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inessss [21]
3 years ago
6

Sam's business will cost $49,500 to set up and run for the first year. Sam then expects an annual operational expense total of $

30,500. According to Sam's model, how long will it take Sam to see an overall profit in his business (where total profits exceed total expenses)?
Business
1 answer:
BabaBlast [244]3 years ago
4 0

Answer:

Within 2 years

Explanation:

1st year of Sam's business:

Operational expense = $30,500

Profit = $45,000

Business set up costs = $49,500

Overall business profit (Loss) = $(4,500)

2nd Year of Sam's business:

Since the profit will be increased by 5.5%, the new profit after operational expenses will be $45,000 + $(45,000 x 5.5%) = $47,475

Therefore, the overall profit = Last year's loss + This year's profit = $(-4,500+47,475) = $42,975

Therefore, he can achieve the overall profit within 2 years' of operation.

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valina [46]

Answer:

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4 0
2 years ago
Consider the market for orange juice. Suppose two events occurred last week. During the course of this past week, the price of o
True [87]

Answer:

these two events would lead to an increase in equilibrium quantity and have an indeterminate effect on equilibrium price

Explanation:

As a result of the decrease in the price of oranges which is use in the production of orange juice, there would be a rightward shift of the supply curve for orange juice. A a result,  the supply of orange juice would increase and price of orange juice would fall

Substitute goods are goods that can be used in place of another good.

The doubling of the price of coke would lead to a decrease in the demand for coke and an increase in the demand for orange juice. This would shift the dead curve for orange juice to the right. As a result,  both equilibrium price and quantity increases

these two events would lead to an increase in equilibrium quantity and have an indeterminate effect on equilibrium price

8 0
3 years ago
Bill is trying to decide what combination of bananas and apples to buy. A banana costs half as much as an apple. If no apples ar
tia_tia [17]

Answer:

To maximize utility, Bill can will buy one banana and one apple.

Explanation:

Utility maximisation refers to the concept that individuals and firms seek to get the highest satisfaction from their economic decisions.

For example, when deciding how to spend a fixed some, individuals will purchase the combination of goods/services that give the most satisfaction.

The theory of Utility maximization highlights two fators

  • combination of goods
  • Highest satisfaction that is cost effective

if a banana cost half as much as an apple,

Cost of banana = cost of apple/2

cost of apple - cost of banana × 2

Assuming the cost of one banana is $1

The cost of buying 6 bananas = 6×$1 = $6

the same $6 can only buy 3 apples

Therefore the price of apples is $2

If the total amount available = $6,

It can purchase one banana and one apple.

8 0
3 years ago
Suppose we are a distributor that uses safety stock and a reorder point for inventory management. If we can find a more consiste
Ulleksa [173]

Answer:

The answer is False. By cutting the variance of the demand during lead time to 1/2 its original value while maintaining the same lead times, the new safety stock will also drop to 1/2 its original value.

Explanation:

Safety stock is a form of inventory management that provides an additional unit of an item held as a buffer i order to mitigate risk of running out of stock.

A reorder point provides a buffer of time to restock items when stock is running out. It helps to reduce operational costs and chaos that may arise  such as rush fees owed to suppliers. It makes the use of a warehouse space more efficient.

Suppose we are a distributor that uses safety stock and a reorder point for inventory management. If we can find a more consistent manufacturer that will maintain the same mean lead times while cutting the variance of the demand during lead time to 1/2 its original value, the new safety stock that we need to carry to achieve the same service level will also drop to 1/2 its original value.

6 0
3 years ago
The W.C. Pruett Corp. has $800,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition,
statuscvo [17]

Answer:

1. TIE ratio = EBIT / Interest expense

EBIT = [ (Annual sales x profit margin) / (1 - tax rate) ] + Amount of debt x interest rate

= [ ($2,880,000 x 3%) / (1 - 0.30) ] + $800,000 x 8%

= 187428.57143

= $187,428.57

TIE ratio = $187,428.57 / ($800,000 x 8%)

TIE ratio = $187,428.57 / $64,000

TIE ratio = 2.92857

TIE ratio = 2.93

2. ROIC = [ EBIT x (1 - tax rate) ] / (Amount of debt + common stock)

= [$187428.57  x (1 - 0.30) ] / ($800,000 + $600,000)

= 0.093714285

= 9.37%

3 0
3 years ago
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