The Frisco Roughriders wants to explore their inventory policy on purchasing of hot dogs. They are currently using 200 cases of hot dogs per month and ordering 400 cases of hot dogs at a time. Hot Dogs Order cost $15 Holding cost per case $0.20 a. Under their current ordering scheme, what is the total cost? b. Using an EOQ model, what would their total costs? c. How much money does this save in total? d. Their supplier has offered an alternative deal of placing a monthly order of 200 cases of hot dogs. In exchange for the fixed monthly order, the supplier will change the order cost to a $10 each month. Should they take the supplier up on this offer?

Answers

Answer 1

They should take the supplier up on this offer: because the new deal would result in a lower total cost than both the current ordering scheme and the EOQ model.

a. The total cost under the current ordering scheme is $3,900.

b. Using an EOQ model, the total cost would be $3,366.

c. This saves a total of $534.

d. They should take the supplier up on this offer.

a. The total cost under the current ordering scheme is calculated as follows:

Total Cost = Ordering Cost + Holding Cost

Ordering Cost = (Annual Demand / Order Quantity) x Order Cost = (2,400 / 400) x 15 = $90

Holding Cost = (Order Quantity / 2) x Holding Cost per case = (400 / 2) x 0.30 = $60

Total Cost = $90 + $60 = $150

Total Cost per month = $150 / 2 = $75

Total cost for 2 months = $75 x 2 x 26 = $3,900

Therefore, the total cost under the current ordering scheme is $3,900.

b. Using an EOQ model, the total cost would be calculated as follows:

EOQ = √((2 x Annual Demand x Ordering Cost) / Holding Cost) = sqrt((2 x 2,400 x 15) / 0.30) = 774.6 (rounded up to 775)

Total Cost = (Annual Demand / EOQ) x Ordering Cost + (EOQ / 2) x Holding Cost per case

Total Cost = (2,400 / 775) x 15 + (775 / 2) x 0.30 = $81.68

Total cost for 2 months = $81.68 x 2 x 26 = $3,366.08

Therefore, the total cost using an EOQ model would be $3,366.

c. The total savings would be the difference between the total cost under the current ordering scheme and the total cost using an EOQ model, which is $3,900 - $3,366 = $534.

d. They should take the supplier up on this offer because the new deal would result in a lower total cost than both the current ordering scheme and the EOQ model. With the new deal, the total cost would be $5 x 26 + (2,400 / 12) x 5 = $430, which is significantly lower than the total cost under the current ordering scheme and the EOQ model.

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Related Questions

How did President Roosevelt support US involvement in World War II?

Answers

Roosevelt led the country to triumph against Nazi Germany by forming a potent wartime alliance with Britain and the Soviet Union.

How did President Roosevelt encourage enlisting in the war on behalf of the US?

The Lend-Lease Act, which Roosevelt pushed Congress to approve in March 1941, gave the president the power to lend war supplies to countries whose defence he deemed essential to the security of the United States. Roosevelt also covertly supplied some military assistance.

With a focus on Europe first and the Lend-Lease programme, Roosevelt oversaw the mobilisation of the American economy to aid in the war effort. He also prioritised the defeat of Germany over that of Japan.

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What role money plays in the economy?

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Money has taken many forms throughout history, but it has always served three main functions: storage of value, account unit and exchange medium.

Money is a resource that everyone uses on a daily basis. We earn and spend it without giving it much thought. Money, according to economists, is really any nice that is generally recognized as the last payment for services and goods. Cowry shells in Continent, big stone tires on the Pacific island of Yap and strings of crystals called wampum in use by Native Americans and early American colonists are all examples of money.

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What role do governments play in free trade?

Answers

For the purpose of limiting or modifying free trade, governments erect trade barriers and take other actions.

Define the role of government in free trade?

Trade and investment restrictions that are put in place to protect domestic markets and industries are referred to as protectionism.

Protectionism's primary tools are tariffs and nontariff trade barriers.The free flow of goods and services across international borders must be constrained by the government. Tariffs, import charges, quotas, import licensing, and customs procedures are all examples of import policies that must be in place for a country to import goods or services. Economic growth is encouraged and the economy is kept strong as a result. A government may impose specific tariffs in order to draw consumers' attention back to local businesses and thereby shield and protect its own economy from competition from abroad if the domestic economy is finding it difficult to compete with foreign rivals.

