Baker Enterprises operates a midsized company that specializes in the production of a unique type of memory chip. It is currently the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000 units (which would lower its price to $100 per chip), the entrant will stay out of the market and Baker will earn profits of $8 million per year for the indefinite future. 1. What must Baker do to credibly deter entry by limit pricing? 2. Does it make sense for Baker to limit price if the interest rate is 10 percent?

Answers

Answer 1

Answer:

Baker Industries manufactures two products: A and B. The company predicts a sales volume of 10,000 units for product A and ending finished-goods inventory of 2,000 units. These numbers for product B are 12,000 and 3,000, respectively. Bacon currently has 7,000 units of A in inventory and 9,000 units

Explanation:

It is currently the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000


Related Questions

The February contribution format income statement of XYZ Corporation appears below: Sales $ 169,500 Variable expenses 96,000 Contribution margin 73,500 Fixed expenses 58,000 Net operating income $ 15,500 The degree of operating leverage is closest to:

Answers

Answer:

degree of operating leverage= 4.742

Explanation:

Giving the following information:

Contribution margin 73,500

Net operating income $ 15,500

To calculate the degree of operational leverage, we need to use the following formula:

degree of operating leverage= Total contribution margin / operating income

degree of operating leverage= 73,500 / 15,500

degree of operating leverage= 4.742

Calculate the standard deviation of this scenario Outcome 1: Recession. Probability = 40%. Return = 7.38%. Outcome 1: Recovery. Probability = 60%. Return = 17.27%.

Answers

Answer:

4.845%

Explanation:

Expected return X = 0.40 * 7.38% + 0.60 * 17.27%

Expected return X = 0.02952 + 0.10362

Expected return X = 0.13314

Expected return X = 13.314%

Particulars   Prob.   Return(x)   (x-Xbar)   (x-Xbar)^2   Prob*(x-Xbar)^2

Recession     40%      7.38%      -5.9340%  0.3521%            0.1408%

Recovery       60%     17.27%      3.9560%   0.1565%           0.0939%

Sum                                                                                        0.2347%

Standard deviation = [tex]\sqrt{Sumof Prob*(x-Xbar)^2}[/tex]

Standard deviation = [tex]\sqrt{0.002347}[/tex]

Standard deviation = 0.0484458461

Standard deviation = 4.845%

One observation we made this week was that consumer surplus is maximized at a price of zero. We also learned that this is impractical for market provided goods. If this is the case (and it is), why then do we choose free markets over the public provision of an important good like high-speed internet?

Answers

Answer:

The description of the given problem is described in the below explanation segment.

Explanation:

A supply as well as the demand-based economy with hardly any government regulation whilst general populace provisioning is fully controlled by the government, which would be aimed at satisfying person's welfare programs, is considered as the free market.

For commodities like the slightly elevated internet, we support free market rather than governmental provision for the aforementioned purposes:

In something like a free market system, buyers decide the final success or failure of the items.Throughout the event of general populace procurement then perhaps the capitalist economy, there seem to be numerous failures such as time delays as well as misinformation.

On January 1, 20Y2, Hebron Company issued a $175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of $43,830, beginning on December 31, 20Y2.Journalize the entries to record the following:

Answers

Answer and Explanation:

The journal entries are shown below:

1. Cash Dr $175,000

     To note payable $175,000

(being note payable is issued)

2. Interest expense Dr (8% of $175,000) $14,000

        To interest payable $14,000

(being interest expense is recorded)

3. Interest payable $14,000

Note payable $29,830

       To cash $43,830

(being cash paid is recorded)

4. Interest expense $6,253

          To interest payable $6,253

(being interest expense is recorded)

5.  Interest payable $6,253

Note payable $37,577

       To cash $43,830

(being cash paid is recorded)

Fallgater, Inc. expects to sell 15,000 units. Each unit requires 3 pound of direct material at $12 per pound and direct labor hours at $10 per direct labor hour. The manufacturing overhead rate is $8 per direct labor hour. The beginning inventories are as follows: direct material, 2,000 pound; finish goods 2,500 units. The planned ending unventories are as follows: direct materials, 5,000 pounds finished goods,3000 units. given a planned production of 10,000 units what are the planned direct materials purchases? A. $324,000 B.$288,000 C.$360,000, D $396,000

Answers

Answer:

Purchase cost= $396,000

Explanation:

Giving the following information:

Each unit requires 3 pounds of direct material at $12 per pound

Beginning inventory= 2,000 pounds

Desired ending invnetory= 5,000 pounds

Production= 10,000 units

To calculate the direct material purchases, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 10,000*3 + 5,000 - 2,000

Purchases= 33,000 pounds

Purchase cost= 33,000*12= $396,000

At the beginning of the recent period, there were 960 units of product in a department, 35% completed. These units were finished and an additional 5,200 units were started and completed during the period. 880 units were still in process at the end of the period, 25% completed. Using the weighted average method, the equivalent units produced by the department were:

Answers

Answer:

Using the weighted average method, the equivalent units produced by the department were:

= 5,500 units.

