,500.
Therefore, the total amount of dividends paid to each class of stockholders for the four years combined is $562,500 and $937,500 for the preferred and common stockholders, respectively.
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In a market for x draw an decrease in the demand for x, ceteris paribus, then predict what happens to the price of x and quantity of x.
Will the price and quantity increase, decrease or have no change?
When there is a decrease in demand for X, ceteris paribus, then there is a shift in the demand curve towards the left. This shift results in lower prices for X and a reduction in the quantity of X demanded. When there is less demand for a good, suppliers lower the price of the good, in an attempt to attract buyers.
This causes the equilibrium price to fall. Additionally, a decrease in demand results in lower profits for producers, which can cause them to produce fewer goods. The quantity of X demanded is expected to decrease. An example can help in understanding this concept better. Let's say that a company produces 5000 units of X at a price of $30 per unit. However, due to a decrease in demand, the company can only sell 4000 units of X at a price of $25 per unit. Thus, a decrease in demand for X results in a decrease in price and quantity of X.
The price and quantity will decrease. The decrease in demand can be caused by a number of factors including a decrease in consumer income, a shift in consumer preferences, a change in the price of a substitute or complement good, and changes in government policies.
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Describe the marketing channel the Uber Eats has chosen? Analyze
the factors that led to this choice and strategy selection?
Uber Eats has chosen a digital platform-based marketing channel for its food delivery service. Factors such as technological advancements, wide reach, cost efficiency, scalability, customer experience, and synergy with the Uber brand have influenced this choice and strategy selection.
Uber Eats has chosen a digital platform-based marketing channel for its food delivery service. This channel involves connecting customers, restaurants, and delivery drivers through a mobile application and online platform. The factors that led to this choice and strategy selection include:
Technological Advancements: Uber Eats leverages advancements in mobile technology and internet connectivity to create a seamless and convenient food ordering and delivery experience. This channel allows customers to easily browse menus, place orders, and track deliveries in real-time.
Wide Reach and Accessibility: By operating through a digital platform, Uber Eats can reach a large customer base across different geographic locations. It eliminates the need for physical infrastructure like restaurants or brick-and-mortar stores, enabling the service to be accessible to customers wherever they are.
Cost Efficiency: The digital platform-based model reduces the need for extensive investments in physical assets, such as restaurant spaces or delivery vehicles. This allows Uber Eats to operate with lower fixed costs compared to traditional food delivery channels.
Scalability: The platform-based approach offers the potential for rapid scalability and expansion into new markets. Uber Eats can quickly onboard new restaurants and delivery partners onto its platform, catering to increasing customer demand and expanding its service coverage.
Enhanced Customer Experience: The digital channel provides customers with a user-friendly interface, personalized recommendations, and convenient features like cashless payments and order tracking. This focus on customer experience helps differentiate Uber Eats from traditional food delivery options.
Synergy with Existing Uber Brand: Uber Eats leverages the existing brand recognition and user base of its parent company, Uber. This allows for cross-promotion and integration of services, strengthening the overall value proposition for both Uber and Uber Eats customers.
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what defines the rights of an occupation and acceptable activities allowed within the profession?
The rights and acceptable activities within a profession are defined by professional ethics and standards.
Professional ethics and standards play a crucial role in defining the rights and acceptable activities within a profession. These guidelines are established to ensure that professionals adhere to certain principles, maintain a high level of competence, and act in the best interests of their clients, organizations, or the public. Professional ethics outline the moral and ethical obligations that professionals must uphold. They provide guidelines for behavior, integrity, confidentiality, and the responsible use of professional knowledge and skills. These ethics are often developed and enforced by professional associations or regulatory bodies specific to each profession. In addition to ethics, professional standards set forth the expected level of knowledge, competence, and performance within a profession.
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financing of new, nonpublic companies is broadly referred to as ________ financing.
Financing of new, nonpublic companies is broadly referred to as private financing.
Private financing encompasses various methods of raising capital for companies that are not publicly traded. It involves obtaining funding from private investors, venture capital firms, angel investors, or private equity firms. Unlike public financing, where companies raise funds by issuing stocks or bonds to the general public through the stock market, private financing involves a more limited pool of investors.
Private financing options can include equity investments, where investors provide capital in exchange for an ownership stake in the company, or debt financing, where companies borrow money and repay it with interest over a specified period. Other forms of private financing may involve convertible notes, mezzanine financing, or strategic partnerships with larger companies.
Private financing is often sought by startups or early-stage companies that may not yet meet the requirements for public offerings or prefer to maintain greater control over their operations. It allows these companies to secure the necessary capital to fund their growth, research and development, marketing efforts, and operational expenses.
