Answer: True
Explanation:
Sales refer to transactions which involves the provision of goods and services to the consumer.
Revenue is recognized at the time of sale so the risk of loss due to price decline or destruction of the goods is passed to the buyer.
Therefore, the correct option is true.
Dilts Company has a unit selling price of $400, unit variable costs of $250, and fixed costs of $210,000. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin.
Answer:
(a) Break-even point in units using the mathematical equation = 1,400 units
(b) Break-even point in units using unit contribution margin = 1,400 units
Explanation:
(a) Break-even point in units using the mathematical equation
Break-even point in units using the mathematical equation = Fixed costs / (Unit selling price - Unit variable costs) …………….. (1)
Substituting the relevant values into equation (1), we have:
Break-even point in units using the mathematical equation = $210,000 / ($400 - $250) = 1,400 units
(b) Break-even point in units using unit contribution margin
Unit contribution margin = Unit selling price - Unit variable costs = $400 - $250 = $150
Therefore, we have:
Break-even point in units using unit contribution margin = Fixed costs / Unit contribution margin = = $210,000 / $50 = 1,400 units
Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare? Unset starred question She'll prepare a seller net sheet to disclose the seller's net profit on the sale. Working with the lender, she'll prepare the Loan Estimate, which details the costs the buyer and seller will pay at closing. Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing. Working with the title company attorney, she'll prepare the preliminary title commitment.
The answer is "In collaboration with both the lender, she will write a settling declaration detailing the price to the buyers and sellers.", and the further calculation can be defined as follows:
A trust agreement is generally an arrangement between both the depositor, its buyer, usually the beneficiary, and us as trustees.The account holder shall, in accordance with the terms, deposit with us as a scroll agent a particular document or sum.In four days Corinne, the escrow agent, prepared for close Thomas / Trenton.In collaboration with both the lender, they would produce the settlement statement detailing that cost to be paid by the buyers and sellers to close those documents.Therefore, the "third option" is the only correct choice.Learn more:
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A permanent flood control dam is expected to have an initial cost of $2.8 million and an annual upkeep cost of $20,000. In addition, minor reconstruction will be required every 5 years at a cost of $200,000. As a result of the dam, flood damage will be reduced by an average of $180,000 per year. Using an interest rate of 6% per year, the conventional B/C ratio will be closest to:
Answer:
0.81
Explanation:
Present Value of annual Maintenance cost = $20,000 / 6% = $333,333.33
In five year time, $200,000 is required as major maintenance cost. So effective rate for 5 year = [(1 + 6%) ^ 5] - 1 = 1.3382 - 1 = 0.3382 = 33.82%. Present Value of 5 year cost = $200,000 / 33.82% = $200,000 / 0.3382 = $591,366.06
Total Present Value cost = $2,800,000 + $333,333.33 + $591,366.06 = $3,724,699.39.
Annual Cost = $3,724,699.39 * 6% = $223,481.96.
Benefit / Cost = $180,000 / $223,481.96
Benefit / Cost = 0.805434138845032
Benefit / Cost = 0.81
So, conventional B/C ratio is 0.81.
A consumer's weekly income is $250, and the consumer buys 12 bars of chocolate per week. When weekly income increases to $280, the consumer buys 13 bars per week. The income elasticity of demand for chocolate by this consumer is about
Answer:
0.69
Explanation:
Given that we have the formula for calculating income elasticity of demand as the percent change in quantity demanded divided by the percent change in income, hence, we have the percent change in quantity demanded => 13 - 12 = 1 ÷ 12 = 0.083
the percent change in income => 280 - 250 = 30 ÷ 250 = 0.12
Therefore we have => 0.083 ÷ 0.12 = 0.69
Hence, the final answer is 0.69
The most recent financial statements for Xporter, Inc., are shown here:
Income Statement Balance Sheet
Sales $5,700 Current assets $ 3,900
Current liabilities $ 2,200 Costs 4,200
Fixed assets 8,100 Long-term debt 3,750
Taxable income $1,500 Equity 6,050
Taxes (34%) 510 Total $12,000 Total $12,000
Net income $ 990
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 15 percent. What is the external financing needed?
