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3 years ago

8

what will happen if a shoe firm sells its shoes at a price lower than the opportunity cost of the input used in the production p

rocess

1 answer:

dsp733 years ago

6 0

The output would be a negative gain.

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Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for

kirill115 [55]

Answer and Explanation:

The computation is shown below;

1. Reorder point is

= Daily demand × lead ime

= 20 × 3 days

= 60 pounds

2. The length of the order cycle is

= Order quantity ÷ demand rate

= 80 ÷ 20 pounds

= 4 days

3. The average inventory level is

= Order quantity ÷ 2

= 80 ÷ 2

= 40 pounds

4. The total daily cost is

the cost of the pepperoni = daily demand × cost per pound

= 20 × 3 pound

= 60

Daily ordering cost is

= daily demand ÷ ordering quantity × ordering cost

= 20 ÷ 80 × $10

= $2.50

And, the daily holding cost is

= ordering cost ÷ 2 × holding cost

= 80 ÷ 2 × 0.04

= $1.60

Now the total daily cost is

= $60 + $2.50 + $1.60

= $64.10

5. The economic order quantity is

= (√2 × annual demand × ordering cost ÷ carrying cost)

= √2 × 20 × 10 ÷ 0.04

= √10,000

= 100

7 0

3 years ago

A firm with no debt has 200,000 shares outstanding valued at $20 each. Its cost of equity is 12%. The firm is considering adding

Kipish [7]

Answer:

Option (C) is correct.

Explanation:

Given that,

No. of shares = 200,000

Market value per share = $20 each

Tax rate = 34%

Debt amount = $1,000,000

Market value of firm:

= Market value of equity + (Tax rate × Debt)

= (No. of shares × market value per share) + (Tax rate × Debt amount)

= (200,000 × $20) + (0.34 × $1,000,000)

= $4,000,000 + $340,000

= $4,340,000

= $4.340 million

The firm be worth after adding the debt is $4.340 million.

7 0

3 years ago

has determined he will have an annual retirement income deficit. The deficit for the first year of retirement, 10 years from now

Greeley [361]

Answer:

Total needed= $2,700,000

Explanation:

Giving the following information:

The deficit for the first year of retirement, 10 years from now, is $90,000. He expects to be in retirement for 30 years and believes he can earn a 7% after-tax annual return on invested dollars. Inflation is expected to average 4% annually over this same period.

Real rate= 7 - 4= 3%

Total needed= 90,000*30= 2,700,000

7 0

4 years ago

On January 4, 2021, Snow Co. purchased 40,000 shares (40%) of the common stock of Walker Corp., paying $900,000. There was no go

telo118 [61]

The balance in an investment account after shares are sold is $845,250.

<h3>What is an investment?</h3>

An investment is the acquisition of shares owned by a parent company in a subsidiary company.

Given values for step 1:

Cost of shares : $900,000

Share in profit of Company W: $ 96,000 ($240,000 X 40%)

Share in dividends of Company W: $ 30,000 ($75,000 X 40%)

<u>Step-1</u> Computation of investment value of Company S :

$\rm\ Investment \rm\ income \rm\ of \rm\ Company \rm\ S =\rm\ Cost \rm\ of \rm\ shares+ \rm\ Share \rm\ in \rm\ profits - \rm\ Share \rm\ in \rm\ Dividends\\\rm\ Investment \rm\ income \rm\ of \rm\ Company \rm\ S=\$900,000+\$96,000-\$30,000\\\rm\ Investment \rm\ income \rm\ of \rm\ Company \rm\ S=\$966,000$

Given values for step 2:

Number of shares sold: 5,000

Number of shares owned : 40,000

investment value (refer Step-1): $966,000

<u>Step-2</u> Computation of investment value after the sale of shares :

$\rm\ Investment \rm\ value \rm\ after \rm\ sale \rm\ of \rm\ shares=\frac{\rm\ Number \rm\ of \rm\ shares \rm\ sold}{\rm\ Number \rm\ of \rm\ shares \rm\ owned } \times\ \rm\ Investment \rm\ value\\\rm\ Investment \rm\ value \rm\ after \rm\ sale \rm\ of \rm\ shares=\frac{5,000}{40,000} \times\ \$ 966,000\\\rm\ Investment \rm\ value \rm\ after \rm\ sale \rm\ of \rm\ shares=\$120,750$

Given values for step 3:

Investment value of Company S:$966,000

Investment value after shares sale:$120,750

<u>Step-3 </u>Computation of balance in investment value:

$\rm\ Balance \rm\ of \rm\ investment = \rm\ Investment \rm\ value \rm\ of \rm\ Company \rm\ S - \rm\ Investment \rm\ value \rm\ after \rm\ shares \rm\ sale\\\rm\ Balance \rm\ of \rm\ investment =\$966,000-\$120,750\\\rm\ Balance \rm\ of \rm\ investment=\$845,250$

Therefore, after selling the shares, the amount of investment comes out to be $845,250.

Learn more about the investment balance in the related link:

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4 0

3 years ago

Discuss Five types of visual aids?

kap26 [50]

Answer:

1. power Point

2. Whiteboards

3. Video clips

4. Handouts

5. Props

4 0

3 years ago