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Assume that an average consumer of appetizers has a demand curve given by the expression Q = 4 – (1/3) P. Note that because this is a linear demand curve, the elasticity will change at different points of the curve (e.g., not constant own price elasticity).
a)Find the inverse demand curve and graph it.
b)Make a chart that states total revenue, marginal revenue and the price elasticity of demand at each quantity.
At the highest level of total revenue what is marginal revenue? In one sentence, why?
What price should the bar charge for appetizers to maximize revenue?
c)Now assume that there are 100 identical consumers who eat at the bar on an average night and consider the market demand curve for appetizers. Without performing any calculations, what price should the bar charge to maximize revenue for the market? In one sentence, how did you come to that answer?
d)Assume now that there is a constant marginal cost of production of appetizers for ingredients and labor of $2.
What is net marginal revenue associated with each quantity on the average consumer’s demand curve now?
On the market demand curve in the last question, if you decreased the price from $9 to $6, what would be the change on the extensive and intensive margins net costs?
To find the inverse demand curve, you need to solve for P, which is: Q = 4 - (1/3)PP = 12 - 3QThis equation represents the inverse demand curve for this demand function.
Now, to graph it, you can draw a graph with quantity on the x-axis and price on the y-axis and plot the points. The total revenue (TR) can be calculated by multiplying the quantity demanded (Q) by the price (P). The marginal revenue (MR) can be calculated as the change in total revenue when one unit of the good is sold. The price elasticity of demand (E) can be calculated using the formula:
E = (ΔQ/ΔP) * (P/Q)
At each quantity, you can use the inverse demand equation to solve for price, and then calculate total revenue, marginal revenue, and price elasticity of demand. A chart of these values might look like this:
Quantity (Q) | Price (P) | TR | MR | E-----------------------------------------------1 | 9 | 9 | 9 | -32 | 6 | 12 | 3 | -23 | 3 | 9 | -3 | -1/34 | 0 | 0 | -3 | 05 | -3 | -15 | -3 | 1/3
If you move one unit away from this point in either direction, marginal revenue will be negative. This is because as you move away from the point of maximum total revenue, each additional unit sold will bring in less revenue than the previous one.
TR = (400P - 100P²)MR = 400 - 200P400 - 200P = 0P = $2
At this price, the quantity demanded will be:
Q = 400 - 100PQ = 400 - 100(2)Q = 200 units
The net effect will depend on the price elasticity of demand at the initial price of $9, but in general, a decrease in price will increase total revenue if demand is elastic and decrease total revenue if demand is inelastic.
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when consumer tastes and preferences differ significantly between countries, there is low pressure for local responsiveness. a) True b) False
The statement "when consumer tastes and preferences differ significantly between countries, there is low pressure for local responsiveness" is false.
Consumer tastes and preferences play a significant role in a company's international marketing strategies. The study of cultural differences is a crucial aspect of global business.
The way people live, behave, and consume products in one country is vastly different from how people behave in another. These differences can range from language and religion to consumer behaviour and social interactions.
Thus, when consumer tastes and preferences differ significantly between countries, there is high pressure for local responsiveness.
To satisfy the specific needs of local consumers, firms must adapt their product offerings and marketing strategies accordingly.
This adaptation is known as local responsiveness. As a result, firms must have a better understanding of local market conditions and consumer behaviour.
When a firm takes this approach, it means that it is willing to adapt its products or services to meet the specific requirements of each market, rather than adhering to a one-size-fits-all strategy.
The demand for local responsiveness is high in countries with distinct cultures and consumer behaviours. For instance, McDonald's offers a halal menu in its outlets in Muslim-majority countries such as Indonesia and Malaysia.
Similarly, Coca-Cola offered a green tea drink in Japan called Ito En, which catered to the local population's taste buds.
This demonstrates the importance of local responsiveness and how it can contribute to a firm's success in international markets.
In conclusion, firms must respond to local market conditions and tailor their products and services to meet the specific needs of each market to succeed in international markets. When consumer tastes and preferences differ significantly between countries, there is high pressure for local responsiveness, not low.
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Milton Corporation has 8 percent coupon bonds making annual payments with a YTM of 7.2 percent. The current yield on these bonds is 7.55 percent
How many years do these bonds have left until they mature? [hint: current yield coupon/current price]
Time until maturity
years
Milton Corporation has 8 percent coupon bonds making annual payments with a yield to maturity (YTM) of 7.2 percent. The current yield on these bonds is 7.55 percent. In this problem, we are required to calculate the time until maturity.
The formula for the bond price is:
P= 80/(1 + 0.072) + 80/(1 + 0.072)^2 + 80/(1 + 0.072)^3 + ... + 80/(1 + 0.072)^n + 1000/(1 + 0.072)^n Where:
P = Current price of the bond
Face value of the bond
= $1000r
= Yield to maturity
= 7.2%N
= Number of years until maturity
P = $1,098.93Now, we'll calculate the current yield of the bond.
