Inventory Costs plays a major role in ascertaining working capital requirements as well structuring cash flow statement.
Explanation:
In the given example,
inventory cost 40 percent
Inventory Value $400 million
Ratio of inventory cos ts to inventory value = Inventory Cost / Inventory Value
.
so in the current case it will be 40% x/$400 million
Hence, Inventory Cost 160 Million
Since the cost is fairly on a higher side at 40$ it should try to reduce it which will help in improving its bottom-line.
Company should focus on offering on discounts and promotions and reduce Obsolete Stock.
It should work on restructuring and organizing warehouse costs by prioritizing inventory based on their movements.
The procurement team should order in minimum quantities and benchmark reorder point.
Question Completion with options:
Select one:
a. Include the $5,000 in total income on Form 1040
b. Include the $5,000 as a capital gain on Schedule D
c. Include the $5,000 as self-employment income on Schedule C
d. Include the $5,000 as interest income on Form 1040
Answer:
Loc Nguyen should:
b. Include the $5,000 as a capital gain on Schedule D.
Explanation:
Both long-term and short-term capital gains and deductible capital losses are reported on Schedule D of Form 1040. If the gain from the sale of the boat is a long-term capital gain, it will be subject to the lower capital gain tax rate of up to 20%, unlike the short-term capital gain that attracts a rate of up to 37%.
Answer:
D : production capacity is prioritized to the product with the highest unit contribution margin.
Explanation:
The poduct with the highest unit contribution margin is key to calculate the Gross Profit Margin
.
"Gross profit margin analyzes the relationship between gross sales revenue and the direct costs of sales. This comparison forms the first section of the income statement. Companies will have varying types of direct costs depending on their business. Companies that are involved in the production and manufacturing of goods will use the cost of goods sold measure while service companies may have a more generalized notation.
Overall, the gross profit margin seeks to identify how efficiently a company is producing its product. The calculation for gross profit margin is gross profit divided by total revenue. In general, it is better to have a higher gross profit margin number as it represents the total gross profit per dollar of revenue.
"
Reference: Beers, Brian. “Gross, Operating, and Net Profit Margin: What's the Difference?” Investopedia, Investopedia, 14 Sept. 2019
Answer:
a. True
Explanation:
Answer this question using YTM, coupon rate, price and par value relationship/rules.
If YTM > coupon rate, then Price < Par value
If YTM < coupon rate, then Price > Par value
If YTM = coupon rate, then Price = Par value
In this case, the assumption is that YTM > coupon rate, hence based on the above rules, the Price or market value of the bond will be < Par value. This makes the statement true.
