Answer:
b. Increase by $17,000
Explanation:
For computing the change in the operating income, first we have to determine the cost by make and buy options
Make options:
= Variable cost + fixed cost
= $70 + $60
= $130
Buy options:
= Outside supplier cost + fixed cost × remaining percentage
= $77 + $60 × 60%
= $77 + $36
= $113
So, the difference of cost would be
= $130 - $113
= $17
And, the operating income would be
= Number of units make in each year × cost difference
= 1,000 units × $17
= $17,000
Answer:
payback 5 years
if the ltaer years cash flow increases several times, it would not affect the payback date. This is a disavantage of this method, it is focus on recover the investment without considering the total cash flow of the project.
Explanation:
Payback = the time in the life of a project on which the initial ivnestment is recover.
-31,000 Balance
Year 1 2,000 - 29,000
Year 2 0 - 29,000
Year 3 8,000 - 21,000
Year 4 9,000 - 12,000
Year 5 12,000 0
At year 5 the proejct achieve payback
Answer:
True
Explanation:
Stock ownership plans refer to those plans whereby the existing employees are provided with an opportunity to purchase the stocks of the company at a lower price than they are offered in the open market
Employee stock option plans are one of the stock ownership plans. The condition for availing such plans is usually the length of the service of the employees. The benefit is recorded as an employee compensation.
In the context of big organizations with innumerable employees, employees may not be able to identify themselves as significant and may consider those with major chunk of shareholdings as the ones whose actions affect the stock price.
This being merely an illusion since collective efforts of all the employees affect the company's stock price.
Answer: Option (A) is correct.
Explanation:
In a competitive market, when the demand curve i.e. the marginal benefit curve is exactly equal to the supply curve i.e. marginal cost curve and at this point the sum of consumer and producer surplus is maximized then an equilibrium is set in an economy and economic efficiency is obtained.
Inefficiency occurs at a point where there is a disequilibrium in an economy which means that competitive equilibrium is not achieved by the economy.
Answer:
$20.29
Explanation:
The computation of the today share price is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend
= $2.20 + $2.20 × 3.75%
= $2.20 + 0.0825
= $2.2825
The other items values would remain the same
So, the today price would be
= $2.2825 ÷ (15% - 3.75%)
= $2.2825 ÷ 11.25%
= $20.29