= (8 / $1,098.93) x 100%Current Yield
= 0.7278 x 100%Current Yield
= 7.28%We have been given that the current yield of the bond is 7.55%.Since the current yield is higher than the coupon rate, the bond is selling at a premium.
= 80 / Price X 100%Price
= 80 / 0.0755Price
= $1,060.26Using the bond pricing formula to calculate the time until maturity:$1,060.26
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You decide to buy 1.500 shares of stock at a price of $90 and an initial margin of 65 percent. What is the maximum percentage decline in the stock price before you will receive a margin call if the maintenance margin is 40 percent? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Input the amount as a positive value.)
Maximum percentage decline = ([(1,500 * Stock price) - $52,250] / [1,500 * Stock price]) * 100
To calculate the maximum percentage decline in the stock price before receiving a margin call, we need to determine the equity percentage at the maintenance margin level.
Given information:
Number of shares: 1,500
Stock price: $90
Initial margin: 65%
Maintenance margin: 40%
First, let's calculate the initial investment (equity) and the loan amount:
Initial investment (equity) = Number of shares * Stock price * Initial margin
Initial investment (equity) = 1,500 * $90 * 0.65 = $87,750
Loan amount = Total value of shares - Initial investment (equity)
Loan amount = (Number of shares * Stock price) - Initial investment (equity)
Loan amount = (1,500 * $90) - $87,750 = $52,250
Now, let's calculate the equity at the maintenance margin level:
Equity at maintenance margin = Total value of shares - Loan amount
Equity at maintenance margin = (Number of shares * Stock price) - Loan amount
Equity at maintenance margin = (1,500 * Stock price) - $52,250
Now, we can calculate the maximum percentage decline:
Maximum percentage decline = (Equity at maintenance margin / Total value of shares) * 100
Substituting the values:
Maximum percentage decline = ([(1,500 * Stock price) - $52,250] / [1,500 * Stock price]) * 100
Since the stock price is not provided, we cannot calculate the exact maximum percentage decline. However, you can substitute the current stock price to determine the specific maximum percentage decline.
Please note that the provided information is insufficient to calculate the maximum percentage decline without knowing the current stock price.
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The stock of an important food retail company has a beta of 1.2. The expected return on the market portfolio is 12% and the risk-free rate 6%. What is the expected or required rate of return on that stock?
The expected or required rate of return on the stock is 13.2%.
The required rate of return, r, is calculated by the Capital Asset Pricing Model (CAPM), which is:
r = Rf + beta(Rm – Rf)
where Rf is the risk-free rate, beta is the beta coefficient of the stock, Rm is the expected return on the market portfolio, and (Rm – Rf) is the market risk premium.
In the given case, the risk-free rate, Rf = 6%.
The expected return on the market portfolio, Rm = 12%.
The beta coefficient of the stock, beta = 1.2.
Now, we can use the CAPM equation to calculate the required rate of return:
r = Rf + beta(Rm – Rf)r = 6% + 1.2(12% – 6%)r = 6% + 1.2(6%)r = 6% + 7.2%r = 13.2%
Hence, the expected or required rate of return on the stock is 13.2%.
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ziplines inc. enters into a contract to employ scot as a manager for two years. if ziplines breaches the contract, scot has a duty to a. do nothing. b. act to punish ziplines as an example to deter others from similar acts. c. rescind the contract with ziplines. d. reduce the damages that scot might otherwise suffer.
If Ziplines Inc. breaches the contract, Scot typically has a duty to mitigate the damages that he might otherwise suffer. Hence the correct answer is option d.
When one party violates a contract, the other party usually has an obligation to limit their losses. This obligation, which derives from the fairness concept, aims to lessen the losses sustained by the party who doesn't break the law.
Scot has a responsibility to limit his losses if Ziplines Inc. violates the contract by refusing to hire him as a manager for the predetermined two-year period. He must thus make a reasonable effort to lessen the financial loss brought on by Ziplines' breach.
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gdi industries produces three types of plates: ceramic, glass, and plastic. a condensed segmented income statement for a recent period follows: segmented income statement ceramic glass plastic total sales $100,000 $125,000 $40,000 $265,000 variable expenses $50,000 $65,000 $29,000 $144,000 contribution margin $50,000 $60,000 $11,000 $121,000 fixed expenses $15,000 $20,000 $12,000 $47,000 net income (loss) $35,000 $40,000 ($1,000) $74,000 assume none of the fixed expenses for the plastic line is avoidable. what will be total net income if the plastic line is dropped?
