(T/F) one of the attributes of a successful acquisition is that the acquiring firm conducts effective due diligence
Answers
The statement ''one of the attributes of a successful acquisition is that the acquiring firm conducts effective due diligence'' is true as conducting effective due diligence is a crucial attribute of a successful acquisition.
Due diligence is the process of thoroughly evaluating a company to identify any potential issues or risks before making a purchase decision. It involves analyzing financial statements, legal documents, contracts, and other important information to gain a comprehensive understanding of the target company's operations, liabilities, and opportunities for growth.
Effective due diligence can help the acquiring firm identify any hidden liabilities, avoid costly mistakes, and negotiate a fair purchase price. Therefore, it is essential for the acquiring firm to conduct thorough and effective due diligence to ensure a successful acquisition.
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Related Questions
Lola-Rose converted her personal residence to rental property in 2021. She purchased the property in 2011 for $300,000 (including acquisition expenses), of which $75,000 was allocable to the land. She made no improvements. On the date of conversion, an appraisal valued the property at $233,000; $58,250 was allocated to the land. Lola-Rose's basis for depreciation is __________.
O $174,750
O $225,000
O $233,000
O $300,000
Answers
Lola-Rose's basis for depreciation is $174,750. The correct option is a.
To calculate the basis for depreciation, we need to start with the original cost of the property, which is $300,000. From this, we need to subtract the value of the land, which is $75,000. This gives us a cost basis for the building of $225,000. However, when Lola-Rose converted the property to rental use, she had to adjust the basis to reflect the fair market value of the property at that time. The appraisal valued the property at $233,000, so this becomes the new adjusted basis for the property. To calculate the basis for depreciation, we need to use the lower of the original cost basis or the adjusted basis. In this case, the adjusted basis of $233,000 is lower than the original cost basis of $225,000, so we use the adjusted basis. From this adjusted basis, we need to subtract the value of the land, which is $58,250. This gives us a basis for depreciation of $174,750.Learn more about depreciation: https://brainly.com/question/27971176
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peewee's toys purchased $119,800 worth of pegablock toys on account with credit terms of 2/10, n/30. mar. 12 peewee's toys returned $11,900 of the merchandise to pegablock due to damage during shipment. mar. 14 peewee's toys paid the amount due, less the return and discount.
Answers
The net amount due after Peewee's toys purchase is about $105,504.
What is the net amount due?
Peewee's toys purchased $119,800 worth of pegablock toys on account with credit terms of 2/10, n/30.
On March 12, Peewee's toys returned $11,900 of the merchandise to Pegablock due to damage during shipment.
On March 14, Peewee's toys paid the amount due, less the return and discount.
To calculate the amount due:
Calculate the discount by multiplying the amount of the purchase by the discount rate.
Subtract the discount from the amount of the purchase.
Calculate the net amount due by subtracting the return from the purchase minus the discount.
Therefore, the calculation is as follows:
Discount = $119,800 × 2% = $2,396
Amount Due Less Discount = $119,800 - $2,396 = $117,404
Net Amount Due = $117,404 - $11,900 = $105,504
The net amount due is $105,504.
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what is the key that government could use to get low-income earners to commit to saving?
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One key strategy that the government could use to encourage low-income earners to commit to saving is the implementation of automatic enrollment programs.
By making saving the default option, individuals would be automatically enrolled in savings programs or retirement accounts unless they actively choose to opt-out.
This approach leverages the concept of inertia, where people tend to stick with the default option. Automatic enrollment can be combined with features such as automatic contribution increases over time or employer matches to further incentivize saving.
By simplifying the process and removing barriers, the government can help low-income earners develop a habit of saving and build financial security for the future.
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One key approach that governments could use to encourage low-income earners to commit to saving is by implementing financial incentives or matching programs. These programs aim to provide additional funds or benefits to individuals who save a portion of their income.
Here's how it works:
Matching Programs: The government can establish savings programs where they match a certain percentage of the amount saved by low-income earners. For example, for every dollar saved, the government may provide a matching contribution. This incentive encourages individuals to save as they see their savings grow faster with the government's contribution.
Tax Incentives: Governments can offer tax incentives specifically targeted at low-income earners who save. These incentives can include tax credits or deductions for contributions made to savings accounts, such as retirement accounts or education savings accounts. By reducing the tax burden on savings, individuals are motivated to save more.
