Answer:
If sales fall by 20% AFC raises 38 cents per paper, i.e. a 25% increase in AFC.
Explanation:
To find the average fixed cost (AFC), we have to sum all fixed costs and divide it by the amount of units produced. Fixed costs are those that don't depend on how much is produced, in this case, rental and labor cost don't depend on output, as you can neither move to a cheaper place nor decrease labor obligations even if the factory had no output (newspapers printed).
We can see that as the output reduced, AFC rose 38 cents per paper or a 25% increase in AFC.
The value of cars produced by a Japanese company are part of United States Gross Domestic Product (GDP) as long as the cars are produced in a factory located within U.S. territory.
The reason why is that GDP includes the final value of all goods and services produed within a country, during a specific period of time (usually a year). If the cars are produce in U.S. territory, they are counted as part of U.S. GDP, even if the company is from Japan or any other country.
Answer:
The correct answer is d) It was deducted as an expense on the income statement, but does not require cash.
Explanation:
The indirect method involves the adjustment of net income with changes in balance sheet accounts to arrive at the amount of cash generated by operating activities.
It depends on the account if it is added or subtracted to net income. Depreciation is added to net income because it was deducted as an expense on the income statement, but does not require cash.
Answer:
Profit = $0.60
Explanation:
Call option is an option to buy by paying a call premium. The option is exercised when current market price is more than the strike price. In this case, the strike price is $40 and the premium is $1.30, whereas the current market price is $41.90. The option buyer can exercise the contract by purchase the stock at lower price and sell at current market price to gain return. The gain will be calculated as:
Value = Current Price - Strike Price
Value = 41.90 - 40
Value = 1.90
To calculate the profit, we needs to subtract premium cost from value:
Profit = Value - Call Premium
Profit = 1.90 - 1.30
Profit = $0.60
Answer:
retained earnings at the beginning of the period plus net income minus dividends.
Explanation:
As we know that
The ending balance of retained earning = Beginning balance of retained earnings + net income earned - cash dividend paid
While calculating the ending balance, we added the net income and deduct the cash dividend paid to the beginning balance of retained earning account so that the ending retained earnings balance could come
