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arlik [135]
2 years ago
6

Ponzi Products produced 100 chain-letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 50 of

the kits next quarter at a price of $11, and the other 50 kits in the third quarter at a price of $12. It takes a full quarter for Ponzi to collect its bills from its customers. (Ignore possible sales in earlier or later quarters.)
a. What is the net income for Ponzi next quarter?
b. What are the cash flows for the company this quarter?
c. What are the cash flows for the company in the third quarter?
d. What is Ponzi’s net working capital in the next quarter?
Business
1 answer:
zalisa [80]2 years ago
6 0

Answer:

Ponzi Products

a) Net income for the next quarter:

= $50

b) Cash outflow for this quarter = $1,000

c) Cash inflow in the third quarter = $550

d) Net working capital in the next quarter = $550

Explanation:

a) Production of chain-letter kits for the quarter = 100 units

Total production cost (outlay) = $1,000 (100 * $10)

Sales in the second quarter = $550 (50 * $11)

Sales in the third quarter = $600 (50 * $12)

Cash collections:

Third quarter = $550

Fourth quarter = $600

a) Net income for the next quarter:

Sales revenue = $550

Production cost   500 ($1,100 * 50/100)

Net income =       $50 ($550 - $500)

b) Cash outflow for this quarter = $1,000

c) Cash inflow in the third quarter = $550

d) Net working capital in the next quarter = $550

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Think of a firm that has attained a differentiation focus or cost focus strategy. Are its advantages sustainable? Why? Why not?
quester [9]

Answer:

Yes they are sustainable

Explanation:

The strategies mentioned in the question were laid out my Michael Porter and therefore, we can look analyse his model to understand whether these strategies are sustainable or not.

Porter has categorized strategies into 3 broad categories: Cost Leadership, Differentiation, and Focus strategies (all three are known as "Generic Strategies). Focus strategy is branched out into two sub-segments known as Cost Focus and Differentiation Focus.

Now, the question has already clarified that the strategies in question are both focus strategies. So lets understand what each entails.

Differentiation Focus: A strategy in which the company aims to gain market leadership in a focused market (a specific market) through strategic differentiaion. This strategic differentiaion involves offering a specialized service or a unique product in a niche market. Cost focus strategy is similar in the sense is that that the aim is to offer highly low cost products/services to a niche market. Because of the focus on these niche markets, company's develop a strong understansing of the consumer thereby developing strong brand loyalty with that particular customer base. The key ingredient, again, is that the competitive advantage is being harnessed by focusing just on a particular niche market. Another key component is that the companies using this strategy rely on the consumers in the target market having different needs, tastes, and requirements than consumers in other segments in the industry.

Now, these strategies by desig were put forth my Porter has being sustainable. Hence the term "generic strategies" in that they can be broadly used to create and sustain performance. The focus strategies as defined above are sustainable since they harness the power of having priority knowledge of their target market to provide appropriate services and products. The high brand loyalty and knowledge of consumers give them an edge over competitors (competitive rivalry). Supplier power depends on the nature of products being offered therefore it cant be taken into consideration. Buyer power can be managed since you are prodiving unique service offerings to unique customers. Threat of substitution depends on the product and service offering. Threat of new entry by larger player exists, but due to the focus that the company had in the target market, barriers to entry (long strong brand loyalty) can be developed.

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3 years ago
Companies have the opportunity to use varying amounts of different sources of financing, including internal and external sources
Mrrafil [7]

Answer:

A) Company A is the one that is financially leveraged.

Where there is the presence of debt in the capital structure of a firm, that firm is said to be Financially leveraged.

B) A is true.

A company's return on equity or expected returns increases because the use of leverage increases stock volatility. Volatility increases its level of risk which in turn increases returns. This happens only if the company is operating an ideal level of financial leverage.

On the other hand, however, but excessive debt can increase the risk of default and can lead to low returns or even bankruptcy.

Cheers!

5 0
2 years ago
Baker Inc. acquired equipment from the manufacturer on 10/1/2018 and gave a noninterest-bearing note in exchange. Baker is oblig
bekas [8.4K]

Answer:

4%

Explanation:

Interest included in $918000 is for six months from 10/1/18 to 4/1/12.

Interest for first three month period from 10/1/18 to 31/12/18 = $9000.

This implies that :

Interest from 1/1/19 to 4/1/19 = $9000.

Principal amount excluding interest due:

= Baker's obligation amount - Accrued interest - Accrued interest

= $918,000 - $9,000 - $9,000

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Interest rate:

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3 years ago
The contribution margin is determined by subtracting _______.
sineoko [7]

Answer:

c. variable product and variable period cost from sales.

Explanation:

Contribution Margin is obtained by subtracting the total variable costs from the sales. This is also known as direct costing. Deducting fixed expenses from the contribution margin yields profit . Contribution margin is used in various ratios such as the contribution margin ratio and break even sales is also determined by using it sometimes. Contribution margin is a tool for managers as sales figures guide cost figures. The variable cost of goods sold varies directly with sales volume and the influence of production on profit is eliminated.by deducting only the variable product costs and not the variable period costs we get gross contribution margin. After deducting the variable period costs we get the contribution margin.

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3 years ago
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