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Sophie [7]
3 years ago
8

The accounting hired by Forever Fitness have determined total fixed cost to be $75,000, total variable cost to be $130,000, and

total revenue to be $125,000.
Because of this information, in the short run, Forever Fitness should:


a) lower their prices to increase their profits.

b) stay open because the firm is making an economic profit.

c) stay open because shutting down would be more expensive.

d) shut down because staying open would be more expensive.
Business
1 answer:
yan [13]3 years ago
5 0

Answer:

Option D. Shut down because staying open would be more expensive.

Explanation:

The reason is that the total variable cost is lower than the total revenue which means the company can not reduce its variable cost so it is meaningless to produce the product. So the best option left is not to generate loss by simply shutting down the business.

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Discuss the advantages and disadvantages of owning versus renting a home.
emmasim [6.3K]
Advantages and disadvantages ofrenting vs. owning a home.Advantages: One variable that may be an advantage when renting is leasing flexibility. ... Rent can be significantly less than a mortgage because renter's insurance is cheaper than homeowner's insurance and there is no property tax. Got this of Google hope this helps
5 0
3 years ago
Kaplan Corp. is evaluating the purchase of a small firm, Pahl Corp., which manufactures ornamental gadgets, products involving a
Neko [114]

Answer: The correct answer is "A. Question marks".

Explanation: This firm would be placed in the "Question marks" category of bussiness in the BCG matrix.

The questions are those that still do not know what their evolution will be (usually those that are in the development or launch phase), but which can become star products.

7 0
2 years ago
Kendall Company has sales of 1,000 units at $60 a unit. Variable expenses are 30% of the selling price. If total fixed expenses
Lelu [443]

Answer:

There are several ways to compute the degree of operating leverage (DOL). A fairly intuitive approach is expressed below.

DOL = (sales - variable costs) / (sales - variable costs - fixed costs)

For Kendall, the DOL is computed as follows:

DOL = (1,000 * $60 - 1,000 * $60 * .30) / (1,000 * $60 - 1,000 * $60 * .30 - $30,000) = 3.5

<em>hope this helps</em>

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8 0
2 years ago
Cardinal Industries purchased a generator that cost $11,000. It has an estimated life of five years and a residual value of $1,0
atroni [7]

Answer:

Correct answer is letter D, $11,000 cost, five-year life and $1,000 salvage value

Explanation:

To compute depreciation expense of an asset using straight-line method of depreciation, the information we needed is 3,

1. cost of an asset

2. life of an asset (in year)

3. residual value (if available)

<em>* residual value of an asset is to be determined by the company, some asset don't have scrap value assigned.</em>

<em />

<em>FORMULA </em>

<em>The difference between the cost of an asset and the expected residual value over the number of years it is expected to be useful.</em>

<em>(cost of an asset - residual value ) / life of an asset</em>

6 0
3 years ago
Connor Corp. has large amount of data that they are trying to analyze from the last 15 years. They have an arithmetic sales grow
MrRa [10]

Answer:

11.14%

Explanation:

Blume's formula is used to combine both arithmetic and geometric returns. This is because using arithmetic growth rate exclusively would be overly optimistic for longer time horizons and on the other hand, using geometric growth rates exclusively would be overly pessimistic for short time horizons.

Using the attached formula, plug in the given numbers;

R(T) would be the sale growth rate we need to calculate.

R(T) = \frac{5-1}{15-1} *0.09 + \frac{15-5}{15-1} *0.12

R(T) =0.0257 + 0.0857

R(T) = 0.1114 as a decimal

Therefore, the forecast sales growth would be 11.14%

7 0
2 years ago
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