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pishuonlain [190]
3 years ago
8

150-seat restaurant $8,000,000 is needed to construct the restaurant; no additional investment is needed in working capital.

Business
1 answer:
goldenfox [79]3 years ago
3 0

Answer:

The answer is $7400000

Explanation:

Solution

Recall that:

There is  no information is given about per unit cost or sales price hence, a reverse calculation is to be made to find out the projected total revenue.

Now,

The reverse calculation to find sales is computed as follows:

Begin from the expected profit + Tax expenses + Interest Expenses + undistributed expenses + variable cost

Thus,

From the calculation of each term is as stated below:

1. The profit expected = 15% return on their investment. it is to be after tax return, total investment = $8000000,

So,

The Profit expected  = $8000000 *15% = $1200000.

2. The tax xxpenses = 25% that is, it should be 25% on taxable profit which is  decreased from it and then net profit after tax is available,

Thus,

we have net profit after tax we can compute the  taxable profit as = $1200000 / 75% = $1600000.  for example, tax amount on taxable profit = $160000 * 25% = $400000.

3. The Interest Expenses = 5% of borrowed fund from bank,

Now,

The  borrowed fund from bank = $2000000 (8000000-6000000)

The expenses interest = $ 100000 ($2000000*5%)

4. Undistributed Expenses is stated as follows:

The Undistributed expenses are given in the question = $2000000.

5. Variable cost that is the labor cost and cost of food :

From the question it is given that it is 50% of the sales, which means the remaining 50% is the contribution.

Now

The contribution on reverse calculation is  computed as:

Profit +taxes + Interest + fixed expenses

Contribution = 1200000 + 400000 + 100000 + 2000000 = $ 3700000,

Thus,

We say,let the sales be 10 , then variable cost be 50 and contribution is 50, that means variable cost = contribution in this case.

so, in proportional calculation , the variable cost = $3700000 .

Thus

The projected sales = expected profit + Tax expenses + Interest Expenses + undistributed expenses + variable cost

The total revenue projected =$1200000+ $ 400000 + $100000 + $ 2000000 +$ 3700000

Therefore, the total revenue projected = $ 7400000

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Foster, Inc., purchased a truck by paying $5,000 and borrowing the remaining $30,000 required to complete the transaction. Ident
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Answer: c. Foster Inc.'s assets will decrease by a net amount of $30,000.

d. The Company's liabilities will increase by $30,000.

Explanation:

From the question, Foster, Inc., bought a truck by paying $5,000 and then borrowed the remaining $30,000 that was required to complete the transaction.

Since the company borrowed $30,000, this will lead to an increase in the liability of the company by $30,000. Also, it will lead to a reduction in the net assets of the company by a net amount of $30,000

6 0
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As a result of a thorough physical inventory, Railway Company determined that it had inventory worth $180,000 at December 31. Th
fgiga [73]

Answer:

The answer is: $215,000

Explanation:

Railway Company should include the goods worth $35,000 that Rogers Consignment store has. Once this amount is included, the total inventory for Railway Company should be $215,000 ($180,000 + $35,000).

Merchandise purchased and shipped as FOB destination, belongs to the seller until it has been properly delivered to the buyer. It will increase the inventory once it arrives on January 3.

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2 years ago
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following:
andrew-mc [135]

Cost of inventory destroyed in fire is $1,140,000

<u>Explanation:</u>

The loss from fire to inventory can be calculated by finding the cost of the inventory on the may 4 , 2021.

Cost of sales = Sales – profit on sales

= 9000000-1800000

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The value of inventory on the may 4 = opening inventory on January 1 + purchases + freight in – cost of sales

=1980000+5880000+480000-7200000

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Cost of sales is referred to the amount that is incurred in producing the goods. Cost of sales is included in the sale price of the product to earn a profit beyond the cost. So sales includes cost and profit which can be used to find the cost of sales.

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3 years ago
Suppose that the organic-produce industry is composed of a large number of small firms. In recent
masha68 [24]

Answer:

The correct answer is option d.

Explanation:

An industry is comprised of a large number of small firms.  

Because of losses, many firms have left the industry.  

This will cause the industry supply to decline.  

The industry supply curve will move to the left.  

The new supply curve will intersect the demand curve at a higher point.

This leftward shift in the supply curve will cause the equilibrium price to increase and equilibrium quantity to decline.

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2 years ago
The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate
Bezzdna [24]

Answer:

Option B is the correct answer,1.05

Explanation:

Present value index can be computed using the below formula:

present value index=present value of cash inflows/initial amount invested

present value of cash inflows=annual net cash flow*present value factor of annuity

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The present value index of this project is approximately 1.05,which is the option B in the multiple choices

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