If the plastic line is dropped, the total net income will be affected. To calculate the new total net income, we need to subtract the fixed expenses for the plastic line from the previous total net income.
In the given segmented income statement, the fixed expenses for the plastic line are $12,000. The previous total net income is $74,000. To find the new total net income, we subtract the fixed expenses for the plastic line from the previous total net income.
Therefore, if the plastic line is dropped, the new total net income will be $62,000. In the given segmented income statement, the fixed expenses for the plastic line are $12,000. The previous total net income is $74,000.
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Which statement best describes noise in communication? Anything that breaks the silence The first step in the communication process It interferes with or distorts the message It determines the medium to be used to send the message
The statement that best describes noise in communication is that it interferes with or distorts the message. Noise refers to any factor that can disturb the communication process or hinder the interpretation of the message, either by the sender or the receiver.
The presence of noise in communication can cause misunderstanding or misinterpretation of the message. There are several types of noise that can affect communication channels:Physical noise: This is the most obvious type of noise and it refers to the actual sounds present in the environment where communication is taking place.
Examples include traffic noise, music, or other people talking.Psychological noise: This type of noise refers to internal factors that can affect communication, such as stress, fear, or emotions. For instance, if a person is worried or anxious, they may have difficulty concentrating on the message, which can lead to misinterpretation of the message. Semantic noise: This refers to confusion that arises from the use of different meanings for the same words.
For instance, if a word has multiple meanings, the receiver may misunderstand the message intended. Cultural noise: This refers to differences in language, customs, and culture that can affect communication. People from different cultures may have different interpretations of the same message, leading to misunderstanding or misinterpretation. In conclusion, noise in communication refers to any factor that can interfere with or distort the message, leading to misunderstanding or misinterpretation. It is crucial to identify the different types of noise that can affect communication channels to prevent misunderstandings.
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In calculating GDP:
a) both exports and imports are added
b) neither exports nor imports are added
c) exports are added and imports are subtracted
d) imports are added and exports are subtracted
In calculating GDP, (c) exports are added and imports are subtracted.
1. Gross Domestic Product (GDP) is a measure of the total value of all goods and services produced within a country's borders during a specific period, typically a year.
2. When calculating GDP, exports and imports play a crucial role in determining the final value.
3. Option a) states that both exports and imports are added to GDP. However, this is incorrect because adding both would result in double-counting the value of goods and services.
4. Option b) suggests that neither exports nor imports are added to GDP. This is also incorrect because both exports and imports contribute to the overall economic activity of a country.
5. Option c) states that exports are added and imports are subtracted from GDP. This is the correct approach. Adding exports captures the value of goods and services produced domestically but consumed abroad. On the other hand, subtracting imports accounts for goods and services consumed domestically but produced abroad.
6. Option d) suggests that imports are added and exports are subtracted from GDP. This is the opposite of the correct approach. Adding imports would result in counting the value of goods and services produced abroad, while subtracting exports would mean excluding the value of goods and services produced domestically but consumed abroad.
7. Therefore, the correct answer is c) exports are added and imports are subtracted when calculating GDP. This method ensures an accurate representation of a country's domestic production and economic activity.
Thus, the correct option is c.
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An asset having a cost of $70,000 and accumulated depreciation of $20.000 is revalued to $90.000 at the beginning of the current year. Depreciation for the year is based on the revalued amount and the remaining useful life of six years. Required: Ptepare journal entries to teflect the revaluation of the asset and the subsequent depreciation of the revalued asset.
Revaluation entry: Debit Asset Account ($20,000 + $70,000) $90,000; Credit Revaluation Surplus Account $20,000; Credit Asset Account (Depreciation Reserve) $60,000.
Depreciation entry: Debit Depreciation Expense Account ($90,000/6 years) $15,000; Credit Asset Account (Depreciation Reserve) $15,000.
To reflect the revaluation of the asset and the subsequent depreciation of the revalued asset, the following journal entries can be prepared:
Revaluation entry:
Debit - Asset Account ($20,000 + $70,000) - $90,000
Credit - Revaluation Surplus Account - $20,000
Credit - Asset Account (Depreciation Reserve) - $60,000
Depreciation entry:
Debit - Depreciation Expense Account ($90,000/6 years) - $15,000
Credit - Asset Account (Depreciation Reserve) - $15,000
The Depreciation Expense Account is a profit and loss account that is debited to record the depreciation on the asset. The Asset Account, as well as the Depreciation Reserve account, are credited.
The Depreciation Reserve is an equity account that is credited to account for the expense of depreciation. Since the asset has been revalued, the credit entry to the Revaluation Surplus Account represents the profit, while the debit entry to the Asset Account reflects the asset's cost.