Solution :
Expected sales = current sales x (1 + projected sale next year increase)
= 5,700 x (1 + 15%)
= $ 6555
Expected cost = current cost x (1 + projected sale next year increase)
= 4200 x (1 + 15%)
= $ 4830
Taxable income = 1500 x ( 1 + 15%)
= $ 1725
Taxes (34%) = 510 x (1+15%)
= $ 586.5
Net income = sales - cost - taxes
= 6555 - 4830 - 586.5
= $ 1138.5
Calculation of total asset :
Current asset = 3,900 x 1.15
= $ 4485
Fixed asset = 8100 x 1.15
= $ 9315
Total asset = 4485 + 9315
= $ 13800
Calculation of total liabilities
Current liabilities = 2200 x 1.15
= $ 2530
Long term debt = $ 3,750
Equity = $ 6050 + (1138.5 x 0.50 )
= $ 7189
Total liabilities = $ 2530 + $ 3,750 + $ 7189
= $ 13, 469
Therefore the external financial needed is = $ 13800 - $ 13, 469
= $ 331
The following information comes from the accounts of James Company: Account Title Beginning Balance Ending Balance Accounts Receivable $ 34,700 $ 35,700 Allowance for Doubtful Accounts 1,520 2,720 Note Receivable 54,700 54,700 Interest Receivable 1,000 3,556 Required a. There were $182,700 of sales on account during the accounting period. Write-offs of uncollectible accounts were $1,800. What was the amount of cash collected from accounts receivable
Answer: $179,900
Explanation:
The amount of cash collected from accounts receivable will be calculated thus:
Account receivable at begining = $34700
Add: Sales on account = $182700
Less: Write-offs of uncollectible accounts = $1,800
Less: Account receivable at ending balance = $35700
Cash collected = $179,900
A Whopper combo meal costs $3.00 and gives you an additional 15 units of utility; a meal at the Embassy Suites costs $29.00 and gives you an additional 145 units of utility. Based solely on the information you have, using the theory of rational choice, you most likely would:
Answer:
be indifferent between the two meals
Explanation:
Marginal utility is the additional satisfaction received from consuming an additional unit of a good or service. Marginal utility is the additional utility derived from consuming one more unit of a good. the consumption decision is to consume more units of a good that gives the higher utility per good.
Marginal utility per good = marginal utility / price of the good
Whopper combo meal = 15 / 3 = 5
a meal at the Embassy Suites = 145 / 29 = 5
both meals have the same marginal utility of 5. She would be indifferent between consuming the two meals
Beasley, Inc., reports the following amounts in its December 31, 2021, income statement.
Sales revenue $ 310,000
Income tax expense $ 39,000
Interest expense 12,000
Cost of goods sold 125,000
Salaries expense 36,000
Advertising expense 23,000
Utilities expense 42,000
Prepare a multiple-step income statement.
Answer:
$33,000
Explanation:
Preparation of a multiple-step income statement.
Beasley, Inc. Multiple-step Income Statement For the Year Ended December 31, 2021
Sales Revenue$310,000
Less Cost of goods sold ($125,000)
Gross Profit $185,000
($310,000-$125,000)
Salaries expense $36,000
Advertising expense $23,000
Utilities expense $42,000
Less Total Operating Expenses ($101,000)
($36,000+$23,000+$42,000)
Operating Income $84,000
($185,000-$101,000)
Less Interest Expense ($12,000)
Income Before Income Taxes $72,000
($84,000-$12,000)
Less Income Tax Expense ($39,000)
Net Income $33,000
($72,000-$39,000)
Therefore multiple-step income statement is $33,000
Super Garage was started on June 1 by Mr. Peter Thomson . A summary of June transactions
is presented below.
June 1. Invested $25,000 cash to start the garage.
