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3 years ago

If a firm is making an economic profit of zero:__________.

Business

1 answer:

kati45 [8]3 years ago

6 0

Answer:

The correct answer is letter "D": the firm should change to a different line of business.

Explanation:

Economic profit is the difference between the revenue a firm earns from sales and the firm's total opportunity costs. It is important to distinguish between accounting profit and economic profit. Accounting profit is total revenue minus the explicit costs of producing goods or services. Economic profit includes the opportunity costs a company losses or gains by choosing a route to pursue revenue. If a firm has an economic profit of zero, it implies the company should start looking for alternative ways to generate income.

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You can buy an item for $125 on a charge with the promise to pay $125 in 60 days. Suppose you can buy an identical item for $115

Margarita [4]

Answer:

Effective annual interest rate=0.52%

Explanation:

Step 1: Express the formula for calculating interest

The formula for calculating interest can be expressed as;

I=PRT

where;

P=principal amount borrowed

R=annual interest rate as a percentage

T=number of years

Step 2: Determine the value of the variables P, R and T

In our case;

I=$10

P=(125-10)=$115

R=unknown=r

T=2 months=2/12=1/6 years

replacing in the expression;

10=115×r×(2/12)

10=(230/12)r

r=10×12/230=0.5217

0.5217 rounded off to the nearest 2 decimal places is:

r=0.52%

Effective annual interest rate=0.52%

4 0

3 years ago

E3-27 (book/static) The Home Style Eats has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants to

vazorg [7]

Answer:

Explanation:

Contribution Margin=Sales - variable cost =$8.75-$3.50=$5.25

Contribution Margin Ratio = Contribution Margin / Sales = $5.25/ $8.75=60%

Pre-Tax Net Income=Net Income/(1-tax rate)

$117,600/(1-0.36)=$183,750

Target Revenue =Fixed cost +Target Pre-Tax net Income/Contribution margin Ratio =($430,500+$183,750)/0.6=$1,023,750

2. Number of customers needed to Break Even

Fixed costs/Contribution margin per unit=$430,500/$5.25=82,000 Customers

Number of customers to earn 117,600 = (Fixed costs + 117,600)/5.25 = (430,500+117,600)/5.25 = 104,400

Sales (170,000*8.75) 1,487,500

Less: Cost of goods sold (170,000*3.50) -595,000

Contribution margin 892,500

Less: fixed costs -430,500

Net Income before tax 462,000

Less: tax rate (462,000*36%) - 166,320

Net Income after tax 295,680

3 0

3 years ago

What occurs when the cyclical unemployment rate is zero ?

natka813 [3]

The economy is consider to be at full employment.

7 0

3 years ago

I WILL GIVE BRAINLIEST

Ray Of Light [21]

Answer:fixed

Explanation:

Fixed expenses might include: Lease or a mortgage. Other capital expenses, like the cost of buying business assets - equipment, vehicles, furniture.

7 0

3 years ago

Read 2 more answers

The Allowance for Bad Debts account has a debit balance of $ 7 comma 000 before the adjusting entry for bad debts expense. After

IgorC [24]

Answer:

$17,000

Explanation:

The amount of the Allowance for Bad Debts account after adjustment is shown below:

= Debit balance of Allowance for Bad Debts account + uncollectible accounts

= $7,000 + $10,000

= $17,000

The journal entry is also shown for better understanding

Bad debt expense A/c Dr $17,000

To Allowance for doubtful debts $17,000

(Being bad debt expense is recorded)

7 0

3 years ago