Answer:
c. 10%
Explanation:
Margin of safety is the sales value at which the business is safe from making loss. It measures the profit after the break-even point. The sales over the break-even point is considered as the margin of safety.
Margin of safety = Actual Sales - Break-even point = 12,500 units - 11,250 units = 1250 units
Percentage of margin of safety to sales = Margin of safety / Actual sales
Percentage of margin of safety to sales = 1,250 / 12,500
Percentage of margin of safety to sales = 0.10
Percentage of margin of safety to sales = 10%
Answer:
Correct option is c.
That is heavy cost and high regulations <u>raise cost of production so that the aggregate supply curve shifts to the left .
</u>
Explanation:
Supply curse shifting towards left means there is decrease production efficiency .
- TAXES MEANS it is the compulsory monetary payment which later get contributed in the state revenue .
- REGULATIONS MEANS a set of rule which is maintained by a superior authority .
<span>Tim's performance pizza should call up its landlord and try to make a deal with him/her. It could obviously be in both parties' interest if for example tim decided to extend his contract while reducing the number of ovens to two. The landlord gets the restaurant space rented for a guaranteed longer amount of time and tim gets more workspace and a more efficient operation.</span>
Answer: $86,112
Explanation:
The MACRS depreciation rate for recovery period of 5 years is attached to the table below.
In the first year, there was a depreciation of;
= 299,000 * 20%
= $59,800
In the second year;
= 299,000 * 32%
= $95,680
In the third year;
= 299,000 * 19.20%
= $57,408
The Accumulated Depreciation in Year 3;
= 59,800 + 95,680 + 57,408
= $212,888
Book Value in third year;
= 299,000 - 212,888
= $86,112
Answer:
Adjusted accounting profit - $63,200
Cash inflow / Outflow - $63,200
Depreciation Tax shield - $63,200
Explanation:
Revenue - $188,000
Variable cost ($57,000)
Contribution $131,000
Rental cost ($37,000)
Depreciation (17,000)
($54,000)
PBIT 77,000
Income Tax (40%) (30,800)
Net Income 46,200
A) Adjusted Accounting profit
Add back non cash expenses (depreciation) = 46,200+$17000 =$63,200
B)Cash Inflow/Outflow
Revenue $188,000
Variable cost (57,000)
Rental cost (37000)
Income Tax (30,800)
$63,200
C Depreciation Tax Shield
Tax shield =40%*17,000= $6800
Cash income from operation (EBITDA*(1-tax rate) = 56,400
Add back $6,800 = 6,800
$63,200