Answer:
-1.9%.
Explanation:
The computation of the abnormal change in the stock price of ford should be given below:
Given that
The return on the market is 8%.
So, the forecast monthly return for Ford is
= 0.10% + (1.1 × 8%)
= 8.9%.
And, the Ford’s actual return was 7%,
So,
the abnormal return be
= 7% - 8.9%
= -1.9%.
Conoly Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value at 18 percent and at 24 percent? Year 1, 2, 3, and 4 Cash Flow $1,200, 600, 855 and 1,480 respectively
Answer:
Present Value when discount rate is 10% = $3240.01
Present Value when discount rate is 24% = $2432.40
Present Value when discount rate is 18% = $2,731.61
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = $1,200
Cash flow in year 2 = 600
Cash flow in year 3 = 855
Cash flow in year 4 = 1,480
Present Value when discount rate is 10% = $3240.01
Present Value when discount rate is 24% = $2432.40
Present Value when discount rate is 18% = $2,731.61
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On January 2, 2017, the board of directors of Michael declared a 10% stock dividend to be distributed on February 15, 2017. The market price of Michael Company's common stock was $75 per share on January 2, 2017. On the date of declaration, the retained earnings account should be decreased by
Answer:
the decrease in the value of the retained earning is $172,500
Explanation:
The computation of the decrease in the value of the retained earning is given below:
The dividend of the stock is
= (25,000 shares - 2,000 shares) × 10% × $75
= $172,500
Since there is the stock dividend of $172,500 so it ultimately reduced the retained earning account by $172,500
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.62 and the total portfolio is exactly as risky as the market, what must the beta be for the other stock in your portfolio
Answer:
1.71
Explanation:
Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
The market has a beta of one. If a portfolio has the same level of systematic risk that is the same as that of the market, its beta would be equal to 1.
The beta of a risk free asset is zero
The portfolio's beta can be determined by adding together the weighted beta of each stock in the portfolio
weighed beta of a stock = percentage of the stock in the portfolio x beta of the stock
1 = (0.3 x 1.62) + (0.3 x 0) + (0.3 x a)
1 = 0.486 + 0 + 0.3a
1 - 0.486 = 0.3a
a = 1.71
Waterway Industries started the year with total assets of $314000 and total liabilities of $254000. During the year the business recorded $626000 in revenues, $327000 in expenses, and dividends of $61000. The net income reported by Waterway Industries for the year was
Answer:
the net income reported by Waterway Industries for the year was $299,000
Explanation:
The computation of the net income reported is as follows:
As we know that
Net income = Revenue - expenses
= $626,000 - $327,000
= $299,000
hence, the net income reported by Waterway Industries for the year was $299,000
The same should be considered
Asonia Co. will pay a dividend of $4.95, $9.05, $11.90, and $13.65 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 9.2 percent on the company's stock, what is the stock price
Answer: $30.86
P = $4.95/(1 + .92) + $9.05/(1 + .92)^2 + $11.90/(1 + .92)^3 + $13.65/(1 + .92)^4
P = 4.53+7.59+ 9.14+ 9.60=$30.86
Explanation:
Dividend discount: Dividend year 1 divided by (1 plus the required rate of return)
PLUS Dividend year 2 divided by (1 plus the required rate of return) to the second power
PLUS Dividend year 3 divided by (1 plus the required rate of return) to the third power
PLUS Dividend year 4 divided by (1 plus the required rate of return) to the fourth power
According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes.
Required:
Calculate the employer's payroll taxes.
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
Answer:
$9800
Explanation:
This question requires us to calculate the employer's payroll taxes
His social security tax = $110000*6.0%
= 110000x0.06
=$6600
His Medicare tax = $110000*1.5%
= 110000*0.015
= $1650
His state and federal unemployment tax = 25000 dollars
State = 25000x5.4%
= $1350
Federal = 25000x0.8%
= $200
Total employers payroll tax
$(6600+1650+1350+200)
= $9800
Meghan, a calendar year taxpayer, is the owner of a sole proprietorship that uses the cash method. On February 1, 2020, she leases an office building to use in her business for $157,350 for an 18-month period. To obtain this favorable lease rate, she pays the $157,350 at the inception of the lease.
