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wariber [46]
3 years ago
15

Suppose you decided to open a copy store. You rent store space (signing a one year lease), and you take out a loan at the local

bank and use the money to purchase 10 copiers. Six month later a large chain opens a copy store two blacks away from yours. As a result, the revenue you receive from your copy store, while sufficient to cover the wages of your employees, and the cost of paper and utilities, does not cover all of your rent and the interest rate and repayment costs on the loan you took out to purchase the copiers. Should you continue operating your business? Explain
a. Should shut down because total revenue does not cover all my costs and I earn a loss

b. Should operate at loss because I have some total revenue left to cover fixed cost

c. Should shut down and accept the total loss equal to fixed cost

d. Should shut down because I will be not able to compete with the large copy store
Business
1 answer:
barxatty [35]3 years ago
8 0

Answer:

a. Should shut down because total revenue does not cover all my costs and I earn a loss

Explanation:

In the example, after the large copy store open two blocks away, the copy store that you own is not covering all the costs. What it earns, is only covering employee wages, the cost of materials, and utilities, but it is not allowing you to pay rent and the bank loan.

For this reason, the financial situation is too dire to continue, and the copy store should be shut down. Afterwards, a new agreement with the bank should try to be reached in order to refinance the loan.

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You purchased XYZ stock at $50 per share. The stock is currently selling at $80. You expect the stock price to go up, but not 10
Anton [14]

Answer:

"Stop-loss order" is the right answer.

Explanation:

According to the question,

Purchase price,

= $50

Current selling price,

= $80

Current gains,

= $30

  • Investors begin to give their earnings if somehow the market capitalization begins to fall beneath $80. In advance to minimize this, we need to set a purchase requisition of $80 for stop-loss.
  • So whenever the market decreases beyond $80, with us investments are traded, and thereby the existing profits of $30 have been safeguarded.

Thus, the above is the correct explanation.

4 0
3 years ago
Waymon Co. has net sales of $100,000, cost of goods sold of $70,000, and operating expenses of $18,000. What is its gross profit
Serjik [45]
Gross profits is defined as the total profit generated minus the costs of goods sold, that is, gross profit = sales - costs of goods sold.
From the question given, 
Net sale = $ 100,000
Costs of goods sold = $ 70,000
Gross profit = $100,000 - $70,000 = $30,000.
Thus, the gross profit is $30,000.
Operating expenses is not directly involved in the production process that is why it is not used in the calculation of gross profit. But the operating cost will be involved in the calculation if we are asked to calculate the NET PROFIT.
7 0
4 years ago
A firm is producing 24 units of output. At the 24th unit of output, marginal revenue is $5, and marginal cost is $4; at the 25th
agasfer [191]

Answer:

False.

Explanation:

(1) Units produced = 24 units of output

At the 24th unit of output,

Marginal revenue = $5

Marginal cost = $4

MR ≠ MC

At the 25th unit of output,

Marginal revenue = $4.50

Marginal cost = $4.50

MR = MC

At the 26th unit of output,

Marginal revenue = $4

Marginal cost = $5

MR ≠ MC

A firm maximizes its profit at a point where the marginal revenue is equal to the marginal cost i.e. MR = MC.

It is clear from the above scenario that this firm doesn't stop at 24 units of output because at this point of production profit maximizing condition is not fulfilled which means MR ≠ MC.

This firm should stopped at 25 units of output where marginal revenue is equal to the marginal cost from the 25th unit of output.

6 0
3 years ago
During the current year JET Industries issued 5 million of its $1 par common shares to its underwriters for $25,000,000 less pro
victus00 [196]

Answer:

Check the explanation

Explanation:

When it comes to journal entry, it involves keeping or making or creating records of whichever transactions either an Economic transaction or a non economic one. The transactions are scheduled in an accounting journal which reveals an organization’s credit and debit balances.

The diagram showing the journal entry for recording the issuance of the shares can be seen in the attached image below.

8 0
3 years ago
When is the most important information given in a newscast?
Nadusha1986 [10]
I would think that it would be the middle

8 0
3 years ago
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