2. Purchased repair equipment for $5,000 cash.
4. Paid $500 cash for the space rent.
4. Hired an employee
5. Paid $700 for a one-year fire insurance policy.
6. Received $10000 in cash from customers for repair service.
10. Provided repair service on account to customers $1750.
21. Collected cash of $5000 for services provided on June 6.
27. Withdrew $1,000 cash for personal use.
30. Paid employee salaries $3,000.
30. Received an electricity bills $170.
Required:
i. Journalize the transactions
ii. Post and balance the transactions to ledger accounts
A company like Motorola might establish a goal of reducing its inventory by 50 percent over the next year. To ensure that it reaches this goal, the company could monitor its progress on a quarterly or monthly basis. If the managers at Motorola discover that there is a danger of not achieving this goal, they can take corrective action to adjust for the deficiency. This is a description of the managers' ____ function.
Answer:
stfhgocovovohdj vbb
Explanation:
sryyy
In 2008, as a financial crisis began to unfold in the US, the FDIC raised the limit on insured losses to bank depositors from $100K to $250K per account. How would this help stabilize the financial system?
Answer:
.
Explanation:
.
In 2008, as a financial crisis began to unfold in the US, the FDIC raised the limit on insured losses to bank depositors from $100K to $250K per account The FDIC was able to guarantee bank debt in 2008 and offer an unlimited deposit insurance guarantee for specific types of transaction accounts by relying on the clause that permitted a systemic risk exception. These two moves preserved financial institutions' access to funding.
Why was the FDIC successful in 1993?In the end, Congress was compelled to pass deposit insurance legislation by the weight of public opinion. President Roosevelt signed the Banking Act of 1933, which established the FDIC, on June 16, 1933. The FDIC has been successful in preserving public trust in the banking system by practically every metric.
In total, 25 banks failed in 2008, while 140 did so in 2009, resulting in a negative fund balance. The liquid assets of the fund, which the FDIC required to quickly close failing banks and protect insured depositors, started to be depleted as a result of mounting failures.
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Frozen Gold is a fast-growing chain of ice cream shops. It has acquired an edge over its competitors through its ability to provide a wide array of unique flavors and a hip atmosphere in stores. This advantage of Frozen Gold best exemplifies a:_________.
A. markup.
B. resource flow.
C. capital gain.
D. core competency.
B.
Customers will have a variety of flavors to choose from
This advantage of Frozen Gold best exemplifies a core competency. Thus the correct option is D.
What is a core competency?Core competencies refer to unique abilities, skills, or characteristics which an organization carries in order to differentiate their goods from the competition and achieve a market advantage with the help of this.
This core competency can be anything like the process of manufacturing, promotion, advertising, product design, product features and so on which helps to identify the product.
In the given case, the core competency of ice cream shop is that they provide a wide array of flavors which is unique in nature as well as the atmosphere in their stores is also attractive which reflects their services to the customers.
Therefore, option D is appropriate.
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You have used the best data available and framed the best and most focused questions you could. What must you keep in mind about using averages?
The statement "the improbable outliers should be eliminated at the time when it contains the good database" is correct.
The following information should not relate to the averages:
It should be hidden by averages irrespective of how the good database is maintained.It provides meaningful outcomes.In the case when the good database is maintained so the conclusions could be drawn.Therefore we can conclude that The statement "the improbable outliers should be eliminated at the time when it contains the good database" is correct.
Like -300,200 and 100 should be zero.
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The following data apply to Elizabeth's Electrical Equipment:
Value of operations $20,000
Short-term investments $1,000
Debt $6,000
Number of shares 300
The company plans on distributing $50 million by repurchasing stock. What will the intrinsic per share stock price be immediately after the repurchase?
Answer:
$50
Explanation:
Calculation to determine the intrinsic per share stock price be immediately after the repurchase
First step
Total Assets=Value of operations of 20,000+ Short term investments of 1000
Total Assets=$21,000
Second step
Equity =Assets - Debt
Equity= $21,000-$6,000
Equity= $15,000
Now let determine the intrinsic per share stock price
Intrinsic per share stock price=$15,000/300
Intrinsic per share stock price=$50
Therefore the Intrinsic value per share will be $50 immediately after the repurchase has occured.