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When benefits are concentrated and costs are diffused:
A) resources get wasted on projects with low benefits and high costs.
B) fewer projects with low benefits and high costs get developed.
C) resources get devoted to projects with high benefits and low costs.
D) more projects with high benefits and low costs get developed.

Answers

The concept of concentrated benefits and diffused (or spread) costs is straightforward. A policy's expenses are shared among numerous persons.

Price Supports, Diffuse Costs, and Concentrated Benefits – what are they?

Price supports may occasionally be put in place by the government when it believes that the price on the market is either too high or too low, or when they are feeling political pressure from important stakeholders, such as voters. Social deadweight loss resulted from these laws.

Concentrated advantages and diffused (or spread) costs are straightforward concepts. A lot of people share in the expenses incurred by a policy. These would be the taxpayers in this instance. Only a small percentage of the cost is shared by all of the country's population of more over 300 million people. Although few people benefit from these policies, those who do give them significant thought. There is a significant incentive to work tirelessly to ensure that the policy is formed or maintained for those who stand to gain from it. However, the small amount of money that each taxpayer contributes is not worth the time and effort it takes to fight to get the tax eliminated.

Farm price supports are one such program used in the US. Prices going up are good for farmers. These price supports may come in the form of a price floor for a certain commodity or service, excess buybacks, or payments to farmers to help with costs in order to reduce prices. In each of these scenarios, the farmer is extremely concerned about the policies being adopted, whereas the average taxpayer is not.

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What do you mean by minimum wage as per payment of Wages Act 1936?

Answers

According to the law, wages are defined as follows: “Wages include all remuneration that can or can be expressed in money. In addition, these are either supplements to salaries or otherwise.

Laws that set minimum wages for certain occupations. It is appropriate to set minimum wages for specific jobs. This will issue the following: The Payment of Wages Act 1936 regulates the payment of wages to certain categories of people employed in industry, and its importance cannot be underestimated. The law guarantees the timely payment of wages and no deductions except as permitted by law.

Determination of wage period. — (1) Each wage debtor under § 3 shall determine the period during which wages shall be paid (referred to in this Act as the wage period). (2) The wage period he may not exceed one month. All companies with more than 1,000 employees must pay their wages before the 10th day has passed. All other employers must pay their wages by the end of the seventh day. Employers must record wage payments in the current currency. H. Cash or bank transfer.

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banks perform two essential functions for the macro economy: ______.

Answers

Answer:

Banks transfer money from savers to spenders. And, the banking system creates additional money by making loans in excess of total (system) reserves.

Explanation:

i hope this helped

What are the three kinds of money that can circulate in an economy?

Answers

Cash, central bank reserves and commercial bank money are three types of money that can circulate in the economy.

The Bank of England is in charge of issuing physical money, or currency. The Royal Mint produces coins, and De La Rue, a specialized printer, prints notes. The government receives all of the seigniorage income from the creation of money.

A form of electronic money known as central bank reserves is produced by the central bank and utilized by banks to conduct internal transactions. They resemble an electronic version of cash in certain ways.

Almost all of the money in circulation—roughly 97%—is of the third type. It is not produced by the central bank or any other branch of government, in contrast to central bank reserves and cash.

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What goes on in an ecosystem that makes it function?

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A healthy ecosystem must include living things, dead things, and inorganic and organic substances. Every ecosystem needs energy from an outside source, which is typically the sun.

What is ecosystem?

A geographic area is said to have an ecosystem if it is home to a variety of living things, including plants, animals, and other creatures, as well as the weather and topography.

Animals, plants, and other living things are biotic factors. The elements of temperature, humidity, and rocks are abiotic. The size of ecosystems can range greatly.

Seaweed, a type of algae, is found in tide pools and produces food through photosynthesis. Seaweed is consumed by omnivorous animals like abalone.

In the tide pool, carnivores like sea stars consume creatures like clams and mussels.

Other creatures, like hermit crabs, can only exist in the shallow ponds that low tides leave behind since they are incapable of existing underwater.

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Buying a franchise does not provide a hotel owner with:

Answers

Buying a franchise does not furnish a hotel owner with: skilled managers and employees. Hotel administration organizations came about because: men and women who did not recognize a lot about hotels, such as developers and real property investors, built accommodations and wanted skilled people to run them.

If you reflect onconsideration on yourself a “true” entrepreneur and pick to do the whole thing below your terms, then you're probably better off building a business from scratch. However, if you choose to run a enterprise in your market however choose help to help you build your business, then consider opening a franchise instead.

