Answer:
e) $4,651
Explanation:
The break-even point is the level of activity that a company must operate to have its total cost equal to its total revenue. At this level of activity, the business makes a zero profit, as the total contribution is exactly the same as the total fixed cost.
It is important for the business to have an idea of the number of customers or units of product to sell inorder for it to cover its total fixed cost. This is the information the break-point analysis seeks to provide.
Working it out
Break-point in sales = Total General fixed cost/ Contribution margin ratio
Contribution margin ratio (CMR): Contribution is sales less variable costs. And the contribution margin ratio is the proportion of sales that is earned as contribution. The higher the better.
CMR = contribution/sales
Fixed cost = Contribution + net loss
We can now apply all these relationships to the question given:
Fixed cost = 1720 + 280
= 4,000
Contribution margin ratio = 1720/400 = 43%
Break-even sales ($) = 4000/0.43
= $4,651
Answer:
The company's cost of preferred stock is 5.1%
Explanation:
In order to find the cost of the preferred stock we will need to divide the dividend the company pays on it by the net amount that the company is receiving for selling it.
In order to find the dividend we will multiply 9% by the par value of 20
Dividend = 0.09*20=1.8
Now we need to find the net amount the company receives for selling the preferred stock.
The company sells the stock for $40 but also has a issuing cost of $5, so in order to find the net amount we will subtract the cost from the price.
40-5= 35
35 is the net amount the company receives.
Now we will divide the the dividend 1.8 by the net amount 35
1.8/35=0.051
=5.1%
The company's cost of preferred stock is 5.1%
If Inez is not satisfied with the painting by Josh, Inez does not have to accept the portrait or pay Josh any money. Inez does not have to pay Josh at all.
Answer: This loan would would have priority over the other unsecured claims in this bankruptcy case.
Explanation:
Since the trucks are secured collateral the loan is a secure loan. It will be the priority in the bankruptcy case since the other claims were unsecured. The law firm would have a right to the trucks since he owed them 20,000$ and put them up as collateral.
Everything that was an unsecured loan does not have anything to take from and will be a loss for the other companies who filed against Henry Anderson.