The intrinsic per share stock price immediately after the repurchase would be approximately $166,716.67
How did we get the value?To determine the intrinsic per share stock price immediately after the repurchase, we need to calculate the new number of shares outstanding after the repurchase and then divide the remaining value of operations by the new number of shares.
Given data:
Value of operations: $20,000
Short-term investments: $1,000
Debt: $6,000
Number of shares: 300
First, we need to calculate the new number of shares outstanding after the repurchase. Since the company plans on distributing $50 million by repurchasing stock, we can use this information to determine the number of shares repurchased.
The value of operations ($20,000) plus the short-term investments ($1,000) minus the debt ($6,000) gives us the total equity value of the company before the repurchase:
Equity value before repurchase = Value of operations + Short-term investments - Debt
= $20,000 + $1,000 - $6,000
= $15,000
Let's assume the repurchased shares are denoted by R.
Now, we can set up an equation to represent the total equity value after the repurchase:
Equity value after repurchase = (Number of shares - R) × Intrinsic per share stock price
Given that the total equity value after the repurchase is $15,000 and the number of shares is 300, we have:
$15,000 = (300 - R) × Intrinsic per share stock price
We also know that the company plans on distributing $50 million by repurchasing stock, so we can set up another equation to represent the total value of the repurchased shares:
Total value of repurchased shares = R × Intrinsic per share stock price
Given that the total value of repurchased shares is $50 million, we have:
$50,000,000 = R × Intrinsic per share stock price
Now we can solve these two equations simultaneously to find the values of R (repurchased shares) and Intrinsic per share stock price.
We have the following system of equations:
$15,000 = (300 - R) × Intrinsic per share stock price ...(1)
$50,000,000 = R × Intrinsic per share stock price ...(2)
Divide equation (2) by Intrinsic per share stock price:
$50,000,000 / Intrinsic per share stock price = R
Substitute this value of R into equation (1):
$15,000 = (300 - ($50,000,000 / Intrinsic per share stock price)) × Intrinsic per share stock price
Simplify:
$15,000 = 300 × Intrinsic per share stock price - (50,000,000 / Intrinsic per share stock price) × Intrinsic per share stock price
$15,000 = 300 × Intrinsic per share stock price - 50,000,000
Rearrange the equation:
300 × Intrinsic per share stock price = $15,000 + $50,000,000
300 × Intrinsic per share stock price = $50,015,000
Intrinsic per share stock price = $50,015,000 / 300
Intrinsic per share stock price = $166,716.67 (rounded to two decimal places)
Therefore, the intrinsic per share stock price immediately after the repurchase would be approximately $166,716.67.
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A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2. a. How much output should the firm produce in the short run?
Answer: 24 units.
Explanation:
Price(P) = 110
C(Q) = 70 + 14Q + 2Q²
The output level will be gotten when price e equals to the marginal cost.
Since C(Q) = 70 + 14Q + 2Q², the marginal cost (MC) will be: 14 + 4Q.
Therefore, P = MC
110 = 14 + 4Q
4Q = 110 - 14
4Q = 96
Q = 96/4
Q = 24
In the short run, the firm will produce 24 units.
Bombs Away Video Games Corporation has forecasted the following monthly sales:
January $113,000 July $58,000
February 106,000 August 58,000
March 38,000 September 68,000
April 38,000 October 98,000
May 33,000 November 118,000
June 48,000 December 136,000
Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by 12. Of each month's sales, 40 percent are for cash and 60 percent are on account. All accounts receivable are collected in the month after the sale is made.
Required:
Construct a monthly production and inventory schedule in units. Beginning inventory in January is 38,000 units.
