Answer:
18%
Explanation:
In this question, we use the DuPont Analysis which is shown below:
ROE = Profit margin × Total assets turnover × Equity multiplier
ROE = 6% × 2 × 1.5
= 18%
The total assets turnover is shown below:
= Sales ÷ total assets
= $230 million ÷ $115 million
= 2
Simply we apply the ROE formula in which the profit margin is multiplied with the total assets turnover and the equity multiplier
Answer:
(a) What is the amount by which Carla Bank's liabilities have changed?
Carla Bank's liabilities increased by $15,000 (bank deposits are liabilities).
(b) Calculate the change in required reserves for Carla Bank.
Carla Bank's reserves must increase by $15,000 x 5% = $750
(c) What is the dollar value of the maximum amount of new loans Carla Bank can initially make because of Christopher's deposit?
Carla Bank can loan $15,000 x 95% = $14,250
(d) Based on the central bank's open-market purchase of bonds, calculate the maximum amount by which the money supply can change throughout the banking system.
Money multiplier = 1 / 5% = 20
The money supply has the potential to increase by $15,000 x 20 = $300,000
(e) How will the change in the money supply in part (d) affect aggregate demand in the short run? Explain.
Aggregate demand will increase since the total money supply increases. This should also help to decrease the interest rates and foster investment.
Answer:
1. 120 hot dogs per day
2. $1,920
3. Inelastic
4.200
Explanation:
1. Break even is a term given to a situation where there is no profit or loss made by an organization for product sales.
Formula is;
Fixed cost /contribution per unit, where contribution per unit is selling price - variable price.
Solution.
Since Total fixed cost =$1,200, Selling price=$16, Variable costs=$6
=Fixed costs/(Selling price - Variable costs).
= $1,200/($16 - $6)
=$1,200/$10
=120 hot dogs.
2. Break even point in dollar sales volume. This refers to the number of products that would be produced and sold to cover production cost.
Formular is ;
Fixed cost/contribution per unit× Sales price per unit.
Solution
=Fixed costs/(Selling price - Variable costs)× Selling price.
=$1,200/($16 - $6)×$16
=$1,200/$10×$16
=$1,200×$16/$10
=$19,200/$10
=$1,920
3. The demand would be inelastic. Inelastic demand is when the demand of buyers does not change as much as changes in price.
4. Achieve level of sales target. This is when management wanted to know the sales level at which targeted profit will be achieved.
Formula
Fixed costs + Target profit/Contribution per unit
Solution.
=Fixed costs + Target profit/(Selling Price - Variable costs)
= $1,200 + $800/($16-$6)
=$1,200 + $800/($10)
=$2,000×/$10
=$200
=200 cases would needed to sell
Answer:
Current multi factor productivity for 640 work hours per month is 0.24 loaf/dollar
Explanation:
Employees are being paid $8 per hour,
Constant utility cost per month will remain same as $600
and loaf ingredient cost $0.35/loaf
Current multi factor productivity for 640 work hours per month is 0.24 loaf/dollar
640 hours * $8/hour = $5,120
1500 loaves * $0.35 = $525
$5,120 + $525 + $600 = $6,245
= 1500 loaves / $6,245
=0.24 loaf/dollar
Answer:
$7.85
Explanation:
Provided that
Selling price per unit = $24.15
Variable cost per unit = $16.30
Total fixed cost = $25,400
Budgeted sales 8,400 units
The formula to compute the contribution margin per unit is as follows
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $24.15 - $16.30
= $7.85
By deducting the variable cost per unit from the selling price per unit we can find out the contribution margin per unit