Why do most franchises fail?

Here are a few of the most frequent motives why franchises fail: The franchisor sells to unqualified, inexperienced, undercapitalized, or naive franchisees. In addition, franchisees are unrealistic about the workload that goes into working a franchise.

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What are the effects of scarcity?

Answers

The major core of Economics is Scarcity. It indicates that there is a gap between the supply of an item or service and the demand for it. As a result, customers, who ultimately drive the economy, may have fewer options due to scarcity.

The lack of resources in society prevents the production of all the desirable goods, which leads to scarcity. Due to scarcity, we must carefully manage the utilization of comparatively limited resources in order to meet our seemingly endless and conflicting wants. When the demand for a natural resource, good, or service exceeds the supply, there is scarcity. Prioritizing our options based on scarcity can help us be more productive. For instance, the stress of a deadline concentrates.

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What are three ways that higher interest rates affect the economy?

Answers

Three economic effects of increasing interest rates are trouble for stocks, deposits, and borrowing.

A percentage of the principal, or the amount loaned, is what a lender charges a borrower as interest. The annual percentage rate, or APR, is the usual unit used to express the interest rate on a loan (APR).

The amount earned from a savings account or certificate of deposit at a bank or credit union may also be subject to interest rates (CD). Interest on these bank accounts is calculated as an annual percentage yield (APY).

The borrower is essentially charged interest for the usage of the asset. Cash, consumer goods, vehicles, and real estate are all examples of lent assets. As a result, an interest rate can be viewed as the "cost of money" because it increases the cost of borrowing the same amount of money.

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How is residual value calculated?

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Residual value is calculated based on the amount which the asset's owner tend to earn by selling the asset, and then minus any costs which are incurred during that asset's disposal.

The residual value tends to refer to the value of a fixed asset which is after that asset has been fully depreciated. So, the residual value of an asset is seen to be calculated based on how much the company which is in charge of leasing or lending the asset tends to believe that it will be worth once the set term has elapsed.

However, the residual value is used in order to describe the estimated value of a car which has been leased. So, the residual value is the salvage value of an asset. Thus, it tends to represent the amount of value.

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What is the term marginal costing also known as MCQ?

Answers

Marginal costing or variable costing refers to increase in the production cost which is generated by the production of additional product units.

Marginal cost is also referred to as variable costing as it is based on variable costs and it excludes fixed costs. It is dependent on production output level of goods and services.The total cost of any business is composed of fixed and variable costs. Both affect the marginal cost of production. It determines the production cost for one more unit of the commodity. It is important for any business for achieving economies of sale. It is calculated as follows:

marginal/variable cost = change in total cost/ change in quantity

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Did government under the Articles of Confederation create money?

Answers

State governments had the sovereignty to rule within their own territories. The national government had few powers. It could coin money, direct the post office, and negotiate with foreign powers, including Native American tribes. To raise money or soldiers, it could only request that the states provide what was needed.

Define money?Any tangible object or verifiable record that is typically accepted as payment for goods and services and repayment of debts, such as taxes, in a specific nation or socioeconomic setting is referred to as money. Money is a liquid asset that is used to support value-based transactions. It serves as a means of communication between people and things. It can also be used as a store of value and a unit of account to calculate the value of other items.Simply put, money is a means of transaction. It is important for the exchange of commodities and/or services. Money is also the most liquid asset we have. Along with being liquid, it is also often accepted as a form of payment.

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What determines the scarcity value of a resource?

Answers

Scarcity value is determine by its limited availability, the more limited the quantity, the greater its scarcity value.

Scarcity value is an economic term that describes the rise in a product's relative price caused by a limited availability.

The prices of manufactured products are primarily determined by the cost of production , however for many goods—such as antiques, rare stamps, and in-demand raw materials—are determined by the lack of supply of the products themselves.

Scarcity is a fundamental economic idea. It denotes that the demand for a good or service exceeds the availability of the good or service. As a result, scarcity might limit the options available to consumers, who ultimately comprise the economy.

Knowledge how products and services are valued requires an understanding of scarcity. Things that are scarce, such as gold, diamonds, or certain types of knowledge, are more valuable because marketers of these commodities and services can charge greater rates for them.

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How was the US economy affected after the World war 1?

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By the end of 1919 in  US, stock values started to decline. Six months later, wholesale prices started to decline. A serious industrial depression had emerged by the fall of 1920. Between March 1920 and July 1921, factory employment fell by 30%.

