In June 201X, a six-month call on XYZ stock, with an exercise price of $22.50, sold for $12.30. The stock price was $27.27. The risk-free interest rate was 3.9 percent. How much would you be willing to pay for a put on XYZ stock with the same maturity and exercise price

Answers

Answer 1

Answer:

Price of Put = $ 7.1037

Explanation:

Put-Call Parity:

Price of Call + Exercise Price / (1 + Risk-free rate)^T  = Price of Put + Stock Price

Price of Call = $12.30

Exercise Price = $22.50

Stock Price = $27.27

Risk-free rate = 3.9%

Time period = 6 months or 0.5 year

Now insert the values:

Price of Call + Exercise Price / (1 + Risk-free rate)^T  = Price of Put + Stock price

12.30 + 22.50 / (1 + 3.9%)^0.5 = Price of Put + 27.27

12.30 + 22.50 / 1.019313 - 27.27 = Price of Put

Price of Put = 12.30 + 22.0737 - 27.27

Price of Put = $ 7.1037


Related Questions

The expected average rate of return for a proposed investment of $4,250,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $8,500,000 over the 20 years is:_________ (round to two decimal points).
a. 10.00%
b. 20.00%
c. 40.00%
d. 1.00%

Answers

Answer:

A

Explanation:

Average rate of return is a capital budgeting method. It is used to determine if a firm should invest in a project or should not invest in a project

average rate of return = average net income / average cost of investment

average net income = (total net income - depreciation) / useful life

(8,500,000 - $4,250,000) / 20 = 212,500

Average cost of investment =( beginning book value of the investment - ending book value of the investment) / 2

($4,250,000 - 0) / 2 = 2,125,000

ARR = 212,500 / 2125,000 = 0.1  = 10%

How many shares are held as treasury stock by Coca-Cola at December 31, 2015, and by PepsiCo at December 26, 2015

Answers

Answer:

December 31 ,2015 Coca cola and December 26, 2015

Kuley plans to retire in 8 years with $263,700 in her account, which has an annual return of 8.17 percent. If she receives annual payments of X, with her first payment of X received in 8 years and her last payment of X received in 15 years, then what is X, the amount of each payment

Answers

Answer:

Kuley

If she receives annual payments of X, with her first payment of X received in 8 years and her last payment of X received in 15 years, then the amount of each payment is:

X = $50,944.35

Explanation:

a) Data and Calculations:

Amount in savings account in 8 years' time = $263,700

Annual return rate = 8.17%

Period of savings from Year 8 to Year 15 = 7 years

Annual payments = X

X = $50,944.35

From an online financial calculator, the payment is determined as follows:

N (# of periods)  7

I/Y (Interest per year)  8.17

PV (Present Value)  263700

FV (Future Value)  0

Results

PMT = $50,944.35

Sum of all periodic payments $356,610.45

Total Interest $92,910.45

A structure that organizes worldwide operations primarily based on function and secondarily on product is called: a global area division. a global functional division. a multinational matrix structure. a global product division.

Answers

Answer:

a global functional division.

Explanation:

In a global functional structure, the MNC activities are to be organized among the particular functions that are related to the production, finance, marketing etc. Here the developments are establishment that would have the responsibility worldwide for the particular function

So as per the given situation, the above should be the answer

Manner Inc. has incurred the following overhead costs over a 6 week period: Calculate the approximate fixed cost component of Manner's overhead costs using the high-low method. Group of answer choices $408. $470. $258. $250. $542.

Answers

Answer:

250 dollars

Explanation:

Variable cost = 1190-710/94-46

= 480/48

= 10 dollars

Fixed cost = 1190-(10*94)

= 1190-940

= 250 dollars

Fixed cost = 710-(10*46)

= 710-460

= 250 dollars

Cyclical unemployment arises when:______.
a. the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply.
b. labor unions strike for higher wages.
c. the business cycle enters an expansionary phase.
d. business activity in the macroeconomy declines.

Answers

Answer:

D

Explanation:

types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.  

