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marin [14]
3 years ago
13

You have determined that an OCF of $142,098 will result in a zero net present value for a project, which is the minimum requirem

ent for project acceptance. The fixed costs are $418,000 and the contribution margin per unit is $87.20. The company feels that it can realistically capture 4.5 percent of the 120,000 unit market for this product. The required rate of return is 11 percent. Should the company develop the new product
Business
1 answer:
Arturiano [62]3 years ago
0 0

Answer:

The company should not develop the new product as The operation cash flow is too low as compared to the OCF that results in zero NPV .

Explanation:

In order to know if the company should develop the new product we would have to make the following calculations:

The No, of units the company expects to sell = Market share*Market size = 4.5%*120,000 = 5,400

Total contribution = No. of units sold*contribution margin per unit = 5400*87.20 = $470,880

Fixed costs = $418,000

Profit before tax = Total contribution - Fixed costs = $470,880 - $418,000 = $52,000

Net profit = (1-Tax rate)*Profit before tax = (1-34%)*$52,000 = $34,320

Since there are no depreciation costs(assumed), net profit is the operating cash flow.

Therefore, the company should not develop the new product as The operation cash flow is too low as compared to the OCF that results in zero NPV .

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Anna is 88 years old and under the court-appointed guardianship of her daughter. One day Anna receives a telephone call from a h
Sergio039 [100]

Answer:

c. This contract is void.

Explanation:

Since in the question it is mentioned that one day Anna received a phone call from the health insurance salesman and she purchase a $400 medigap insurance policy so the contract should be void in the eyes of law as it is not valid in terms of law plus nothing is specified for whom she purchased the policy for $400

Therefore the correct option is c.

4 0
2 years ago
Agin i need help
AlexFokin [52]
I believe it is commas but let me verify real quick

6 0
3 years ago
The Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable rate of r
Afina-wow [57]

The residual income for the Division A of Magnolia Company for an income from operations of $80,000 will be $32,000.

<h3>What is residual income?</h3>

Residual Income is the total of total income from operations less the minimum acceptable rate of return on the deployed assets for such operations over a financial period.

Using the above information, it can be ascertained that the residual income will be,

\rm Residual\ Income = Income\ from\ Operations - Rate\ of\ Return\ x\ Assets\\\rm Residual\ Income = 80000- (12\%\ x\ 400000)\\\\\rm Residual\ Income = \$32,000

Hence, the residual income will be as computed above.

Learn more about residual income here:

brainly.com/question/27330050

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8 0
2 years ago
According to PCN analysis, service operations exist only within the area(s) of: a. independent processing.b. independent process
topjm [15]

Answer:

(D). surrogate interaction and direct interaction.

Explanation:

Process Chain Network (PCN) analysis involves designing an organization's processes in such a way that it brings about better interaction with customers.

The PCN analysis highlights three process areas which are; <u>surrogate interaction, direct interaction</u> and independent processing areas.

<em>Service operations only exist within the areas of </em><em>surrogate interaction and direct interaction</em><em>, because they require more interaction with customers and are more personal in nature.</em>

7 0
3 years ago
Read 2 more answers
ABC Services reported the following transactions for September, 2013. A) The owner opened the business with a capital contributi
NemiM [27]

Answer:

ABC Services

The total liabilities at the end of September, 2013

= $9,000

Explanation:

a) Data and Calculations:

Capital contribution = $23,500

Equipment = $11,500

Cash payment for equipment = $2,500

Note payable on equipment = $9,000

Insurance expense paid = $1,350

Utility expense paid = $980

Rent paid = $2,000

Sales = $12,000

Cash Sales = $7,200 (60% of $12,000)

Credit Sales = $4,800 (40% of $12,000)

Office furniture paid = $9,700

Therefore, total liabilities at the end of September, 2013 = $9,000.  This represents the note payable for the office equipment purchased in B.

8 0
2 years ago
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