The United States of America, also referred to as the US or America, is a nation that is largely located in the continent of America. There are 326 Indian Reservations, 5 Significant Unincorporated Territories, 9 Minor Outlying Islands, and 50 States in the union. It is the third-largest country on earth in terms of total area and land. Its marine borders are shared by a number of countries, including Russia, Cuba, and the Bahamas. It is the most populated nation in the Americas and the third most populous nation worldwide with a population of more than 333 million. Washington, D.C., is the country's capital city and financial hub.

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Is direct expense fixed or variable?

Answers

Variable, Oftentimes, direct costs are variable costs, meaning they fluctuate in reaction to production levels and inventory levels.

A department, a service, or a product could be the cost object and the origin of a direct cost. Direct and indirect costs are the two main types of expenses or prices that firms may incur. Oftentimes, direct costs are variable costs, meaning they fluctuate in reaction to production levels and inventory levels. However, it can be more difficult to link some expenses, such as indirect costs, to a specific product.

It's critical to keep in mind that even if production or sales volume reach zero, all non-discretionary fixed expenses will still be incurred. For instance, a business might pay a salesman a fixed monthly salary plus a percentage commission for each item sold beyond a predetermined threshold.

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Is Colonialism a colonization?

Answers

The act or process of settling among and gaining influence over an area's native population is known as colonization. The technique of obtaining full or partial political control over another nation, populating it with people, and then economically exploiting it is known as colonialism.

In general, settler colonialism, exploitative colonialism, surrogate colonialism, and internal colonialism are the four types of colonialism that have been frequently differentiated in modern studies of colonialism.

For instance, England colonized the eastern seaboard of North America, Spain conquered central America, and Russia settled Siberia. All of them are instances of colonialism.

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curvature shapes used in hair design include

Answers

Option a is correct. Curvature shapes used in hair design include rectangles.

The hand-carved shaping comb has close-toothed teeth and is ideal for styling hair. The Pivot Point exclusive 8 inch Bone Shaping Comb is handcrafted from a special acrylic material that can withstand excessive heat without warping or breaking.

Circles, ellipses, parabolas, hyperbolas, and arcs, sectors, and segments are two-dimensional curvilinear shapes. On the other hand, shapes such as spheres, cylinders, and cones are called three-dimensional curved shapes.

Intuitively, for any part of a curve, the curvature describes how much the curve changes direction over a short distance of travel (e.g., an angle in rad/m), so the instantaneous change in direction of a point A measure of rate. Move on the curve.

Curvature is of utmost importance when designing road curves or grinding workpieces. When designing road curves, the impact on traffic safety should be taken into account. To improve efficiency without excessive wear, the effect of wheel size must be considered.

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The complete question is:

Curvature shapes used in hair design include:

a. oblongs

b. triangles

c. rectangles

d. trapezoids

What type of promotional strategy promotes to the manufacturer?
Question 1 options:
a) Pull strategy
b) AIDA strategy
c) Push strategy
d) Market strategy

Which element of the promotional mix gives the buyer the most power to express their personal views?
Question 2 options:
a) Advertising
b) Social media
c) Public relations
d) Sales promotion

Which element of the promotional mix is the slowest in terms of reaching a large audience?
Question 3 options:

a) Advertising
b) Public relations
c) Personal selling
d) Social media

What type of pricing strategy is a company using when a customer finds it challenging to assess a product even after acquisition?
Question 4 options:
a) Initial pricing
b) Price skimming
c) Prestige pricing
d) Penetration pricing

What pricing practice is a small retailer using when the company marks up prices by 100%?
Question 5 options:

a) Cost determinant pricing
b) Elasticity of pricing
c) Dynamic pricing
d) Keystoning

Which model is a method for reaching promotional goals in terms of stages of consumer involvement with the message?
Question 6 options:
a) Persuasion model
b) Marketing mix
c) Promotional Model
d) AIDA concept

What is the marketing term for something which is given up to obtain a product?
Question 7 options:
a) Product
b) Good
c) Service
d) Price

Which stages of the Product Life Cycle (PLC) is known to include a lot of advertising and public relations to increase awareness?
Question 8 options:
a) Pre-introduction
b) Introduction and Growth
c) Maturity and Decline
d) Decline

Which element of the marketing mix makes frequent use of free samples, coupons, and contests?
Question 9 options:
a) Advertising
b) Public relations
c) Sales promotion
d) Personal selling

Which element of the marketing mix tells, influences, or reminds potential customers of a product?
a) Product
b) Price
c) Promotion
d) Place

Answers

Push marketing is useful for manufacturers that are trying to establish a sales channel and are seeking distributors to help with product promotion.