Financial Education and Counseling: Providing accessible financial education and counseling services to low-income earners can empower them with the knowledge and skills needed to make informed financial decisions, including saving. These programs can teach budgeting, goal-setting, and strategies for effective saving.
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what is the difference between the FBI and the CIA
Answers
Answer:
The CIA (Central Intelligence Agency) mostly operates outside the United States to gather intelligence via a network of spies whereas the FBI (Federal Bureau of Investigation) predominantly operates within the U.S. to both gather intelligence as well as tackle federal crimes.
Explanation:
lean manufacturing refers to just-in-time production coupled with total quality control.
Answers
Lean manufacturing involves a comprehensive approach to optimizing processes, reducing waste, improving quality, and maximizing value throughout the entire production system.
Lean manufacturing refers to a systematic approach and set of principles aimed at maximizing efficiency and eliminating waste in manufacturing processes. While just-in-time (JIT) production and total quality control are often associated with lean manufacturing, lean principles encompass a broader range of concepts and practices.
Just-in-time production is a component of lean manufacturing that focuses on producing and delivering products at the right time, in the right quantity, and with minimal inventory. It aims to minimize inventory holding costs, reduce lead times, and increase responsiveness to customer demand.
Total quality control, or total quality management (TQM), is another component of lean manufacturing that emphasizes a culture of continuous improvement and achieving high-quality products or services. TQM involves various quality control techniques, employee involvement, and customer satisfaction focus.
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A product sells for $290 per unit, and its variable costs per unit are $213. the fixed costs are $438,000. if the firm wants to earn $76,360 pretax income, how many units must be sold?
Answers
A product sells for $290 per unit, and its variable costs per unit are $213. the fixed costs are $438,000. if the firm wants to earn $76,360 pretax income the unit sold will be = 6,680 units
Target Pretax Income: is The sales units or sales revenue that must be generated in order to achieve that profit objective can then be calculated using the tools in break-even analysis.
Calculation=
Selling price per unit =$290
Variable cost per unit =$213
Contribution margin per unit=$77
Total fixed cost =$438,000
Target profit=$76,360
Target profit sales units = Target profit + Total Fixed Costs / Contribution margin per unit
=$76,360+$438,000/$77
=6,680 UNITS
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CenterPoint Energy is a Fortune 500 energy delivery company based in Houston, Texas. Its primary business includes electric transmission and distribution, natural gas distribution, and natural gas sales and service. It has over five million metered customers in the United States. CenterPoint Energy uses smart grids to collect real-time information about the health of various aspects of the grid like meters, transformers, and switches that are used in providing electricity. This real-time power usage information is analyzed with Big Data analytics and allows for a much quicker diagnosis and solution. For example, the data can predict and potentially help prevent a power outage. In addition, the tool collects weather information allowing historical data to help predict the magnitude of an outage from a storm. This insight will act as a guide for putting the right resources out before a storm occurs to avoid an outage. Second, to better understand their customers, CenterPoint Energy utilizes sentiment analysis, which examines a customer’s opinion by way of emotion (happiness, anger, sadness, etc.). The company segments their customers based on the sentiment and is able to market to these groups in a more personalized way, providing a more valuable customer service experience. As a result of using Big Data analytics, CenterPoint Energy has saved 600,000 gallons of fuel in the last 2 years by resolving six million service requests remotely. In addition, they have saved $24 million for their customers in this process.
Question: how can companies predict a possible outage at a location?
Question: What is customer sentiment analysis and how does it help companies provide a personalised service to their customers?
Answers
To predict outages, companies use smart grids and Big Data analytics. Customer sentiment analysis helps personalize marketing and service by understanding emotions and preferences.
To predict possible outages, companies like CenterPoint Energy use smart grids and Big Data analytics. Real-time data from meters, transformers, and switches is collected and analyzed. Historical data and weather information are incorporated to build predictive models. Alerts are generated to enable proactive measures like dispatching crews and optimizing resource allocation.
Customer sentiment analysis involves gathering feedback from sources like surveys and social media. Using sentiment analysis algorithms, customer feedback is classified into positive, negative, or neutral sentiments. Segmentation based on sentiment allows companies to personalize marketing and service. Targeted offers, promotions, and customized experiences are provided to enhance customer satisfaction. By understanding emotions and preferences, companies can address concerns and provide proactive assistance, resulting in a more personalized and valuable customer service experience.
