Answer:
There are several ways to compute the degree of operating leverage (DOL). A fairly intuitive approach is expressed below.
DOL = (sales - variable costs) / (sales - variable costs - fixed costs)
For Kendall, the DOL is computed as follows:
DOL = (1,000 * $60 - 1,000 * $60 * .30) / (1,000 * $60 - 1,000 * $60 * .30 - $30,000) = 3.5
<em>hope this helps</em>
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Answer:
Company quotes an interest rate 17 percent on one-year loans.
Explanation:
Borrow value=$34000
interest rate of company in one year=17 percent
Total interest in a year =$34000×
total interest=$5780
Total payment in one year=$34000+$5780
Total payment=$39780
You will pay $39780/12 or $3315.00/month according to company statement.
Answer:
a. $60.
Explanation:
While computing the relevant cost in case of special order only the variable manufacturing cost is to be considered as it will be changed in special order case.
And the other cot like - fixed manufacturing, variable & fixed selling, traceable fixed administrative cost, etc are not relevant as it remains constant
These costs are not useful for decision making. Hence, it is to be ignored
Direct financing involves the financial market and indirect financing involves intermediaries. In the financial market, companies put their shares for sale and investors buy them. This is a direct financing mechanism for companies, which raise funds by sharing their own capital in traded shares.
On the contrary, if a company seeks bank financing, there will necessarily be intermediation by third parties, such as banks. In the middle market, economic agents deposit their money with the bank, and the bank uses it to lend to companies. This is intermediating a financing. Both types of financing are widely used, all will depend on the structure and purpose of each company in the search for financing.
Answer:
The principal repaid in the second year will be $33,296.
Explanation:
Out of each 37,341.79 payment a part of it will be principal repayment and a part of it will be interest payment. When the first 100,000 is paid (0.059*100,000)=5,900 is interest and (37,341-5,900)= 31,441 is principal repayment which means, that in the second year the principal remaining is (100,000-31,441)=68,559. So the interest payment in the second year will be (0.059*68,559)=4,045 and the principal repaid will be (37,341-4,045)=33,296.
