In actual practice, managers most frequently use which two types of investment criteria?.

Prepare an income statement and a common size income statement from the following information. Sales $525,000.00 Cost of goods s

Sladkaya [172]

Answer:

Net Income for the year is $145,800 (28% as percentage of Sales)

Explanation:

Income Common Size

Statement Income Statement

Sales Revenue $525,000 100%

Less: Cost of Goods Sold $(200,000) 38%

Gross Profit $325,000 62%

Less expenses:

General & Administrative Expenses $(62,000) 12%

Depreciation $(8,000) 2%

Earnings before Interest & Taxes (EBIT) $255,000 49%

Less: Interest Expense $(12,000) 2%

Earnings before Tax (EBT) $243,000 46%

Less: Income Tax Expense $(97,200) 19%

Net Income $145,800 28%

Common Size income statement is the one where each line item of the company's income statement is expressed as percentage of Sales Revenue.

Please note that:

Figures in brackets represent negative figures
Solution to the question is also attached in Excel format for your reference

Download xlsx

7 0

4 years ago

At the beginning of the year, an investor buys 1,000 shares of XYZ stock, purchased at $33 per share. Subsequently, the stock ri

Tamiku [17]

Answer: C - 12%

Explanation: Dividend yield is calculated as the annual dividend divided by the share price.

The dividend yield for the stock is calculated as:

= Annual Dividend/ share price

= $4/$33

=12.12

=12%

6 0

3 years ago

Nicklin Corporation is considering two alternatives, code-named M and N. Costs associated with the alternatives are listed below

xz_007 [3.2K]

Answer and Explanation:

a. The cost that are relevant or irrelevant is shown below:-

Relevant costs are those costs which influence the company's decision-making process and these costs vary between alternatives. However, irrelevant costs are the same for each alternative and thus do not impact decision-making processes.

Supplies costs = Relevant

Supplies cost is relevant as amount are vary between alternatives

Power cost = Irrelevant

Power cost is relevant as amount is not vary between the alternatives

Inspection cost = Relevant

Inspection cost is relevant as amount are vary between alternatives

Assembly cost = Relevant

Assembly cost is Relevant as amount are vary between alternatives

b. The computation of differential cost between Alternative M and Alternative N is shown below:-

Alternative M Alternative N Differential cost

Supplies costs $77,000 $68,000 $9,000

Power costs $49,000 $49,000 $0

Inspection costs $29,000 $44,000 -$15,000

Assembly costs $42,000 $31,000 $11,000

Differential cost $197,000 $192,000 $5,000

4 0

4 years ago

Answer the following questions regarding the matrix below, which represents the strategic interaction between the two largest mo

Ilia_Sergeevich [38]

Answer:

a. A pure strategy Nash equilibrium of a game is a strategy profile in which both players are best responding to each other's strategies. For the given payoffs, we have 2 pure strategy Nash equilibrium (June, August) and (August. June). The arguments are as follows:

- Universal playing June and Fox playing August is equilibrium. This is because given that Universal in releasing in June. FOX maximizes its payoff by releasing in August and the same reasoning applies for Universal as well.

• Universal playing August and Fox playing June is equilibrium. This is because given that Universal is releasing in August, Fox maximizes its payoff by releasing in June and the same reasoning applies for universal as well.

b. The extensive form diagram is given below. The sub game perfect equilibrium is computed by backward induction. Fox chooses its action given what universal has decided. These actions are marked by the red arrows. Universal therefore faces the following payoffs:

- By playing June, Universal gets 8 and Fox gets 6

- By playing July, Universal gets 4 and Foxs gets 6

- By playing August, Universal gets 7 and Fox gets *

Thus, given the above information by backward induction, Universal will choose to release in June and then Fox will release in August leading to payoffs (8,6).

Universal would want this to happen because the subgame perfect equilibrium gets rid of the Nash equilibrium that generated lower payof for them. That is , the only SPE is giving payoffs (8,6) and (7,8). Since Universal prefers 8 over 7, it would want the game to be sequential

4 0

3 years ago

What do you prefer Aldi or Lidl? and why?

Jlenok [28]

Aldi!!! Personal preference due to the organization.

4 0

3 years ago