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mash [69]
3 years ago
7

A web designer quits a project where she was paid $50,000 on completion of the project. She starts a new company with sales reve

nues of $550,000 last year, while spending $250,000 on compensation for employees (excluding herself), $70,000 on capital, and $30,000 on materials. What was the firm’s economic profit?
Business
1 answer:
shepuryov [24]3 years ago
7 0

Answer:

$150,000

Explanation:

Amount paid after project completion was =$50,000

The sales revenue for the new company = $550,000

Total deductions =$(250,000+70,000+30,000)=$350,000

Economic profit is the difference between the earned revenue from sell of outputs and cost of all inputs used and any opportunity costs.

In this case, opportunity cost will be the amount received by the web designer after the quit of the project.

Economic profit = $550,000 - $350,000-$50,000 = $150,000

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During December, Far West Services makes a $2,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.
Leno4ka [110]

Answer:

Total sales tax payable:170, sales :2000

Explanation:

Sale price x sales tax rate = sales tax payable

2000 x .085 (6%+2.5%) = 170

it doesn’t say so I’m assuming that the 2,000 credit sale does NOT include the sales tax due.

3 0
3 years ago
The income statement shows the difference between a firm's income and its costs--i.e., its profits--during a specified period of
Aloiza [94]

Answer:

True.

Explanation:

‘Cash Flow Statement’ is one of major financial statement that indicates the inflow and outflow of cash along with the reasons by categorizing each cash transaction in three activities i.e., operating, investing or financing activity. Non-cash transactions are not considered while preparing a cash flow statement.

The cash flow from operating activities is generally more than the net income after taxes.

The cash flow from operating activities includes only the cash transactions relating to the operations of the business. It ignores the non-cash transactions. On the other hand, net income is derived after deducting all the expenses (paid or unpaid) from the revenue earned, pertaining to a particular period.

Example: Depreciation expense is a non-cash transaction. It is treated as follows:

While calculating cash flow from operating activities, depreciation expense is ignored (added back to the net income) as it is a non-cash transaction.

On the other hand, depreciation expense pertaining to the accounting period is deducted from revenue to calculate net income after taxes.

Thus, the cash flow from operations is generally more than the net income after taxes.

5 0
3 years ago
How would inflation impact on a start up business?
Mariana [72]

Answer:

Let's say that the value of the US dollar goes down due to inflation.

A startup business would have to pay more money to it's employees, spend more money on products, try and charge the same prices, and lose a lot of money. Essentially, more money would be going out than coming in.

5 0
2 years ago
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance
kondor19780726 [428]

Explanation:

The  computation is shown below:

1. Average operating assets is

= (Opening operating assets + closing operating assets) ÷ 2

where,

Opening operating assets is

= Total assets -  Land (undeveloped) - Investment in Buisson, S.A

=$2,020,000 - $180,000 - $250,000

= $1,590,000

And, the closing operating assets is

= Total assets -  Land (undeveloped) - Investment in Buisson, S.A

= $2,100,000 - $170,000 - $280,000

= $1,650,000

So, average operating assets is

= ($1,590,000 + $1,650,000) ÷ 2

= $1,620,000

2.

Margin = Net operating income ÷ Sales

= $405,000 ÷ $4,050,000

= 0.1 or 10%

Turnover is

= Sales ÷ Average operating assets

= $4,050,000 ÷ $1,620,000

= 2.5

Return on Investment = Margin ×Turnover

= 0.1 × 2.5

= 0.25 or 25%

3.  Residual Income = Net operating Income - (Average operating assets × Minimum required rate of return)

= $405,000 - ($1,620,000 × 15%)

= $405,000 - $243000

= $162,000

3 0
3 years ago
What is the main purpose of conducting an informational interview?
liberstina [14]

Answer:

c

Explanation:

3 0
3 years ago
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