3) to determine if the firm should increase market share by lowering the price, total revenue must be considered. At $5.00, the firm sells 17650 units for total revenue of $88,250. At $4.99, the firm sells 17,692 units for a total profit of $88,283.08. Thus, the firm gains addition revenue by lowering its price to sell more units, at least to a point. At some point, lowering the price will result in a decrease in total revenue.
4) to calculate the portion of sales that is reliant on the independent variables, set the variables to zero. The sales remaining will be the portion that is not dependent on these variables. The base market is negative in total, so these variables determine all of the sales. To determine how much each individual variable contributes, they can be set to zero one at a time. Thus, there...
The passenger miles would be (1,500,000 * 1.1) = 1,650,000. The revenue per passenger mile would be $0.20 -- (.08*.2) = $0.184 So the actual revenue was (.184)*(1,650,000) = $303,600. Now we can calculate Flex for Actual Level, the third column. This is based on the flex budget figures, which were $0.20 in revenue per passenger mile. Variable expenses were 195,000 / 1,500, 000 = $0.13 per passenger mile in the
Economic Value Added (EVA) Accounting Practice Although Economic Value Added (EVA) is not a new concept in economics and financial theory and is based on the 19th century concept of "economic profit," it has only been widely adopted recently by business firms as an accounting practice. In this paper we shall describe what EVA is, and look at its pros and cons from the point-of-view of the company adopting the practice
JIT Management Eli Whitney developed the interchangeable parts system when accepting a contract to manufacture muskets for the U.S. Army in 1799 (A Brief History of (Just-In) Time). Over the next 100 years, large scale processes held focus while manufacturers focused on individual technologies. The system of engineering drawing developed and modern tools were perfected during this time. In the late 1890s, Fredrick W. Taylor created "Scientific Management" by observing workers and
Ratio Analysis: Midwest Health Plan Inc. Financial ratios are critical for decision making purposes. Some of those who utilize information derived from the analysis of financial statements include but they are not limited to lenders, managers, the government and stockholders. In this text, I amongst other things compute two financial ratios from Midwest Health Plan, Inc. In an attempt to determine the financial health of the organization. Midwest Health Plan, Inc. Ratio
Finance Assessing WalMart Cost of Equity Cost of Equity Using CAPM To calculate the cost of equity using the capital asset pricing model (CAPM), the equation requires collection of some data regarding the firm and the market. The equation tells us what data is needed, the equation is cost of equity = RF + ?(RM - RF). RF is the risk free rate, RM is the return on a market portfolio, and ?
This approach to defining a performance-based taxonomy will also allow for a more effective comparison within industries as well. All of these factors taken together will provide enterprise computing buyers with more effective foundations of arguing for more thorough measures of application performance. The net result will be much greater visibility into how cloud computing is actually changing the global economics of the enterprise computing industry. III. Final Report: Introduction The foundational
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