Answer:
Because fixed costs will not change, the overall effect on the company's monthly net operating income will be equal to the contribution margin of the product once the new component is added.
Explanation:
The contribution margin is equal to: Revenue - Variable Costs.
We already know that the variable cost will be increased by $50 once new component is added, and that monthly sales are expected to increase by 500 units after that.
Depending on the price of the product, the amount sold, and the variable costs, we get the contribution margin, and this contribution margin will be exactly the same as the overall effect on the net operating income.
Answer:
the effective annual rate for Freda is 12.70%
Explanation:
<u>Freda investment</u>
500 shares x $ 35 each x 70% margin = 12,250
<u>Financing taken:</u>
500 shares x $ 35 each x 30% = 5,250
<u>Payment of the loan:</u>
principal x (1 + rate x time)
5,520 x ( 1 + (0.0475 + 0.02) x 8/12) = 5,483.67
<u>Holding return:</u>
(500 shares x 37.5 - 5,483.67)/12,250 - 1 = 0.0830
Then we calcualte the annual equivalent rate to the holding return:
effective rate = 12.70 percent
Answer:
No sale discount,
Shipping cost will be paid by buyer (Coleman Company)
Explanation:
2/10 means if payment is done within 10 days then 2% discount, n/30 means to pay full amount within 30 days. As payment was made after 12 days, so no discount. FOb means free on board shipping point, which means after product left port of supplier country then buyer will be responsible for goods and its shipping cost.
<h3>
Answer :</h3>
<em>Less than</em>
(If a business has a negative cash flow, the revenue must be less than operating expenses.)
Answer:
d. other things being equal
Explanation:
"Ceteris Paribus" refers to a latin phrase which means other things remaining equal.
The term is used to convey the constancy of other variables while establishing a relation between factors.
For instance, in the law of demand, ceteris paribus is used to convey factors other than price being constant.
The term is often used to convey cause- effect relationship between parameters.
In economic context, the term conveys the effect one variable casts over another.