The geologist lost his hob permanently due to increase in wages (polices)

Frictional unemployment:  the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom  

Three years ago, Kuley invested $32,200. In 2 years from today, he expects to have $50,300. If Kuley expects to earn the same annual return after 2 years from today as the annual rate implied from the past and expected values given in the problem, then in how many years from today does he expect to have exactly $87,200

Answers

Answer:

8.17 years(closest to 8 years )

Explanation:

The future value of $50,300, would be accumulated after 5 years of having made the investment(3 years+2 years=5 years)

As a result, we can determine the annual rate of return based on the future value in year 5 using the future value formula below:

FV=PV*(1+r)^n

FV=future value=$50,300

PV=amount invested initially=$32,200

r=unknown=annual rate of return

n=5 years

$50,300=$32,200*(1+r)^5

$50,300/$32,200=(1+r)^5

$50,300/$32,200 can be rewritten as ($50,300/$32,200)^1

($50,300/$32,200)^1=(1+r)^5

divide index on both sides by 5

($50,300/$32,200)^(1/5)=1+r

r=($50,300/$32,200)^(1/5)-1

r=9.33%

Our next task is to determine how long( in years) it takes to accumulate a future value of $87,200 from today's point, which means we need to determine the value of the investment today( 3 years after making the investment)

FV=$32,200*(1+9.33%)^3

FV=value of investment today=$42,079.82

Lastly, we can ascertain when $42,079.82 today would become $87,200

$87,200=$42,079.82*(1+9.33%)^n

n=number of years=unknown

$87,200/$42,079.82=(1+9.33%)^n

$87,200/$42,079.82=1.0933^n

take log of both sides

ln ($87,200/$42,079.82)=n ln(1.0933)

n=ln ($87,200/$42,079.82)/ln(1.0933)

n=0.72863604/0.08920065

n=8.17 years( from today, approx 8 years)

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,138. FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,516.27. What is the amount of the employer's payroll taxes expenses for this employee

Answers

Answer:

$ 1,119.06

Explanation:

It is given that :

Gary Marks total earning = $ 9,138

The social security tax = 6.2%

The Medicare tax = 1.45%

We known, the FUTA and the SUTA must only be applied to the first $7000 earned from Gary's pay.

So, the employer's payroll taxes expenses = Social security + Medicare + FUTA + SUTA

    = ($9,138 x 6.2%) + ($9,138 x 1.45%) + ($7000 x 0.6%) + ($7000 x 5.4%)

    = 566.56 + 132.5 + 42 + 378

    = $ 1,119.06

Therefore, the amount of the employer's payroll taxes expenses is $1,119.06

Over the past four years, Hashwari Corporation reported sales revenue and warranty expense as follows.
2016 2017 2018 2019
Sales revenue $5,000,000 $5,200,000 $5,382,000 $5,704,920
Warranty expense 105,200 104,100 118,500 108,400
We wish to reformulate the income statement to reflect a constant proportion of warranty expense to sales over the four-year period. What is our warranty expense adjustment for each year?

Answers

Answer:

Missing word "Average warranty to sales rate is 2.05%"

                Adjusted expense and Adjustment required

                                                 2014            2015             2016             2017

Sales revenue                   $5,000,000 $5,200,000 $5,382,000  $5,704,920

Average warranty to sales rate 2.05%      2.05%            2.05%         2.05%

Adjusted warranty expense $102,500  $106,600   $110,331      $116,951

Actual warranty expense       $105,200   $104,100     $118,500      $108,400

Adjustment required            -$2,700       $2,500      -$8,169          $8,551

Below is financial information for two sporting goods retailers. Extreme Sports Company operates a retail business and franchising business. At the end 2011, Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores. Extreme's stores are located in suburban, strip mall and regional mall locations, the company operates in 32 states. All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores.
Selected Data for All Sports and Extreme Sports (amounts in millions):
All Sports Extreme Sports
Sales $5,320 $1,344
Cost of Goods Sold 3,897 887
Interest Expense 138 43
Net Income 212 33
Average Accounts Receivable 114 18
Average Inventory 998 286
Average Fixed Assets 1,163 130
Average Total Assets 2,472 662
Average Tax Rate 40% 40%
Calculate the following ratios for All Sports and Extreme Sports: If required, round your answers to two decimal places.
Find the following for each: All Sports / Extreme Sports
a. Return on assets
b. Profit Margin for ROA
c. Assets turnover
d. Accounts receivable turnover
e. Inventory turnover
f. Fixed asset turnover

