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3 years ago

Which of the following assumptions is embodied in the AFN equation?

Business

1 answer:

aleksandr82 [10.1K]3 years ago

8 0

Answer:

d. Accounts payable and accruals are tied directly to sales.

Explanation:

Additional funds needed method determines the amount that the company needs to finance the increase in total sales.

In response to the increase in sales, the company has to increase its assets to achieve that goal. The increase in total assets is partly offset by an increase in liabilities and the other part is offset by an increase in retained earnings.

The only true statement of the AFN equation is the option d), and the other options are not right.

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A monopolistic competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed co

gizmo_the_mogwai [7]

Answer:

either the selling price decreases or the total output decreases

Explanation:

The firm's income statement:

total sales revenue = $120,000

minus total variable costs = ($72,000)

minus total fixed costs = ($15,000)

net profit = $33,000

The long run equilibrium for a monopolistically competitive firm occurs when the firm is making no economic profit since it is charging a price = average total cost.

In this case the average total cost per unit = $6 per unit + ($15,000 / 12,000 units) = $7.25 per unit

Since the firm is currently charging a higher selling price than average total cost ($10 > $7.25), one or two things might happen in the long run:

selling price will decrease
output will decrease

5 0

3 years ago

Real estate is a great investment for everyone, particularly since the money is more liquid than common stocks.

sveta [45]

This answer is FALSE - FUN FACT - Liquidity of money refers to the ease with which the owner of an asset can convert it into cash it is easier to convert common stocks into cash rather than attempt to raise cash from sale or mortgage of real estate assets

5 0

3 years ago

Read 2 more answers

Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with a proviso that they

nata0808 [166]

Answer:

The following summarizes the solution to the given problem.

Explanation:

The given values are:

Sales,

= $660,000

Expenses,

= $255,453

Received cash revenues,

= $605,934

(a)

According to the accrual, profits would be acknowledged and therefore not necessarily received on the occasion of purchase.

⇒ $Net \ income=Sales-Expense$

On substituting the given values, we get

⇒ $=660,000-255,453$

⇒ $=404,547$ ($)

(b)

⇒ $Net \ Income =Received \ cash \ revenues-Expenses$

On substituting the given values, we get

⇒ $=605,934-255,453$

⇒ $=350,481$ ($)

(c)

The reliable financial foundation again for a financial consultant is more helpful because it demonstrates or represents the organization's appropriate financial status.
It accepts the profits throughout a similar time frame.

5 0

3 years ago

Kaplan, Inc. produces flash drives for computers, which it sells for $27 each. The variable cost to make each flash drive is $13

notka56 [123]

Answer:

Break even sales will be $2700

So option (b) will be correct option

Explanation:

We have given fixed cost = $1400

Sells per unit = $27 each

And variable cost per unit = $13 each

So contribution margin ratio $=\frac{sales\ per\ unit-variable\ cost\ perunit}{sales\ per\ unit}=\frac{27-13}{27}=0.5185$

We know that break even sales is given by

Break even sales $=\frac{fixed\ cost}{contribution\ margin\ ratio}=\frac{1400}{0.5185}=$2700$

So option (b) will be correct answer

6 0

3 years ago

Sapphire Aerospace operates 52 weeks per year, and its cost of goods sold last year was $6,500,000. The firm carries eight items

OLEGan [10]

a. The average aggregate inventory value is $336,000.

b. The number of weeks of supply that the firm has is 3 weeks, approximately (2.69 ($336,000/$6,500,000 x 52).

c. The inventory turnover of Sapphire Aerospace for last year was 19.3x.

Question Completion:

Category Part Number Average Value Total Category

Inventory Units per Unit Value Totals

Raw Materials RM-1 20,000 $1 $20,000

Materials RM-2 5,000 5 25,000

RM-3 3,000 6 18,000

RM-4 1,000 8 8,000 $71,000

Work-in-process WIP-1 6,000 10 60,000

WIP-2 8,000 12 96,000 $156,000

Finished goods FG-1 1,000 65 65,000

FG-2 500 88 44,000 $109,000

Total value of inventory $336,000 $336,000

Inventory turnover = Cost of goods sold/Average inventory

= 19.3x ($6,500,000/$336,000)

Thus, the average inventory value is $336,000, while the inventory turnover was 19.3x.

Learn more about inventory turnover here: brainly.com/question/5701250

3 0

3 years ago