Answer:
c
Explanation:
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Answer:
The account balance after 4 years will be $2,420.
Explanation:
First we need to add Bob and Judy's amount to find the total amount that will be deposited. (1260+975)=2,235.
Now we will break up the annual interest into monthly interest because it will be compounded monthly. 2/12=0.166.
Then we will break up the 4 years into months also because the interest is compounded monthly. 4*12=48
Now we use the formula for compound interest
Final amount = Principal*(1+R)^N
Principal = 2,235
R= 0.166% or 0.00166
N= 48
We put these values into our formula
2,235*(1+0.00166)^48
=2,420
Answer:
It should accept the special order at the price of $36 as the total marginal cost will be $28.5 (27 variable cost + 1.15 shipping cost).
Explanation:
Special orders are accepted only if marginal revenue increases the marginal cost. Marginal cost is the total cost incurred to fulfill any order.
In the given scenario, since the Company already has adequate capacity and it will not incur any additional fixed cost, therefore the order can be accepted by taking variable cost in to consideration.
Marginal Revenue 36
Less: Marginal Cost
Variable Cost (27)
Shipping Cost <u> (1.15)</u>
Total Profit from Order <u> 7.85</u>
Answer:
A) The GAAP statement is based on cost function rather than cost behavior.
Explanation:
Income statements that follow GAAP rules categorizes expenses based on their business function: product, selling or administrative.
While cost behavior categorizes costs based on how they influence a company's activities: variable, fixed and mixed. When a manager wants to measure the impact of any decision he/she makes, they need to use this type of categorization. For example, if fixed costs increase, what is the new break even point? If variable costs decrease, how is the marginal cost affected?
Answer: 4.7%
Explanation:
Expected return is calculated as:
= Risk free return + Beta ( Market risk premium)
10.8% = 5% + (1.22 × Market risk premium)
10.8% - 5% = 1.22market risk premium
5.8%/1.22 = market risk premium
Market risk premium = 0.058/1.22
Market risk premium = 0.047
Market risk premium = 4.7%