Explanation:

a) Data and Calculations:

                                         Units    Conversion

Beginning inventory          960         35%

Additional units started 5,200

Units available                6,160

Ending inventory              880

Units completed           5,280

Equivalent units of production:

Units completed          5,280         5,280 (100%)

Ending inventory            880            220 (25%)

Equivalent units of production      5,500

The Kretovich Company had a quick ratio of 1.0, a current ratio of 3.5, a days' sales outstanding of 36.5 days (based on a 365-day year), total current assets of $980,000, and cash and marketable securities of $115,000. What were Kretovich's annual sales

Answers

Answer:

Total sales = $1650000

Explanation:

Below is the given values:

Quick ratio = 1.0

Current ratio = 3.5

Current assets = $980000

Marketable security = $115000

Current ratio=Current assets/Current liabilities

3.5 = 980000 / Current liabilities

Current liabilities = 980000/3.5

Current liabilities = 280000

Quick ratio=Quick assets/Current liabilities

1.0 =Quick assets/280000

Quick assets = 1.0 x 280000 = 280000

Quick assets = Marketable security + Accounts receivable

Accounts receivable =  280000 - 115000

Accounts receivable = $165000

Days sales outstanding=(Accounts receivable/Total sales)*Days in a period

36.5 = (165000 / total sales ) x 365

Total sales=$165,000/(36.5 days/365 days

Total sales = $1650000

Recurring upswings and downswings in an economy's real GDP over time are called Group of answer choices recessions. total product oscillations. business cycles. output yo-yos.

Answers

Answer:

Business cycles

Explanation:

Business cycle is the correct answer because when the economy grows then the GDP of the country also grows. While the decrease in economic activities leads to slow down the economy and then GDP of the country falls. Therefore, the complete circle of GDP boost and then contract is called the business cycle.

What is the term for a portion of a company's profit paid to common and preferred shareholders? For example: a stock selling for $20 per share has an annual ________ of $1 per share, yielding the investor guaranteed gains of 5% annually.

Answers

Answer:

Dividend

Explanation:

The dividend is the amount of the portion that should be paid to the common and preferred shareholders

Like in the question it is mentioned that the stock has been sold for $20 per share that contains the annual dividend of $1 per share where the investor guaranteed of gaining 5% on annual basis

So it is a dividend

The same is relevant and considered too

Entrepreneurs who start businesses because they cannot find work any other way are______.?

1. Necessity entrepreneurs

2.Serial entrepreneurs

3.Opportunity entrepreneurs

4. Corporate cast-off

Answers

Answer:

Entrepreneurs who start businesses because they cannot find work any other way are______.

4. Corporate cast-off

Explanation:

Corporate cast-off includes former corporate executives who were laid off from their corporate positions as a result of corporate downsizing.  Not finding any other corporate employment, they decide to establish their own businesses, using their saved resources and borrowings.  They now constitute a sizeable number of small businesses, which eventually grow to medium-sized corporations.  Some of them engage in consultancy services depending on their areas of specialty.

You would like to have enough money saved to receive a growing annuity for 25 years, growing at a rate of 4 percent per year, with the first payment of $60,000 occurring exactly one year after retirement. How much would you need to save in your retirement fund to achieve this goal

Answers

The question is incomplete. The complete question is :

You would like to have enough money saved to receive a growing annuity for 25 years, growing at a rate of 4 percent per year, with the first payment of $60,000 occurring exactly one year after retirement. How much would you need to save in your retirement fund to achieve this goal? (The interest rate is 12%.)