How much rent expense may Maud deduct on her 2020 tax return? Round any calculations to two decimal places and round the final answer to the nearest dollar.
$
Answer:
Meghan Sole Proprietorship
The rent expense that Meghan may deduct on her 2020 tax return is:
= $96,158.
Explanation:
a) Data and Calculations:
February 1, 2020: Rent Expenses $157,350 Cash $157,350
Rent Expenses for 2020 = $157,350 * 11/18 = $96,158
b) The actual cash payment for rent should be prorated to the months in 2020 for which the rent was consumed. This gives 11 months (from February 1, 2020 to December 31, 2020).
A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:
a. 11.3%; 1.73
b. 11.3%; 19.5
c. 1.7%; 19.5
d. 1.7%; 11.3
d. 19.5%; 11.3
Answer:
11.3%, 1.73
Explanation:
Net income= 43,000
Net sales= 380,500
Total assests= 220,000
Therefore profit margin can be calculated as follows=
Net income/sales
= 43000/380,500
= 0.113×100
= 11.3%
Total assets turnover can be calculated as follows
= 380,500/220,000
= 1.73
the Hence profit margin is 11.3% and total assets turnover is 1.73
Rolando, a senior employee, has been asked to monitor the activities of some new employees and report to her if he finds them engaged in activities that are not work related. He finds them spending far too much time on social networking sites. However, instead of reporting this, he advises the new employees to refrain from using those sites in the future. Moreover, he tells Alexa that they were doing their work effectively. In this scenario, Rolando has engaged in
Answer:
Explanation:
From the question we are informed about Rolando, who is a senior employee, has been asked to monitor the activities of some new employees and report to her if he finds them engaged in activities that are not work related. He finds them spending far too much time on social networking sites. However, instead of reporting this, he advises the new employees to refrain from using those sites in the future. Moreover, he tells Alexa that they were doing their work effectively. In this scenario, Rolando has engaged in Filtering.
Filtering can be regarded as distortion as well as withholding of information so that reactions of a person or entity can be managed. It can be explained as process whereby some information is been hide to higher rank workers by
employee, whereby this is done so that
employees that committed a fault is not affected. Filtering serves as an act that middle-range workers can take to give
enough confidence to their surbodinates so that they can correct themselves which is alternative of punishing them.
The following data apply to Elizabeth's Electrical Equipment:
Value of operations $20,000
Short-term investments $1,000
Debt $6,000
Number of shares 300
The company plans on distributing $50 million by repurchasing stock. What will the intrinsic per share stock price be immediately after the repurchase?
Answer:
$50
Explanation:
Calculation to determine the intrinsic per share stock price be immediately after the repurchase
First step
Total Assets=Value of operations of 20,000+ Short term investments of 1000
Total Assets=$21,000
Second step
Equity =Assets - Debt
Equity= $21,000-$6,000
Equity= $15,000
Now let determine the intrinsic per share stock price
Intrinsic per share stock price=$15,000/300
Intrinsic per share stock price=$50
Therefore the Intrinsic value per share will be $50 immediately after the repurchase has occured.
The intrinsic per share stock price immediately after the repurchase would be approximately $166,716.67
How did we get the value?To determine the intrinsic per share stock price immediately after the repurchase, we need to calculate the new number of shares outstanding after the repurchase and then divide the remaining value of operations by the new number of shares.
Given data:
Value of operations: $20,000
Short-term investments: $1,000
Debt: $6,000
Number of shares: 300
First, we need to calculate the new number of shares outstanding after the repurchase. Since the company plans on distributing $50 million by repurchasing stock, we can use this information to determine the number of shares repurchased.
The value of operations ($20,000) plus the short-term investments ($1,000) minus the debt ($6,000) gives us the total equity value of the company before the repurchase:
Equity value before repurchase = Value of operations + Short-term investments - Debt
= $20,000 + $1,000 - $6,000
= $15,000
Let's assume the repurchased shares are denoted by R.