If the company had previously accounted for the asset on a revaluation basis, it would credit the revaluation account and debit the asset account in a similar manner to reflect the reversal of the revaluation.
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The preferred stock of General Motors pays an annual dividend of $1.4 forever. The appropriate discount rate is 4% per year. art 1 Attempt 1/1 What is the present value of all dividends?
Preferred stock is a type of stock that pays a constant dividend. The constant dividend is considered a perpetuity.
Perpetuity is an annuity that continues indefinitely. It means that the present value of an infinite stream of cash flows is considered a perpetuity.
In the given case, The preferred stock of General Motors pays an annual dividend of $1.4 forever, and the appropriate discount rate is 4% per year. The present value of the preferred stock of General Motors is the value of a perpetuity.
In order to calculate the present value of all dividends, we will use the following formula:
P = D / r
Where,
P = Present Value of Perpetuity
D = Annual Dividend
r = Interest or Discount Rate
Here,
Annual Dividend, D = $1.4
Discount Rate, r = 4% or 0.04
The formula can be rewritten as:
P = D / r
= $1.4 / 0.04
= $35
The present value of the perpetuity is $35. The present value of an infinite stream of cash flows can be calculated using the formula P = D / r, where D is the annual dividend and r is the interest rate or discount rate.
In this case, the annual dividend is $1.4, and the appropriate discount rate is 4% per year. Therefore, the present value of all dividends is $35.
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You are consultant studying the capital restructuring of Lambton Bros. The firm's current WACC is 12.5% and marginal corporate tax rate is 34.0%. The firm's market value is currently distributed 75.0% equity and 25.0% debt. The debt mainly consists of an outstanding bond that trades at a yield to maturity of 9.2% and is expected to remain constant. The risk-free rate is 3% and the expected return on the market portfolio is 9.5%. Lambton Bros is strategically positioning itself for an acquisition of a rival firm and has the capacity to increase its debt 70.0% if needed. Answer the following questions (all parts are equally valued): 1. What is the current equity cost of capital? % (Give answer as \% to 4 decimal places) 2. What is the beta risk of Lambton Bros? (Give answer to 4 decimal places) 3. What is the unlevered beta risk of Lambton Bros? (Give answer to 4 decimal places) 4. If the firm increases its debt to 70.0%, what is the new beta risk of the firm? (Give answer to 4 decimal places) 5. What would be the new equity cost of capital? \% (Give answer as percentage to 4 decimal places) 6. What would be the new WACC of the firm? \% (Give answer as percentage to 4 decimal places)
1. Current equity cost of capital= 12.5%2. Beta risk of Lambton Bros= 0.66943. Unlevered beta risk of Lambton Bros= 0.50854. New beta risk of the firm= 0.9644.
New equity cost of capital= 16.05915. New WACC of the firm= 11.50261.1. Calculation of current equity cost of capital:Given,[tex]WACC = 12.5%Market value of equity = 75%Market value of debt = 25%Tax rate = 34%Cost of equity = WACC - [(Market value of debt / Market value of equity + Market value of debt) * (WACC - Cost of debt) * (1 - Tax rate)]Cost of debt = 9.2%Current equity cost of capital = 12.5% - [(0.25 / 0.75 + 0.25) * (12.5% - 9.2%) * (1 - 0.34)][/tex]Therefore,
Current equity cost of capital= 15.2125 %2. Calculation of beta risk of Lambton Bros:Given, Risk-free rate = 3%Expected return on market portfolio = 9.5%Market value of equity = 75%Market value of debt = 25%Beta = [(0.75 * Beta equity) + (0.25 * 0)]
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A project consists of an annual investment 47,000.00 for four years, with no residual values. The annual revenue forecast is R$ 110,000.00 in the 6 years following the conclusion of the investments, then R$ 120,000.00 per year for 6 years and, finally, R$ 160,000.00 per year in 6 years. The forecast annual costs (including taxes) is R$70,000.00 in the 6 years following the completion of the investments, then R$80,000.00 per year for 6 years and, finally, R$100,000.00 per year in 6 years . Assume that the minimum attractiveness rate is 12% p.a. and calculate the capital efficiency ratio (NPV / PVI) for that project..
The capital efficiency ratio (NPV/PVI) for the given project is 24.4%.