Solution :

Given data :

pv of growing annuity, i = 0.04

Rate of interest, r = 0.12

Therefore,

[tex]$pv=\frac{60000}{(1+r) } + \frac{60000(1+i)}{(1+r)^2 } + \frac{60000(1+i)^2}{(1+r)^3 } + ...+ \frac{60000(1+r)^{24}}{(1+r)^{25} } $[/tex]

[tex]$pv=\frac{\frac{60000}{(1+r)}\left(1-\left(\frac{1+i}{1+r}\right)^{25}\right)}{1-\left(\frac{1+i}{1+r}\right)}$[/tex]

[tex]$pv=\frac{\frac{60000}{(1.12)}\left(1-\left(\frac{1.05}{1.12}\right)^{25}\right)}{1-\left(\frac{1.04}{1.12}\right)}$[/tex]

[tex]$pv = \frac{60000}{1.12} \times 11.80461368$[/tex]

[tex]$pv = \$ 632390.0191$[/tex]

pv = $ 632390.02 (rounding off)

A change in an accounting estimate is:__________
a) Reflected in past financial statements.
b) Reflected in future financial statements and also requires modification of past statements.
c) Reflected in current and future years' financial statements, not in prior statements.
d) Not allowed under current accounting rules.
e) Considered an error in the financial statements.

Answers

B

Good luck with this

MC Qu. 74 If a firm's forecasted sales are... If a firm's forecasted sales are $238,000 and its break-even sales are $184,000, the margin of safety in dollars is: rev: 07_12_2018_QC_CS-131102

Answers

Answer:

22.69%

Explanation:

Margin of safety = (forecasted sales -  break-even sales) / forecasted sales

( $238,000 - $184,000) / $238,000 x 1000 = 22.69%

In the wake of everything described in the case study, Wells Fargo has fired many employees, clawed back bonuses from executives, replaced many of its directors, dismantled its sales incentive system and made other changes. Do you think these changes were made out of a utilitarian calculation designed to avoid further monetary penalties, a desire to avoid the shame and embarrassment the bank’s managers and employees were feeling, or a combination of both? If a combination, which do you think played a bigger role? Why?

Answers

Answer:

These changes made by Wells Fargo were made as a result of a combination of utilitarian calculation to avoid further monetary penalties and the desire to avoid the shame and embarrassment the bank's managers and employees were feeling.

The factor that played a bigger role is the utilitarian calculation because it foresaw that it could lose more through monetary penalties.

Explanation:

Wells Fargo must have factored in the benefits and harms that could result from its actions and then compared them with the benefits and harms that might result from other actions.  It then figured out that it could pay it better to make amends instead of facing the torrents of accusations for fraud.  Admitting that one is wrong from the beginning and showing signs of changes is less painful overall.

ngân hàng tiến hành xóa nợ như thế nào

Answers

Answer:

How does the bank write off the debt?

a. A consulting firm that is for sale has an annual operating cash flow of $2,000,000 assuming no future growth in cash flow, what is the value of this business at a 50% cost of capital.

Answers

Answer: $4,000,000

Explanation:

Based on the information given in the question, the value of this business at a 50% cost of capital will be calculated thus:

= Annual cash flow / Cost of capital

= $2,000,000 / 50%

= $2,000,000 / 0.5

= $4,000,000

Therefore, the value of the business is $4,000,000.

Sheridan Company can produce 100 units of a component part with the following costs: Direct Materials $22000 Direct Labor 6500 Variable Overhead 20000 Fixed Overhead 11000 If Sheridan Company can purchase the component part externally for $55000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision

Answers

Answer:

If the company makes the component, it will save $2,500.

Explanation:

To determine which option is better, we need to calculate the total cost of each option and choose the cheapest one. We will take into account the avoidable fixed overhead cost, thus the rest is inconsequential to the decision-making process.

Make in-house:

Direct material= $22,000

Direct labor= $6,500

Variable overhead= $20,000

Avoidable fixed overhead= $4,000

Total cost= $52,500

Buy:

Total cost= $55,000

If the company makes the component, it will save $2,500.

The Accounts Receivable account of Brownstone Company has the following​ postings: Accounts Receivable Calculate the ending balance of the account. A. debit B. credit C. debit D. debit

Answers

Answer:

D. $16,000 debit

Explanation:

As we know Account receivable is a current asset account that has a normal debit balance. A debit entry in this account would increase the balance of the account and a credit entry in this account would decrease the account balance.

In the given question, There are two entries in the debit side.

Hence, The debit balance should be

Debit side total = 20,000 + 2,000 = 22,000

There is a credit entry in the account that will decrease the account balance

Account ending balance = 22,000 - 6,000

Account ending balance = 16,000

As the balance of the debit side is greater than the credit side. The answer will be debit 16,000

The question is incomplete

The complete question is provided in the attachement and the answer is made accordingly.

