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Delicious77 [7]
3 years ago
10

It costs Oriole Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit.

A foreign wholesaler offers to purchase 5600 units at $21 each. Oriole would incur special shipping costs of $2 per unit if the order were accepted. Oriole has sufficient unused capacity to produce the 5600 units. If the special order is accepted, what will be the effect on net income
Business
1 answer:
Sedaia [141]3 years ago
4 0

Answer:

Effect on income= $5,600 increase

Explanation:

Giving the following information:

It costs Oriole Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit. A foreign wholesaler offers to purchase 5600 units at $21 each. Oriole would incur special shipping costs of $2 per unit if the order were accepted.

Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.

Effect on income= (21-18 - 2)*5,600= $5,600increase

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The attractiveness test for evaluating whether diversification into a particular industry is likely to build shareholder value i
vodka [1.7K]

Answer:

<u>A) conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es).</u>

<u>Explanation</u>:

Remember, the key word here is about whether diversification into a particular industry would likely increase shareholders value.

Thus, any company wanting to test this out would consider whether conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es).

This option is better because improved profits implies better shareholder value.

4 0
3 years ago
Susan's paycheck this month says her gross pay was $400 and net pay was $350. What's the best explanation for why those two numb
charle [14.2K]
Divid 400 divid by 359
6 0
3 years ago
Read 2 more answers
A truck rental company rents a moving truck for one day by charging $ 34 plus $ 0.05 per mile. Write a linear equation that rela
lara [203]

Answer:

C = 0.05*x + 34

Explanation:

There are several ways to approach this problem. However, we will follow a logical and simple procedure.

It is always possible to write any linear equation as:

y = mx + b, where:

m = slope

b = y-intercept (value when x = 0)

The problem statement guarantees us that b=34, because if we do not drive any mile (x=0), then the cost should be equal to $ 34. Also, we know that m=0.05, because every driven mile (increase in x by 1) the cost should increase by $5. Therefore, we can write the linear equation as:

y = 0.05x + 34

Changing the dependent variable y for C (to relate it with the cost) we have that:

C = 0.05x + 34

6 0
3 years ago
Stoneheart Group is expected to pay a dividend of $3.11 next year. The company's dividend growth rate is expected to be 4.2 perc
lukranit [14]

Answer:

$43.19

Explanation:

Use dividend discount model(DDM) to solve this question; specifically constant dividend growth model.

P0 = D1/(r-g)

P0 = Current price

D1 = Next year's dividend = $3.11

r = investors' required return = 11.4% or 0.114 as a decimal

g = dividend growth rate = 4.2% or 0.042 as a decimal

P0 = 3.11/(0.114 - 0.042)

P0 = $43.19

Therefore, this stock price is $43.19

8 0
3 years ago
X-treme Vitamin Company is considering two investments, both of which cost $22,000. The cash flows are as follows:
lukranit [14]

Answer:

0.88 years

1 year

Explanation:

Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.

For project A:

Amount invested = $-22,000

Amount recovered in year 1 = $-22,000 + $25,000 =$-3000

The amount invested is recovered In 22,000 / $25,000 = 0.88 years

For project B:

Amount invested = $-22,000

Amount recovered in year 1 = $-22,000 + $22,000 = 0

The amount invested is recovered in a year

I hope my answer helps you

8 0
3 years ago
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