Now, we can set up an equation to represent the total equity value after the repurchase:
Equity value after repurchase = (Number of shares - R) × Intrinsic per share stock price
Given that the total equity value after the repurchase is $15,000 and the number of shares is 300, we have:
$15,000 = (300 - R) × Intrinsic per share stock price
We also know that the company plans on distributing $50 million by repurchasing stock, so we can set up another equation to represent the total value of the repurchased shares:
Total value of repurchased shares = R × Intrinsic per share stock price
Given that the total value of repurchased shares is $50 million, we have:
$50,000,000 = R × Intrinsic per share stock price
Now we can solve these two equations simultaneously to find the values of R (repurchased shares) and Intrinsic per share stock price.
We have the following system of equations:
$15,000 = (300 - R) × Intrinsic per share stock price ...(1)
$50,000,000 = R × Intrinsic per share stock price ...(2)
Divide equation (2) by Intrinsic per share stock price:
$50,000,000 / Intrinsic per share stock price = R
Substitute this value of R into equation (1):
$15,000 = (300 - ($50,000,000 / Intrinsic per share stock price)) × Intrinsic per share stock price
Simplify:
$15,000 = 300 × Intrinsic per share stock price - (50,000,000 / Intrinsic per share stock price) × Intrinsic per share stock price
$15,000 = 300 × Intrinsic per share stock price - 50,000,000
Rearrange the equation:
300 × Intrinsic per share stock price = $15,000 + $50,000,000
300 × Intrinsic per share stock price = $50,015,000
Intrinsic per share stock price = $50,015,000 / 300
Intrinsic per share stock price = $166,716.67 (rounded to two decimal places)
Therefore, the intrinsic per share stock price immediately after the repurchase would be approximately $166,716.67.
learn more about stock price: https://brainly.com/question/26128641
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Which of the following is an example of a mixed cost?
a. electricity costs of $3 per kilowatt-hour
b. salary of a factory supervisor
c. rental costs of $10,000 per month plus $0.30 per machine hour of use
d. straight-line depreciation on factory equipment
Answer:
C
Explanation:
Mixed cost is a cost that consists of both fixed cost and variable cost
Fixed costs are costs that do not vary with output. e.g., rent, mortgage payments, depreciation
Variable costs are costs that vary with production
An example of variable cost is electricity costs of $3 per kilowatt-hour. If the factory is locked down, no electricity cost would be incurred.
The rental costs of $10,000 per month plus $0.30 per machine hour of use consists of both a fixed cost and a variable cost
the fixed cost is 10,000
the variable cost is $0.30 per machine hour
Below is budgeted production and sales information for Best Dog Collar Company for the month of December:
Product CCC Product DDD
Estimated beginning inventory 30,000 units 18,000 units
Desired ending inventory 32,000 units 15,000 units
Region I, anticipated sales 320,000 units 500,000 units
Region II, anticipated sales 190,000 units 130,000 units
The unit selling price for product CCC is $5 and for product DDD is $12. Budgeted sales for the month are:
a. $9,692,000
b. $8,680,000
c. $10,110,,000
d. $9,010,000
Mary is currently buying apples and oranges such that the last unit of apples has 30 units of utility and the last unit of oranges has 40 units of utility. She has allocated her entire budget. If the price of an apple is 10 cents and the price of an orange is 20 cents, to maximize her utility, what should Mary do
Answer:
Buy more apples and fewer oranges
Explanation:
Utility is defined as the level of enjoyment or satisfaction that a person gets from consumption of a good or service.
Consumers logically try to maximise utility.
In the given instance we need to get the level of utility for apples and oranges to see which has more utility per unit cash spent.
