The National Division of Roboto Company is buying 10,000 widgets from an outside supplier at $30 per unit. Roboto's Overseas Div
ision, which is producing and selling at full capacity (12,000 units), has the following sales and cost structure:
Sales price per unit $45.00
Variable cost per unit 22.50
Fixed cost (at capacity) per unit 15.00
If the Overseas Division meets the outside supplier's price and sells the 10,000 widgets to National, the effect on overall company profits will be:
A. $75,000 higher
B. $225.000 lower
C. $300,000 higher
D. $150,000 lower
Sales price per unit $45.00
Variable cost per unit 22.50
Fixed cost (at capacity) per unit 15.00
If the Overseas Division meets the outside supplier's price and sells the 10,000 widgets to National, the effect on overall company profits will be:
A. $75,000 higher
B. $225.000 lower
C. $300,000 higher
D. $150,000 lower
1 answer:
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Answer:
8.99%
Explanation:
For this question we use the PMT function that is presented on the excel spreadsheet. Kindly find it below:
Given that,
Present value = $975
Future value = $1,000
Rate of interest = 9.25% ÷ 2 = 4.625%
NPER = 25 years × 2 = 50 years
The formula is shown below:
= PMT(Rate,NPER,-PV,FV,type)
The present value come in negative
So, after solving this, the PMT is $44.96
Now the annual PMT is
= $44.96 × 2
= $89.92
So, the coupon interest rate is
= $89.92 ÷ $1,000
= 8.99%
