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Yuri [45]
3 years ago
10

One of Simplex Company’s products has a contribution margin of $44,000 and fixed costs totaling $54,000. If the product is dropp

ed, $37,000 of the fixed costs will continue unchanged. As a result of dropping the product, the company’s net operating income should:
Business
1 answer:
levacccp [35]3 years ago
5 0

Answer:

Decrease by $27000

Explanation:

Given that

Contribution margin = 44000

Initial fixed cost = 54000

Final fixed cost = 37000

Recall that

Net operating income = Contrubution Margin - Net fixed cost.

NOI = 44000 - (54000 - 37000)

NOI = 44000 - 17000

NOI = $27000

Thus, Net operating income decreased by 27000.

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Answer:

                                   Statement of Cash Flows

Cash from operating activities

Net Income                                                                                         $24,000

Adjustments to reconcile net income with

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Salaries payable increase                                      <u>     1,000             $19,000</u>

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3 years ago
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Answer:

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4 0
3 years ago
From 2007 to 2012, the u.s. personal savings rate rose. if the additional savings were not translated into investment, keynes wo
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4 years ago
A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is
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Answer:

If the yield to maturity remains at 8%, then the bond's price will decline over the next year.

Explanation:

When the bonds sells at a premium it means that the coupon payment is greater than the yield to maturity, which means that the income generated by the bond is greater than return required by the investor and because of this the bond sells at a premium because the investor is willing to pay more for the bond as it offers more income than its required rate of return. With a premium the bond price increases to a point where the coupon and required return become equal. When the bond has 10 years to maturity it means that it will give 10 equal payments to the investor which will be greater than the investors required return therefore the investor will be willing to pay a higher price for the bond, as the maturity decreases the number of payments which will be higher than the required return also decrease, so for example if there are 5 years to maturity then the bond will pay 5 payments that are greater than the required return so the investor will be paying a lower premium compared to when he was getting 10 payments that payed more than his required return.

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3 years ago
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Answer:

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