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3 years ago

Why is using cash unhelpful when a person wants to apply for a loan in the near future?

1 answer:

7 0

It is unhelpful and non-beneficial because always using cash will result in you having no credit history so banks would not be able to see how reliable you are in paying back a loan

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An establishment has three departments with variable costs as a percentage of sales revenue of 30 percent, 40 percent, and 50 pe

zalisa [80]

Answer:

60 percent

Explanation:

Contribution margin refers to the revenue a firm derives after deducting the variable cost it has incurred.

Contribution margin = Sales - Variable costs

Contribution margin or contribution to sales ratio represents the percentage of contribution a firm earns from the sale of it's output.

It is represented mathematically as,

= $\frac{Contribution\ margin}{Sales}$

Also, contribution margin ratio = 100 - variable cost ratio percentage.

Hence, contribution margin for three departments would be:

A = 100 - 30% = 70%

B = 100 - 40% = 60%

C = 100- 50% = 50%

This represents if sales revenue is 100, contribution margin earned is 70, 60 and 50 under three cases.

Since sales revenue in all three departments is the same, let us assume the sales revenue of a department as y.

$\frac{0.70y\ +\ 0.60y\ +\ 0.50y}{3y}$

Thus, weighted average contribution margin would be, 60 percent

7 0

3 years ago

Fairbanks Co.'s balance sheet showed long-term debt of $4.75 million in 2016, and $3.5 million in 2017. In 2016, the balance she

Angelina_Jolie [31]

Answer:

Firm's 2019 operating cash flow, or OCF

Cash Flow to Creditors

Cash Flow to Creditors = Interest Expenses Paid – Net Increase in Long term debt

= Interest Expenses Paid – [Long term debt at the end – Long term Debt at the Beginning]

= $165,000 – [$5,250,000 - $5,000,000]

= $165,000 - $250,000

= -$85,000

Cash Flow to Stockholders

Cash Flow to Stockholders = Dividend Paid – Net New Equity

= Dividend Paid – [(Common stock at the end + Additional paid-in surplus account at the end) - (Common stock at the beginning + Additional paid-in surplus account at the beginning)

= $410,000 – [($550,000 + $4,800,000) – ($510,000 + $4,6000,000)]

= $410,000 – [$5,350,000 - $5,110,000]

= $410,000 - $240,000

= $170,000

Cash Flow from assets

Cash Flow from assets = Cash Flow to Creditors + Cash Flow to Stockholders

= -$85,000 + $170,000

= $85,000

Operating Cash Flow

Operating Cash Flow using the Cash Flow from assets Equation

We know, Cash flow from assets = Operating Cash flows – Change in Net Working capital – Net Capital Spending

$85,000 = Operating cash flow – (-$69,000) - $1,370,000

Operating cash flow = $85,000 - $69,000 + $13,70,000

Operating cash flow = $1,386,000

“Therefore, the firm's 2019 operating cash flow, or OCF will be $1,386,000”

6 0

3 years ago

Teesha is in the french club. there are 21 students in the club. the french teacher will pick two students at random to guide vi

Aleonysh [2.5K]

19/21. You can get this answer by deducting 2/21 which is the probability of Teesha being picked from 1.

6 0

3 years ago

Read 2 more answers

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per un

lubasha [3.4K]

Answer:

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per unit. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).

Dairy Division Income Division B Income Transfer Price .

Option "D" is the correct answer - High Low High.

Explanation:

Since in Division B, the tax rate is higher than the tax rate in US-based dairy division. Therefore to minimize the impact of the overall tax, transfer price from dairy division should be high to Division B so that the dairy division income would be higher. and the income of Division B would be lower.

Hence option "D" is the correct answer.

3 0

3 years ago

Drag the tiles to the correct boxes to complete the pairs.

aleksandr82 [10.1K]

Tha is thanks for the free 8 points

7 0

3 years ago