For apples utility per cash spent = 30 units of utility ÷ 10 cents= 3 utility per cent
For oranges utility per cash spent = 40 units of utility ÷ 20 cents = 2 utility per cent
As apples have a higher utility per cent spent, it will be best Mary buys more apples and fewer oranges
Joshua borrowed $1,400 for one year and paid $70 in interest. The bank charged him a service charge of $12. If Joshua repaid the loan in 12 equal monthly payments, what is the APR? (Enter your answer as a percent rounded to 1 decimal place.)
APR %
Answer: 10.81%
Explanation:
The annual percentage rate is the percentage cost of credit on yearly basis.
APR will be calculated
= [(2 x n x I) /( P x ( N + 1)]
where,
n = number of months = 12
I = Finance cost = Interest + service charge = $70 + $12 = $82
P = Borrowed amount = $1,400
N= Loan period = 12
We'll then slot the values into the annual percentage rate (APR) formula and this will be:
= ( 2 x n x I) /( P x ( N + 1))
= ( 2 x 12 x 82) /( 1400 x ( 12 + 1))
= 0.1081
=10.81 %
Which of the following statements is the most correct?
a. A borrower's long-term debt typically has a higher interest rate than its short-term debt.
b. Debt that is infrequently traded (less liquid) typically has a lower interest rate than similar but highly traded debt.
c. Variable (floating) rate debt is more prevalent when long-term borrowing rates are low.
d. Variable (floating) rate debt should never be used by healthcare providers because it is too risky.
e. Fixed interest rate debt is more prevalent when long-term borrowing rates are high.
Answer:
A
Explanation:
i think it has been explain according to the option
Herr Corporation has 3,000 shares of 7%, $100 par value preferred stock outstanding at December 31, 2019. At December 31, 2019, the company declared a $105,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios.
The preferred stock is noncumulative, and the company has not missed any dividends in previous years.
1. The dividend paid to preferred stockholders ____________
2. The dividend paid to common stockholders _____________
Answer and Explanation:
The computation is given below:
a. For preferred stockholders
= 3000 shares × $100 × 7%
= $21,000
b. For common stockholders
= $105,000 - $21,000
= $84,000
In this way it should be calculated
The same should be considered and relevant
he next dividend payment by Savitz, Inc., will be $5.05 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. If the stock currently sells for $43 per share, what is the required return
Answer:
16.74%
Explanation:
Current Price = Expected Dividend / (Required Return - Growth Rate)
Required Return = (Expected Dividend / Current Price) + Growth rate
Required Return = ($5.05 / $43) + 5%
Required Return = 0.1174419 + 0.05
Required Return = 0.1674419
Required Return = 16.74%
Sutton Inc. can produce 100 units of a component part with the following costs: Ch01Q78 If Sutton Inc. can purchase the component part externally for $345,000 and only $28,000 of the fixed costs can be avoided, what is the correct make-or-buy decision
Question Completion:
Direct materials cost $150,000
Direct labor cost $100,000
Variable overhead $50,000
Fixed overhead $60,000
Answer:
Sutton Inc.
The correct make-or-buy decision is:
Continue to produce the component.
Explanation:
a) Data and Calculations:
Production costs:
Direct materials cost $150,000
Direct labor cost $100,000
Variable overhead $50,000
Fixed overhead $60,000
Production costs = $360,000
Relevant costs to make:
Direct materials cost $150,000
Direct labor cost $100,000
Variable overhead $50,000
Fixed overhead $28,000
Avoidable costs = $328,000
Cost of purchasing the component = $345,000
Difference = $17,000
Sutton will pay $17,000 more if it buys the component than if it makes it. Therefore, it is more cost-effective to make the component than buying from the outside supplier.
Big Red Motors, Inc., employs 15 personnel to market its line of luxury automobiles. The average car sells for $75,000, and a 6 percent commission is paid to the salesperson. Big Red Motors is considering a change to the commission arrangement where the company would pay each salesperson a salary of $1,600 per mont plus a commission of 2 percent of the sales made by that salesperson. What is the amount of total monthly car sales at whit Big Red Motors would be indifferent as to which plan to select?