So, that to predict outages, companies use smart grids and Big Data analytics. Customer sentiment analysis helps personalize marketing and service by understanding emotions and preferences.
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A down payment is usually what percentage of the asking price of a home?
05 percent
5-20 percent
20-50 percent
50-75 percent
Answers
A down payment is usually what percentage of the asking price of a home is 5-20 percent. People take out a loan to cover the remainder of the purchase price of the Home.
What is down payment?
A down payment is a sum of money given by a buyer at the beginning of the buying process for a costly item or service.
Because the down payment is only a portion of the total purchase price, the buyer will almost certainly need to borrow the balance.
Thus, option B is correct.
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Answer: B or 5–20 percent
A down payment is usually what percentage of the asking price of a home?
0–5 percent
√5–20 percent
20–50 percent
50–75 percent
Explanation:
In the context of inventory costs, _____ costs can reflect backorders or service interruptions for external customers.
Answers
Answer: Stockout costs
Explanation:
Question 2(Multiple Choice Worth 5 points)
(02.06 MC)
In general, what kind of people earn the most money?
O People with skills that are in high demand and high in supply
O People with skills that are in high demand but low in supply
O People with skills that are in low demand and low in supply
People with skills that are in low demand but high in supply
Answers
They earn the most money since skills also follow the law of supply and demand, so consumers are willing to pay more due to low supply
What are the 4 stages of data mining?
Answers
The four stages of data mining are Data Preparation, Data Exploration, Model Building, Evaluation and Deployment .
What are the four stages of data mining?
Data Preparation: This involves gathering, cleaning, and organizing the data to prepare it for analysis.
Data Exploration: This involves exploring the data in an effort to gain a better understanding of the data and to uncover patterns and relationships between variables.
Model Building: This involves building a predictive model based on the patterns and relationships discovered in the data exploration stage.
Evaluation and Deployment: This involves evaluating the model to ensure it is accurate and efficient, and then deploying the model in a production environment.
What does Data mining means?
The process of discovering patterns in large datasets using methods from artificial intelligence, machine learning, statistics, and database systems is known as "data mining." It is the process of discovering hidden relationships and insights in large data sets through the use of analytical techniques such as clustering, classification, and regression. Data mining is a technique for extracting information from large data sets and can assist businesses in gaining insights into their customers, products, and operations.
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FILL IN THE BLANK. Regarding civil servants, each position gets a GS rating from GS 1 to GS 18, which determines its salary. GS stands for General ______.
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Regarding civil servants, each position gets a GS rating from GS 1 to GS 18, which determines its salary. GS stands for General Schedule.
The civil service is a collective term for a zone of government composed specifically of career civil servants hired on expert merit instead of appointed or elected, whose institutional tenure typically survives transitions of political management. A civil servant, also known as a public servant, is someone employed in the public zone by way of a government branch or enterprise for public region undertakings. Civil servants work for critical and country governments, and answer to the authorities, no longer a political party.
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What is the structure of Public corporation
Answers
Public corporate structures are managed by a board of directors. The members of the board are from all walks of industry and commerce. The chairmen of these corporations are appointed by the government. The entire capital is financed by the government.
The amortization of fair value allocations totaled $60,000 in 2020. Not including its investment in Harbor, Femur Co. had its own revenues of $4,500,000 and expenses of $3,000,000 for the year 2020. The noncontrolling interest's share of the earnings of Harbor Corp. for 2020 is calculated to be
Answers
Answer:
Noncontrolling interest's share of the earnings = $132,000
Explanation:
Missing information;
Share of Femur Co. acquired = 70%
Amount of amortization of fair value in 2020 = $60,000
Revenues in 2020 = $2,500,000
Expenses in 2020 = $2,000,000
Find:
Noncontrolling interest's share of the earnings
Computation:
Noncontrolling interest's share of the earnings = [$2,500,000 - $2,000,000 - $60,000][1-70%]
Noncontrolling interest's share of the earnings = [440,000][0.3]
Noncontrolling interest's share of the earnings = $132,000
______ Is a market in which a large number of suppliers compete with each other to satisfy the needs and wants of a large numbers of consumers at a competitive price.???
