TSD Inc. sells 500,000 bottles of its soft drinks per year. Each bottle has a variable cost
Question:
TSD Inc. sells 500,000 bottles of its soft drinks per year. Each bottle has a variable cost of $0.25 and sells for $0.45. Fixed operating costs are $50,000. The firm also has current interest changes of $6,000 and preferred dividends of $2,400.
Corporate taxes are at 25%.
Calculate the degree of operating leverage, financial leverage and total leverage.
Calculate the Herfindahl index for a duopoly market where each firm has equal market share.
ii. Calculate the Herfindahl index for a three-firm oligopoly market in which one firm has a 80% market share and the other firms each have 10% market share.
iii. Calculate the Herfindahl index for a 10-firm oligopoly in which each firm has equalmarket shares.
iv. Which of the markets is the least competitive?
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin