Contribution for Standard is $30 per unit and Supreme is $60 per unit, Thus if Fixed expenses are first divided between the two products on the basis of Contribution per unit, It can be calculated as below:
Fixed Expense Bifurcated on basis of Contribution per unit= 30:60
Which Comes to 1:2
Thus it will be bifurcated as $1200000 for Supreme and $600000 for Standard
Thus for Standard to break even it Requires to Sell the below no of units:
Break Even Point in units=
Break Even Point in units=
Break even points in units=20000 units
<span>Prefer the 6.1 percent tax-exempt investment.
Let's do the math and see why the tax-exempt investment is the better choice. For the 8.1% taxable investment, you get taxed at the rate of 28%. Which means that you only get to keep 100%-28% = 72% of your gains. So 0.72 * 8.1 = 5.832 which means your effective earning percentage is only 5.832% which is less than the 6.1% rate you get for the tax-exempt investment. Another consideration that wasn't taken into account for the question is the earnings on the taxable investment may push you up into a higher tax bracket. Which in turn increases the tax burden on your other investments. So the better choice here is the 6.1% tax-exempt investment even though that first glance the 8.1% investment looks higher.</span>
Answer:
Option C is correct one.
Interest expense 773
Discount on bonds payable 73
Cash 700
Explanation:
2016 interest expense = initial issue price, which is the 1/1/2014 book value x the market (effective) interest rate
= $9,668 x 08
= $773
Cash interest payment
= maturity value of the bond x the stated interest rate = $10,000 x .07
= $700
Amortization of discount on bonds payable
= interest expense - interest cash payment
= $773 - $700.
= $73
Answer: 20.15%
Explanation:
The IRR is the discount rate that makes brings the Net Present Value to zero.
It can be solved for by various means including using Excel as shown in the attached file.
Year 0 -33790
Year 1 8,210
Year 2 9,890
Year 3 14,120
Year 4 15,930
Year 5 10,820
= IRR (-33,790
, 8,210
, 9,890
, 14,120
, 15,930
, 10,820
)
= 20.15%
