A budget isn’t an expense, nor is a new computer rather an asset
Answer:
total costs
Explanation:
The cost equation Y = a + bx represents the mixed cost which includes both fixed and variable components
The explanation of the cost equation is shown below:
Y = a + bx
where
Y = Total cost
a = Fixed cost
b = variable rate per unit for an activity
X = number of units in an activity
So, this cost equation is referred to the mixed cost which considers both types of cost i.e fixed cost and the variable cost
Answer:
The new breakeven point is 737,500 in sales revenue
Explanation:
Breakeven point = Fixed cost / Contribution Margin Ratio
Actual Fixed Cost are Contribution Margin Ratio x Breakeven point
Fixed cost=Contribution Margin Ratio x Breakeven point
Fixed cost=0.40 x 650,000
Fixed cost=260000
If the company's fixed expenses increase
Fixed cost=260000 + 35000
Fixed cost=295000
Breakeven point = 295000/ 0.40
Breakeven point = 737,500
Answer:
$725
Explanation:
Price of call option = Call value * Number of shares in a contract
Where Call value = $7,25, Number of shares in the contract = 100
So, Price of call option = $7.25 * 100 shares
Price of call option = $725
So, the buyer would have to pay $725 for one call option contract assuming each contract is for 100 shares.
Answer:
Part a to f are answered in the tables attached. Part g and h are answered below:
Explanation:
Value of a bond is given by the excel function, PV = PV(R,N,PMT,FV)
R - YTM
N - years to maturity
PMT - Coupon
FV - Par value
Coupon = Coupon rate * par value
g - From the column change, Long-term bonds are more affected than short-term bonds by rise in interest rates
h - From the column change, Long-term bonds are more affected than short-term bonds by decline in interest rates
