Price / Earnings Ratio Q1: (Introductory) What three alternative measures of the price-earnings ratio (P/E ratio) are described in this article? Answer: Following are three price-earnings ratio described in the article: 1. P/E ratio 2. “Forward” P/E ratio 3. “Trailing” P/E ration Q2: (Advanced) Which of the three measures matches the definition of the P/E ratio given in your textbook? Explain your answer. Answer: Books has only discuss the simple P/E ratio‚ PE ratio measures how much investor
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Discussion Questions 1. Suppose the price of coffee beans increases by $0.20 per pound. What is the effect of this raw material price increase on the demand for roasted coffee? If one pound produces 50 cups of coffee‚ would the price of a cup of coffee rising by $0.01? Explain. Price of the product comes from the production of the goods all the way till it hits the market shelf. So when the price of the product like coffee increases during the productivity of the product then the end cost could increase
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Five (5) price adjustment strategies Discount and allowance pricing This is when companies adjust their price to reward customer for certain response. Such as early payment of bills and buy one get one half price or free. The many form of discount include a cash payment discount‚ a price reduction to buyers who pay their bills promptly. For examples “2/10 net 30‚” this means although payment is due within 30 days‚ the buyer can deduct 2 percent if the bill is paid within 10 days. Also buyers
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can assist in promoting a healthy lifestyle by educating our children in their choices eating healthy food‚ and in preventing illness in proper hand washing techniques. Health promotion is the practice of allowing individuals to increase their own control over‚ and to improve their health. The purpose of health promotion is to monitor and evaluate
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for a product would be to use the concept of elasticity of demand. This paper will look at elasticity and the factors that go into calculating it‚ and describe how using elasticity could help Apple Inc. (Apple) maximize its revenue from the iPod. Finally‚ this paper will describe how a change in consumer income will affect the overall demand for iPods. Price elasticity is a tool designed to identify the overall change in demand or supply of a product compared to the overall movement of price. For
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Week I Quiz Results/Answers ECO561 1. Revenue increases when * producer surplus increases 2. An increase in the price of an inelastic good * increases revenues 3. Price elasticity of Demand increases when * people become less price sensitive over time 4. The purpose of a market in a market system is to * bring buyers and sellers into contact 5. By specializing in the production of one good‚ a company is able to benefit from economies of scale which increases its revenue. Which
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The impact of the minimum price per unit of alcohol on the on and off trade. The Scottish Government has suggested introducing a minimum price per unit of alcohol to reduce binge drinking. The impact of this on the on and off trade will be researched. The Scottish government has introduced a minimum price per unit of alcohol of £ 0.45. www.bbc.co.uk [online] The proposal is to put the price up for really cheap alcohol‚ with that‚ less people would have access to that‚ for example a two litre-bottle
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self-assembly furniture products at low price. The IKEA business idea is: ‘We shall offer a wide range of well-designed‚ functional home furnishing products at prices so low that as many people as possible will be able to afford them.’ IKEA targets price-conscious young couples and families who are willing and able to transport and assemble furniture kits. The low-price strategy‚ seeks to achieve a lower price than competitors while maintaining similar perceived product or service benefits to those
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of the product. Through this a company is capable of determining their profitability which then may determine how they can generating appropriate amount of income that will support their operation. This may‚ as well‚ serve as great strategic tool as this may help the company cope up with their competition through certain adjustments and empolying different strategies. There are certain phenomena that may occur upon utilizing such in an industry and one of those is the price war. Price war is
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rare. As we learned earlier this year about the free market‚ price is determined by quantity of demand and supply‚ but with government intervention‚ prices may be controlled‚ quantity of supply may change because of subsidies‚ and demand may change if tax is added on products. Intervention may cause the market disordered‚ and also leads to unwanted harmful consequences. A several examples of government interventions are taxation‚ price control‚ and subsidizing. Tax is an amount of money placed on
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