Durable ceramics, inc., provides inexpensive ceramic tile to builders of institutional buildings such as schools, prisons, and public administration buildings. it has always competed on a cost leadership basis. most of its products are purchased by a few commercial construction firms, so it is fairly dependent on these construction firms for selling its product. durable ceramics' next most-efficient competitor, cost-less ceramics, inc., earns average returns, whereas durable earns above-average returns. the commercial construction firms are putting pressure on durable to reduce its prices. if durable reduces its prices below those of cost-less's prices, it is likely that:a. both durable and cost-less will devise additional ways to become more efficient in their productionprocesses. b. durable will be unable to absorb the lower cost, and will go out of business. c. both cost-less and durable will go out of business, leaving the customers with fewer alternative sources oflow-cost tile. d. cost-less will go out of business, and durable will gain higher power over its customers.

Suppose that xtel currently is selling at $40 per share. you buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. the rate on the margin loan is 8%. a. what is the percentage increase in the net worth of your brokerage account if the price of xtel immediately changes to (a) $44; (b) $40; (c) $36? (leave no cells blank - be certain to enter "0" wherever required. negative values should be indicated by a minus sign. round your answers to 2 decimal places.) b. if the maintenance margin is 25%, how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.) c. how would your answer to requirement 2 would change if you had financed the initial purchase with only $10,000 of your own money? (round your answer to 2 decimal places.) d. what is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if xtel is selling after one year at (a) $44; (b) $40; (c) $36? (negative values should be indicated by a minus sign. round your answers to 2 decimal places.) e. continue to assume that a year has passed. how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.)