Answer: Price after 1 year = $24.83
Explanation:
Return = [D1/P0 ]+ g
= [(3*1.08)/23] + 0.08
= 22.09%
We assume the return is same for next year as well.
Thus,
r = [D2/P1] + g
22.09% = (3*1.082/P1) + 8%
P1 = $24.83
<u>Thus, price after 1 year is $24.83</u>
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Answer:
$270,000
Explanation:
Contribution per kite = $6.50 - $3.50 = $3.00
Break even point = 90,000 kites
Since;
Break even point = Fixed cost / Contribution per kite.
We have:
90,000 = Fixed cost / $3.00
Fixed cost = 90,000 * $3.00 = $270,000
Therefore, Ocean City Kite Company's fixed costs is $270,000.
Answer:
A) $704,000.
Explanation:
For computing the cash payments we need to calculate the following amounts which are as follows
Total purchases = cost of goods sold + ending inventory - opening inventory
= $720,000 + $188,000 - $200,000
= $708,000
Now cash payment to merchandise is
= Beginning account payable balance + purchased made - ending account payable balance
= $80,000 + $708,000 - $84,000
= $704,000
Hence, the correct option is A. $704,000