Answers
Answer : Monopolistic competition
Answer:
Monopolistic Competition
Explanation:
In a monopolistic competitive market, there are large numbers of sellers who do not sell identical products instead they sell differential products. They compete with each other at a competitive price. The products could be differentiated in many ways including quality, style, location and even brand name. Since they compete at a competitive price, if there is a substantial rise in the price of any of the products, the buyers could quickly shift from one product to another. The most crucial factor behind product differentiation is because of geographical factors. Under a monopolistic competitive market, the sellers do not have any influence over customer loyalty and limited control over the price.
In 2018, country a exports $84.9 billion and imported products valued at $74.69 billion. the difference between the dollar value of its exports and imports represents a:_____.
Answers
In 2018, country a exports $84.9 billion and imported products valued at $74.69 billion. The difference between the dollar value of its exports and imports represents a Trade Surplus.
A trade surplus is an economic indicator which indicates a favorable trade balance when a nation's exports are more than its imports.
It is calculated as : Total value of Exports minus Total value of Imports.
When the outcome of the computation which is done above is positive, there is a trade surplus. A trade surplus is the result of a net local money inflow from the international markets.
It takes place when the outcome of the aforementioned computation is negative and is the opposite of a trade surplus, then it will denote a net inflow.
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2. Making choices is necessary in all economic systems because:
A. there are so many products that we cannot use them all at once
B. the government has so much money that it does not know what to do with it
C. there are so many resources compared to people’s needs that we have to choose which ones not to use
D. there are so many wants compared to scarce resources that we have to decide what to produce
Answers
Explanation:
it is d because we don't have enough resources to sustain forever so we have to figure out how to make them last.
Bgn sells furniture such as beds and tables. It started as a partnership but is now a private limited company. BG has expanded quickly and has 10 shops located in different cities.Each shop manager is responsible for recruitment and decisions about inventory levels. They send the board a monthly report. The managing director has a laissez fair leadership style.There has been an increase in customer complaints and employees think internal communications need to be improved.Identify and explain one advantage and one disadvantage of the managing director's leadership style?
Answers
Answer:
See below
Explanation:
The Laissez-faire leadership style allows group members or employees to make important decisions. Managers operate hands-off, meaning they allow employees to run the business. The Laissez-faire leadership style is delegates responsibilities to employees.
Advantages
1. It promotes employees' personal growth.
When leaders are hands-off, employees get the chance to be hands-on. The Laissez-faire leadership style creates an environment that facilitates employee growth and development.
2. It encourages innovation. Employees have the freedom to try out different ways of achieving objectives. This promotes creativity and innovation in the workplace.
Disadvantages
1.Subject to abuse by employees
Because there is little supervision by managers, some workers may take advantage of their benefit. They might engage in fraud-related activities to steal money from the business. Absenteeism without genuine reason is likely to be high.
2. Reduces cohesion in teams
Due to a lack of clear leadership, each group member act as per their judgment. Teamwork is destroyed, which results in low productivity.
Decision goes through different process.Elaborate
Answers
A project has an initial cost of $80,000 and a 3-year life. The company uses straight-line depreciation to a book value of zero over the life of the project. The projected net income from the project is $1,200, $2,300, and $2,800 a year for the next 3 years, respectively. What is the average accounting return? 5.25 percent 5.35 percent 5.45 percent 5.56 percent
Answers
Answer:
5.25%
Explanation:
The computation of the average accounting return is shown below:
Average accounting return is
= Average net income ÷ average initial cost
where,
Average net income is
= ($1,200 + $2,300 + $2,800) ÷ 3 years
= $2,100
And, the average initial cost is
= $80,000 ÷ 2
= $40,000
So , the average accounting return is
= $2,100 ÷ $40,000
= 5.25%
Hence, the average accounting return is 5.25%
According to the OOH, what educational, training, certification, or licensing requirements do Physicians and Surgeons need? Check all that apply.
medical school
volunteer work
internship and residency program
a public-speaking certification
license
Answers
Answer:
There are actually 3 answers to this question.
A. medical work
C. internship and residency program
E. license
Hope this helps :)
Explanation:
The U.S. Bureau of Labor Statistics, the educational, training, certification, or licensing requirements for Physicians and Surgeons include:
Medical school:
Internship and residency program
License
The correct options are A, C, and E.
What is the difference between being a licensed and certified PA?Even while some jurisdictions define certification as having governmental authorization to perform a profession, the distinction between licensing and certification really only refers to the difference between governmental regulation and self-regulation of a field.