A(n) ______ is a network that links the intranets of business partners via the Internet in such a way that the result is a virtually private network.a. intranet b. browser c. extranet

Answers

Answer:

c. extranet

Explanation:

The controlled, and the private network that permits the third-party partners in order to received the information that related to the particualr company and also it can be done without any access for an overall network of an organization

So as per the given situation, it is an extranet

Hence, the same is to be considered

The market will overproduce goods that have external costs because Group of answer choices Producers experience higher costs than society Producers experience lower costs than society Producers cannot keep these goods from consumers who do not pay, so they have to produce greater amounts The government is not able to produce these goods

Answers

Answer:

Producers experience lower costs than society

Explanation:

In the case when the market excess produce the goods that contains the external cost so it should be because of producers would have less cost as compared to the society that means the private equilibrium cost should be less than the social equilibrium cost

So as per the given situation, the above statement should be true

The most likely effect of an decrease in income tax rates would be a(n): increase in interest rates. decrease in the supply of loanable funds. decrease in the savings rate. all of the above would occur none of the above would occur

Answers

Answer:  none of the above would occur

Explanation:

When there are lower tax rates, people will have more disposable income left aft paying taxes. It is from this disposable income that people are able to save so if it increases, they will be able to save more.

When they save more, supply of loanable funds will increase because loanable funds come from savings. Interest rates would therefore decrease because there are now more loanable funds.

Income tax rate are taxes placed or collected on income of people. The most likely effect of an decrease in income tax rates would be none of the above would occur

Lower tax rates often leads to the following:

An increase the demand for assets An increase in the supply of labor.The economy will react to it by having with lower interest rates, higher employment, higher investment and faster economic growth. It often increase the spending power of consumers It also increase aggregate demand, resulting to higher economic growth.

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A company that wanted to provide a single, unified entry point to its network that would allow different types of users access to different types of resources could do so by establishing a(n):____________.
A. enterprise portal.
B. broadband interface.
C. intranet.
D. mainframe network.

Answers

Answer: A. Enterprise portal

Explanation:

Enterprise portals is a relatively new type of information portal that works to integrate information and other processes in the company and allow different users in a company access to this information through different types of resources.

This ensures that the employees in the company can get information that they need in a timely and efficient manner and is the reason why enterprise portals are becoming increasingly popular.

The enterprise portal are used by company's that wanted to provide a single or unified entry point to its network to allow users access to different resources.

The Enterprise portals is an information portal that integrate information and processes in the company and allow users have access to this information..

The enterprise portals ensures that the employees in the company can get information that they need in a timely and efficient manner.

So, the enterprise portal are used by company's that wanted to provide a single or unified entry point to its network to allow users access to different resources.

Therefore, the Option A is correct.

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The Milken Company is offering you an investment that promises you $10,000 at the end of 7 years if you invest $ 6,330 today. What is the annual return on this investment?

Answers

Answer:

The Milken Company

The annual return on this investment is:

= 8.3%

Explanation:

a) Data and Calculations:

Total returns at the end of 7 years = $10,000

Total investment today =                       6,330

Total returns from the investment =  $3,670

Annual return = $524 ($3,670/7)

= 8.3% ($524/$6,330 * 100)

b) The annual return on this investment is the total returns of $3,670 annualized to 7 years.  This gives an average annual return of $524, which is then used to calculate the percentage return, weighing it against the investment cost of $6,330.

Strait Co. manufactures office furniture. During the most productive month of the year, 3,200 desks were manufactured at a total cost of $82,800. In the month of lowest production, the company made 1,290 desks at a cost of $64,900. Using the high-low method of cost estimation, total fixed costs are a.$52,816 b.$82,800 c.$64,900 d.$17,900

Answers

Answer:

a.$52,816

Explanation:

Calculation to determine total fixed costs

First step

Variable cost per unit = (Highest activity cost - Lowest activity cost)/(Highest activity - Lowest activity)

Variable cost per unit= ( 82,800-64,900)/(3,200-1,290)

Variable cost per unit= 17,900/1910

Variable cost per unit= $9.37 per unit

Now let determine the Fixed cost

Fixed cost = Highest activity cost - Highest activity x Variable cost per hour

Fixed cost= $82,800 - 3,200 x 9.37

Fixed cost= $82,800-$29,984

Fixed cost= $52,816

Therefore Using the high-low method of cost estimation, total fixed costs are $52,816

Hammond Supplies expects sales of 117,106 units per year with carrying costs of $2.82 per unit and ordering cost of $4.14 per order. Assuming the level of inventory is stable, what is the optimal average number of units in inventory