Answer: $600,000
Explanation:
The commission earned per car in the initial arrangement is:
= 6% * Total cars sales
With the second arrangement the amount spent would be:
= Salary of employees + commission
= (15 * 1,600) + (2% * total car sales)
= 24,000 + (2% * car sales)
Assuming total car sales is x, relevant expression is:
6% * x = 24,000 + (2% * x)
0.06x = 24,000 + 0.02x
0.06x - 0.02x = 24,000
0.04x = 24,000
x = 24,000 / 0.04
x = $600,000
Answer please I need help
Answer:
1st answer is 1,100
2nd answer is 1,050
he manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,600 direct labor-hours will be required in January. The variable overhead rate is $4 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,200 per month, which includes depreciation of $3,560. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: Multiple Choice $54,040 $39,640 $14,400 $57,600
Answer:
$54,040
Explanation:
Calculation to determine what The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Using this formula
Cash disbursements for manufacturing overhead= Variable + Fixed
Let plug in the formula
Cash disbursements for manufacturing overhead= (3600*4) + (43,200 - 3,560)
Cash disbursements for manufacturing overhead= $14,400 + $39,640
Cash disbursements for manufacturing overhead= $54,040
Therefore The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:$54,040
Fina Corp. had the following transactions during the quarter ended March 31, 2018: Payment of fire insurance premium for calendar year 2018 800,000 What amount should be included in Fina's income statement for the quarter ended March 31, 2018?
Answer:
$200,000
Explanation:
When a company prepays for a service, the amount prepaid is recognized as an asset until the service is enjoyed (usually with the passing of time).
This is recorded as follows
Dr Prepaid expense
Cr Cash account
Being entries to recognize amount prepaid.
As the service is enjoyed,
Dr Expense
Cr Prepaid expense
Being entries to recognize expense incurred.
Since 800,00 was the amount prepaid for the calendar year 2018, by 31 March 2018, the amount used up (to be recognized as expense in the income statement) will be
3/12 * $800,000
= $200,000
Broker Pat received an offer for a listing along with a $5,000 check from the buyer as an earnest money deposit. When the owner accepts the offer, Pat should handle the check in any of the following ways, except to:____.
a. deposit the check into Pat's brokerage account.
b. give the check to the owner of the property.
c. give the check to the escrow agent.
d. deposit the check in Pat's trust fund account.
Answer:
b. Give the check to the owner of the property.
Explanation:
Pat is a broker who has received an offer for a listing along with check. He can give the check to an escrow agent or deposit the check into pat's brokerage account. he cannot give check directly to the owner of the property.
Yesterday, the dollar was trading in the foreign exchange market at 1.10 euros per dollar. Today, the dollar is trading at 1.20 euros per dollar. The dollar has ________ and a possible reason for the change is ________ in the expected future exchange rate.
Answer: appreciated; an increase.
Explanation:
Since there's an increase in the dollar rate at the foreign exchange market at 1.10 euros per dollar to 1.20 euros per dollar, this implies that the dollar has appreciated.
The appreciation of the dollar simply means that there's an increase in the value of the dollar when it's compared to.anitgee currency. Tge reason for the change is the increase in the expected future exchange rate.
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs:
Direct materials $5.00
Direct labor 3.00
Variable overhead 1.50
Fixed overhead 7.00
Variable marketing cost 1.20
Fixed overhead per unit 1.20
Total fixed factory overhead is $280,000 per month. During October, 38,400 units were sold at a price of $24, and fixed marketing and administrative expenses were $130,500.
Required:
1. Calculate the cost of each unit using absorption costing.
2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing?
3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October.
