Answer:
0.875
Explanation:
The income elasticity of demand measures the responsiveness of quantity demanded to changes in income.
Income elasticity of demand = percentage change in quantity demanded / percentage change in income
14% / 16% = 0.875
Demand is inelastic because the coefficient of elasticity is less than one.
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Answer:
$810,000
Explanation:
The computation is shown below:
The increase in fixed cost is
= Salary of each sales representative × number of sales representatives hired
= $45,000 × 18
= $810,000
Now the increase in sales needed for break even is
= Increase in fixed cost ÷ Contribution margin ratio
= $810,000 ÷ 30%
= $2,700,000
As we know that break even sales is computed by dividing the fixed cost by the contribution margin ratio and we applied the same
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Answer:
Straight line method rate = 1/ Number of years * 100 = 1/25*100 = 4%
Double declining balance depreciation = 2*Straight line method rate*Book value
First Year depreciation = 8%*$960,000
First Year depreciation = $76,800
Second year depreciation = 8% * (Book Value as on 1st year - First Year depreciation)
Second year depreciation = 8%*($960,000-$76,800)
Second year depreciation = 8%*$883,200
Second year depreciation = $70,656
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