In order to calculate the capital efficiency ratio (NPV / PVI) for the project, we need to follow the given steps:
Calculation of present value of all the cash flows associated with the project:
Year0Outflow (47,000)Year1-4
Outflow (47,000)Year5-10
Inflow (110,000)Year11-16Inflow (120,000)Year17-22Inflow (160,000)Year5-10
Outflow (70,000)Year11-16
Outflow (80,000)Year17-22
Outflow (100,000)
The present value of all cash flows can be calculated as:
NPV = -47,000 - 47,000 - 47,000 - 47,000 + 110,000/(1.12)^5 + 110,000/(1.12)^6 + 110,000/(1.12)^7 + 110,000/(1.12)^8 + 110,000/(1.12)^9 + 110,000/(1.12)^10 + 120,000/(1.12)^11 + 120,000/(1.12)^12 + 120,000/(1.12)^13 + 120,000/(1.12)^14 + 120,000/(1.12)^15 + 120,000/(1.12)^16 + 160,000/(1.12)^17 + 160,000/(1.12)^18 + 160,000/(1.12)^19 + 160,000/(1.12)^20 + 160,000/(1.12)^21 + 160,000/(1.12)^22 - 70,000/(1.12)^5 - 70,000/(1.12)^6 - 70,000/(1.12)^7 - 70,000/(1.12)^8 - 70,000/(1.12)^9 - 70,000/(1.12)^10 - 80,000/(1.12)^11 - 80,000/(1.12)^12 - 80,000/(1.12)^13 - 80,000/(1.12)^14 - 80,000/(1.12)^15 - 80,000/(1.12)^16 - 100,000/(1.12)^17 - 100,000/(1.12)^18 - 100,000/(1.12)^19 - 100,000/(1.12)^20 - 100,000/(1.12)^21 - 100,000/(1.12)^22NPV = R$45,876.74
Calculation of the present value of investments (PVI):
PVI = R$47,000 + R$47,000 + R$47,000 + R$47,000PVI = R$188,000
Capital efficiency ratio (NPV/PVI):
Capital efficiency ratio = NPV/PVI
Capital efficiency ratio = R$45,876.74/R$188,000
Capital efficiency ratio = 0.244 or 24.4%
Therefore, the capital efficiency ratio (NPV/PVI) for the given project is 24.4%.
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What is the target market for a company and how can you
identify or make recommendations for a profitable target market if
given information about a company/industry?
The target market refers to the set of customers a business aims to attract and sell its products or services to.
For a company to be profitable, it needs to have a clear understanding of its target market and their specific needs. The following are some steps on how to identify a profitable target market for a company or industry:
1. Conduct market research: The company should conduct thorough research to understand the needs, wants, and preferences of the customers. This research can include customer surveys, focus groups, online analytics, and market reports.
2. Analyze competition: The company should analyze its competitors and understand their target markets and strategies. This analysis will help identify gaps in the market that the company can fill.
3. Define the ideal customer: Once the company has a clear understanding of the market, it should define its ideal customer, including demographics, psychographics, and behavior. This definition will help the company tailor its marketing messages and product offerings to meet the needs of the target market.
4. Test the market: Before investing resources into targeting a specific market, the company should test the market by offering its product or service to a small group of customers. This test will help the company determine if the target market is profitable and make necessary changes.
5. Monitor and adjust: The company should continuously monitor the market and adjust its strategies to meet the changing needs of the target market. This process will help the company stay competitive and profitable.
In conclusion, identifying a profitable target market requires a clear understanding of the customers' needs and wants. Through market research, analyzing competition, defining the ideal customer, testing the market, and monitoring and adjusting, a company can identify and target a profitable market for its products or services.
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One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1 ; 300,000 in year 2 ; and 500,000 in year 3 . Shipping and handing of parts from the supplier's factory is estimated at $0.03 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $20,000. Direct materials can be purchased for $0.04 per unit. Direct labor is estimated at $0.05 per unit for wages plus a 50 percent surcharge for benefits and, indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor wage costs. The firm uses a cost of capital of 15 percent per year. a. Calculate the difference in NPVs between the Make and Buy options. Express all costs as positive values in your calculations. It is suggested to use the NPV function in Excel. (Do not round intermediate calculations. Round your answer to 2 decimal places.
NPV is short for Net Present Value. The NPV is an economic measure that compares an investment's value to its expenses. The Taiwanese supplier's bid for a new molded plastic component is $0.10 per unit. Direct materials are available for $0.04 per unit.
Management has determined that overhead should be allocated at a rate of 100% of direct labor wage expenses if the parts are made in-house.A molding machine that costs $20,000 would be required if the parts were made in-house. The estimated direct labor costs for wages and benefits are $0.0755 per unit ($0.05 + 0.0255). If the parts are created in-house, there will be up-front engineering and design costs of $30,000. There are estimated administrative expenses of $20 each month.
Shipping and handling from the supplier's factory are expected to cost $0.03 per unit, while additional inventory handling charges are expected to cost $0.005 per unit. The following forecasts have been given: 200,000 units in year 1, 300,000 units in year 2, and 500,000 units in year 3. The firm has a 15% cost of capital per year. In order to calculate the difference in NPVs between the Make and Buy options, we must first determine the present value (PV) of the Make and Buy options' costs and profits.
