Answer:
Break-even sales = $800,000.
Explanation:
<em>The beak-even point is the units of products to be sold or number of customers to be served to enable a business to cover exactly its total cost from the revenue. At the break-even point, the business makes no profit or no loss because the contribution from sales exactly equals the total fixed cost</em>
<em>Break-even in sales revenue = Total fixed cost/Contribution margin</em>
<em>Contribution margin (%) = Contribution/ sales × 100</em>
= 160,000/640,000
= 0.25 × 100
= 25%
<em>Fixed cost = Contribution - operating income</em>
= 160,000- -( 40,000)
= 160,000 + 40,000
= 200,000
<em>Break-even point sales = 200,000/25%</em>
= $800,000.
Answer:
C) both an initial cash outflow and a future cash inflow.
Explanation:
Net present value method: The initial investment is subtracted from the discounted cash inflows of present value in this approach. If the sum is positive than the project, otherwise it is not beneficial to the company.
In mathematically,
Net present value = Present value of all annual cash inflows after the discount factor is applied - initial investment
The change in working capital impact the initial cash outflows and future cash inflows i.e net present value
Answer:
c. less corporate profits.
Explanation:
Subtract all the expenses from the revenue that are solely associated with Cookbook product line.
60000 - 36000 - 18000 - 2000 = 4000
This $4000 suggests that CookBook product line contributes profit of 4000 towards the company. So If the cookbook product line had been discontinued prior to this year, the company would have reported less corporate profits by $4000.
Answer:
d. $100,000
Explanation:
<u><em>Ronaldo Soccer Shop</em></u>
<u><em>Income Statement</em></u>
Sales $100,000;
Cost of goods sold $46,000,
Operating expenses $34,000,
Interest expense $15,000,
Income tax expense $2,000,
Net Income $3,000
The vertical analysis of the income statement is performed by dividing each of these income statement line items by the total sales.
Vertical Analysis ( income Statement) = (Income Statement Item/ Total Sales )* 100
