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cricket20 [7]
2 years ago
8

Precise Machinery is analyzing a proposed project. The company expects to sell 7,500 units, ±10 percent. The expected variable c

ost per unit is $314 and the expected fixed costs are $647,000. Cost estimates are considered accurate within a ±4 percent range. The depreciation expense is $187,000. The sales price is estimated at $849 per unit, give or take 2 percent. The tax rate is 21 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $850. What is the operating cash flow based on this analysis?'
Business
1 answer:
statuscvo [17]2 years ago
4 0

Answer:

$2,703,940

Explanation:

Calculation for the operating cash flow based on this analysis

Particulars Amount

Sales amount 6,375,000

(850*7,500)

Less vaiable cost 2,355,000

(314*7,500)

Less Fixed cost 647,000

Less Depreciation 187,000

PBT 3,186,000

Tax 21% 669,060

(21%*3,186,000)

PAT 2,516,940

(3,186,000-669,060)

Add: Depreciation 187,000

Operating cash flow $2,703,940

(2,516,940+187,000)

Therefore the operating cash flow based on this analysis will be $2,703,940

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If we look at the equation for money demand from Irving Fisher, which of the following statements is true?
Juliette [100K]

Answer:

The correct answer is option D.

Explanation:

The money equation given by Irving fisher is popularly known as fisher's equation.

The equation is given as MV=PT

Here, M represents money supply, V is the velocity of money, P is the price level and T refers to the volume of transactions or output level.

The supply of money refers to the quantity of money in existence while the velocity of transactions shows the number of times, money changes hands.  Together they show the volume of money in circulation.

P is the average price level and T represents the expenditures on all transactions or, in other words, output level.  

Here, V and T are assumed to be constant. This means that the money supply directly affects the price level.  

There is no explicit mention of the interest rate in this equation.  

So, option D is the correct answer.

6 0
3 years ago
Coachlight Inc. has a periodic inventory system. The company purchased 205 units of inventory at $9.50 per unit and 310 units at
lukranit [14]

Answer:

Weighted average cost per unit = $10.10

Explanation:

We know,

Under weighted average unit cost, the cost for purchased inventory = Total inventory costs ÷ total inventory in units

Given,

Total inventory in units = 205 + 310 = 515 units

Total inventory costs = (205 units × $9.50) + (310 units × $10.50)

= $1,947.50 + $3,255 = $5,202.50

Therefore,

Weighted average cost per unit = $5,202.50 ÷ 515 units

Weighted average cost per unit = $10.10

Therefore, the company will use this cost per unit to determine cost of goods sold and ending inventory.

5 0
2 years ago
A _______ lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of
Sveta_85 [38]

A step lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of the agreement.

4 0
2 years ago
Read 2 more answers
A can be cut from chickens, pheasants,
kolezko [41]
Can you give a better explanation


5 0
3 years ago
Pacific Packaging's ROE last year was only 6%; but its management has developed a new operating plan that calls for a debt-to-ca
Flura [38]

Answer:

36%

Explanation:

For the computation of the company's return on equity first we need to follow some steps which is shown below:-

Step 1

Earnings before tax = EBIT - Interest

= $452,000 - $152,000

= $300,000

Step 2

Earnings after interest and taxes = Earnings before tax - Tax

= $300,000 - ($300,000 × 40%)

= $300,000 - $120,000

= $180,000

Step 3

Asset turnover ratio = Total revenue ÷ Total assets

3.6 = $4,000,000 ÷ Total assets

Total assets = $1,111,111.11

Step 4

Equity ratio = 1 - Debt ratio

= 1 - 0.55

= 0.45

Step 5

Total Equity = Equity ratio × Total assets

= 0.45 × $1,111,111.11

= $500,000

and finally

Return on Equity = Net income ÷ Equity

= $180,000 ÷ $500,000

= 0.36

or

= 36%

3 0
3 years ago
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