The following items are the same for the flexible budget and the master budget except:
a. the same variable cost per unit.
b. the same total fixed costs.
c. the same units sold.
d. the same sales price per unit.
Answer: c. the same units sold.
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How does personal selling differ from other forms of promotion?
a. It is considerably less effective for obtaining sales and gaining a satisfied customer. b. Its costs can be less easily controlled. c. It is best able to handle customer objections as they arise. d. It does have to deal with unqualified customers.
In recent years, Sears, Roebuck & Co has paid out only 32% of its earnings in dividends. Retained earnings have been invested in expansion projects that have yielded an average ROE of 20%
If Sears' cost of equity capital is 16% and next year's expected dividend is $1 per share, compute the value of Sears' shares using the constant dividend growth model as interpreted through the sustainable growth model. a. $5.01 b. $9.87 c. $20.47 d. $41.67 FORMULAS: g=bk; V=Dt/(r-g)