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denpristay [2]
3 years ago
7

Ramos Corporation is considering the elimination of one of its segments. The segment incurs the following fixed costs. If the se

gment is eliminated, the building it uses will be sold. Advertising expense $ 70,000 Supervisory salaries 150,000 Allocation of companywide facility-level costs 65,000 Original cost of building 110,000 Book value of building 50,000 Market value of building 80,000 Maintenance costs on equipment 56,000 Real estate taxes on building 6,000
Required
Based on this information, determine the amount of avoidable cost associated with the segment.
Business
1 answer:
g100num [7]3 years ago
8 0

Answer:

$362,000

Explanation:

The market value of the building is an opportunity cost that is avoidable.

Ramos would avoid the real estate taxes if it sold the building.

Therefore,

Amount of avoidable cost associated with the segment:

= Annual advertising expense + Market value of the building (opportunity cost) + Annual maintenance costs on equipment + Annual real estate taxes on the building + Annual supervisory salaries

= $ 70,000 + $80,000 + $56,000 + $6,000 + $150,000

= $362,000

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Small differences in growth rates can create large differences in income levels because of:
Bingel [31]

Answer:

Answer is option B, i.e. compounding.

Explanation:

Compounding can be understood as an ability of an organization to generate earnings from previous given income. This leads to small growth compared to the previous one and therefore, leads to large differences in income.    

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3 years ago
The amphibians have loose fitting skin. this helps them with which of the two major challenges for transition to land?
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The loose fitting skin is one of the defining characteristic of the amphibians in which the toad, frog and almost any other creature in between belong. Some of the many useful and sophisticated purpose of this are: (1) helping with respiration, (2) prevention of hydration loss, (3) easy locomotion. This enables the animals to easily adapt to the environment once it shifts to the land from the water bodies. 
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3 years ago
To develop an effective control system, it must be related to the organizational strategy. Yes or no.
Georgia [21]

Answer:

yes

Explanation:

because in order for everything to be organized you need to know how the system is running

8 0
3 years ago
In a free market setting where quantity supplied is 40 units and quantity demanded is 50 units, price will:
zvonat [6]

Answer: Increase

Explanation:

According to the Law of Supply and Demand, If the demand for the good is higher than the supply, the price will be higher to reflect the relative scarcity and if the demand is lower than supply, the price will be lower to reflect the relative excess.

In this case the quantity demanded is higher than the quantity supplied so the price will have to increase to reflect the relative scarcity of the good.

4 0
3 years ago
The required return on the stock of Moe's Pizza is 10.4 percent and aftertax required return on the company's debt is 3.28 perce
Katarina [22]

Answer:

WACC - new project = 6.408% rounded off to 6.41%

Explanation:

The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure can consist of one or more of the following components namely debt, preferred stock and common equity. The WACC is calculated as follows,

WACC = wD * rD * (1 - tax rate)  +  wP * rP  +  wE * rE

Where,

  • w represents the weight of each component
  • r represents the cost of each component
  • D, P and E represents debt, preferred stock and common equity
  • rD * (1 - tax rate) is the after tax cost of debt

We first need to calculate the WACC of the company and then adjust it for the new project.

WACC = 35% * 3.28%  +  65% * 10.4%

WACC = 7.908%

As the new project is less risky and has an adjustment factor of -1.5%, the required rate of return for the new project will be,

WACC - new project = 7.908%  -  1.5%  

WACC - new project = 6.408% rounded off to 6.41%

4 0
3 years ago
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