Answer:
Bombs Away Video Games Corporation
Production and Inventory Schedule
Sales Units Production units Ending Units
Beginning inventory 38,000
January 22,600 15,200 30,600
February 21,200 15,200 24,600
March 7,600 15,200 1,800
April 7,600 15,200 9,400
May 6,600 15,200 18,000
June 9,600 15,200 23,600
July 11,600 15,200 27,200
August 11,600 15,200 30,800
September 13,600 15,200 32,400
October 19,600 15,200 28,000
November 23,600 15,200 19,600
December 27,200 15,200 7,600
Explanation:
a) data and Calculations:
Sales Budget ($'000) Sales Units Production units Ending Units
Beginning inventory 38,000
January $113,000 22,600 15,200 30,600
February 106,000 21,200 15,200 24,600
March 38,000 7,600 15,200 1,800
April 38,000 7,600 15,200 9,400
May 33,000 6,600 15,200 18,000
June 48,000 9,600 15,200 23,600
July 58,000 11,600 15,200 27,200
August 58,000 11,600 15,200 30,800
September 68,000 13,600 15,200 32,400
October 98,000 19,600 15,200 28,000
November 118,000 23,600 15,200 19,600
December 136,000 27,200 15,200 7,600
Total 182,400 182,400
Determine the amount of money in a savings account at the end of 1 year, given an initial deposit of $12,000 and a 4 percent annual interest rate when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
Answer:
$ 12480
$ 12,484,80
$12,487.25
Explanation:
annually
quarterly
semi annually
The formula for calculating future value:
FV = P (1 + r) nm
FV = Future value
P = Present value
R = interest rate
m = number of compounding
N = number of years
annually - 12,000 x 1,04 = 12480
semi annual - 12,000 x (1.02)^2 = 12,484,80
quarterly - 12,000x (1.01)^4 = 12,487.25
Sutton Inc. can produce 100 units of a component part with the following costs: Ch01Q78 If Sutton Inc. can purchase the component part externally for $345,000 and only $28,000 of the fixed costs can be avoided, what is the correct make-or-buy decision
Question Completion:
Direct materials cost $150,000
Direct labor cost $100,000
Variable overhead $50,000
Fixed overhead $60,000
Answer:
Sutton Inc.
The correct make-or-buy decision is:
Continue to produce the component.
Explanation:
a) Data and Calculations:
Production costs:
Direct materials cost $150,000
Direct labor cost $100,000
Variable overhead $50,000
Fixed overhead $60,000
Production costs = $360,000
Relevant costs to make:
Direct materials cost $150,000
Direct labor cost $100,000
Variable overhead $50,000
Fixed overhead $28,000
Avoidable costs = $328,000
Cost of purchasing the component = $345,000
Difference = $17,000
Sutton will pay $17,000 more if it buys the component than if it makes it. Therefore, it is more cost-effective to make the component than buying from the outside supplier.
briefly state and explain 6 major roles of CEO in an organisation
Answer:
A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate .
At the beginning of the year, a company had accounts receivable of $700,000 and an allowance for doubtful accounts with a credit balance of $60,000. During the current year, sales on account were $195,000 and collections on account were $115,000. Also during the current year, the company wrote off $11,000 in uncollectible accounts. At year-end, an analysis of outstanding accounts receivable indicated that the allowance for doubtful accounts should have a $72,000 credit balance so the company records the appropriate year-end adjusting entry. How much did the cash realizable value change during the current year
Answer:
$77,000
Explanation:
Calculation to determine How much did the cash realizable value change during the current year
First step
Ending accounts receivables = Beginning accounts receivables + Sales on account - collections on account - Write offs
Ending accounts receivables = $700,000 + $195,000 - $95,000 - $11,000
Ending accounts receivables= $789,000
Second step
Ending cash realizable value = Ending accounts receivables - Ending allowance for doubtful accounts
Ending cash realizable value = $789,000 - $72,000
Ending cash realizable value= $717,000
Now let determine the Change in cash realizable value
Change in cash realizable value = Ending cash realizable value - Beginning cash realizable value
Change in cash realizable value= $717,000 - 640,000
Change in cash realizable value= $77,000
Therefore How much did the cash realizable value change during the current year will be $77,000
the gap between 'where we are now' and 'where we want to be' is known as the.....
