Answer:
$800
Explanation:
The computation is shown below:
First we have to determine the total amount invested that is shown below:
= $11,000 + $4,000 + $5,000 + $8,000
= $28,000
And, the profit is $5,600
So, the percentage is
= $5,600 ÷ $28,000
= 0.2
Now the Gary share is
= $11,000 × 0.2
= $2,200
And, each share in profit
= $5,600 ÷ 4
= $1,400
Now the final amount is
= $2,200 - $1,400
= $800
Answer:
WACC 13.85600%
Explanation:
First we calculate Eastern Pizza CAPM:
risk free = 0.08
market rate = 0.12
premium market = (market rate - risk free) 0.04
beta(non diversifiable risk) = 2
Ke 0.16000
Then we solve for WACC
Ke 0.16000
Equity weight 0.8
Kd 0.08
Debt Weight 0.2
t 0.34
WACC 13.85600%
The company will use the data on eastern Pizza to evualuate project presented to it. Also, it will consider the new tax rate to determinate the tax shield.
Answer:
a) A gain is subtracted from net income.
d) An increase in operating current assets is subtracted from net income.
e) A decrease in operating current liabilities is subtracted from net income.
Explanation:
Operating activities: It involves those transactions that affect the after-net income working capital. It would subtract the rise in current assets and a decrease in current liabilities while add a decrease in current assets and an increase in current liabilities.
It would modify those changes in working capital. For addition, the depreciation costs are added to the net income and the loss on the sale of assets is applied, while the gain on the sale of assets is excluded
So, the following options are used-
a) A gain is subtracted from net income.
d) An increase in operating current assets is subtracted from net income.
e) A decrease in operating current liabilities is subtracted from net income.
Answer:
The correct answer here is d.
Explanation:
Real wage is the nominal wages adjusted for price changes. It reflects the purchasing power earned by the workers.
There will be a direct and positive relationship between real wages and number of workers who are willing to work. This means when there is an increase in the real wages, more workers will be willing to work because they will be earning more. Reverse will be the situation in case of reduced real wages.
Answer:
Option 1 is wrong because in the case of multi-product, breakeven is weighted average which means the sales price will weighted average of sale prices of all the multi-products in the sales mix. If we change the weightings the weighted average costs and selling prices changes and so the contribution changes.
Option 2 is also sligthly wrong because Contribution margin per composite unit decreases if the volume of low contribution margin products increases in the sales mix. This means:
Breakeven Point=Fixed Cost/ Contribution per unit.........equartion 1
If the contribution per unit has been decreased the breakeven will rise.
Its impact depends upon the portfolio of products company is managing. It means it increases breakeven with high effects if the products in sales mix 2 to 3.
Option 3 is 100% right because equation 1 is
Breakeven Point=Fixed Cost/ Contribution per unit
Which says
If the contribution per unit has been decreased the breakeven will rise.
Option 4 is absolutely wrong because if we shift to higher volume in low contribution margin products, Contribution margin per composite unit decreases if the volume of low contribution margin products increases
which means Weighted average contribution has been decreased and as a result breakeven point according to equation 1 has been incresed.
