Answer:
The total fixed costs must be:
$36,000.
Explanation:
a) Data and Calculations:
Contribution margin ratio for the new product = 0.2
Target operating income = $60,000
Targeted sales volume in dollars = $480,000
Fixed costs = targeted sales volume in dollars multiplied by contribution margin ratio, minus target operating income
Fixed costs = ($480,000 * 0.2) - $60,000 = $36,000
b) The focus should be on the break-even formula for dollar sales with a target profit. When the formula is reversed, the fixed costs can be calculated as shown above.
Answer:
Financial economies of scale are a type of internal economy of scale. They are economies of scale enable more favourable rates of borrowing. That is, larger businesses are seen by lenders as more reliable or worthy of credit due to their size, whereas smaller businesses will tend to pay higher rates of interest.
It is assumed that the cash flows occur at the end of each period.
<h3>What is the occur period of the cash flow?</h3>
Cash flow is the statement depicts the complete information about the money received or being spent by the company during the period of time.
Cash Inflows refers to the amount received, whereas cash outflows represents the money spent by the firm.
It is generally occur in period of 90 days.
Learn more about the cash flows here:-
brainly.com/question/10714011
#SPJ1
Answer:
b. The proposal is desirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis.
Explanation:
Under the Net Present Value method we compute the present value of all cash flows, inflow or outflow
And these values are discounted at the minimum rate of return required if the resulting value is positive that means that the rate of return expected is less than minimum rate of return used to discount the value. In that case we are sure that the result of this project will be positive and favorable.
As the discount rate used is in, fact is higher than the actual rate of expected return, therefore this assures to return a profit.
Final Answer
b. The proposal is desirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis.
