I think the most appropriate answer would be B.
I hope it helped you!
The cost-benefit principle states that <u>costs and benefits</u> are the incentives that shape decisions.
<h3>How is the cost-benefit principle used?</h3>
According to the fundamental of economics, the cost-benefit principle states that every rational being is likely to take into consideration the cost and the benefit of one or a set of decisions before a final choice is taken.
In order words, a line of decision for example an investment should only be undertaken only if the benefits associated with the cost of such investment are at least as large or way larger than the cost.
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If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
<h3>What is a Contribution Margin?</h3>
The contribution margin can be expressed in gross income terms. After subtracting the variable element of the firm's expenditures, it indicates the extra money gained for each product sold.
The contribution margin is calculated by subtracting the selling price/unit from the variable cost/unit.
This metric displays how much a certain product adds to the company's total earnings. It displays the share of revenue that helps to pay the firm's fixed costs and gives one approach to illustrate the profit potential of a certain product supplied by a company.
Therefore, If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
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Answer:
Explanation:
provision For Doubtfull Accounts Yr.3
Opening Bal. = 3,750
For the Year (215000*2%) = 4300
Write-off = -2100
Closing Balance (3750+4300-2100) = 5950
Account Recievable For Yr.3
Opening Bal. = 61000
Sales For the Year (215000*2%) = 215000
Provision For the Year = -4300
Cash Recived from Debtors = 218000
Closing Balance = 53700
Net Realizable Value of Recievables
Closing Debtors = 53700
Closing Provision = -5650
Net Realizable Value = 47750
C) Collectible Amount
Provision For the Year = 4300
Previously writte of recoverred = -500
Total bad debts for the year = 3800
Answer:
Option A is correct one.
<u>Managing & Franchising s asset turnover ratio at 17.6% suggests inefficiency when compared to Hotel Ownership</u>
Explanation:
The ratio of the operating return on sales for hotel ownership is:
474/1886 = 0.25
The asset turn-over for hotel ownership is :
1886/492.5 = 0.38 = 38%
Now, for managing and franchising :
The ratios are:
Operating return to sales = 113/ 120 = 0.94
Asset Turnover = 120/680 = 0.1765 = 17.65%.
