Answer:
True
Explanation:
STRIPS are zero coupon bonds, and the advantage of them is that they allow an investor to know exactly how much money they will receive at a future date.
The investor purchases the STRIPS at a discount value, which we are not told here. E.g. assuming that the discount rate is 5% (similar to (4), the price of the STRIPS = $50,000 / (1 + 5%)⁶ = $37,311.
<span>An order or ruling governing the procedures of a society, council, or other deliberative body.</span>
Contribution margin is calculated via subtracting the variable cost per unit to the sales price per unit. In equation, we have
Contribution margin = Sales Price - Variable Cost
Contribution margin ratio is calculated via dividing the contribution margin with the sales price. In equation, we have
Contribution margin ratio = contribution margin/sales price
Substituting the given values,
Contribution margin ratio for 65$ variable cost = (120-65)/120 = 0.4583
Contribution margin ratio for 58$ variable cost = (120-58)/120 = 0.5167
<em>ANSWERS: 0.4583 or 45.83% and 0.5167 or 51.67%</em>
Answer and Explanation:
The computation is shown below:
But before that we need to do the following calculations which are shown below:
The Contribution per unit of faucet is
= $75 - $15
= $60
And, the Contribution per unit of pitcher filter is
= $100 - $30
= $70
Now Contribution per unit in present sales mix is
= [($60 × 2) + ($70 × 3)] ÷ 5
= ($120 + $210) ÷ 5
= $66 per unit
And
The Fixed cost is
= $1,000,000 + $200,000
= $1,200,000
Now
Break even units is
= $1,200,000 ÷ $66 per unit
= 18,181.81 units
For faucet, it is
= (18,181.81 × 2) ÷ 5
= 7,272.72 units
For pitcher filter, it is
= (18,181.81 × 3) ÷ 5
= 10,909.086 units
<span>start from scratch and rewrite the contract</span>
