Answer and Explanation:
a. The computation of operating profit is shown below:-
Profit per unit = Purchase price from outside per unit + variable cost of production internally
= $15 - $7
= $8
Total increment in operating profit = Profit per unit × Total number of units
= $8 × 24,000
= $192,000
b. Minimum transfer price = Variable cost = $7 (because polk has overcapacity and there is no change in fixed cost and polk minimum has to recover its variable production cost)
c. Maximum transfer price = purchase cost from outside supplier = $15 (because if the internal transfer piece is more than $15 Bishop will lose so he prefers to buy from outside and the company as a whole will lose $192,000 in incremental operating profit
Answer:
b) economic
Explanation:
Economic risk can be described as the probability that investment in the home country will be affected by changes in exchange rates, a political instability, a change in government regulation or policy, or any other macroeconomic conditions especially in a foreign country.
Despite that the government of Ugania has been trying to stimulate its economy extending huge amounts of loans to the business enterprises in the country, the failure to generate the profits necessary to repay their debts by borrowers likely due to be that the business enterprises in Ugania are most likely to facing economic risk.
Answer:
c. An account that pays 0.5 %0.5% per month for three years.
Explanation:
We can evaluate all the option using following formula:
EAR = ( 1 + ( r / m ) )^m -1
a.
2.5% every six months for three years
r= 2.5% = 0.025 / 6 =
m = 12/6 = 2
EAR = ( 1 + 0.025 )^2 -1
EAR = 0.050625 = 5.06%
7.5% every 18 months for three years
r= 7.5% for 1.5 years = 7.5% / 18 = 0.4167% per month = 0.004167 per month
EAR = ( 1 + 0.004167 )^12 -1
EAR = 0.051166 = 5.12%
0.5% every month for three years
r= 0.5% = 0.005
EAR = ( 1 + 0.005 )^12 -1
EAR = 0.0616778 = 6.17%
We will prefer an account that pays 0.5 %0.5% per month for three years, it pays the highest return.
NO BILLS THAT NEED TO BE PAID
SOMETHING EASY NOT TOO COMPLICATED
I HOPE THIS HELPED
