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arlik [135]
2 years ago
6

A firm’s income statement included the following data. The firm’s average tax rate was 20%. Cost of goods sold $ 9,000 Income ta

xes paid 3,000 Administrative expenses 4,000 Interest expense 2,000 Depreciation 2,000
a. What was the firm’s net income? Net income $
b. What must have been the firm’s revenues? Revenues $
c. What was EBIT? EBIT $
Business
1 answer:
Semmy [17]2 years ago
8 0

Answer:

a. $12,000

b. $32,000

c. $17,000

Explanation:

The computations are shown below:

a.  Net income = (Income tax paid ÷ Tax rate) – Income tax paid    

Net income = ($3,000 ÷  20%) - $3,000    

                   = $12,000

b.  Revenues = Cost of goods sold + Income tax paid + Administration expense + Interest paid + Depreciation + Net income

= $9,000 + $3,000 + $4,000 + $2,000 + $2,000 + $12,000

= $32,000

3. EBIT = Net income + Interest expense + Taxes

= $12,000 + $2,000 + $3,000

= $17,000

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Answer:

The demand for cereal is elastic.

The demand for the magazine is inelastic.

Explanation:

The price elasticity of demand is the degree of responsiveness of quantity demanded to change in price. A negative price elasticity implies that the product is a normal good.

The price elasticity of demand for cereal is −1.03. This means that the demand is price elastic. An elastic demand implies that a change in price will cause more than proportionate change in quantity demanded.

The price elasticity of demand for a particular magazine is −0.72. This means that the demand is price inelastic. An inelastic demand implies that a change in price will cause less than proportionate change in the quantity demanded.

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3 years ago
Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing cust
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8 0
3 years ago
Mars Inc. produces 100,000 boxes of Snickers bars which sell for $4 a box. If variable costs are $3 per box, and it has $150,000
Maru [420]

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keep producing as variable costs are being met.

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I hope my answer helps you

6 0
3 years ago
Which of the below individuals has the best capacity to pay back a loan?
insens350 [35]

Answer:

D. John

Explanation:

John has an annual income of $100,000 which is equivalent to a monthly salary of $ 8,334.00 ($100,000 divide by 12 months)

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3 0
3 years ago
List five of the most widely followed indicators of the economy.
Kobotan [32]

Answer:

1. Gross Domestic Product

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The expansion of a country's GDP is indicative of a growing economy, while a contraction in GDP indicates a slowdown in a country's economy. Meanwhile, a country's projected GDP growth rate can be used to determine an appropriate level of sovereign debt or determine if companies operating within the country are likely to experience growth.1

2. Employment Indicators

The productivity and wealth of a country's citizens is arguably the ultimate determiner of economic success. Employment indicators, such as labor force, payroll, and unemployment data estimate how many citizens are employed and whether they are making more or less money than before.

The financial markets carefully watch these employment indicators, especially in developed countries that generate most of their income from domestic consumer spending. A fall in employment is often followed by a fall in consumer spending, which can hurt GDP statistics and overall economic growth prospects.2

3. Consumer Price Index

CPI measures changes in the prices of consumer goods and services that are purchased by households. The index is a statistical estimate created by using prices from a sample of representative items collected periodically. Often times, this measure is used as a gauge of inflation, which can positively or negatively affect a country's currency.3

The financial markets carefully watch CPI figures for signs of inflation. Rising inflation can lead to higher interest rates and reduced lending, while deflation can lead to lower interest rates and greater lending.4

4. Central Bank Minutes

Central banks create monetary policy and exert significant control over a country's economy. Consequently, the financial markets tend to listen closely to every word that central bankers utter publicly for clues about the future. Central bank minutes are formal releases that contain valuable economic commentary that can signal future policy action.5

In the U.S., the Federal Reserve issues what's called the Beige Book, which contains anecdotal information about current economic conditions from each Federal Reserve Bank. Similar notes are released by many other central banks, including the Bank of Japan, European Central Bank (ECB), and others on a regular or semi-regular schedule.6

5. PMI Manufacturing & Services

The Purchasing Manager's Index (PMI) is an economic indicator developed by Markit Group and the Institute for Supply Management. By polling businesses on a monthly basis, the index reflects the acquisition of goods and services by purchasing managers. The two most important surveys are the PMI Manufacturing and PMI Services indices.

The financial markets watch the PMI Manufacturing and PMI Services indices as key leading economic indicators because companies stop purchasing raw materials when demand dries up. This can indicate problems in an economy much before other reports like retail sales or consumer spending

3 0
2 years ago
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