A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. This firm is earning $5.50 on every $50 invested by its founders. What is its percentage rate of return? Is the firm earning an economic profit? If so, how large? Will this industry see entry or exit? What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?

Q: The best example of a well-stated, specific financial objective is to O achieve lower costs than any…

A: Financial objective of any firm would be to maximize shareholder wealth. This is achieved by proper…

Q: The following information relates to financial projections of Folk Company: Projected sales…

A: Degree of operating leverage (DOL): DOL reflects  variable and fixed cost relationship of an…

Q: You are  involved  in the planning  process for a firm that is  expected to have a large  increase…

A: Fixed costs  are sunk costs and are not relevant for decision making.They are fixed and not Change…

Q: Assume that you are the president of your compar year-end bonus according to the amount of net ine…

A: The cost flow assumption behind the first in, first out (FIFO) approach of inventory valuation is…

Q: Hebner Housing Corporation has forecast the following numbers for this upcoming year: Sales =…

A: Net Income refers to gross income remained of an entity after deducting of all the desired expenses…

Q: Assume that you are the president of your company and paid a year-end bonus according to the amount…

A: Given: The president of the company paid an year-end bonus as per the net income.

Q: A service company has the following financial information (in millions of $)a. What is the profit…

A: The amount arising out of the difference of the sales value and associative costs for sale is known…

Q: 1. What is the present yearly net operating income or loss? 2. What is the present break-even point…

A:

Q: ATEch has fixed costs of $8 million and profits of $5 million. Its competitor ZTech is roughly the…

A: Operating leverage is a cost-accounting metric that determines how an entire lot a business…

Q: Assume that you are the president of your company and paid a year-end bonus according to the amount…

A: Inventory can be valued under any of three methods. They are 1.FIFO 2. LIFO 3.Weighted average…

Q: When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain,…

A: Cost Flow Assumptions: It is an assumption that determines the way or order in which the costs…

Q: You are a financial analyst, and you are tasked with calculating the expected return and standard…

A: State of EconomyProbability (A)Estimated return…

Q: equirement 1.  If SnowDreams cannot reduce its​ costs, what profit will it​ earn? State your answer…

A: Income statement has been prepared in the current case, where concept of variable costing has been…

Q: What is operating leverage, and how does itaffect a firm’s business risk? Show the operating…

A: Operating Leverage is a cost-accounting method that calculates how high an operating turnover can be…

Q: A corporation that is a single product firm is predicting that a price increase next year will cause…

A: The company can decide to increase the sales price. The increase in sales price lower the demand for…

Q: Please select the option that best analyzes the PROFIT MARGIN for our example company.   The profit…

A: Profit margin is the percentage of sales, which explains how much profit a firm can earn for…

Q: An unlevered firm perceives its optimal dividend policy to be a 40 percent payout ratio. Asset…

A: Sustainable growth rate= Asset turnover* Profit margin * (1- dividend payout ratio) = 80%*10%*60% =…

Q: Assuming costs vary with sales and a 20 percent increase in sales is projected, create the pro forma…

A: Due to our protocol only first three sub-parts are solved as there are four sub-parts. The plug…

Q: Consider an economy with two types of firms, S and I. S firms always move together, but I firms move…

A: Deviation = Return -expected returnSquared deviation = Deviation ^2Standard deviation = Variance…

Q: A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit…

A: Solution:- a)Calculation of rate of return as follows:- Given data This firm is earning $15 on every…

Q: PJS Seating Company, a manufacturer of chair, had the following data for 2020. Sales 2,400 units…

A: Contribution margin per unit = Selling price per unit - Variable cost per unit  = 40 - 15 = Php 25…

Q: Consider an economy with two types of companies, S and I. The profits of companies S always move…

A: Risk and return are two important concepts in finance that are closely related. Return refers to the…

Q: Consider a company that pays out all its earnings (i.e., the payout ratio = 1 or plowback/retention…

A: Sustainable growth rate “g” is determined using the formula: When the payout is 1 or 100% or…

Q: You are an industry analyst that specializes in an industry where the market inverse demand is P =…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.