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________ consumers are the most brand conscious of all the ethnic groups, are extremely
brand loyal, and shop frequently.
A) African American
B) Native American
C) Hispanic American
D) Italian American
E) Asian American
The ethnic group of consumers that are the most brand conscious of all the ethnic groups, extremely brand loyal, and shop frequently are the "Hispanic American" consumers. The correct option is C) Hispanic American.
An ethnic group is a social group or category of people who identify with each other, usually based on common ancestral, national, cultural, religious, or linguistic similarities. Ethnic groups are usually united by shared cultural traits, ancestry, or history that distinguish them from other groups.The Hispanic American consumers are the most brand conscious of all the ethnic groups, extremely brand loyal, and shop frequently. Hence, the correct option is C) Hispanic American.
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Trailblazer ha pent £ 6 bn over the pat two year in advertiing. A a reult, it ha increaed it revenue by £10 bn and it ha reduced the revenue of it competitor by £7 bn. How much i it unk cot?
The correct option is d. £ 6bn .The sunk cost for Trailblazer is £6 billion, representing the amount already spent on advertising over the past two years.
In this scenario, the sunk cost for Trailblazer is the amount of money it has already spent on advertising, which is £6 billion. Sunk costs are costs that have been incurred and cannot be recovered, regardless of the outcomes or impacts they may have. In this case, the £6 billion spent on advertising is a sunk cost because it has already been expended and cannot be reversed. Although the advertising efforts have resulted in an increase in revenues by £10 billion and a reduction in competitors' revenues by £7 billion, these outcomes do not affect the classification of the initial expenditure as a sunk cost. Sunk costs are important to consider when making decisions going forward, as they should not be factored into future decisions since they are irretrievable.
The complete question is
Trailblazer has spent £6 bn over the past two years in advertising. As a result, it has increased its revenues by £10 bn and it has reduced the revenues of its competitors by £7 bn. How much is its sunk cost? a. £ 10bn b. £3bn c. £7bn d. £ 6bn.
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question 8
How much must the Big Boy invest today to spend $15,000 next year on a trip to Tahiti, $45,000 for a new car three years from today, and $30,000 per year for six years beginning at the end of year 4 for other fun stuff? He can earn 6.5% on his investments.
a. $171,566.58
b. $200,350.55
c. $164,228.66
d. $179,381.45
e. None of these are correct
question 9
Bucky Bavasi just bought a new TV that cost $2,500. He plans to finance the purchase with his new credit card which has a 21% nominal interest rate. The minimum payment on the card is $49 per month. If he makes the minimum payment and makes no other charges, how many months will it take before he pays off the card?
a. 36.78
b. 128.75
c. 11.72
d. 35.23
e. None of these are correct
8.Big Boy must invest $188,360.38 today to cover all the future expenses so correct option is E 9.it will take approximately 35.23 months (rounded to the nearest whole month) for Bucky Bavasi to pay off the credit card So correct option is D
To calculate the amount Big Boy must invest today, we need to determine the present value of each cash flow:
Trip to Tahiti: $15,000 next year. Since this is a single cash flow in the future, we need to discount it back to the present value. We'll use the formula for present value:
PV = CF / (1 + r)^n
where PV is the present value, CF is the cash flow, r is the interest rate, and n is the number of periods.
PV1 = $15,000 / (1 + 0.065)^1 = $14,150.94
New car in three years: $45,000. We need to discount this cash flow back three years to find its present value.
PV2 = $45,000 / (1 + 0.065)^3 = $38,340.47
Fun stuff: $30,000 per year for six years starting at the end of year 4. This is an annuity, so we'll use the formula for the present value of an annuity:
PV = CF * [(1 - (1 + r)^(-n)) / r]
PV3 = $30,000 * [(1 - (1 + 0.065)^(-6)) / 0.065] = $135,868.97
Now, let's calculate the total present value by summing up the individual present values:
Total PV = PV1 + PV2 + PV3 = $14,150.94 + $38,340.47 + $135,868.97 = $188,360.38
Therefore, Big Boy must invest $188,360.38 today to cover all the future expenses.
None of the options provided match this amount, so none of the options is correct.
Moving on to question 9:
To determine how many months it will take for Bucky Bavasi to pay off the credit card, we can use the formula for the number of periods (months) required to pay off a loan or debt:
n = (-log(1 - (PV / PMT)) / log(1 + r))
where n is the number of periods, PV is the present value (initial debt), PMT is the monthly payment, and r is the monthly interest rate.