Answer:
Planning gap.
Explanation:
Planning can be defined as the process of developing organizational objectives and translating them into action plans or courses of action.
This ultimately implies that, planning is a strategic technique used by organizations to make an aggregate plan for its manufacturing (production) process typically ahead of time, in order to have an idea of the level of goods that are to be produced and what resources are required so as to reduce the total cost of production to its barest minimum.
The planning gap can be defined as the gap between "where we are now?" and "where we want to be?"
Basically, "where are we now?" describe the current situation of things or financial and non-financial activities that a business firm currently holds.
On the other hand, "where we want to be?" is a vision and mission statement that focuses on achieving the goals and objectives set for a business firm.
chuyển 1 TSCĐ hữu hình thuộc nguồn
NSNN cấp do không đủ tiêu chuẩn chuyển thành CCDC, theo nguyên giá 25.000,
giá trị hao mòn lũy kế: 21.000.
A retail store had sales of $44,900 in April and $55,000 in May. The store employs eight full-time workers who work a 40-hour week. In April the store also had eight part-time workers at 12 hours per week, and in May the store had eleven part-timers at 17 hours per week (assume four weeks in each month). Using sales dollars as the measure of output, what is the percentage change in productivity (dollars output per labor hour) from April to May
Answer:
0.52%
Explanation:
Productivity in April = $44,900 / (((8*40) + (8*12)) * 4)
Productivity in April = $44,900 / ((320 + 96) * 4)
Productivity in April = $44,900 / (416 * 4)
Productivity in April = $44,900 / 1664 hours
Productivity in April = $26.98 per hour
Productivity in May = $55,000 / (((8*40) + (11*17)) * 4)
Productivity in May = $55,000 / ((320 + 187) * 4)
Productivity in May = $55,000 / (507 * 4)
Productivity in May = $55,000 / 2028 hours
Productivity in May = $27.12 per hour
% increase in productivity per hour = ($27.12 - $26.98) / $26.98
% increase in productivity per hour = $0.14 / $26.98
% increase in productivity per hour = 0.0052
% increase in productivity per hour = 0.52%
On its December 31, 2017, balance sheet, Calgary Industries reports equipment of $470,000 and accumulated depreciation of $94,000. During 2018, the company plans to purchase additional equipment costing $100,000 and expects depreciation expense of $40,000. Additionally, it plans to dispose of equipment that originally cost $52,000 and had accumulated depreciation of $7,600. The balances for equipment and accumulated depreciation, respectively, on the December 31, 2018 budgeted balance sheet are:
Answer:
The cost balance on 31 December 2018 is $518,000 while that of accumulated depreciation is $126,400
Explanation:
The balance of fixed assets is computed as
Opening balance - accumulated depreciation - depreciation + Addition - Disposal
Hence given that on December 31, 2017, Calgary Industries reports equipment of $470,000 and accumulated depreciation of $94,000. During 2018, the company plans to purchase additional equipment costing $100,000 and expects depreciation expense of $40,000, Additionally, it plans to dispose of equipment that originally cost $52,000 and had accumulated depreciation of $7,600 the balance then
= $470,000 + $100,000 - $52,000
= $518,000
The accumulated depreciation
= $94,000 + $40,000 - $7,600
= $126,400
Josh is a hockey player on his university's team. He practices four times a week with his team and sometimes attends Friday night open skate with his friends. If Josh decides to attend the Friday night skate, the cost is $5. Which of the following is economically true regarding Josh's decision to join his friends on Friday night?
A. Josh will only attend Friday night skate if there is no charge, a fifth time skating will not benefit him at all.
B. Since Josh already skates four times a week with his hockey team, he will never choose to skate a fifth time that week.
C. If Josh decides to join his friends, he must feel that he gains at least $5 in fun by attending a fifth weekly session on the ice.
