question 1)Which of the following types of businesses do you expect to show very little degree of seasonality in sub-period earnings? Explain why earnings might be constant throughout the year for those selected.

A car mechanic - A juice manufacturer - A university - A property valuer - A dentist

 

Question 2) Which of the following types of businesses do you expect to show a high degree of seasonality in quarterly

earnings? Explain why. - A telecommunications company - A consulting company - A software as a service company - A car manufacturer - A grocery retailer

Question 1.

•  A car mechanic 
•  A dentist

Question 2.

• A car manufacturer 
• A grocery retailer

Step-by-step explanation

Question 1.

A car mechanic: A car mechanic business shows very little degree of seasonality. This is because car maintenance is usually done on regular basis. However, car repairs may increase with the increase in car accidents during particular times of the year when people are driving more such as during long weekends and public holidays or when there is reduced visibility on roads. In a such a case, it can show some elements of seasonality.

A juice manufacturer: A juice manufacturer business shows a high degree of seasonality because consumption of juice is higher during summer months and lower during winter months. The fruits are also grown in different seasons and harvested during particular seasons.

A university: Enrollment to a university is not seasonal. The university admits students throughout the year. However, government funding is seasonal and income from particular research grants usually occur at certain times of the year, but in general, they spread across the year. Thus, a university seasonality is dependent on the balance of the two factors in their budgeting.

A property valuer: Property valuation is usually done across the year and thus is not seasonal. However, there could more demand on certain times as a result of factors like start of the year and warm weather when property transactions take place. But generally, it is not seasonal.

A dentist: Patients usually see dentists throughout the year and thus a dentist work is not a seasonal work.

Question 2 

A telecommunication company: A company in the telecommunication industry is not a seasonal. People will seek the communications services throughout the year and thus it shows low degree of seasonality and earnings are constant throughout the year.

A consulting company: A consulting company has seasons that it can peak and others that it is not. The earnings could be higher during summer and low during winter and thus it shows a high degree of seasonality.

A software as a service company: A service software company is not a seasonal business. This is because individuals will seek for the services of a software company throughout the year.

A car manufacturer: A car manufacture business will show a high degree of seasonality. This is because, in the car manufacturing industry, there are usually new models being introduce in the market which shifts sales at the course of the year. 

A grocery retailer: Grocery sales are usually high during certain period of the year such as holidays. Thus, this kind of a business show a high degree of seasonality in quarterly earnings.