A firm expects to sell 25,500 units of its product at $16 per unit. pretax income is predicted to be $60,500. If variable costs are $8 per unit, total fixed costs must be $143,500.
Fixed costs are costs that stay constant no matter changes in production volume, implying that irrespective of whether output rises or decreases, total fixed costs remain constant within the relevant range.
Rent, labor, depreciation, insurance, and other fixed costs per unit fluctuate over the relevant range, on the contrary.
Given,
Selling price = $16
Variable cost per unit = $8
Units sold = 25,500
Pretax income = $60,500
Substituting the provided information into the above calculation yields,
Contribution margin = 
= $204,000
Formula:
This symbolizes,
Substituting the provided information into the above calculation yields,
= $143,500
Hence, the answer is $143,500.
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Answer:
The estimated fixed cost element of power costs is $10,000
Explanation:
For computing the fixed cost first we have to calculate the variable cost per unit which is shown below:
= (High power cost - low power cost) ÷ (High machine hours - low machine hours)
= ($22,000 - $15,000) ÷ (12,000 - 5,000)
= $7,000 ÷ 7,000
= $1
Now the fixed cost would be
= (High power cost) - (high machine hours × variable cost per unit)
= $22,000 - 12,000 × $1
= $22,000 - $12,000
= $10,000
Answer:
a commercial bank
Explanation:
A commercial bank is a deposit accepting institutions regulated by the central bank of a country. The banks play a crucial role in availing capital to businesses. They accept deposits in the form of savings from customers. They keep a small fraction(reserves) in their custody to cater for withdrawal and loan out the rest. Banks, therefore, pool resources together for businesses and households to borrow.
Since banks have a wide customer base, they are able to mobilize huge amounts of resources to loan out. Commercial banks are the best institution to issue a loan to Glenn and Maggie. Saving and loan, credit unions have a limited membership and may not have sufficient resources to issue a loan to Glenn and Maggie.
Answer:
Sell interest-earning assets in order to obtain non-interest-bearing money
Explanation:
The liquidity preference theory states that investors prefer cash or highly liquid assets to long term assets that carry high risk.
When investors obtain long term assets the charge higher interest rates or premium in order to mitigate associated risk.
In this scenario when the supply of money is higher than demand, there is abundance of non interest bearing money that is highly liquid.
According to the liquidity preference theory investors will sell their interest bearing assets and go for assets with high liquidity (non Interest bearing money)
Answer:
a. Assuming that fixed payments are to be made monthly for three years and that the loan is fully amortizing, what will be the monthly payments? What will be the loan balance after three years?
- monthly payment = $997.95
- principal balance after 36th payment = $145,090.59
b. What would new payments be beginning in year 4 if the interest rate fell to 6 percent and the loan continued to be fully amortizing?
- monthly payment = $905.34
c. In (a) what would monthly payments be during year 1 if they were interest only? What would payments be beginning in year 4 if interest rates fell to 6 percent and the loan became fully amortizing?
a. $875
b. $935.98
Explanation:
A 3/1 adjustable rate mortgage is a 30 year mortgage where the interest rate is fixed for the first 3 years, and then it can vary.
I prepared an amortization schedule that shows the first 3 payments with a 7% interest rate and then the rest of the payments will carry a 6% interest rate.
The monthly payment for the first 36 months is $997.95 (principal balance after 36th payment $145,090.59), then it decreases to $905.34 per month.
See amortization schedule 1
if the monthly payments only covered interest expenses during the first 3 years, they would be $150,000 x 7%/12 = $875
then the monthly payments would be $935.98.
See amortization schedule 2
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