D. Josh should never attend Friday night open skate--he could get hurt and jeopardize his hockey career.
Answer:
C. If Josh decides to join his friends, he must feel that he gains at least $5 in fun by attending a fifth weekly session on the ice.
Answer:
C. If Josh decides to join his friends, he must feel that he gains at least $5 in fun by attending a fifth weekly session on the ice.
Explanation:
It is the most fun for him
American Corp. is currently an all-equity firm that has 22,000 shares of stock outstanding with a market price of $27 a share. The current cost of equity is 12 percent and the tax rate is 35 percent. The firm is considering adding $225,000 of debt with a coupon rate of 6.25 percent to its capital structure. The debt will sell at par. What will be the levered value of the equity
Answer: $447,750
Explanation:
The value of a levered firm is calculated as:
= (Number of shares outstanding * Market price) + (Debt * tax rate)
= (22,000 * 27) + (225,000 * 35%)
= $672,750
Equity = Value of levered firm - Debt
= 672,750 - 225,000
= $447,750
Explain how the hotel business could create added value to the goods they buy in?
Answer:
Well-designed rooms, attractive and comfortable appliances, well-dressed and respectful assistants, good quality entertainment equipment, and delightful food made by experienced chefs.
Explanation:
Guests will feel more welcomed to a clean and comfortable hotel. Respectful assistants, good quality entertainment equipment, and food made by experienced chefs can boost the morale of guests.
Big Red Motors, Inc., employs 15 personnel to market its line of luxury automobiles. The average car sells for $75,000, and a 6 percent commission is paid to the salesperson. Big Red Motors is considering a change to the commission arrangement where the company would pay each salesperson a salary of $1,600 per mont plus a commission of 2 percent of the sales made by that salesperson. What is the amount of total monthly car sales at whit Big Red Motors would be indifferent as to which plan to select?
Answer: $600,000
Explanation:
The commission earned per car in the initial arrangement is:
= 6% * Total cars sales
With the second arrangement the amount spent would be:
= Salary of employees + commission
= (15 * 1,600) + (2% * total car sales)
= 24,000 + (2% * car sales)
Assuming total car sales is x, relevant expression is:
6% * x = 24,000 + (2% * x)
0.06x = 24,000 + 0.02x
0.06x - 0.02x = 24,000
0.04x = 24,000
x = 24,000 / 0.04
x = $600,000
Haulsee Inc. builds 800,000 golf carts a year and purchases the electronic motors for these carts for $370 each. Ordering costs are $540, and Haulsee's inventory carrying costs average 14% of the inventory value.
What is the economic order quantity (EOQ) for Haulsee?
Answer:
4,084
Explanation:
Calculation to determine the economic order quantity (EOQ) for Haulsee
Using this formula
Economic Order Quantity (EOQ) =((2* Annual Requirement * Cost per order)/Carrying cost per unit)^ (1/2)
Let plug in the formula
Economic Order Quantity (EOQ) = ((2*800,000*540)/(370*14%))^(1/2)
Economic Order Quantity (EOQ) = 4,084 units
Therefore the economic order quantity (EOQ) for Haulsee is 4,084 units
Blue Manufacturing produces lathes at an inventory cost of $25,000 each that sell for $32,000 each. For credit-approved customers, Blue leases the lathes for $8,500 per year for five years. The lathes are guaranteed to last four years and generally have a six-year life. Collection is predictable and reasonably assured. Additionally, the lessor is aware of all costs to be incurred under the lease that will not be reimbursed by the lessor. What is the financing profit of Blue Manufacturing on a leased lathe
Answer:
The right solution is "$10,500".
Explanation:
Given values are:
Inventory cost,
= $25,000
Selling cost,
= $32,000
The financing profit will be:
= [tex]Lease\ payment - Selling\ price[/tex]
= [tex](8500\times 5) - 32000[/tex]
= [tex]42500 - 32000[/tex]
= [tex]10,500[/tex] ($)
