BUSINESS COLLEGE

A man works for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, frizzles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, a man knows that complements are typically consumed together while substitutes can take the place of other goods.Run-of-the-Mills provides man's marketing firm with the following data: When the price of splishy splashies decreases by 5%, the quantity of frizzles sold increases by 4% and the quantity of kipples sold decreases by 6%. A man's job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods to a man marketing firm should advertise together.
Complete the first column of the following table by computing the cross-price elasticity between splishy splashies and frizzles, and then between splishy splashies and kipples. In the second column, determine if splishy splashies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating should be recommended marketing with splishy splashies.Relative to Splishy Splashies Recommend Marketing with Splishy Splashies
Cross-Price Elasticity of Demand Complement or Substitute
Frizzles _____ _____ _____
Kipples _____ _____ _____

Answers

Answer 1
Answer:

Answer and Explanation:

According to the given situation, when the amount of splishy splashies decrease by 5%, quantity of frizzles increases by 4%.

So, The cross price elasticity of frizzles relative to splishy splashies = Percentage change in quantity demand for frizzles ÷ Percentage change in price for splishy splashies

= 4 ÷ -5

= -0.80

Now,

Cross-price elasticity between splishy splashies and kipples = Percentage change in quantity demand for Kipples ÷ Percentage change in price for splishy splashies

= -6% ÷ -5%

= 1.20

b. Since there is negative cross-price elasticity between splishy splashies and frizzles, these products are complementary.

The elasticity of the cross-price between splendid splashies and kipples is positive, these goods being substitutes.

c.  Here, I would therefore recommend Raskels marketing, since these two are used together.

The required Table are as shown below:-

Particulars      Cross-Price Elasticity Complements   Recommended

                               of Demand              or Substitute   Marketing with

                                                                                         splishy splashies

Frizzles                     0.80                       Complements        Yes

Kipples                      1.20                          Substitute              No

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Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price. When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply.a.The future supply of rental housing units increases.
b.Efficient use of housing space results.
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d.The quantity of available rental housing units falls.

Answers

Answer: C) and D) answers.

Explanation: The rental market must have a free operation, that is, supply and demand have to set their price level, especially since, in this case, the product is not fungible, that is, it is not interchangeable. Each floor varies in location, number of square meters, construction qualities, etc. You cannot set a fixed reference price. Another of the most repeated consequences by experts is that the limitation will cause a reduction in supply, but demand will not go down, which will necessarily lead to greater tension in rental prices.

Suppose that the required reserve ratio is 8%. What is the simple money (deposit) multiplier? Round to two decimal places.Increasing the reserve ratio will _____ the multipliera. increaseb. decrease

Answers

Answer: Money multiplier is 12.50

Explanation: Money Multiplier is the amount of cash to be reserved.

It is calculated thus: 1/r where r is the rate

= 1/0.08= 12.50

Increasing the reserve ration will decrease the multiplier.

On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the first payment on the note on December 31, Year 1 is:

Answers

Answer:

Dr interest expense $7,000

Dr notes payable $7,238

Cr cash                                     $14,238    

Explanation:

The first task is to compute interest expense on the loan in year 1 which is shown below:

interest expense=$100,000*7%

interest expense=$7,000

Principal repayment=repayment-interest repayment

Principal repayment=$14,238-$7,000=$7,238

The double entries are to debit interest expense and notes payable with $7,000 and $7,238 respectively while cash is credited with $14,238 as an outflow of cash.

At the beginning of a year, a company predicts total direct materials costs of $1,010,000 and total overhead costs of $1,270,000. If the company uses direct materials costs as its activity base to allocate overhead, what is the predetermined overhead rate it should use during the year?

Answers

Answer:

1.267 = Overhead Rate

Explanation:

As general approach, the manufacturing rate, along with any rate is done by dividing the cost by a cost driver.

(Cost\:Of\: Manufacturing\: Overhead)/(Cost\: Driver)= $Overhead \:Rate

In this case teh cost is the manufacturing overhead and the cost driver the direct materials cost:

(1,270,000)/(1,010,000)= $Overhead Rate

Using Direct Materials cost, the rate would be:

1.257425743= $Overhead Rate

To judge whether a particular diversification move has good potential for building added shareholder value, the move should pass the following tests:___________. A) the attractiveness test, the barrier-to-entry test, and the growth test.
B) the strategic fit test, the resource fit test, and the profitability test.
C) the barrier-to-entry test, the growth test, and the shareholder value test.
D) the attractiveness test, the cost-of-entry test, and the better-off test.
E) the resource fit test, the strategic fit test, the profitability test, and the shareholder value test.

Answers

Answer:

D) the attractiveness test, the cost-of-entry test, and the better-off test.

Explanation:

To judge a diversification change, an organization needs to pass the attractiveness tests, the entry cost test and the best situation test.

These tests will be decisive to analyze the potential that diversification will have to create added value for the shareholder.

The attractiveness test will list the ability that the market has to ensure that there is a safe return on investments.

The cost-of-entry will aim to ensure that when entering a new sector, the organization does not have higher costs that can influence the generation of profitability.

Finally, the better-off test will analyze whether the planned diversification will be so profitable that it will help to improve the performance of the integration of organizational businesses.

Answer:

OPTION d

Explanation:

A $20,000 municipal bond is offered for sale at $18,000. The bond interest rate is 6 percent per year payable semiannually. The bond will mature and be redeemed at face value 5 years from now. If you purchase the bond, the first premium you will receive is 6 months from today. You have decided that you will invest $18,000 in the bond if your effective semi-annual yield is at least 4 percent. What effective semi-annual rate will this investment yield?

Answers

Answer:

For this calculation we need to use the Effective Annual Yield Formula.

EY = (1 + r/n)^n - 1

Where:

  • EY = Effective annual yield
  • r = coupon rate
  • n = number o periods the coupon rate is compounded per year

Plugging the amounts into the formula we obtain:

EY = (1 + 0.06/2)^2 - 1

EY = 0.062

EY = 6.2%

To obtain the effective semi-annual yield, we simply divide the effective annual yield by two:

= 0.062/2

=0.031

Effective semi-annual yield = 3.1%

In this case, we would not invest in the bond because the effective semi-annual yield does not reach the required 4%.

Explanation:
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