Answer:
Following are the responses to the given question:
Explanation:
For question 1:
Calculating the cost per unit:
[tex]\text{Direct material}\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$5\\\\\text{Direct labor} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$3\\\\\text{Variable overhead}\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$1.5\\\\\text{Fixed overhead}\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$7\\\\\text{Cost per unit}\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$16.5\\\\[/tex]
For question 2:
Calculating the ending inventory units:
[tex]= \text{Beginning inventory + units produced - ending inventory}\\\\= 0+40,000-38,400\\\\= 1600\ units\\\\[/tex]
Calculating the cost for the Ending inventory:
[tex]=1600\ units \times \$16.5\\\\=\$26,400\\\\[/tex]
For question 3:
Calculating the absorption costing for the income statement:
Particular Amount
Sales [tex](38,400\times \$24)\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$921,600[/tex]
-COGS[tex](38,400\times \$16.5)\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$633,600[/tex]
Gross profit [tex]\$288,000[/tex]
Cost of variable marketing [tex](\$1.2\times 38,400)\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$46,080[/tex]
marketing and administrative costs are fixed [tex]\$130,500[/tex]
Net income [tex]\$111,420[/tex]
ABC Manufacturing allocates overhead based on direct labor hours. You are given the following information for 2020:
Budget: Budgeted overhead $2,000, budgeted direct labor hours: 1,000
Actual: Actual overhead was $3,000, actual direct labor hours worked: 1,200
Overhead for 2020 was:_______.
a. Underapplied by $1,000
b. Underapplied by $600
c. Overapplied by $1,000
d. Overapplied by $600
Answer:
c. Overapplied by $1,000
Explanation:
Given that budgeted overhead is $2000 and actual overhead is $3000, overhead is overapplied or in excess(deficit) of overhead budget by $1000. If actual overhead were to be lower than budgeted overhead, overhead would be under applied or we would have a surplus of $1000(if budgeted overhead is $3000 and actual overhead is $1000 for example).
A three-year bond has an 8.0 percent coupon rate and a $1,000 face value. If the yield to maturity on the bond is 10 percent, calculate the price of the bond assuming that the bond makes semiannual coupon payments.
Answer:
$949.24.
Explanation:
The price of the bond also known as the Present Value (PV) of the Bond CAN be calculated using a Financial Calculator as
FV = $1,000
I/yr = 10%
Pmt = ($1,000 x 8.0 %) / 2 = $40
N = 3 x 2 = 6
P/yr = 2
PV = ???
Inputting the data in a Financial Calculator gives a Present Value of $949.24. Thus the price of the bond is $949.24.
Fore Farms reported a pretax operating loss of $137 million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $5 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $12 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022. The enacted tax rate is 25%. There were no tem
Answer: Hello your question is incomplete attached below is the complete question
answer:
1) attached below
2) Net operating income ( loss ) = - $104 million
Explanation:
Pretax operating loss = - $137 million
Non deductible Losses ; $5 million fine paid in 2021 ,
estimated $12 million loss from contingency that will be tax deductible in 2022
Enacted tax rate = 25%
Taxable operating income = - $120 million
attached below is the solution
A bicycle repair company conducted segmentation research and then targeted their direct mail coupons for a first bike tune-up to that identified customer segment. What basic question did targeting and segmentation answer for the company
Answer:
Who am I trying to reach?
Explanation:
Targeting and segmentation is the process by which a company focuses marketing activities regarding a particular product to a defined customer profile.
Certain criteria like income, age, location, culture and so on can be used as a basis for segmentation.
Basically the question that segmentation and targeting answers is - Who am I trying to reach?
In the given scenario the bicycle repair company conducted segmentation research and then targeted their direct mail coupons for a first bike tune-up to that identified customer segment.
So they answered who they want to sell to.
Competitive priorities define the dimensions on which companies should excel in producing their products or services. Which one of the following statements is true?
a. A firm offering little customization cannot compete simultaneously on the dimension of consistent quality.
b. A firm that competes on the dimension of customization tends to have operating systems that are inflexible.
c. It is impossible for a firm to improve cost and quality simultaneously.
d. A firm that competes on the dimension of volume flexibility is more likely to manufacture products that experience a seasonal demand variation.
Answer:
b. A firm that competes on the dimension of customization tends to have operating systems that are inflexible.
Explanation:
It is correct to say that a company that competes in the customization dimension tends to have inflexible operating systems, because product customization is a different process from mass production, as the demand is different, the customization process takes longer and therefore requires inflexible operating systems.
