Answer:
Option D is correct
Expected rate of return = 18.6%
Explanation:
The expected rate of return is the proportion of average investment that is earned as income . It is calculated as follows:
Rate of return on investment = average return / Average investment
Average investment = (Initial cost + salvage value)/ 2
Average investment = 89,000 +14,000/ 2= 51500
Net income = $9,600
Expected rate of return = 9,600/51,500× 100
= 18.6%
Answer:
$8.50
Explanation:
Computation for the net incremental cost or savings of buying the component.
Using this formula
Incremental cost = Purchase price -Cost savings
Let plug in the formula
$37 - ($10.50+ $14.50 + 3.50)
Incremental cost=$37-$28.5
Incremental cost= $8.50
Therefore the net incremental cost or savings of buying the component is $8.50
Contribution is the difference between the Sales per unit and the variable cost per unit. When the selling price reduced to $6 per unit,
Contribution per unit = Sales per unit - Variable Cost per unit
Contribution per unit = $6 - ($6*0.6)
Contribution per unit = $2.4 per unit.
Now, the contribution margin ratio = Contribution per unit / Sales per unit
Contribution Margin Ratio = $2.4 / $6
Contribution Margin Ratio = 0.4 or 40%
Contribution Margin ratio when the sales price is $6 per unit is 40%.
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Answer:
Installing equipment, designing systems, gathering information