Answers

Answer:

All Sports Company and Extreme Sports Company

                                          All Sports                   Extreme Sports

a. Return on assets (ROA) = Profit margin * Assets turnover

=                                       3.98%*2.15                2.46%*2.03

=                                       8.56%                         4.99%

b. Profit Margin for ROA = Net income/Sales

=                                      ($212/5,320 * 100)     ($33/1,344 * 100)

=                                        3.98%                          2.46%

c. Assets turnover = Sales/Total assets

=                                       $5,320/$2,472          $1,344/$662

=                                       2.15                              2.03

d. Accounts receivable turnover = Credit Sales/Average receivable

=                                       $5,320/$114             $1,344/$18

=                                        46.67x                        74.67x

e. Inventory turnover = Cost of goods sold/Average Inventory

=                                       $3,897/$998            $887/$286

=                                       3.9x                            3.10x

f. Fixed asset turnover = Sales/Fixed assets

=                                       $5,320/$1,163         $1,344/$130

=                                       4.57x                        1.03x

Explanation:

a) Data and Calculations:

                                             All Sports     Extreme Sports

Sales                                        $5,320             $1,344

Cost of Goods Sold                   3,897                  887

Interest Expense                          138                     43

Net Income                                   212                    33

Average Accounts Receivable     114                     18

Average Inventory                      998                  286

Average Fixed Assets               1,163                   130

Average Total Assets              2,472                  662

Average Tax Rate                      40%                  40%

A company developed the following per unit standards for its products: 2.30 pounds of direct materials at $5.7 per pound. Last month, 2500 lbs of direct materials were purchased for $5900. The direct materials price variance for last month was

Answers

Answer: $5,010 Favorable

Explanation:

Direct materials price variance is calculated by the formula:

= (Standard Price - Actual Price) * Quantity Purchased

Actual price = Amount pounds were purchased for / Pounds purchased

= 5,900 / 2,500

= $2.36

Direct materials price variance = (5.7 - 2.36) * 2,500

= $5,010 Favorable

The following are all characteristics of projects EXCEPT: A. Projects are complex, involving a variety of skills and capabilities. B. Projects have a clear starting and ending point. C. Projects typically require significant levels of cross-functional and inter-organizational coordination. D. Projects are non-routine, making planning difficult. E. Projects are companies that launch a new, sustainable business model.

Answers

Answer:

E. Projects are companies that launch a new, sustainable business model.

Explanation:

project can be regarded as series of tasks which is under processing and need to be completed so that specific outcome can be reached. A project can as well be regarded as a set of both outputs and inputs that it's needed in achieving a particular goal. Projects can simple or complex one , managing of project can be by one person or a hundred.

It should be noted that following are all characteristics of projects;

✓ Projects are non-routine, making planning difficult.

✓Projects are complex, involving a variety of skills and capabilities.

✓ Projects have a clear starting and ending point.

✓Projects typically require significant levels of cross-functional and inter-organizational coordination.

Gabbe Industries is a division of a major corporation. Last year the division had total sales of $23,826,400, net operating income of $2,835,342, and average operating assets of $9,164,000. The company's minimum required rate of return is 19%.

Answers

Answer:

a. Division margin:

= Net operating income / Total sales

= 2,835,342 / 23,826,400

= 11.9%

b. Division turnover:

= Sales / Total assets

= 23,826,400 / 9,164,000

= 2.6 times

c. Division ROI:

= Net operating income / Total assets

= 2,835,342 / 9,164,000

= 30.94%

In purchasing an existing business, Alice has decided to lease the equipment and fixtures from the original owner rather than purchasing it outright to save money initially. This is an example of ______.

Answers

Answer: thinning the assets

Explanation:

Thinning the assets refers to the reduction of the burden of an asset on the buyer by the seller do that the business can be priced at a reasonable value for the buyer. It is done to make a business more affordable.

Since Alice decided to lease the equipment and fixtures from the original owner rather than buying it outright to save money initially, this is thinning the assets.

