Profit can be found by subtracting revenue from expenses.
The profit for Deal A is $100,000 - $10,000 = $90,000
The average profit as a percentage of revenue for the stadium for Deal A is Average profit divided by revenue multiplied by 100. That is 90,000/100,000 x 100 is 90%
The profit for Deal B is $50,000 - $20,000 = $30,000
The average profit as a percentage of revenue for the stadium for Deal B is Average profit divided by revenue multiplied by 100. That is 30,000/50,000 x 100 is 60%
Answer:
Closing balance $110000
Explanation:
The computation of the cash balance at the end of the first year is shown below:
Funds raised from owners $20000
Less: Funds borrowed $20,000
Collection from debtors $180,000 ($200,000 - $20,000
)
Less: Payment for merchandise $45000
Salaries paid $15000
Interest paid $2000
Insurance policy paid $6000
Income tax at 40% $42000
Closing balance $110000
Working note:
Calculation of tax paid
Sales 200000
Less: purchases 75000
salary 15000
interest 2000
insurance(50% of 6000) 3000
Income 105000
Tax at 40% 42000
Answer:
Ornaments, Inc.
In a recession, the EPS is $2.13 per share.
Explanation:
a) Data and Calculations:
Normal Recession Boom
EBIT $73,000 $65,700 (10% lower) $87,600 (20% higher)
Taxes (40%) 29,200 26,280 35,040
Net income $43,800 $39,420 $52,560
EPS = $2.37 $2.13 $2.84
= Net Income/18,500 or (EBIT -(1 - 40%))/Outstanding shares
EPS = Earnings per share. It is computed by dividing the net income by the number of outstanding shares. It indicates how much dollars Ornaments, Inc. makes for each share held by a common stockholder.
Answer:
The government can increase spending or decrease taxes.
Explanation:
In order to correct recessionary gap, the government can adopt expansionary fiscal policy. The government can increase spending, it will increase production, employment and aggregate income.
The other tool that the government can use is taxes. The government can decrease the tax rates. This will cause the disposable income of the consumers to increase. This will further cause the consumer spending to increase. As a result, production, employment, and aggregate demand will increase.