Although Nike projected a rosy future‚ many analysts had mixed reactions to the projections. Ford was right to come up with her own forecast‚ seeing as the reactions ranged from too aggressive to growth opportunities. In order to completely analyze Nike and its possible place in the NorthPoint Large-Cap Fund‚ Ford needs to know Nike’s cost of capital. One of the most useful ways to measure the cost of capital is the weighted average cost of capital (WACC). Theoretically‚ the optimal capital structure
Premium Weighted average cost of capital Financial markets Finance
. Pricing Strategies: 1. Penetration Pricing: This pricing strategy is followed by companies with the intention to maximize their market share. They believe that a higher sales volume will lead to lower unit costs & higher long-run profit. Example: China Mobile Phones in India.This is one of the fastest growing industries in India. China mobile phones are cheap and offer the same features as a expensive mobile from some other well known manufacturer few samples of Chinese mobiles are shown
Premium Mobile phone Pricing
Lecture 2: Pricing by Arbitrage Readings: Ingersoll – Chapter 2 Dybvig & Ross – “Arbitrage‚” New Palgrave entry Ross – “A Simple Approach to the Valuation of Risky Streams‚” Journal of Business‚ 1978 Here we will take a first look at a financial market using a simple state space model. We first develop some structure then examine the implications of the absence of arbitrage. Often in finance problems‚ uncertainty is characterized by the use of a set of random variables with a particular
Premium Investment Linear algebra Financial markets
PRICING METHODOLOGY Pricing methods adopted by an organization determines the values attached to its products. Pricing determinant can be Internal or External. An Internal pricing determinant is one that is controlled by the marketer while the external is not controllable by the marketer. We shall be considering the following types of pricing models: PRICE DISCRIMINATION: Price discrimination is the practice of setting a different price for the same product in different segments to the market.
Premium Pricing
good or service which was purchased by its customer. For a majority of products price is determined in a free market by the forces of supply and demand. Also price is one of the 4 elements of Marketing Mix. Pricing strategies are only the medium or long-term pricing plans that a business adopts. There are some main pricing strategies: Price skimming is often used when a new innovative product is launched onto the market. The risk that this product will face competition in the short term is very
Premium Pricing Marketing
DATA P 20 Q 2.000 R 40.000 VC 16.000 VCu = 8 FC 20.000 Q1) P/P = +20% P = +20%*20 = +4 The formula to compute Iso-Contribution change in sales volume is the following: Q = -25%*2.000 = -500 The maximum sales loss that the company can incur without hurting profits is of 500 units or -25%. Actual Change in Sales Change in Contribution = Change in Profit (%) (Units) ($) ($) 0‚0% 0 8000 8.000 -10‚0% -200 4800 4.800 -20‚0% -400 1600 1
Premium Variable cost Cost Contribution margin
the northeast of Brazil. First‚ a situational analysis is performed‚ followed by a strategic analysis and final a market and 4Ps analysis of the strategic recommendation. 1. Situational Analysis Unilever Brazil In the section an analysis of the market facing Unilever is preformed that includes an assessment of the company‚ customers‚ competitors and external market environment. This information is then summarized in a SWOT analysis. 1.1 Company Analysis of Objectives and Resources Unilever is an Anglo–Dutch
Premium Marketing Brand Laundry detergent
discuss what is most likely to go wrong in the analysis of direct material and other direct costs and what could be done about it. The analysis of direct material and other direct costs and what could be done about it is that when a particular organization prepares for the budget in relation to the cost of direct material or direct labor then‚ it has to consider the inflation rate and the standard rates in the industry. In relation to the direct labor cost‚ the organization has to analyze of the industrial
Premium Cost accounting Costs Cost
1311180 Global Service Department Business Opportunity Analysis CASE 3. Dogfight over Europe: Ryanair 1) Do you believe Ryanair’s entry into Dublin-London route was successful? Yes‚ Ryanair’s entry into Dublin-London route could be counted successful. Ryanair‚ which has been operated since 1985‚ is a small and rather domestic company compared to Aer Lingus and British Airways (BA). They will operate a turboprop that contains 44 seats‚ that takes 4 round trips per day. Unlike the two giants‚ Ryanair
Premium Aer Lingus Express mail Deutsche Post
Cost Benefit Analysis A cost benefit analysis is important because it can help us decide what would be the total expenditure on a particular project along with the expected returns from the project. From a cost benefit analysis‚ it is easy to decide whether implementing the project will be a profitable deal for the organization or not. It is through the examples of this process that we can get a clear idea of how to proceed with this calculation. Definition As said above‚ a cost benefit
Premium Cost Costs Cost-benefit analysis