Answer:
The correct answer is letter "D": The corporate tax rate increases.
Explanation:
In case the government decides to increase the corporate tax rates, companies will have to invest more in their production process so the output will be higher as long as the revenues so that extra profit could cushion the increase in the levies. However, <em>if companies do not have enough reserves to invest, they are likely to request loans</em> that will increment the firm's debt in the long run.
Answer:
Dr Equipment $6,300
Dr Accumulated depreciation $3,780
Dr Loss on disposal $5,040
Cr Machinery $11,340
Cr Cash $3,780
Explanation:
Whispering Company
Journal entries
Dr Equipment $6,300
Dr Accumulated depreciation $3,780
Dr Loss on disposal $5,040
Cr Machinery $11,340
Cr Cash $3,780
Loss on disposal
$6,300+$3780=$10,080
$11,340+$3,780=$15,120
$15,120-10,080=5,040
Answer:
either using its low-cost edge to underprice competitors and attract price sensitive buyers in large enough numbers to increase total profits or refraining from price-cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold.
Explanation:
Competitive advantage is the edge that a firm has over others in the same industry that results in higher profit margins for them.
One of the importance competitive advantages is price advantage.
This results from the firm being a low cost leader. Their cost of production is low enough for them to attract customers that are price sensitive leading to increased profits.
Also they can underprice their competitors or earn profit margins on the reduced cost of production per unit
Answer:
* The company’s degree of operating leverage: 1.38;
* The impact on net operating income of a 22% increase in sales: it will increase by 30.4%;
* New contribution format income statement:
Engberg Company
Contribution format income statement
Amount Percentage of sales
Sales $176,900 100%
Variable expenses 70,760 40%
Contribution margin 106,140 60%
Fixed expenses 24,000
Net operating income 82,140
Explanation:
* The company’s degree of operating leverage = Contribution / profit = 87,000/63,000 = 1.38
* The impact on net operating income of a 22% increase in sales is calculated as: Degree of operating leverage x % changes in sales revenue = 1.38 x 22% = 30.4%.
* new contribution format income statement is shown in the answer part.
Answer:
$926.59
Explanation:
C =Annual coupon Payment = $1,000 x 6% = $60
YTM = 6.91% = 0.0691
t = Number of year = 12 years
m = number of period in one year = semiannual = 2
Face value = $1,000
Bond's Market Price = (C / YTM)x[1 - ( 1 + YTM/m )^-tm] + [ FV x ( 1 + YTM/m)^-tm]
Bond's Market Price = (60 / 0.0691)x[1 - ( 1 + 0.0691/2 )^-12x2] + [ $1,000 x ( 1 + 0.0691/2)^-12x2]
Bond's Market Price = $868.31 x [1 - ( 1.03455 )^-24] + [ $1,000 x (1.03455)^-24]
Bond's Market Price = $484.04 + 442.55 = $926.59