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Total industry sales for Alliance's relevant market last year were $100 million, with Alliance's sales representing 5% of that total. Contribution margin is 25%. Alliance's sales force calls on retail outlets and each sales rep earns $50,000 per year plus 1% commission on all sales. Retailers receive a 40% margin on selling price and generate average revenue of $10,000 per outlet of Alliance.
a. The marketing manager has suggested increasing consumer advertising by $200,000. By how much would dollar sales have to increase to break even on this expenditure ? What increase in overall market share does this represent?
b. Another suggestion is to hire to more sales representatives to gain new consumer retail accounts. How many new retail outlets would be necessary to break even on the increased cost of adding three sales reps?
c. A final suggestion is a make a 10% across-the-board price reduction. By how much would dollar sales have to increase to maintain Alliance's current contribution.
Harbor Company had sales of $1,500,000 for the year ended Dec 31, 2004, an asset turnover ratio is 2 for the same period, and return on investment is six percent.
Suppose you are the owner of a increasing technology or service company with a healthy cash flow but little in the way of property and equipment.
Determine the mean and standard deviation of the returns
Consider a firm with 80 shareholders, including yourself, who each owns 1 share worth $10. In addition, How would this change the value of the share?
Bond X is a premium bond making annual payments. The bond has a coupon rate of 9.8 percent, a YTM of 7.8 percent, and has 15 years to maturity. Bond Y is a discount bond making annual payments.
Provide some examples of fixed and variable costs from your workplace determine which costs may have both variable and fixed components.
Greengage, Corporation, a successful nursery, is planning several expansion projects. All of the alternatives promise to produce an acceptable return.
What is the foreign exchange risk? What is the difference between balance sheet exposure and transaction exposure? Can you provide an example?
Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or a 20 year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.
It pays federal, state, and local taxes at a 35 percent marginal rate. a. What is the firm's corporate cost of capital?
Find out the cost of equity of a firm that has a beta of 1.98 and a dividend yield of 6.58%? Suppose the risk free rate is 4.43% and the return last year of the S&P500 was 12.29%.
The Botolph Corporation produces botolphinators
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