Hardy Company manufactures a single product by a continuous process involving two production departments. The records indicate that $140,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $25 per machine hour; machine hours were 5,000 in Department 1. Work in process inventory in the department at the beginning of the period totaled $35,000; and work in process inventory at the end of the period was $25,000.
The transfer of production costs to Department 2.
Instructions:
Prepare entries to record (a) The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) overhead (b) The transfer of production costs to Department 2.

Answers

Answer:

Hardy Company

Journal Entries:

Department 1:

1. Debit Work in Process $140,000

Raw materials $140,000

To record the issuance of direct materials to Department 1.

2. Debit Work in Process $200,000

Credit Payroll $200,000

To record the direct labor cost incurred by Department 1.

3. Debit Work in Process $125,000

Credit Factory overhead $125,000

To record the overhead applied in Department 1 ($25 * 5,000).

4. Debit Work in Process (Department 2) $475,000

Credit Work in Process (Department 1) $475,000

To record the transfer of production costs to Department 2.

Explanation:

a) Data and Analysis:

1. Work in Process $140,000 Raw materials $140,000

2. Work in Process $200,000 Payroll $200,000

3. Work in Process $125,000 Factory overhead $125,000 ($25 * 5,000)

4. Work in Process (Department 2) $475,000 Work in Process (Department 1) $475,000

Martinez Company's ending inventory includes the following items. Product Units Cost per Unit Market per Unit Helmets 30 $ 58 $ 62 Bats 23 112 80 Shoes 44 103 99 Uniforms 48 44 44 Compute the lower of cost or market for ending inventory applied separately to each product.

Answers

Answer:

Inventory       Units    CPU    MV per unit    Total Cost   Total MV   LCM

Helmets           30        58             62                  1740           1860      1740

Bats                   23        112             80                  2576          1840      1840

Shoes               44        103             99                  4532         4356      4356

Uniforms          48         44              44                  2112            2112       2112  

Inventory Valuation                                                                               10048

What would be the return on total assets of a firm if net income is $50,000, total sales are $100,000, and total assets are $175,000

Answers

Answer: 28.6%

Explanation:

The return on the total asset of a firm will be calculated as the net income divided by the total asset and this will be:

=Net income / Total assets

=50,000/175,000

=28.6%

Therefore, return on total asset is 28.6%

what is mextura give one example​

Answers

Answer:

A mixture is a substance made by combining two or more different materials in such a way that no chemical reaction occurs. A mixture can usually be separated back into its original components. Some examples of mixtures are a tossed salad, salt water and a mixed bag of M&M's candy.

Answer:

Mextura is a hybrid font, which combines elements of sansserif and black letter types.

Use the following selected balance sheet and income statement information for Caroline Supply Co. (in millions) to compute asset turnover (AT) to the nearest hundredth of a percent.
Operating profit before tax Earnings without interest expense (EWI) Average total assets Sales Tax rate on operating profit
$58,300 $93,400 $360,600 $1,135,420 35%

Answers

Answer:

3.15 times

Explanation:

Asset turnover = Sales revenue / Average total assets

Asset turnover = $1,135,420 / $360,600

Asset turnover = 3.15 times

Mellilo Corporation issued $4.7 million of 20-year, 9.5 percent bonds on July 1, 2021, at 98. Interest is due on June 30 and December 31 of each year, and all of the bonds in the issue mature on June 30, 2041. Mellilo's fiscal year ends on December 31. Prepare the following journal entries.

Answers

Answer:

On Issue date

July 1, 2021

Debit : Cash $4.606 million

Credit : Bonds Payable $4.606 million

Explanation:

The journal entry on Issue date  include a debit of Cash and Credit to Bond Payable at discount price of 98 % ($4.606 million).

We learned about Cost-Volume-Profit analysis. Review a few of the break even examples in the chapter.
1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), does the breakeven point increase or decrease?
2. Using Break Even Analysis, provide a unique mathematical example to support you answer. (Calculate the breakeven point for a base example, then increase the selling price and re-calculate your breakeven point.) Label all numbers in your examples."

