Answer:
The urgency or possibility of postponement results in an inelastic demand for ice melt by customers.
Explanation:
Demand elasticity indicates how much the demand for a product changes in response to a price shift. The formula is % change in demand / % change in price
Factors that influence the price elasticity of demand include the type of product, income level, availability of substitutes, time frame, urgency or potential for delay, and proportion of total spending.
Inelastic demand occurs when changes in demand are less proportional relative to price changes. % change in demand < % change in price
Case 'Customer urgently requires ice melt to commute to work': This situation reflects inelastic demand, meaning demand does not significantly change with price alterations (he will purchase it even at a higher cost). This is due to the pressing nature of the demand and limited possibilities for postponing it.
Answer:
The internal rate of return for this investment stands at 10%.
Explanation:
This rate represents the discount rate at which the present value of the continuous cash inflows matches the initial investment amount of $210.
We utilize the formula for deriving the present value of a growing perpetuity to ascertain the internal rate of return, referred to as X in the equation below:
10.5/ ( X - 5%) = 210 <=> X - 5% = 10.5 / 210 = 5% <=> X = 5% + 5% = 10%.
Thus, the internal rate of return for this investment is 10%.
A. The fixed overhead that is deferred in inventories totals $60,000.
Unit product cost
Year 1
Year 2
Direct materials
$12
$12
Direct labor
$5
$5
Variable manufacturing overhead
$5
$5
Fixed overhead
$48
$36
($432,000 ÷ 9,000)
($432,000 ÷ 12,000)
unit product cost
$70
$58
Fixed overhead deferred (1,000 × $48)
$48,000
Fixed overhead released
-$48,000
Fixed overhead deferred (3,000 × $36)
$108,000
Net
$48,000
$60,000.
The fixed overhead deferred in inventories amounts to $60,000.
Answer: 10%
For the 12 apartments being rented out monthly: 3 units at $600 generate $1800, 3 units at $750 earn $2250, 3 units at $800 bring $2400, and 3 penthouses at $1000 contribute $3000. The total rental income for one month is $9450, leading to an annual income of $9450*12=$113,400.
The building has a vacancy rate of 7% (113,400*.07= 7,938) and annual expenses totaling $9,490.
Calculating the annual profit for the property gives us:
113,400-7,938-9,490
$95,972
The annual rate of return based on a purchase price of $872,473 is:
95972/872473
10.99=
<span>10%</span>