Answers

Economic order quantity: sqrt( (2 x annual

Sales x ordering cost)/ carrying cost)

EOQ = sqrt(2x117106x4.14)/2.82)

EOQ = 586.38

Optimal average in inventory = EOQ/2

Inventory = 586.38/2 = 293.19

Round up:

Answer: 294 units

Emma noticed that she was almost out of gas, so she pulled into the nearest gas station and filled up her tank. Emma's decision on which gas to purchase is characterized by

Answers

Answer: a low level of purchase involvement

Explanation:

A low-involvement purchase simply means a decision making process that's abridged. In such situations, the buyer hardly does any information gathering, and he or she makes a simple and straightforward decision.

Since when Emma noticed that she was almost out of gas, she pulled into the nearest gas station and filled up her tank. Emma's decision here is straightforward as she doesn't analyse other alternatives. Therefore, it's a low level of purchase involvement.

A student takes out a $10,000, 10-year loan with two possible repayment plans, (i) immediate repayment or (ii) a grace period during the college years. The student takes 5 years to graduate. The interest rate is 8%, compounded annually and the loan is paid off as a yearly lump sum. Since the bank is a for-profit business (beholden to its shareholders and required to maximize profit), the bank intends to receive the same return on this loan either way. How much are the annual payments under option (i) and option (ii)

Answers

Answer and Explanation:

The calculation is given below:

(i) Immediate Repayment:

Let us assume the annual repayments be $ P

So

$10,000 = P × (1 ÷ 0.08) × [1 - {1 ÷ (1.08)^(10)}]

$10,000 = P × 6.71008

P = $10,000 ÷ 6.71008

= $1490.3

(ii) Grace Period of 5 years:

Let us assume the annual repayments be $N

Now  

Accumulated Loan Value after 5 years is

= $10,000 × (1.08)^(5)

= $14,693.3

So, $14,693.3 = N × (1 ÷ 0.08) × [1-{1 ÷ (1.08)^(10)}]

$14,693.3 = N × 6.71008

N = 14693.3 ÷ 6.71008

= $2189.74

CK Company stockholders expect to receive a year-end dividend of $5 per share and then be sold for $115 dollars per share. If the required rate of return for the stock is 20%, what is the current value of the stock

Answers

Answer:

$100

Explanation:

Calculation to determine what is the current value of the stock

Using this formula

P=(Dividend sold per share*Year-end dividend)/(1+Required rate of return)

Let plug in the formula

P = (115 + 5)/(1+.2)

P = (115 + 5)/1.2

P=120/1.2

P= $100

Therefore the current value of the stock is $100

All of the following are true regarding implied agreements EXCEPT which one?
An implied agreement is based on actions or behaviors.
An implied agreement is based on a formal
agreement
With an implied agreement it is possible that the other party did not intend to be bound.
With an implied agreement there is an increased chance of confusion.

Answers

Answer:

An implied agreement is based on a formal agreement.

Explanation:

A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.

There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implied contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, executory contract, etc.

Mutual assent is a legal term which represents an agreement by both parties to a contract. When two parties to a contract both have an understanding of the parameters, terms and conditions surrounding a contract, it ultimately implies that they are in agreement; this is generally referred to as mutual assent.

Simply stated, mutual assent connotes agreement, acceptance and consent to a contract by both parties.

An implied contract can be defined as an informal contract that exists based on an assumption or understanding between two or more parties, rather than on terms that are formally and specifically defined.

This ultimately implies that, an implied agreement is not based on a formal agreement but on assumptions or understanding between the parties involved.

On July 1, Hanson Corporation issued 10 shares of $100 par value preferred stock for cash of $1,000 per share. Write down the necessary journal entry.

Answers

Answer:

Debit Cash 10,000

Credit Preferred stock 1000

Credit Paid in capital in excess of par value 9,000

Explanation:

Preparation of the necessary journal entry

July 1

Debit Cash 10,000

($10*1,000)

Credit Preferred stock 1000

Credit Paid in capital in excess of par value 9,000

($10,000-$1,000)

Answer:

Explanation:

Answer:

Debit Cash 10,000

Credit Preferred stock 1000

Credit Paid in capital in excess of par value 9,000

Explanation:

Preparation of the necessary journal entry

July 1

Debit Cash 10,000

($10*1,000)

Credit Preferred stock 1000

Credit Paid in capital in excess of par value 9,000

($10,000-$1,000)

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