The trend projection with regression model can forecast demand well into the future
Indicate whether the statement is true or false
TRUE
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The more loyal a firm's profitable customers, the lower its customer equity
Indicate whether the statement is true or false
The owner of a radio station in a rapidly growing community in central Texas is about to begin operations and must decide what type of program format to offer. She is considering three formats; rock, country, and rap. The number of listeners for a particular format will depend on the type of potential audience that is available. Income from advertising depends on the number of listeners the station has. Three broad categories of audience type can be described as A1, A2, and A3. The rock music format draws mainly for the A1 listener, the country music format draws mainly from the A2 listener and the rap music format draws mainly from the A3 listener. The station owner does not know which type of audience will dominate the community once its growth has stabilized. Probabilities have been
assigned to the potential dominant audience, based on the community growth that has already occurred in this area. Because she wants to begin building an image now, the decision as to which format to adopt must be made in an environment of uncertainty. The station owner has been able to construct the following payoff table, in which the entries are average monthly revenue in thousands of dollars. Audience FormatA1 A2 A3 Rock$ 110 $ 80 $ 70 Country$ 90 $ 120 $ 50 Rap$ 70 $ 60 $ 140 Probability0.3 0.5 0.2 What format is optimal? What is the expected profit in that case? What will be an ideal response?
On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 1,500,000 yen. The exchange rate was $0.00837 per yen on the date of sale. On December 31, when Higgins prepared its financial statements, the exchange rate was $0.00843. Kagome paid in full on January 12, when the exchange rate was $0.00861. On December 31, Higgins should prepare the following journal entry:
A. No journal entry is required until the amount is collected. B. Debit Accounts Receivable-Kagome $90; credit Foreign Exchange Gain $90. C. Debit Foreign Exchange Loss $90; credit Sales $90. D. Debit Sales $90; credit Foreign Exchange Gain $90. E. Debit Foreign Exchange Loss $90; Accounts Receivable-Kagome $90.
In calculating residual income, the variable set by top management is called the:
A) average operating assets. B) operating income. C) hurdle rate. D) actual operating assets.