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Ierofanga [76]
3 years ago
7

Fabri Corporation is considering eliminating a department that has an annual contribution margin of $27,000 and $73,000 in annua

l fixed costs. Of the fixed costs, $16,500 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating this department would be:
Business
1 answer:
faltersainse [42]3 years ago
6 0

Answer:

$29,500

Explanation:

The calculation of annual financial advantage (disadvantage) is shown below:-

If continues

Loss = Contribution - fixed cost

= $27,000 - $73,000

= $46,000 loss

If Eliminates,

Savings = Loss - Fixed cost

= $46,000 - $16,500

= $29,500

Therefore for computing the annual financial advantage (disadvantage) we simply deduct fixed cost from loss.

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.b. It is appropriate to use the constant growth model to estimate a stock's value even if its growth rate is never expected to become constant

TRUE The multi-stage valuation considers different grow rates for the subsequent years

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FALSE as their cost of capital can differ.

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3 years ago
which of the following would most likely have caused the production possibilities frontier to shift outward from a to b? group o
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General technological advance is most likely to cause the production possibilities frontier to shift outward from a to b.

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Afina-wow [57]

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