When inflation was expected to be high and it turns out to be low, wealth is redistributed from debtors to creditors. / true or
1 answer:
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Answer:
Compute the increase or decrease that closing Store 3 should cause in: a. Total monthly sales for Drexel-Hall stores.
- total monthly sales should decrease from $1,800,000 to $1,380,000 = a $420,000 reduction
b. The monthly responsibility margin of Stores 1 and 2.
- store 1 responsibility margin increased from 10% to 12.55% (2.55% increase)
- store 2 responsibility margin increased from 9% to 13.69% (4.69% increase)
c. The company’s monthly income from operations.
- increased from $72,000 to $140,200 ($70,200 increase)
Explanation:
Store Store Total
1 2
Sales $660,000 $720,000 $1,380,000
Variable costs $409,200 $453,600 $862,800
Contribution margin $250,800 $266,400 $517,200
Controllable fixed costs $120,000 $102,000 $222,000
Performance margin $130,800 $164,600 $292,200
Committed fixed costs $48,000 $66,000 $114,000
Store responsibility margin $82,800 $98,600 $178,200
Common fixed costs $38,000
Income from operations $140,200
Option 'C' is correct
<u>Explanation:</u>
Present value of an ordinary annuity of $1
The present value of an annuity is the current value of future payments from an annuity, given a specified rate of return or discount rate.
The future estimation of cash is determined by utilizing a rebate rate. The markdown rate alludes to a financing cost or an accepted pace of profit for different speculations. The littlest markdown rate utilized in these figurings is the hazard free pace of return. U.S. Treasury bonds are commonly viewed as the nearest thing to a hazard-free venture, so their arrival is regularly utilized for this reason.