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aliina [53]
3 years ago
7

Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%. If they sol

d 7,000 shirts last quarter and fixed costs totaled $10,000, what is their net operating income?
Business
1 answer:
Rom4ik [11]3 years ago
7 0

Answer:

Net operating income= 88,000

Explanation:

Giving the following information:

Selling price= $20

Unitary variable cost= 20*0.3= 6

Fixed costs= $10,000

Units sold= 7,000

<u>We need to calculate the net operating income:</u>

Sales= 20*7,000= 140,000

Variable cost= 6*7,000= (42,000)

Contribution margin= 98,000

Fixed costs= (10,000)

Net operating income= 88,000

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Each of the items below must be considered in preparing a statement of cash flows for Baskerville Co. for the year ended Decembe
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Answer:

a. Issued bonds for $200,000 cash ⇒<u> Cash inflow from Financing Activities. </u>

Financing activities refer to those that bring in capital to the company. This capital comes in the form of equity and long term liabilities like bonds. Money coming in from bonds will therefore be an inflow here.

b. Purchased equipment for $150,000 cash. ⇒ <u>Cash Outflow from Investing Activities </u>

Investing activities have to do with the fixed assets of the company as well as investments into the securities of other companies. Money is leaving the company to purchase the fixed asset here -equipment - so this is an outflow.

c.Sold land costing $20,000 for $20,000 cash. ⇒  <u>Cash inflow from Investing Activities.</u>

As already stated, Investing activities relate to fixed assets. Selling a fixed asset such as land will therefore bring in cash from investing activities.

d. Declared and paid a $50,000 cash dividend⇒ <u>Cash Outflow from Financing activities</u>

As financing activities relate to equity, dividends will be a cash outflow from here because it is cash that is leaving the company to go to equity holders.

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Looking at four pillars of a healthy relationship (trust, respect, support and communication), how would you as a health care le
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Megatrends stock will generate earnings of $2 per share this year. The discount rate for the stock is 10%, and the rate of retur
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Answer:

a. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm:

(i) 0% ⇒ g = 0, P₀ = $2/10% = $20

(ii) 20% ⇒ g = 0.2 x 10% = 2%, P₀ = $1.632/8% = $20.40

(iii) 40% ⇒ g = 0.4 x 10% = 4%, P₀ = $1.248/6% = $20.80

b. Redo part (a) now assuming that the rate of return on reinvested earnings is 15%.

(i) 0% ⇒ g = 0, P₀ = $2/10% = $20

(ii) 20% ⇒ g = 0.2 x 15% = 3%, P₀ = $1.648/7% = $23.54

(iii) 40% ⇒ g = 0.4 x 15% = 6%, P₀ = $1.272/4% = $31.80

What is the present value of growth opportunities (PVGO) for each reinvestment rate

ROE = 10%, reinvestment rates:

(i) 0%: PVGO = $20 - $2/10% = $0

(ii) 20%: PVGO = $20.40 - $2/10% = $0.40

(iii) 40%: PVGO = $20.80 - $2/10% = $0.80

ROE = 15%, reinvestment rates:

(i) 0%: PVGO = $20 - $2/10% = $0

(ii) 20%: PVGO = $23.54 - $2/10% = $3.54

(iii) 40%: PVGO = $31.80 - $2/10% = $11.80

Explanation:

sustainable growth rate = g = retention rate x ROE

PVGO = stock price - earnings/Re

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3 years ago
If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if income rises by $4,000, consump
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Answer:

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We simply applied the above formula i.e. marginal propensity to consume is multiplied with the rise in income so that the correct answer could come

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