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Nataly_w [17]
3 years ago
13

Jason is a small business owner. he has a dry cleaning business. one year, jason has to replace nearly all of his equipment, and

the rent on his building increases. jason borrows money to cover his expenses. however, business is slow and jason eventually realizes that he must declare bankruptcy. neither jason nor his creditor wants the expense and hassle of going to court. they can settle their creditor-debtor relations outside of court through a:
Business
2 answers:
evablogger [386]3 years ago
8 0
They can settle their creditor debtor relations out of court through a WORKOUT.
A workout refers to an out of court arrangement in which a debtor and a creditor reach some agree about how the debtor is going to pay the creditor back.
tangare [24]3 years ago
8 0

Work-Out is the strategy, debtors use to payback loans or debts to the creditor.

Work-out in business terms means a way to ease the borrower by developing work-outs for the business customers when they are in difficulty.

In this example, Jason is about the file the bankruptcy, because he is unable to payback the loan he took to meet his expenses. But the creditor and he himself don't want to indulge in the court room hassles, so they develop work-outs for themselves to payback the credit Jason took to continue his business activities.

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Jacoby Company received an offer from an exporter for 26,200 units of product at $18 per unit. The acceptance of the offer will
Leokris [45]

Answer:

The change in revenue (differential revenue from the acceptance of the offer) will be $ 471600

Explanation:

The revenue represents the total sales of the product, regardless of the costs, then If the company produced initially Q units the initial revenue will be

Initial Revenue=total sales= P₁*Q₁

- Since the offer does not alter the domestic sales prices P₁ , the price P₁ remains constant.

- Since the sales does not affect normal production , the quantity sold to the domestic market Q₁ is also not affected ( i don't need to resign units to the domestic market to sell to the exporter)

then

New revenue= Revenue from the exporter + Revenue from the domestic market = Revenue from the exporter + Initial revenue

where Revenue from the exporter=P₂*Q₂ , P₂= price sold to the exporter and Q₂= units sold to the exporter

therefore the change in revenue will be

Change in Revenue= New revenue - Initial Revenue =   Revenue from the exporter

Change in Revenue=P₂*Q₂=$18 /unit* 26200 unit = $ 471600

Note:

The profit represents the revenue, taking into account the costs. Then the change the initial profit will be

initial profit =  P₁*Q₁ - (CF+CV*Q₁)

the New profit

New profit = P₂*Q₂+ P₁*Q₁ - [CF+CV*(Q₂+Q₁)]

and the change in profit

change in profit= New profit - initial profit =   P₂*Q₂+ P₁*Q₁ - [CF+CV*(Q₂+Q₁)] -[P₁*Q₁ - (CF+CV*Q₁)]= P₂*Q₂ - CV*Q₂ = (P₂- CV)*Q₂ = ($18 /unit-  $12 /unit)* 26200 unit = $ 156000

3 0
3 years ago
Finisher Inc. sells merchandise of $250,000 in 2020 that includes a three-year limited warranty. Warranty costs are estimated to
N76 [4]

Answer: See explanation

Explanation:

a. Record the warranty accrual at the time of sale in 2020.

Debit Warranty expense = $250,000 × 1% = $2,500

Credit Warranty Liability $2,500

(To record the warranty accrual)

b. Record the adjustment to the warranty accrual for actual warranty costs in 2020.

Debit Warranty Liability $800

Credit Cash and Payables $800

8 0
3 years ago
Webee Ltd. has entered the growth stage of its business. It is raising external finances to sustain its operations. In which typ
Zepler [3.9K]
Flotation costs are the amounts that are significantly required for the issuing of various securities in a company such as legal fees and registration fees. In addition, the type of funding that would mostly likely incur flotation costs in Webee Ltd. would be by issuing common stocks.
6 0
3 years ago
Read 2 more answers
A monopolist:
Llana [10]

Answer:

The answer is C. can earn profits or incur losses in the short run.

Explanation:

A monopolist maximizes profit or minimizes losses by producing that quantity that corresponds to when marginal revenue = marginal cost. However, if the average total cost is above the market price, then the firm will incur losses, equal to the average total cost minus the market price multiplied by the quantity produced

5 0
3 years ago
What two possible reasons could cause the required return to differ from the coupon interest​ rate? ​(Select the best answer​ be
mixas84 [53]

Answer:

A. Cost of funds has changed

B. Firm's risk has changed

Explanation:

The required rate of return on bonds refers to an investor's expected rate of return which is based upon rate of return other investors earn in the market on similarly priced bonds. This is also referred to as yield to maturity i.e YTM.

Coupon rate of payment of bond is the interest payment on such bonds which is usually fixed at the time of issue of such bonds.

Required rate of return may differ on account of change in cost of funds to the issuer which is cost of debt denoted as K_{d} . Cost of debt is determined by tax rate and net proceeds from the issue of such bonds.

Required rate of return may also change on account of change in the firm's risk. If the firm assumes more risk, such risk would deter investors from investing in such bonds and in such scenario, the firm has to offer higher coupon rate than the rate prevailing in the market to attract the investors.

5 0
3 years ago
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