Answer: A. Lowering the degree of operating leverage.
Explanation:
The degree of operating leverage measure how much the earnings from a project will change as a result of sales.
If you are worried about the cash flow forecasts, it would be best to lower the operating leverage so as to reduce the forecasting error associated with the project. If the operating leverage is high then a small change in sales could impact income in a relatively huge way. By reducing the DOL, the cashflow from the project is easier to forecast and therefore more reliable.
Answer:
The EFF of card is 27.45%.
Explanation:
EFF interest rate is an interest rate which is actually paid or received on debt or investment. It is also known as Effective Interest rate.
APR = 24.50%
EFF = ( ( 1 + r/m )^m ) - 1
EFF = ( ( 1 + 0.245/12 )^12 ) - 1
EFF = ( ( 1 + 0.020417 )^12 ) - 1
EFF = ( ( 1.020417 )^12 ) - 1
EFF = 1.27447765 - 1
EFF = 0.2745
EFF = 27.45%
Answer:
capital budget.
<u>Multiple-Choices</u>
capital budget.
cash budget.
operating budget.
asset budget.
Explanation:
A capital budget is an estimate of capital expenditure requirements. It is a formal plan that details the fixed assets that a business intends to acquire. A capital budget is part of the annual budget for an organization.
Capital budgets are prepared for assets with a useful life of more than one year. These assets help generate revenue for the business for many years. Capital expenses usually involve heavy cash outflow and are prepared after wide consultations with relevant departments and authorities.
Answer:
d. beyond some point, the production costs of additional units of output will rise
Explanation:
To answer this question you need to know the concept of marginal productivity. This concept is associated with input productivity and aims to explain how many inputs are needed to produce one more unit of output. Firms seek to produce more units with fewer inputs. Thus, the ideal is for marginal productivity to be increasing. This can happen over time as production increases. However, at some point marginal productivity will decrease and this will increase production costs if the firm does not stop producing.
To be clear, follow an example. Imagine that a pizza parlor uses two employees to produce 5 pizzas per hour. Now imagine that the pizza factory is experiencing increased demand for pizza and hiring more an employee. Now the pizzeria has hired 1 more employee and produces 10 pizzas. Note that hiring 1 employee increased the total productivity of the pizzeria. Previously 5 pizzas were produced by 2 employees, an average of 2.5 pizzas per employee. After hiring the third employee, this production increased to 3.3 pizzas per employee. Now imagine that the pizzeria hires 3 more employees and produces only 14 pizzas, an average of 2.3 pizzas per employee. In this case, productivity decreased due to structural factors, such as the number of ovens and the size of the pizzeria. Therefore, in the long run, production costs tend to increase when firms increase production greatly.
