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OLga [1]
3 years ago
7

At a sales level of $270,000, the magnitude of operating leverage for the Cake Factory is 2.8. If sales increase by 15%, profits

will increase by: a. 2.8% b. 15% c. 42% d. 18.67%
Business
1 answer:
hichkok12 [17]3 years ago
5 0

Answer:

Increase in profit will be 42 %

So option (C) will be correct answer

Explanation:

We have given sales level is $270000

Operating leverage for the factory is given 2.8

It is given that sales is increased by 15 %

We have to find that by how much percentage profit will increase

Increase in profit percentage is given by multiplication of operating leverage and increase in profit sale

So increase in profit will be equal to 2.8 ×15 = 42 %

So option (C) will be correct answer

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It is appropriate to use the fixed assets turnover ratio to appraise firms' effectiveness in managing their fixed assets if and
Kay [80]

Answer:

False

Explanation:

fixed assets turnover ratio = net sales / average fixed assets

This ration measures how effectively a company uses its fixed assets to generate sales. If a company's fixed assets turnover ratio is higher than the industry average, it means that  it is using its assets more efficiently to generate more sales or it is working at an over capacity, and it needs to add more fixed assets.

5 0
3 years ago
Preissle Company, wants to sell some 20-year, annual interest, $1,000 par value bonds. Its stock sells for $42 per share, and ea
NikAS [45]

Answer:

coupon interest rate that the company must set on the bonds in order to sell the bonds-with-warrants at par is 8.25%.

Explanation:

warrant per share = 2*75 = $150

price of the bond = 1000 - 150 - (1000/(1.05^40))

                             = $707.9543177

coupon*(1 -(1/(1.05^40)))/0.05 = 707.9543177

coupon*17.15908635 = 707.9543177

coupon = 41.25827583

coupon rate = 8.25%

Therefore, coupon interest rate that the company must set on the bonds in order to sell the bonds-with-warrants at par is 8.25%.

6 0
3 years ago
Tom walks bethany's dog once a day for $50 per week. bethany values this service at $60 per week, while the opportunity cost of
s344n2d4d5 [400]

The total surplus is A. $30.

The surplus is the amount of money that is let over after all requirements have been met/paid. This can also be an excess amount of production that is over the amount of money demanded. The opportunity cost is $30, which is what Tom values his time being worth that he is not getting due to dog walking.

5 0
4 years ago
If you decide to buy one of these​ TVs, what statistic is most​ relevant, other than the measures of central​ tendency? Choose t
kupik [55]

Answer:

A. The lowest price is a relevant statistic for someone planning to buy one of the TVs.

Explanation:

The measures of central tendency refers to the measurement of data by considering the mean, median and mode so that it could estimate the sample data based on this measures

In order to decide to buy one of these TV the statistic that is should be considered and ignore the central tendancy measures is the price that is lesser to buy one of the TVs.

hence, the correct option is A.

4 0
3 years ago
The Lorenz curvebreaks down the income levels of each group in the economy.shows what portion of the population is working as pr
Sergeu [11.5K]

Answer: Option (B) is correct.

Explanation:

Correct Option: Shows what portion of total money income is accounted for by different proportions of the nation's households.

Lorenz curve is a graphical representation of income inequality and wealth inequality in an economy. In a graphical representation, there is a straight line and if Lorenz curve is same as the straight line then there is an income equality. The gap between straight line and curved line shows us the income inequality among the households. The larger the gap between these two curves the greater will be the income inequality in an economy.

8 0
3 years ago
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