A sharp increase in taxes affects many middle-class families.
A sports-apparel company cuts jobs as a result of slow sales.
A fast-food chain goes out of business and shuts down all of its restaurants.
Explanation:
The circular income or circulated flow is a model for the economy where the big transactions between the market participants are represented as cash flows, goods and services, etc. The cash and goods flows transferred in a closed circuit complement the interest but are going in the reverse direction.
Retirements are factors in an economy that escapes from distributed labor flows and reduces national income sizes.
Withdrawals include: savings, taxes and imports.
Answer:
Vera Incorporated
Change in annual operating income from discontinued business:
Annual Operating Income would reduce by $78,000.
Explanation:
a) Calculation of the Net Income Lost:
Loss of Contribution ($99,000)
Avoidable fixed cost $21,000
Reduction of Income ($78,000)
b) The line of purses contributes $80,000 towards the company's fixed cost. Therefore, discontinuing this line of business would lead to the loss of this steam of income. The amount of reduced operating income will be $78,000 ($80,000 - 2,000).
Answer and Explanation:
The classification is as follows
For case 1
It is a growing start-up company (S) with the following reasons
a. The cash flow from operating activities is very less as compared to the financing and investing activities
b. It is a start company so in this case the financing and investing activities are more
c. Moreover, the beginning cash balance is also less
For case 2
It is an established company facing financial difficulties (F) with the following reasons
a. The operating activity is in a negative amount
b. It is an established company so it facing a lot of difficulties
c. Net cash flow is also in negative
For case 3
It is a healthy established company (E) with the following reasons
a. The operating activity is in a positive amount
b. Since it is a healthy established company so it shows the positive net cash flow and strong cash position
Answer:
-$5,500
Explanation:
The computation of the overall effect on the company net operating income is as follows:
New Variable cost per unit is
= $44 + $11
= $55
Now the new contribution margin per unit is
= $220 - $55
= $165
New unit Monthly sales is
= 7,000 units + 500 units
= 7,500
Now
New total contribution margin :
= 7,500 units × $165
= $1,237,500
And, the Current total contribution margin is
= 7,000 units × $176
= $1,232,000
So, the change would be
= $1,232,000 - $1,237,500
= -$5,500
