Answer:
a. $700,000
b. 6/7 or 85.7%
c. No they will not.
Explanation:
a. Jacobs will earn the normal salary that the other designers in the other companies are getting in addition to the incremental income he brings to the company as a result of his talents.
Incremental income = Revenue with Jacobs - Revenue without Jacobs
= 1,000,000 - 400,000
= $600,000
Jacobs earnings = Normal designer earnings + incremental income
= 100,000 + 600,000
= $700,000
b. Economic rent is the excess amount that the company is paying Jacobs over what it should normally cost to get a designer.
Normal cost of designer is $100,000. Company is therefore paying an economic rent of $600,000.
Proportion of Jacobs salary that is economic rent = 
= 
= 6/7 or 85.7%
c. The company hiring Jacobs will not be making an economic profit because for them to make an economic profit they would have to be making more than the $400,000 that the other firms make. They cannot make this amount because for them to do so they would have to reduce the amount they pay Jacobs. If they do so, Jacobs would leave for greener pastures and then they would be making the same $400,000 that the rest are making.
Answer:
The value of all future payments discounted by the interest rate
Explanation:
Since the purchase of the asset is by installments to be paid in the future. The present value to be recognized is the sum of the future payments discounted at the predetermined interest rate.
The first payment due now will not have to be discounted but future payments will have to be discounted to ascertain the present value of the asset to be recognized in the balance sheet.
Answer:
b. Uniforms can help customers identify members of the sales staff
Explanation:
When evaluating whether or not to have sales staff wear uniforms on the showroom floor. What the electronics galaxy should consider about wearing uniforms is that "Uniforms can help customers identify members of the sales staff."
As customers come in to buy their products, they can quickly know the sales staff, and approach them to describe the type of. the product they came for and eventually buy the product if satisfied.
The correct answer that will complete the sentence above after the word, personal is identity. It is because it is true that personal identity is the one responsible for an individual to let go of the attitudes that he or she holds deeply in a way of making way for another attitude that he or she will learn and that is new in his or her environment.
Answer:
Explanation:
Sales: 850,000
Variable Cost: (850,000*60%) = <u>510,000</u>
Contribution Margin = 850k-510k= <em>340,000</em>
Fixed cost = 174,000
Depreciation = <u>75,000</u>
Earnings Before Taxes = <em>91,000</em>
Taxes (30%) = <u> (27,300)</u>
<h3>Net Income <u>
63,700</u></h3>
