Answer:
a. 14.75%
b. Under priced
Explanation:
The computation for the required rate of return is shown below:
a. Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6% + 1.25 × (13% - 6%)
= 6% + 1.25 × 7%
= 6% + 8.75%
= 14.75%
b. As the required rate of return comes 14.75% and the required return is 16% so it is under priced as expected return is more than the required return
Answer:
$4,480
Explanation:
The total amount to be recorded as expense would include the cost of the item purchased an the values of the applicable taxes.
As such, the advertising expense would include the value of the goods and services tax as well as the provincial sales tax with both tax rates applied to the applicable cost.
Goods and services tax = 5% × $4,000
= $200
Provincial sales tax = 7% × $4,000
= $280
Total debit to advertising expense
= $4,000 + $200 + $280
= $4,480
Answer:
a. Break-even point in sales units = 350,000 units
b. Break- even point in sales units to achieve a target profit of $400,000 = 430,000 units
Explanation:
a. Break-even point in sales units = Fixed cost ÷ Contribution margin per unit
= $1,750,000 ÷ $5
= 350,000 units
Working note:- Contribution margin = $15 - $10 = $5
b. Break- even point in sales units to achieve a target profit of $400,000 = fixed cost + Targeted profit ÷ Contribution margin per unit
= $1,750,000 + $400,000 ÷ $5
= $2,150,000 ÷ $5
= 430,000 units
According to the Uniform Commercial Code's interpretation of an open quantity term, if the quantity term is left open in a contract for the sale of goods courts generally have no basis for determining a remedy.
<h3>What do you mean by Uniform Commercial Code?</h3>
The uniform Commercial code states that a sale consists of the passing of title from the seller to the buyer for a price.
According to the Uniform Commercial code's interpretation of an open quantity term, if the quantity term is left open in a contract for the sale of goods, courts have no basis for the determination of remedy.
Learn more about uniform commercial code here:
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Answer:
Relevant:
$5,500
$1,650
$7,700
Explanation:
The only data irrelevant is the first production cost. <u>The $4,400 is not relevant because it is a sunk cost. It will remain constant in both choices.</u> The other costs and income are relevant because they vary on each decision. The $4,400 should not be a part of the decision making process.
