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3 years ago

How would inflation impact on a start up business?

Business

1 answer:

Mariana [72]3 years ago

5 0

Answer:

Let's say that the value of the US dollar goes down due to inflation.

A startup business would have to pay more money to it's employees, spend more money on products, try and charge the same prices, and lose a lot of money. Essentially, more money would be going out than coming in.

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Jenny Jennarator Co has the motto of placing a Jenny in every home in a state receiving more than 12 inches of snow per year. Fa

goblinko [34]

Answer:

a. 19 units

b. $56,452

c. Facility B shall be chosen.

Explanation:

As for the provided information,

We have

Costs under facility A

Cost per generator = $1,300

Setting up cost = $22,500

Number of generators = 20

Costs under facility B

Cost per generator = $950

Fixed cost = $35,000

Number of generators = 42

Selling price of generator = $2,500

a. Break even point for Type A, in units

= $\frac{Fixed\ cost}{Contrbution\ per\ generator}$

Fixed cost = $22,500

Contribution per generator = $2,500 - $1,300(Variable cost) = $1,200

Break even point in units = $\frac{22,500}{1,200} = 18.75$

since units can not be in decimals, it will be 19 units.

b. For type B contribution margin in percentage shall be:

Selling price - variable cost = $2,500 - $950 = $1,550

Contribution margin = 1,550/2,500 = 62%

Break even in dollars = $35,000/62% = $56,451.61

c. If facility Q has fixed cost = $40,000

and unit cost = $800

contribution = $2,500 - $800 = $1,700

Thus, break even in units = $40,000/1,700 = 23.5 = 24 units

As the break even for facility b = $35,000/1,550 = 22.58 = 23 units

Thus, since facility B has least break even the facility B shall be chosen, as for facility A the break even is low but profit will not be there as maximum capacity is 20 units.

4 0

3 years ago

Cramer Corp. issued $20,000,000 of 5-year, 9% bonds at a market (effective) interest rate of 10%, receiving cash of $19,227,757.

Slav-nsk [51]

Answer:

The journal entry is as follows:

Interest expense $961,388.00

Discount on issue of bond $61,388.00

Cash $900,000.00

Explanation:

In order to prepare the journal entry we have to calculate first the interest expense and the cash.

Therefore, Interest expense= ($19,227,757×10%×6/12)=$961,388.00

Cash=$20,000,000×9%×6/12= $900,000

By difference then, the discount on bond payable=$961,388-$900,000

=$61,388.

Hence, the journal entry is as follows:

Interest expense $961,388.00

Discount on issue of bond $61,388.00

Cash $900,000.00

7 0

3 years ago

Murray is planning a project that will cost $22,000. The annual cash inflow, net of income taxes, will be $5,000 a year for 7 ye

notka56 [123]

Answer:

The correct option is b. $22,820

Explanation:

For computing the present value of this project, we have to multiply the yearly cash inflows with their present values which is shown below

In mathematically,

Present value = Year 1 cash inflows × present value factor of year 1 + Year 2 cash inflows × present value factor of year 2 + Year 3 cash inflows × present value factor of year 3 + Year 4 cash inflows × present value factor of year 4 + Year 5 cash inflows × present value factor of year 5 + Year 6 cash inflows × present value factor of year 6 + Year 7 cash inflows × present value factor of year 7

= $5,000 × 0.893 + $5,000 × 0.797 + $5,000 × 0.712 + $5,000 × 0.636 + $5,000 × 0.567 + $5,000 × 0.507 + $5,000 × 0.452

= $4,465 + $3,985 + $3,560 + $3,180+ $2,835 + $2,535 + $2,260

= $22,820

Hence, the present value of the cash flow generated by this project is $22,820

Therefore, the correct option is b. $22,820

8 0

4 years ago

Webmail

malfutka [58]

Answer:

Try and make it more explanatory I don't understand

4 0

3 years ago

If a country has a current account deficit, which of the following must be true? It must also show a deficit in its capital acco

koban [17]

Answer:

A. It must show a surplus in its capital account.

Explanation:

A deficit can be defined as an amount by which money, falls short of its expected value.

In Financial accounting, deficit is usually as a result of revenue falling below expenses or expense exceeding revenue at a specific period of time.

For instance, if in a country liabilities exceeds assets or import exceeds export there would be a deficit in the financial account of the country.

Generally, a deficit on the current account of a country leads to a surplus on the financial and capital account. This is simply as a result of a country having to import more goods and services than it is exporting to other countries in trade.

Hence, if a country has a current account deficit, it must show a surplus in its capital account.

In conclusion, a deficit on the current account is because the value of goods and services exported is lower than the value of goods and services being imported in a particular country.

3 0

3 years ago