Answer:
- I think Ben should encourage the Senior Management to call a multidisciplynary meeting and do some research.
Explanation:
<em>I think Ben is right</em>. Even though the statement is technically correct, it may mislead customers.
Customers may interpret the phrase "<em>no sugar added</em>" as if the product did not contain any sugar.
Thus, customers interested in drinking beverages without sugar at all might think they are "safe" consuming the smoothie beverage, when in reallity each <em>smoothie's bottle contains sugar 35 g of naturally occurring sugars from the fruit.</em>
Customers deserve to be certain on what they are buying, thus the labels must be a sincere help for them, and not ambiguos at all.
This is a "gray zone" and an example of what in ethics is called a dilema.
I think the decision should be shared by a wider team and based on some research.
I think Ben should encourage the Senior Management to call a multidisciplynary meeting, where the subject is widely discussed. Also, I would suggest Ben to do some research, look for precedents about labeling in the industry, and try to learn the opinion of the FDA about this sensitive matter.
Answer:
$31.76 million
Explanation:
Economic Value Added is the residual wealth left for shareholders after having accounted for the financing needs of the company as shown by the formula below:
EVA=NOPAT-(WACC*invested capital)
NOPAT is the net operating profit after tax =operating profit(EBIT)*(1-tax rate)
Net income=Earnings before tax*(1-tax rate)
net income= $55 million
EBT=unknown
tax rate=40.0%
$55=EBT*(1-40.0%)
$55=EBT*0.60
EBT=$55/0.60
EBT=$91.67
EBIT=EBT+interest
EBIT=$91.67+$19
EBIT=$110.67
NOPAT=$110.67*(1-40%)
NOPAT=$66.41
WACC=9.0%
perating capital employed=$385
EVA=$66.41-(9.0%*$385)
EVA=$31.76 million
operating capital em
Answer:
C) Townson's fixed asset turnover ratio has decreased between Year 1 and Year 2.
Explanation:
Year 2 Year 1
Sales $3,645,000 $4,250,000
Fixed assets:
Beginning of year 880,000 820,000
End of year 520,000 880,000
fixed asset turnover (FAT) ratio = net sales / average fixed assets
FAT ratio year 1 = $4,250,000 / [($820,000 + $880,000) / 2] = 5
FAT ratio year 2 = $3,645,000 / [($880,000 + $520,000) / 2] = 5.2
Townson's fixed asset turnover ratio increased between year 1 and year 2.
Answer:
Selling price= $224
Explanation:
Giving the following information:
Unitary purchase cost= $140
Mark-up percentage= 60%
<u>To calculate the selling price per unit, we need to use the following formula:</u>
Selling price= unitary cost*(1 + mark-up)
Selling price= 140*1.6
Selling price= $224
Answer:
$7,500,000
Explanation:
Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of $7,500,000 in demand deposits
From the stated assumptions in the question,we will use the money multiplier to calculate the eventual effect of the $1,500,000 injection into the money supply.
Money multiplier can be calculated using this formula 1/r (r is the required reserve ratio)
Therefore, the resulting change in demand deposits is as follows:
Change in Demand Deposits = Change in Fresh Reserves ×1/r
= $1,500,000×1/0.20
= $7,500,000
