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Anna007 [38]
3 years ago
5

Carver Packing Company reports total contribution margin of $80,960 and pretax net income of $25,300 for the current month. In t

he next month, the company expects sales volume to increase by 5%. The degree of operating leverage and the expected percent change in income, respectively, are:
Business
1 answer:
Pavel [41]3 years ago
8 0

Answer:

3.2 & 16%

Explanation:

Degree of operating leverage = Contribution margin / Pretax net income

Degree of operating leverage = $80,960 / $25,300

Degree of operating leverage = 3.2

Degree of operating leverage 3.2 means if sales (or contribution margin) increases by 1%, income increases by 3.2 %.

Thus, Expected % change in income = Increase in sales * degree of operating leverage

Expected % change in income = 5% * 3.2

Expected % change in income = 0.5 * 3.2

Expected % change in income = 0.16

Expected % change in income = 16%

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Question 3: Economic value-added (EVA) Net operating profit before taxes is $1,800. Total assets (invested capital) are $8,500,
posledela

Answer:

- $454

Explanation:

Net Operating Profit after tax = Net operating profit before tax - tax rate

                                                  = $1,800 - 20%

                                                  = $360

Economic Value Added:

= Net Operating Profit after tax - (Capital Invested × Weighted average cost of capital )

= $360 - [($8,500 - $1,100) × 11%]

= $360 - ($7,400 × 11%)

= $360 - $814

= - $454

7 0
3 years ago
State whether true or false and briefly explain why:
gayaneshka [121]

Answer:

Stating True or False

P > MC, so producing more would mean that the marginal cost increases to match the market price. FALSE

P = AC, so producing more would mean that the average cost would exceed the price reducing profits. FALSE

P = MC, so producing more would mean that the marginal cost would exceed the price reducing profits.  TRUE

MR < MC, so producing more would mean that the marginal cost increases to match the market price. FALSE

Explanation:

All profit-maximizing producers accept a market price (P) that is equal to the marginal cost (MC), i.e. (P = MC).  At this point, the market price does not exceed the marginal costs (costs of factors of production).  When = P > MC, it shows that the benefits of producing more goods exceed the production costs, to the benefit of the society.   However, if P < MC, then the social costs of producing the goods exceed the social benefits, signalling that the economy should produce less.

4 0
3 years ago
?in order to receive customers' feedback on the company's latest product, the marketing managers of havtol inc., a food products
Anvisha [2.4K]
 In this scenario, Havtol Inc. is using a web survey system. From the description of the situation, it is clear that the company is using an online system in obtaining feedback from consumers thorough a web survey. It is a system where opening a website would prompt the user to a separate page containing questions in a form a survey while the answers are being collected to a certain server where the company is managing. In this way, they can monitor how well are their products and are the responses of their consumers good or bad. They can easily check whether their methods in advertising are effective.
3 0
4 years ago
Maddie's shoe store donated hundreds of pairs of shoes to needy children at an inner city school. A news crew reported on the do
chubhunter [2.5K]

Answer:

publicity

Explanation:

Publicity involves creating an excellent reputation for a company's brand name. Publicly arises from positives messages from the media, and other sources such as the internet and word of mouth.  An organization engages in activities that create a good relationship with the media and the public to build the desired publicity.

Publicity messages are not paid for, unlike advertising.  In the case of Maddie, the business was engaged in a charitable event. The event was captured in the press, and Maddie brand name was mentioned, thus promoting its brand name.  

3 0
3 years ago
Kasey Corp. has a bond outstanding with a coupon rate of 5.86 percent and semiannual payments. The bond has a yield to maturity
BaLLatris [955]

Answer:

Market price = $2,464.21

Explanation:

coupon rate = 5.86% / 2 = 2.93%

YTM = 4.3% / 2 = 2.15%

face value = $2,000

periods to maturity = 24 x 2 = 48

Present value of face value = $2,000 / (1 + 2.15%)⁴⁸ = $720.42

Present value of coupon payments = $58.60 x {[1 - 1/(1 + 0.0215)⁴⁸ ] / 0.0215} = $1,743.79

Market price = $2,464.21

3 0
3 years ago
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