Given:
PV = $2,500
PMT = $49
r = 21% / 12 = 0.0175 (monthly interest rate)
n = (-log(1 - (2500 / 49)) / log(1 + 0.0175))
n ≈ 35.23
Therefore, it will take approximately 35.23 months (rounded to the nearest whole month) for Bucky Bavasi to pay off the credit card.
Option (d) "35.23" matches this result, so the correct answer for question 9 is (d).
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Present and future value trbles of $1 at 3% are presented below: Muhiple Choses 56036 554,593 557428 165632: Present and future value tables of $1 at 3% are presented below: Bill wants to give Maria a $590,000 gift in 3 years. If money is worth 6% compounded semiannually, what is Maria's gift worth todoy? Multiple Choice $494,113. $587,250 $492718. $495,638. Present and fiture value tables of $1 at 3% are presented below: At the end of each quarter. Patti deposits $2.400 into an account that pays 12% interest compounded quarterly. How much wir Patti have in the account in 3 years? Multain Choice $34.061. 534790 $35,318
Maria's gift is worth approximately $703,942.24 today. Patti will have approximately $34,050.17 in her account after 3 years.
In the first scenario, where the money is worth 6% compounded semiannually, we need to calculate the present value of Maria's gift. The future value of $590,000 in 3 years, given a semiannual compounding rate of 6%, can be calculated using the future value formula:
Future Value = Present Value × (1 + Interest Rate/Number of Compounding Periods)^(Number of Compounding Periods × Number of Years)
Substituting the values into the formula, we get:
Future Value = $590,000 × (1 + 0.06/2)^(2 × 3) = $590,000 × (1.03)^6 = $590,000 × 1.191016 = $703,942.24
Therefore, Maria's gift is worth $703,942.24 today.
In the second scenario, where Patti deposits $2,400 at the end of each quarter into an account that pays 12% interest compounded quarterly, we need to calculate the future value of Patti's account after 3 years. We can use the future value formula again:
Future Value = Payment × [(1 + Interest Rate/Number of Compounding Periods)^(Number of Compounding Periods × Number of Years) - 1] / (Interest Rate/Number of Compounding Periods)
Substituting the values into the formula, we get:
Future Value = $2,400 × [(1 + 0.12/4)^(4 × 3) - 1] / (0.12/4) = $2,400 × (1.03)^12 - 1) / (0.03) = $2,400 × 1.425005 - 1) / 0.03 = $34,050.17
Therefore, Patti will have approximately $34,050.17 in her account after 3 years.
Please note that the exact values might differ slightly due to rounding errors.
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Two firms compete in prices in a market for a homogeneous product. In this market there are > 0 consumers; each buys one unit if the price of the product does not exceed $10, and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume that ⁄2 consumers buy from each firm. Assume zero production cost for both firms
a. Find the Bertrand equilibrium prices for a single-shot game, assuming that the firms choose their prices simultaneously.
b. Now suppose that the game is repeated infinitely. Let denote the time-discount parameter. Propose trigger price strategies for both firms yielding the collusion prices of (10,10) each period. Calculate the minimal value of that would enforce the trigger price strategies you proposed.
c. Now suppose that the unit production cost of firm 2 is $4, but the unit cost of firm 1 remained zero. Find the Bertrand equilibrium prices for the single-shot game.
d. Assuming the new cost structure, propose trigger price strategies for both firms yielding the collusive prices of (10, 10) each period, and calculate the minimal value of that would enforce the trigger price strategies you propose.
e. Conclude whether it is easier for firms to enforce the collusive prices when there is symmetric industry cost structure, or when the firms have different cost structures. Explain!
a. Bertrand equilibrium prices for a single-shot game, assuming that the firms choose their prices simultaneously are: The reverse will also be true, hence Bertrand equilibrium prices for a single-shot game is ($10, $10).
b. For the game repeated infinitely, consider trigger strategies. Suppose firm 1 chooses $10 every period. Then, firm 2 will be able to earn more in every period by also charging $10. If at any point, firm 2 deviates from $10, firm 1 will decrease its price to slightly less than $10 and capture the entire market.
c. In case the unit production cost of firm 2 is $4, but the unit cost of firm 1 remained zero, the Bertrand equilibrium prices for the single-shot game is (4, 10).
d. For this new cost structure, trigger price strategies for both firms yielding the collusive prices of (10,10) each period is: Both firms will agree to charge $10. $10 is a trigger for both firms. Minimum δ that would enforce the trigger price strategies is: δ > 0, but can be arbitrarily small.
e. It is easier for firms to enforce the collusive prices when there is a symmetric industry cost structure. In case of different cost structures, one of the firms has a lower production cost, giving it a strategic advantage over the other. The high-cost firm will always have an incentive to undercut the low-cost firm and capture the market.
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