Although a business has had record sales it is having a hard time paying the bills each month. As a manager you are uncertain wh
1 answer:
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Answer:
1. What was the product's operating income(loss) last year = $90,000 loss
2. What is the product's Break even point in unit sales and dollars
• Break even sales in units 18,000
• Break even i n sale dollars $1,260,000
3. Maximum annual profit given an increment of 5,000 units and reduction of sales price per unit by $2.
• Net profit of $20,000
4. What would be the break even point in unit sales and dollars using the selling price that you determined in requirement 3.
• Break even sales units 19,285.7
• Break even in sales dollars $1,311,427.6
Explanation:
Please see attached detailed solution to the above questions and answers.
Answer:
The correct answer is "32.076%".
Explanation:
Given:
Initial investment,
= $500,000
Cash inflows,
= $500,000
The floatation cost will be:
=
= ($)
The total cost will be:
=
=
=
hence,
The rate of return will be:
=
=
=
=
= (%)