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RUDIKE [14]
3 years ago
12

Currently, Glasgow Importers sells 280 units a month at a price of $729 a unit. The firm believes it can increase its sales by a

n additional 40 units if it switches to a net 30 credit policy. The monthly interest rate is 0.5 percent and the variable cost per unit is $480. What is the net present value of the proposed credit policy switch
Business
1 answer:
Natali [406]3 years ago
7 0

Answer:

$1,768,680

Explanation:

Given that:

  • Number of units: 280
  • Price per unit: $729
  • The monthly interest rate: 0.5 % = 0.005
  • Number of  additional units:  40
  • The variable cost per unit:  $480

The net present value of the proposed credit policy switch as the following formula:

NPV =  -[Number of units*price/unit) + (Number of  additional units*Variable cost/unit) + (price/unit - Variable cost/unit)*Number of  additional units] / Rate

NPV = - [($729*280) + ($480*40)] + [($729 - $480) 40]/0.005 = $1,768,680

Hope it will find you well.

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Zigmanuir [339]

Answer:  b. ​Economies of Scope

Explanation:

Economies of Scope refers to a situation where a company is able to reduce the cost of producing two or more goods by combining their production thereby leading to savings in the production process.

Economies of Scope in effect points out that there are some goods that when produced in tandem with another, lead to a cost reduction which means that its savings is <em>based on variety</em>.

Goods that usually achieve Economies of Scope are goods that are compliments, produced by similar methods or use similar inputs for production.

Firm A merging with Firm B produced the 5 radios and batteries cheaper so the new company is experiencing Economies of Scope.

5 0
3 years ago
Budgeting material purchases budget. The Howell Company has prepared a sales budget of 42,000 finished units for a 3- month peri
tangare [24]

Answer:

The number of Gallon materials Howell company should buy is 166000 Gallons

Explanation:

Finished goods

opening inventory               11000

produced                                            

closing inventory                13000

finished goods sold            42000

using the bottom up approach to get goods produced

sold goods + closing goods - opening goods = produced =44000 goods

Direct material ( Gallons)

opening materials                  66000

purchased                             166000              

available for use                   232000

used in production                 176000

closing gallons                       56000

We use the bottom up approach to get the materials to be purchased

closing stock plus used in production to get available for use then subtract opening material to get purchased = 166000

4 0
3 years ago
The work of _____ on light was not widely regarded at the time because it was the opposite of what Newton (who was already wildl
gtnhenbr [62]

Answer:

Christiaan Huygens

Explanation:

Christiaan Huygens was a Dutch physicist with many credits and inventions some of which is the pendulum clock and production of many telescopes. He is also credited as the father of theoretical physics being the first to make use of formula in physics. His wave theory of light was controversially not widely regarded because of Isaac Newton's earlier theory on corpuscular theory of light.

He published his work on the wave theory of light in the book called Treatise on Light in 1690 which was then seen as the opposite of what Newton (who was already wildly famous) had proposed.

6 0
3 years ago
Raner, Harris &amp; Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm h
Snezhnost [94]

Answer:

The Break Even Point is the Sales Value that will cover the cost of production. Meaning the Sales Value that will bring profitability to Zero

Break Even sales for Company wide =  $378,000

Break Even Value for Chicago is $111,429

And Break Even Value for Minneapolis is $120,000

The Addition of both Outlets/Offices Break Even Sales is less than the Company-wide because the Offices don't share in the Common Fixed Expense as these are specific to Group reporting.

Explanation:

6 0
3 years ago
Factory Overhead Cost Budget Sweet Tooth Candy Company budgeted the following costs for anticipated production for August: Adver
Doss [256]

Answer:

variable costs

manufacturing supplies =$14000

production supervisor wages=$135,000

power and light=$48000

production control wages=$32000

materials management wages=$39000

total=$268000

fixed costs

factory insurance =$30000

factory depreciation =$22000

<u>Total= $52000</u>

3 0
3 years ago
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