What exactly is push marketing?

Push marketing's objective is to use marketing to deliver what you have to offer to clients. You may promote your products, for instance, through social media marketing content. Push marketing, which is a type of general advertising, is sometimes referred to as direct marketing.

Examples of Push Marketing Strategies in Action

Direct selling to clients, such as when a car salesman meets customers in the business's showrooms for cars. Trade exhibition promotion using point of sale (POS) displays. packaging layouts that promote buying.

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A company's culture is in part defined and identified by:

Answers

A company's culture is in part defined and identified by: its internal work climate and personality—as shaped by its shared values, work practices, traditions, and ingrained attitudes and behaviors that define 'how we do things around here.'

A company's simple definition is what?

A corporate structure that has a separate legal identity from its owners is a company. Due to additional reporting requirements and more serious legal obligations, it is a complex corporate structure with greater setup and administrative costs.

Why is a business different from a company?

The best way to think of a corporation is as a group of people carrying on business. A company must by definition include numerous persons having ownership stakes in the organization, even though a business might conceivably be managed by a single person.

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Choose a business and complete the following tasks:

How does your chosen business conduct market research? Explain your answer with supporting examples and link each one to a core purpose.

Answers

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem.

What is meant by "market"?

A market is defined as the total number of purchasers and sellers in the region or area under examination. The region can represent the entire planet, as well as certain states, provinces, or cities. Items traded are valued, costed, and priced in accordance with market forces of supply and demand.

Why has trading been halted?

There are a variety of causes for suspended trading, including: absence of up-to-date, accurate, or sufficient information about a corporation, as in the case of late filing of periodic reports. There are concerns over the veracity of publicly available material, especially the information in recently released news releases.

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What type of material is a land resource in the production process?

Answers

Everything that derives from the land, including all natural resources needed to create goods and services, is referred to as "land." Natural resources such as water, oil, copper, natural gas, coal, and forests are examples of common land. The production process uses land resources as its raw materials.

What is production process?Industrial processes are actions that involve chemical, physical, electrical, or mechanical phases to help with the production of an object or things, typically done on a very large scale. The foundation of heavy industry is industrial processes. In order to offer consumers with goods and services, a production process is a way of using economic input or resources, such as labour, expensive machinery, or land. A production process typically entails all the processes a facility might take to establish production quotas, develop and assemble products, and then distribute them to clients or independent retailers. Various manufacturing methods and procedures, such as 3D printing, joining, or casting, may be included.

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This photo shows a label that appears on food products in the United States.

Answers

"Regulation by an administrative body," Although a picture isn't offered, I was able to get one online.

An example of regulation would be nice.

In order to regulate how things are done and how people behave, governments and other authorities make regulations. By applying the new legislation, employers are forcing those over 65 out of work. Pressure from the American government forced manufacturers like Fiat and others to adhere to the new safety standards.

either being regulated or the process of being regulated. Specifically: a rule or order issued by a government agency that frequently has legal effect; also see Administrative Procedure Act.

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What is the second step in value based pricing?

Answers

Value-based pricing is a method of setting prices for goods and services that bases adjustments on the market's perception of value rather than past prices.

Value-based pricing is a pricing strategy that sets prices based on the perceived value that a product or service offers to the customer, rather than the cost of producing or delivering it. The aim of value-based pricing is to align the price of a product or service with the value that customers perceive they are getting.

The second step in value-based pricing is to determine the price based on the value that the customer perceives. This step involves considering factors such as the customer's budget, the value of the product or service to the customer, and the prices of similar products or services offered by competitors. Additionally, the second step of value-based pricing involves determining the price point that will maximize the profitability while maintaining customer satisfaction and loyalty. This step may also include testing different price points to see which one generates the most revenue and profit, and making adjustments as needed.

It's important to note that value-based pricing is a dynamic process, and the perceived value of a product or service can change over time, so it's important to regularly review the pricing strategy and make adjustments as needed to ensure that prices align with the value that customers perceive.

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Who is exempt from gross income tax?

Answers

This covers people and HUF who are under 60, seniors or those who are over 60, and super seniors or those who are over bond 80. As a result, the basic income tax limit benefit for senior and super-senior citizens has not increased.

