Answer:
B) $480,000
Explanation:
In this question we compare the operating income
In the first case,
The operating income is
= Contribution margin - fixed cost
where,
= (Selling price per unit - Variable cost per unit) × Expected sales units per year
= ($100 - $45) × 20,000 units
= $1,100,000
And, the fixed cost is $420,000
So, the operating income is
= $1,100,000 - $420,000
= $680,000
In the second case,
The operating income is
= Contribution margin - fixed cost
where,
= (Selling price per unit - Variable cost per unit) × Expected sales units per year
= ($100 - $45) × 20,000 units
= $1,100,000
And, the fixed cost is $420,000 + $200,000 = $620,000
So, the operating income is
= $1,100,000 - $620,000
= $480,000
When consumers and businesses have greater confidence that they will be able to repay in the future, <u>the quantity demanded of financial capital at any given interest rate will shift to the right.</u>
Answer:
a.
NPV X 44352,90
NPV Y 38729,29
b.
NPV X 28619,86
NPV Y 29008,94
Explanation:
To get the present value of each cash flow we use excel or spreadsheets.
File is attached with the comparison of both investments.
<u>Investment X </u>
Net Present Value (NPV) 44353 (Interest rate 8%)
Net Present Value (NPV) 28620 (Interest rate 20%)
<u>Investment Y </u>
Net Present Value (NPV) 38729
(Interest rate 8%)
Net Present Value (NPV) 29009 (Interest rate 20%)
Answer:
The three scenarios describe a competitive market.
Explanation:
1) In the competitive market buyers and sellers are price takers, this means that there are many producers and consumers and none of them are able to intervene in price and market. Price is given, ie price is determined by interaction in the market. 2) The products are identical. That is, no company will make a profit due to differentiated products. In perfect competition, companies produce identical products, and the consumer is indifferent to the product characteristics of each company. 3) There is free entry and exit of companies and factors of production, ie there is no cost to enter and exit any sector. This means that factors can migrate from one sector to another without incurring costs, meaning there are no barriers to entry and exit from any sector.
Thus, from items 1 and 2, consumers and buyers are price takers, that is, they cannot influence the price determined by the market. Item 3 is about achieving zero profit or normal long-term profit. This is because the free entry and exit of companies avoids extraordinary profits by encouraging companies to migrate to sectors that earn higher profits in the short term. Thus, in perfect competition, compa
Answer:
Current break even units = $17,125
New break even point in units = $21,200
Explanation:
The computation of current break-even point in units and comparison with break-even point in units is shown below:-
Current break even units = Fixed cost ÷ Contribution margin per unit
= $411,000 ÷ ($60 - $36)
= $411,000 ÷ $24
= $17,125
New break even point in units = Fixed cost ÷ Contribution margin per unit
= ($411,000 + $34,200) ÷ ($57 - $36)
= $445,200 ÷ $21
= $21,200