Physicians and Surgeons typically need a Doctor of Medicine (M.D.) or Doctor of Osteopathic Medicine (D.O.) degree from an accredited medical school. After completing medical school, physicians and surgeons typically complete an internship and residency program that lasts 3 to 7 years, depending on the specialty.
Physicians and Surgeons must be licensed in the state where they practice medicine. To obtain a license, they must pass a state-specific exam and meet other requirements, such as completing continuing education courses.
Thus, the ideal selections are options A, C, and E.
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when the personal circumstances of a client change, which asset management step does the investment professional return to?
Answers
The first step an investment professional returns to when a client's personal circumstances change is to reassess the client's risk tolerance and investment objectives.
This is because the client's personal circumstances may have changed their risk tolerance and investment objectives, which can have a significant impact on the investment strategy. The next step is to check and adjust asset allocation and portfolio diversification. This ensures that the portfolio is tailored to the client's new risk tolerance and objectives. Finally, the investment professional reviews and adjusts the individual investments in the portfolio. This ensures that investments meet the client's new objectives and are consistent with the new asset allocation and diversification.
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What is an accurate definition of experience?
the collection of things a person has done
a natural ability a person is born with
a subject a person would like to learn more about
the factors that have influenced a person throughout life
Answers
Answer: A)the collection of things a person has done
Explanation: just answered it EDGE 2021
Answer:
A on edge
Explanation:
schager company purchased a computer system on january 1, 2022, at a cash cost of $25,000. the estimated useful life is 10 years, and the estimated residual value is $3,000. the company will use the double declining-balance depreciation method. what is the accumulated depreciation balance as of december 31, 2023?
Answers
In order to calculate the accumulated depreciation balance as of December 31, 2023 using the double-declining balance technique. Amounting to $8,520 as of December 31, 2023, would be the total amount of depreciation.
We must first compute the yearly depreciation rate and then apply it to the asset's net book value (NBV).
The yearly depreciation rate is determined using the double-declining balance technique as 2 * (100% / projected useful life), or in this example, 2 * (100% / 10) = 20%.
The depreciation expenditure would be as follows for the asset's first year of life (2022):
Initial book value multiplied by depreciation costs for 2022. The annual depreciation rate is ($25,000 - $3,000) * 20%, which comes to $4,400.
On December 31st, 2022, there would be $4,400 left in the depreciation balance.
For the second year (2023),depreciation rate of 20% to the net book value (NBV) of the asset as of January 1, 2023:
NBV as of January 1, 2023 = Cost - Accumulated depreciation
= $25,000 - $4,400
= $20,600
Depreciation expense for 2023 = NBV as of January 1, 2023 * Annual depreciation rate
= $20,600 * 20%
= $4,120
December 31, 2023, would be:
Accumulated depreciation balance as of December 31, 2023 = Accumulated depreciation balance as of December 31, 2022 + Depreciation expense for 2023
= $4,400 + $4,120
= $8,520
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what is engineering?
Answers
Answer:
Engineering is an occupation with an extremely wide reach. The term 'engineering' covers many fields and, by extension, many skills. Engineers are scientists, inventors, designers, builders and great thinkers and improve the state of the world, expand human capability and make people's lives safer and easier.
Engineering skills include:
The scientific methodSocial, cultural and economic awareness MathematicsBiology, chemistry, physics and other areas of scienceCreativityTeamworkWhere science is involved with designs, buildings, use of engines, machines, and structures.The purchaser of a tbond futures contract priced at 101-16 at the time of the sale agrees to deleiever 100,000 facevalue treasury bond in exchange for
Answers
Answer:
The answer is "True".
Explanation:
Please find the complete question in the attached file.
It implies that its price of the bond is 101-16, which is to say
\(\to 101 + \frac{16}{32}\\\\\to \frac{3232+ 16}{32} \\\\\to \frac{3248}{32} \\\\\to 101.5\)
Each bond is thus stated as \(101.5 \%\) face value
\(\to 101.5\% \times 100,000 \\\\\to 101,500.00\)
That's why this statement is true.
A legal arrangement where two or more people share ownership of a business is called a ______. A. Corporation b. Sole proprietorship c. Partnership d. Franchise Please select the best answer from the choices provided A B C D.
Answers
The correct statement is that a legal arrangement where two or more people share ownership of a business is called a partnership. So, the correct option is C.
A partnership may be started by two individuals with an intention to share the profits and losses of such business in a predetermined proportion.