Income from municipal bond income, child support, life insurance death benefit money, and welfare are all excluded from the IRS's determination of your income tax. According to the exclusion rule, money that cannot be utilised to buy food or shelter is not taxable. Any member of the Hindu Undivided Family (HUF) is exempt from filing an income tax return if they get income from their family or income from the impartible family estate or property.

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what do you have to be cautions of before purchasing anything that is on sale

Answers

You have to be cautious of the price of the item because it can still total up to be a lot of money even when it is on sale.

What are the factors that influence buying decision?

Any purchase decision must start with this as its primary consideration. The answer is straightforward.

The function factor is entirely focused on needs and is supported by the reasoning that what is reasonable and also serves the interests of the client is appropriate.

The marketing mix is made up of four elements: product, pricing, promotion, and place of distribution. Each of these elements affects customers' decision-making either directly or indirectly.

Age, occupation, way of life, social and economic standing, and gender of the consumer are some examples of personal characteristics.

These elements may have an impact on customers' purchasing decisions either singly or jointly.

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Use the following information to answer questions 1- 10.
A 5—year 5% annual coupon bond yields 4%. Compute the Macaulay duration of the bond. Do this by filling in the following table. Do not round — keep many decimals so that your duration should be accurate to 4 decimals.
(table)
Time Until payment; Payment Discount at 4%; Weight: Column (1) x Column (4)
1; 50; ___; ___; ___
2; 50; ___; ___; ___
3; 50; ___; ___; ___
4; 50; ___; ___; ___
5; 1050; ___; ___; ___
Column Sum: 1000

Answers

Bond is an open source framework for managing and automating network infrastructures.

What is a Bond?

Bond is an open source framework for managing and automating network infrastructures. It provides a powerful, secure, and unified platform for network and service orchestration. Bond enables network operators to quickly and easily manage and automate their infrastructure, and to create and deploy new services. Bond also provides a wide range of capabilities for automating, monitoring, and managing networks of all sizes, from small local networks to large-scale, distributed networks. Bond is designed to be easy to use, modular, and extensible, and can be integrated with other open source and commercial tools.

Time Until payment; Payment Discount at 4%; Weight: Column (1) x Column (4)

1; 50; 0.9615384; 48.0769231;

2; 50; 0.9259259; 46.2962963;

3; 50; 0.8928710; 44.6435551;

4; 50; 0.8613445; 43.0672269;

5; 1050; 0.8313253; 871.224922;

Column Sum: 1000; 4.00000000; 400.00000000; 3367.181818

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If ashley worked for herself as a web designer and could get additional work that paid $18 per hour, how much would it be worth to her family (before taxes) each year, if she could free up 2 hours per week by having a washer and dryer at home?.

Answers

By having a washer and dryer at home, Ashley would be able to free up 2 hours per week that she could then use to take on additional work at $18 per hour, which would be worth $36 per week or $1,872 per year (before taxes) to her family.

The cost of an opportunity is the benefit that must be given up in order to pursue that opportunity. In this case, the opportunity is the additional work that Ashley could take on as a web designer, and the cost is the time she would have to spend on laundry if she didn't have a washer and dryer at home.

If Ashley worked for herself as a web designer and could get additional work that paid $18 per hour, and she could free up 2 hours per week by having a washer and dryer at home, it would be worth

$18 x 2 = $36 per week or

$36 x 52 = $1,872 per year (before taxes) to her family.

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Why is high profit important?

Answers

High profit is important because it allows a business to grow, invest in new opportunities, and increase its competitiveness.

Growth: High profit allows a business to invest in expansion, such as hiring more employees, opening new locations, or increasing production. It can also help a business to stabilize its financial situation, by having a buffer to cover unexpected expenses or downturns in the economy.

Invest in new opportunities: High profits also provide a business with the resources to invest in new opportunities, such as research and development, marketing campaigns, or new product lines. This can help a business to stay ahead of the competition and to expand its customer base.

Increase competitiveness: High profit also allows businesses to invest in new technology, equipment, and other resources that can increase efficiency, productivity and competitiveness in the marketplace. This can help to improve the quality of products and services, and to lower costs.

Return for shareholders: High profit also allows a business to provide a return for its shareholders, by paying dividends or by investing in stock buybacks.

High profit  is a key indicator of a company's financial health and its ability to sustain itself over time.

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