Answer:
Stage 1
Stage one is the period of most growth in a company's production. In this period, each additional variable input will produce more products. This signifies an increasing marginal return; the investment on the variable input outweighs the cost of producing an additional product at an increasing rate. As an example, if one employee produces five cans by himself, two employees may produce 15 cans between the two of them. All three curves are increasing and positive in this stage.
Stage 2
Stage two is the period where marginal returns start to decrease. Each additional variable input will still produce additional units but at a decreasing rate. This is because of the law of diminishing returns: Output steadily decreases on each additional unit of variable input, holding all other inputs fixed. For example, if a previous employee added nine more cans to production, the next employee may only add eight more cans to production. The total product curve is still rising in this stage, while the average and marginal curves both start to drop.
Stage 3
In stage three, marginal returns start to turn negative. Adding more variable inputs becomes counterproductive; an additional source of labor will lessen overall production. For example, hiring an additional employee to produce cans will actually result in fewer cans produced overall. This may be due to factors such as labor capacity and efficiency limitations. In this stage, the total product curve starts to trend down, the average product curve continues its descent and the marginal curve becomes negative.
Answer:
The net cash flows from operating activities is $54.9 million computed as below:
Explanation:
<u>Hi-Tech Corporation</u>
<u>Cash flows from Operating Activities</u>
Net Income 51.0
Depreciation 4.1
Loss on disposal of equipment 1.9
Increase in receivable (1.1)
Increase in payable 2.1
Increase in inventory <u> (3.1)</u>
Net CF from Operating Activities <u> 54.9</u>
The major is here is that in determining the cash flows from operating activities, the net income is adjusted for the impacts of non cash items by:
- adding back depreciation and/or amortization, loss on sale of fixed assets, increase in provision and impairment of assets (if any),
- deducting gains on sale of fixed assets, decrease in provisions and reversal of impairment of assets.
Thereafter, movement in working capital is considered as follows:
- Deduct Increase/add decrease in current assets (receivables and payable),
- Add increase/less decrease in payable.
The essence of making these adjustments are that they have have inverse relationship between net income computation and cash flows. For example, while depreciation is deducted to arrive at net income, depreciation does not involvement in cash, hence depreciation charge should be added back to arrive at cash flow from operating activities.
Regarding movement in working capital, an increase in receivable means that the reporting entity have sold its goods or services without collection cash, thus tieing down its cash resources. The same can be said of inventory where the increase in inventory means that the entity have let out cash in stocking up inventory thus reducing its cash inflow or increasing its cash outflows. But the reverse is the case when talking about payable, as an increase in payables means that the reporting entity have held back cash it will have used to settle its obligations hence increasing reducing cash outflows or increasing cash inflows.
Answer:
the nominal annual percentage rate for the line of credit is 12.4%
Explanation:
The computation of the nominal annual percentage rate is given below:
Nominal Annual percentage rate is
= (Prime rate + line of credit) ÷ (1 - compensation balance percentage)
= (9% + 1.50%) ÷ (1 - 15%)
= 10.50% ÷ 85%
= 12.4%
Hence, the nominal annual percentage rate for the line of credit is 12.4%
The same should be considered
Answer:
$247,000
Explanation:
Based on the information given we were told that the Operating expenses that was used in conducting bingo games was the amount of $247,000 which means that the amount that Rex may DEDUCT is the OPERATING EXPENSES amount of $247,000.
Hence, OPERATING EXPENSES can simply be defined as the amount of money that is been use to run or operate a business, company or organization such as paying for office rent , buying of office Equipment, delivery expenses , Employee wages expense among others.
Therefore Rex may deduct $247,000