Partnership FirmA partnership firm is a form of business organization where at least two individuals put their resources and carry a legal business.
The individuals of a partnership firm are collectively known as partners, where they tend to share the profits and losses proportionately to their capital invested.
There exists vicarious liability among the partners, which means that all the partners are liable for the acts of one or more partner as per the legal contract.
A partnership firm may be terminated by lapse of time, dispute between the partners, dissolution, insolvency, but has a perpetual succession.
Hence, the correct option is C that legal arrangement where two or more people share ownership of a business is called a partnership.
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Answer:
C
Explanation:
trust me bro
Kaylin works in the Manufacturing career cluster. The daily tasks of her career involve looking at ways that her company is at risk for causing problems to the health of its workers. She also analyzes those problems and comes up with solutions to implement.
What job does Kaylin most likely have?
Occupational Health and Safety Specialist
Environmental Science and Protection Technician
Quality Control Analyst
Product Safety Engineer
Answers
Answer:
A-Occupational Health and Safety Specialist
Explanation:
Occupational Health and Safety Specialist. Hence, option A is appropriate.
What is the meaning of Health?A state of complete physical, mental, and social well-being is referred to as health. A balanced diet and consistent exercise are necessary for a healthy life cycle. Additionally, one needs to maintain appropriate hygienic practices, live in a decent shelter, and get adequate sleep.
Your lifestyle should include a commitment to good health. A healthy lifestyle can aid in the prevention of chronic diseases and debilitating conditions. Your self-esteem as well as self-image depend on how you feel about yourself and how well you take care of your physical and mental well-being. Living a healthy lifestyle means taking care of your body.
Personal health is divided into five categories: physical, emotional, social, spiritual, and intellectual.
The WHO Constitution defines "health" as "a condition of complete physical, mental, and social well-being and not only the absence of disease or disability." Balanced health is based on five pillars: activity, diet, sleep, stress reduction, and social interaction. While we can borrow from or swap out part of the balance in one area for another, when we take too much of too many of these fundamentals, our general health begins to deteriorate.
Hence, option A is correct.
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Business lab!! need help
A market overview, including a summary of challenges and opportunities
Top three sectors for export, with detail of major items or sub-sectors to consider. (Since this is an imaginary assignment, rather than coming to this research with your product already in mind and ready to export, you will research what product would be best to export to your country of choice. An easier task!)
How to sell US products in this market
A recommendation on whether it is a good time (politically, and economically) to export to this country
France:
China:
Japan:
Answers
Top three sectors for export, with detail of major items are
Global Oil & Gas Exploration & Production. Global Pharmaceuticals & Medicine Manufacturing. Global Car & Automobile Manufacturing. .The products are:
Refined PetroleumCrude PetroleumCarsHow to sell us products in the international market?International markets or your own website are your two choices. Alibaba, Etsy, and eBay are examples of international marketplaces where users anticipate purchasing from vendors located in distant nations.
The direct sale of goods and/or services to another nation is known as exporting. It is possibly the least risky and most well-known way to join a foreign market.
Therefore, some global market entry strategies for any kind of product are:
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A reference value involves a. comparing the costs and benefits of items from one particular manufacturer or distributor. b. products with which a consumer is familiar and items the consumer has not seen or used before.c. items of equal or greater value. d. substitute items.
Answers
Complete Question:
A reference value involves comparing the costs and benefits of?
Answer:
d. substitute items.
Explanation:
A price elasticity of demand can be defined as a measure of the responsiveness of the quantity of a product demanded with respect to a change in price of the product, all things being equal.
Mathematically, the price elasticity of demand is given by the formula;
\( Price \; elasticity \; of \; demand = \frac {Percentage \; change \; in \; price}{Percentage \; change \; in \; demand} \)
The demand for goods is said to be elastic, when the quantity of goods demanded by consumers with respect to change in price is very large. Thus, the more easily a consumer can switch to a substitute product in relation to change in price, the greater the elasticity of demand.
Generally, consumers would like to be buy a product as its price falls or become inexpensive.
Hence, a reference value involves comparing the costs and benefits of items substitute items.
A substitute item can be defined as a product (item) that a consumer sees as an alternative to another product (item) and as such would offer similar benefits or satisfaction to the consumer.
For substitute products (items), the cross-price elasticity of demand is always positive because the demand of a product increases when the price of its close substitute (alternative) increases.