Answer:
The two factors that determine the form of ownership of a business are;
1. Start-up costs
2. Level of control desired
Explanation:
The form of ownership of a business defines the structure with which the business will be governed. There are different form of business ownership that exist, namely; sole proprietorship, partnerships and corporations. They all differ in different aspects as shown;
1. Sole proprietorship
A sole proprietorship as the name suggests is a business structure where there is only one owner. The owner is in charge of the business profits and liabilities. It is generally a simple business structure that needs a small company, where filing tax returns are very easy.
2. Partnerships
A partnership is a business structure where two or more parties come together to form a business. The parties are responsible for the profits depending on the amount contributed by each party. Each individual always pool their resources towards the successful completion of a given project therefor each party is liable for their own profits and risks.
3. Corporations
Corporation are similar in a way to partnerships since they involve two or more parties with the major difference being that a corporation is a separate legal entity. So the liability is always to the corporation itself and not to the parties that constitute the corporation.
Two factors that determine the form of ownership of the business are;
1. Start-up costs: if you intend to minimize the cost of starting up you business then a sole proprietorship is the best option due to its simplistic nature and very minimal start-up expenses.
2. Level of control desired: Depending on the level of control one would like to have in the business regarding decision making and the daily operations of the business. If one needs a larger level of control, the best option would be sole proprietorship, while minimal control would require a coorporation form of ownership.
Answer:
Income increased by $315,000
Explanation:
Since there is spare capacity available, we assume there are no incremental fixed costs and as such we only analyze relevant variable costs that vary with the order to identify the possible income effect.
Profit per unit = Order Selling price - Direct + Variable costs
Profit = 100 - 12 - 18 = $70
Total profit from the order = 70*4500 = $315,000
We do not include fixed costs as these will have to be paid regardless of the order. These fixed overheads are probably already absorbed fully given the current production level of 84000 units.
Hope that helps.
Contribution margin means WHAT REMAINS FROM TOTAL SALES AFTER DEDUCTING ALL VARIABLE EXPENSES. Contribution margin is defined as the selling price minus variable cost. It is the ability of a company to cover variable costs with revenue. The amount left over, which is called contribution cover fixed costs and profits.
Answer:
D. Ability to provide a healthy work environment
Explanation:
Every employee should provide a healthy work environment in the workplace. A healthy work environment is not limited to hygiene issues but extends to works ethics.
Employers will seek employees who are team players. The employees should be self-motivated, productive, happy, and should be acceptable by team members.
Poor hygiene and poor organization can have adverse effects on the entire team. It will affect communication and general wellness in the workplace.
A good team player will work in any field. The other options in the questions relate to specific careers.
The discounted payback period for the project is 2.33 years.
Time Cashflow PVF at 8% Present value Cumulative Present value
0 -$100 1 -100 -100
1 40 0.925926 37.03704 -62.963
<u><em>2 50 0.857339 42.86694 -20.096</em></u>
3 60 0.793832 47.62993 27.53391
<u>Note</u>
- The PVF for each year are derived using the PVF calculator (i.e PVF, 8%, 0 years)
- We can also observe that we are able to payback the money before the entire 3rd year, therefore, the 2nd year will be used in calculation of discounted payback period.
Discounted payback period = 2 Years + 20.096/47.6299
Discounted payback period = 2 Years + 0.33
Discounted payback period = 2.33 years.
Therefore, the discounted payback period for the project is 2.33 years.
Missing word includes <em>"Compute the discounted payback period for a project with the following cash flows received uniformly within each year and with a required return of 8%: Initial Outlay = $100 Cash Flows: Year 1 = $40 Year 2 = $50 Year 3 = $60"</em>
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