It’s hard to see what Zazzle can do that Café Press can’t match. It also seems like Zazzle’s cut of the revenues generated by the freelance artists that post material on its site is very generous. An artist gets only a 10 percent royalty (17 percent if the sale is made through a referral). That means that Zazzle keeps 83 to 90 percent of the sale. By comparison, although eBay’s fee schedule is complex, in general, it charges $.25 to $80 per listing and two to eight percent of the final price.
From this total, in 2010 the most part of this money was wasted on the commissions for stores selling these tickets, and prizes; the government received only $17.9 billion, which broke down to 30 percent in profits and 8 percent in administrative costs. In addition, lotteries can be seen as a hidden form of taxing; in 2009, 11 American state lotteries raised more money per person than corporate income taxes. Though people usually tend to see lotteries as a panacea against their unsatisfactory financial condition, in fact lotteries cannot save one from poverty or going bankrupt. In 2007, one of three lottery winners experience severe financial problems within about five years, and even lose all their capital. One of the main reasons standing behind this phenomenon is that despite suddenly gaining vast amounts of money, people do not revise their financial habits; moreover, rather often lottery winners spend money less
Chap1 Solution of 1st Homework 1. a. Total explicit cost = $793,000 (= 555,000 + 45,000 + 28,000 + 165,000) Total implicit cost = $190,000 (= 175,000 + 0.15 ( 100,000) Total economic cost = $983,000 (= 793,000 + 190,000) b. Accounting profit = $177,000 (= 970,000 – 793,000) c. Economic profit = –$13,000 (= 970,000 – 983,000) d. The owner’s accounting profit is $13,000 less than what he could have earned in salary and return on investment of his $100,000, i.e., his economic profit is –$13,000. Thus, he would have made $13,000 more if he had kept his job and invested his $100,000 in stocks of other businesses. 3. a. Burton's explicit cost's are $18,000 per month.
Although United States may be in a recession and Vanilla Bicycles doesn’t offer the cheapest bikes around, averaging 7,000 dollars a bike, it hasn’t stopped bicyclist from buying high-quality American-made bikes. The company has an income of 300,000 dollars a year, earning 100,000 dollars in profit, which is more than enough to keep White from ever having to become a bike messenger again. This article reminded me of Chapter 2, Competing in Global Markets, due to the reasons of other bicycle companies that are imported into the country with a much lower resale value. Not only does White face competition from bikes made in China, but other American-made
On the other hand, Inditex has achieved net income of 340 million euros in 2001 with relatively such small revenue. This could be explained by the fact that complete outsourcing of the production caused a limited control over the production and long lead times made the company less responsive to market changes. However, since Inditex owned much of its production facilites, production took place in small batches and thus fast response to market changes gave Inditex a competitive advantage. Thus, it can be concluded from the financial results of two companies, Inditex is more profitable despite that The Gap has the largest operating revenues. 2- Zara has many distinctive features that affect its operating economics.
With local operations in over 200 countries around the world. Debt Ratio (in Millions of Dollars) 2013 2012 Total Liabilities / 1,085 1,148 Total Assets 1,276 1,283 Debt Ratio 83.50% 89.48% The ratio shows the company’s ability to cover its debts through its total assets. The ratio was 89.48% in 2012, then went down in 2013 to 83.50%. The ratio has to be low. So we can interpret that in the year 2013, the risk of the firm is getting lower as the ratio goes down.
negative 2500 $.The company needs to raise about 40,000 $ as the ending cash balance for the month of July is negative 40,000 $. The Company can get a short term loan for 40,000 $ which can be repaid in October. 2. Even though the Company started with a Capital of 250,000 $ it still ends up with a zero bank balance. This is because the increase in the collections of Accounts Receivable from customers is not sufficient to recover the total disbursements (variable production cost and the fixed cost).
Case question 1 During the recent years, Robertson Tool has been underperforming. Poor profit and sales performance reflects potential profits to be achieved from an acquisition with Robertson. At Robertson, key line items such as sales income, cost of sales and administrative expenses are much likely to be improved. Despite the fact that Robertson’s distribution system has a great range with wholesalers selling to over 15,000 retailers in 137 countries, the company’s sales growth (2%) falls behind the industrial sales growth by 4 per cent (6%). Poor sales performance and relatively high cost of sales have contributed to the profit margins to slip to one third of other hand tool manufacturers.
The larger expenses coming along with high quality and services render salespeople a disadvantage when talking to their clients for business. The standards of performance (SOP) set for extra compensation seem unrealistic, with 75% of salespeople earning no commission in the first half of 1992, and so conceivably, fail to motivate them. This makes the result control less effective as they failed to evoke the desired behaviors – achieving sales targets. Together with other offers by competitors, this resulted in high turnover rate. Profit Sharing - Result controls may serve well with congruence between employees’ and company’s objectives, but employees take for granted the law-required 10% profit sharing of the company’s income and so their motivational effect seems little.