Answers

Answer:

decrease

1. fixed cost is 100

variable cost is 10

price = 20

100 / ( 20 - 10) = 10

2. fixed cost is 100

variable cost is 10

price = 30

100 / (30 - 10) = 5

Explanation:

In deciding who should chair the wellness committee, several members identified Ian, a tall, handsome 40-ish staff accountant with a lively sense of humor, as someone who would do a good job. It is possible that the committee members were operating under which leadership approach?

a. Traits approach
b. Situational approach
c. Functional approach
d. Relational approach

Answers

Answer:

a. Traits approach

Explanation:

It is correct to state that the committee members were operating under the leadership traits approach, which corresponds to the collective perception of an individual's personality through their personal characteristics that are outstanding and that make them stand out among other individuals.

As in the case of Ian, who was perceived by many members as a person with a lively sense of humor, as someone who would do a good job.

a) Take a real time example of a company of your own choice working in Pakistan and then discuss the factors that lead to pressure for local responsiveness. Discuss it in detail. Draw diagram to show the effect.

Answers

Answer:

This responsiveness also promotes the local market orientation of a subsidiary and therefore the strength of its existing network with the businessmen and government authorities.

Explanation:

Usually, firms working within the global market confront two sorts of competitive pressure. They face pressure to scale back costs and pressure to react locally. These competing forces throw a corporation into conflict. It's going to also need a corporation to supply a consistent product on the international market to downstream the experience curve as soon as feasible. In response to local pressures, however, it's necessary for a firm to differentiate its product offering and marketing strategy from one country to a different in an effort to satisfy the various demands arising from domestic consumer preferences, business practices, channels of distribution, competitive conditions and public policies. Because it's going to entail substantial redundancy and a scarcity of product standards to adapt products to varied domestic needs, the result could also be a rise in prices.

While some organizations, like Company A, face a high to scale back cost and low for the reaction of locally, while others, like Company B, face low to scale back costs and high for local reaction, many companies are within the situation of Company C.  It suggests and supports three layers of variables, including environmental, structural, and organizational responsiveness. The analysis of 168 MNE companies within the People's Republic of China shows that environmental complexity and therefore the uniqueness of business culture increase local reaction. Structural variables like the intensity of competition, heterogeneity of demand and localisation of components increase local reaction.

Suppose that the price of a rental car (Prc) is $50 while the price of a flight (Pfl) is $85. Also, suppose that the marginal utility of a rental car (MUrc) is 20 utils while the marginal utility of flying (MUfl) is 30 utils. What is the best advice for this consumer?

Answers

Answer:

Consumers should choose to take the flight.

Explanation:

The price of a rental car = $50

Marginal utility from the car = 20 utils

Now find the per dollar utility from car = $50 / 20 = 2.5

The price of a flight = $85

Marginal utility from the flight = 30 utils

Now find the per dollar utility from flight = $85 / 30 = 2.83

Since the per dollar, MU is greater in the case of flight so consumers should choose to take the flight.

Ajax Inc. was formed on April 25 and elected a calendar year for tax purposes. Ajax paid $13,200 to the attorney who drew up the articles of incorporation and $7,100 to the CPA who advised the corporation concerning the accounting and tax implications of its organization. Ajax began business operations on July 15. To what extent can Ajax deduct its $20,300 organizational costs on its first tax return

Answers

Answer: $5510

Explanation:

For organizations cost up to $50,000, there'll be a deduction of $5000. The remaining non deductible expense will then be spread out for 180 months. Here, the non deductible cost will be:

= ($13200 + $7100) - $5000

= $20300 - $5000

= $15300

The capitalized cost will then be:

= $15300 / 180

= $85 per month.

Since there's an ammortization of 6 months from July, then the capitalized cost will be:

= $85 × 6

= $510

Therefore, the amount that should be deducted on its first tax return will be:

= $5000 + $510

= $5510

Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at underlying book value on January 1, 20X9. At that date, the fair value of the noncontrolling interest in First's common stock was equal to 20 percent of the book value of its common stock. First's balance sheet at the time of acquisition contained the following balances:
Total Assets $600,000 Total Liabilities $90,000
Preferred Stock 100,000
Common Stock 150,000
Retained Earnings 260,000
Total Assets $600,000 Total Liabilities and
Equities $600,000
The preferred shares are cumulative and have a 10 percent annual dividend rate and are four years in arrears on January 1, 20X9. All of the $5 par value preferred shares are callable at $6 per share. During 20X9, Shovel reported net income of $100,000 and paid no dividends.
Required information
Based on the preceding information, what is First's contribution to consolidated net income for 20X9?
a. $80,000
b. $100,000
c. $90,000
d. $50,000

Answers

Answer:

b. $100,000

Explanation:

Based on the information given , the FIRST'S CONTRIBUTION TO CONSOLIDATED NET INCOME for 20X9 will be NET INCOME amount of $100,000 because During the year 20X9, the company reported NET INCOME of $100,000 in which they paid no dividends.

Therefore First's contribution to consolidated net income for 20X9 is $100,000

Suppose a chair manufacturer finds that the marginal rate of technical substitution​ (MRTS) of capital for labor in her production process is substantially than the ratio of the wage rate for​ assembly-line labor​ (w) to the rental rate on machinery​ (r). How should she alter her use of labor and capital to minimize the cost of​ production? Holding output​ constant, the chair manufacturer should use ▼ less more labor and ▼ more less capital.

Answers

Answer:

The chair manufacturer should use less labor and more capital.

Explanation:

Note: This question is not complete because the important word less is omitted. The complete question is therefore provided before answering the question as follows:

Suppose a chair manufacturer finds that the marginal rate of technical substitution (MRTS) of capital for labor in her production process is substantially less than the ratio of the wage rate for assembly-line labor (w) to the rental rate on machinery (r). How should she alter her use of labor and capital to minimize the cost of production? Holding output constant, the chair manufacturer should use [less/more] labor and [more/less] capital.

Explanation of the answer is now provided as follows:

The marginal rate of technical substitution (MRST) is the amount by which the quantity of one input must be reduced when one more unit of another input is used to keep output constant.

In order to minimize cost of production while holding output constant, when the MRTS of capital for labor is substantially greater than the ratio of w to r, it implies that less capital and more labor should be used; but when the MRTS of capital for labor is substantially less than the ratio of w to r, it implies that more capital and less labor should be used.

Based on the above explanation, the chair manufacturer should use less labor and more capital.

Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 26,000 units from an outside supplier for $16 per unit. Polk is currently operating at less than its full capacity of 630,000 units and has variable costs of $9 per unit. The full cost to manufacture the unit is $12. Polk currently sells 460,000 units at a selling price of $18 per unit.
a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?
b. What is the minimum transfer price from Polk’s perspective?
c. What is the maximum transfer price from Bishop’s perspective?

Answers

Answer:

a. The effect is that Avery Company’s operating profit will increase by $182,000 if the transfer is made internally.

b. Minimum transfer price = $9

c. Maximum transfer price from Bishop’s perspective = $16.

Explanation:

a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?

To determine this, fixed cost is ignored because it considered irrelevant. Therefore, we have:

Profit per unit = Purchase price from outside - Variable cost of production internally = $16 - $9 = $7

Total increment in operating profit = Current purchase unit of Bishop * Profit per unit = 26,000 * $7 = $182,000

Therefore, Avery Company’s operating profit will increase by $182,000 if the transfer is made internally.

b. What is the minimum transfer price from Polk’s perspective?

Since Polk is currently operating at less than its full capacity, this implies that it will not incur additional fixed cost to produce current purchase units of Bishop. Therefore, only its variable cost of $9 will have to recovered. By implication, we have:

Minimum transfer price = Variable cost = $9

c. What is the maximum transfer price from Bishop’s perspective?

Any price that is higher than $16 at which Bishop is currently purchasing from an outside supplier will result in a loss for Bishop and the increment profit of $182,000 will be lost by Avery Company. This therefore implies that:

Maximum transfer price from Bishop’s perspective = Price at which Bishop is currently purchasing from an outside supplier = $16

How do global logistical systems influence the 4Ps of marketing (price, product, place, and promotion)?

Answers

Answer:

In simple words, Because of customised backing to miniscule distributors, fast motion of components, detecting price levels from resting some other nation like China, providing product lines from one nation to some other nation with the assistance of a representative, internet assistance, and even product promotion, global logistic systems have a significant impact on marketing 4Ps like price, product, place, and promotion.

how to assess a peers written assignment​

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