Answer: $116
Explanation: Opportunity cost refers to the loss of profit by an individual or a firm when one chooses to go for best alternative instead of the second best alternative.
In the given case, John has two alternatives and if he chooses to go on the trip it would cost him the loss of $116 salary that he receives.
Thus the opportunity cost of going on the trip would be $116.
Answer:
Operating cash flows
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV is a capital budgeting method used to determine profitable investments
An increase from 16k to 20k is a 20%increase proportionate to production
Answer:d. LIFO will result in higher income taxes than FIFO
Explanation:
A period of rising prices means price will be higher on the latter goods than the former, inventory sold on Last in first out method (LIFO) will be costlier in this period than inventory sold on First in First out ( FIFO) this invariably means LIFO will result in lower net income due to high cost of inventory compared to FIFO and the lower the net income the lower the income tax this invariably means LIFO will result in lower income tax.
Average costing will yield result that are between those of LIFO and FIFO since it can an average of two price with one LIFO and the other on FIFO, LIFO will result in higher cost of goods sold since the latter goods will be costlier, FIFO will result in higher net income since the goods will be cheaper than LIFO.
