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Brandies,Inc

question 21

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Brandies,Inc.reported net income of $5.6 million.At the beginning of the year,6.8 million shares of common stock were outstanding and at the end of the year,7.2 million shares were outstanding.No dividends were declared.The EPS is approximately:


Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output produced.

Perfectly Competitive

A market structure characterized by many buyers and sellers, identical products, and free entry and exit, leading to price determination by supply and demand.

Market Price

The ongoing value for buying or selling a product or service in the free market.

Shut Down

A short-term decision by a firm to cease production when marginal revenue does not cover variable costs, differing from going out of business, which is a long-term decision.

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