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const2013 [10]
3 years ago
8

Alicia is considering adding toys to her gift shop. She estimates the cost of new inventory will be $9,500 and remodeling expens

es will be $850. Toy sales are expected to produce net cash inflows of $1,300, $4,900, $4,400, and $4,100 over the next four years, respectively. Should Alicia add toys to her store if she assigns a 3-year payback period to this project?
Business
1 answer:
Greeley [361]3 years ago
8 0

Answer:

Yes she should.

Explanation:

The cash flow analysis is as shown below

                                       Outflow      Inflow        Balance

Year 0 Total investment      (10,350.00)  -          (10,350.00)

Year 1 Cash inflow                        -     1,300.00       (9,050.00)

Year 2 Cash inflow                        -     4,900.00      (4,150.00)

Year 3 Cash inflow                        -     4,400.00       250.00  

Year 4 Cash inflow                        -     4,100.00       4,350.00

From the cashflow above, the business is in a net income position at the end of the 3rd year. As such, if she assigns a  3-year payback period to this project, she should add toys to her store.

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Profitability Analysis Kolby Enterprises reports the following information on its income statement: L04 Net sales ......... . ..
notsponge [240]

Answer:

Gross profit percentage = Gross profit / Net sales

= (Net sales - COGS) / Net sales

= (250,000 - 150,000) / 250,000

= 40%

Return on sales ratio = EBIT / Net sales

= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales

= (250,000 - 150,000 + 15,000 - 10,000 - 10,000 - 50,000) / 250,000

= 18%

<u>With new product:</u>

Gross profit percentage = Gross profit / Net sales

= (Net sales - COGS) / Net sales

= (250,000 + 45,000  - 150,000 - 38,000) / (250,000 + 45,000)

= 36.3%

Return on sales ratio = EBIT / Net sales

= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales

= (250,000 + 45,000  - 150,000 - 38,000 + 15,000 - 10,000 - 10,000 - 50,000) / (250,000 + 45,000)

= 52,000 / 295,000

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3 0
3 years ago
The problem with bank runs is not that ____________will fail; they are, after all, bankrupt and need to be shut down. The proble
shusha [124]

Answer:

Insolvent banks;Solvent banks.

Explanation:

A bank run can be defined as a situation where bank clients or depositors make withdrawals of their money simultaneously from banks as a result of being scared or afraid the depository institution will run out of cash (bankruptcy) and become insolvent.

The problem with bank runs is not that insolvent banks will fail; they are, after all, bankrupt and need to be shut down. The problem is that bank runs can cause solvent banks to fail and spread to the rest of the financial system.

In order to counter the problem with bank runs, the Federal Deposit Insurance Corporation (FDIC) was established on the 16th of June, 1933.

Furthermore, to avoid bank runs or other financial institutions from being insolvent, the Federal Reserve (Fed) and Central banks (lender of last resort) are readily accessible and available to give monetary funds to these institutions when they're running out of money and as well as regulate their activities.

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The records of Pippins, Inc., included the following information: Net sales $ 1,000,000 Gross margin 475,000 Interest expense 50
Lelu [443]

Answer:

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Explanation:

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Times Interest Earned (TIE)  =  EBIT / Total Interest expense

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