Answer:
the interest payable is $210,000
Explanation:
The computation of the interest payable is shown below:
= Principal payments × rate of interest × no of months ÷ total no of months × time period
= $350,000 × 6% × 6 months ÷ 12 month × 20years
= $210,000
hence, the interest payable is $210,000
The same should be considered and relevant
Answer:
a. in order to calculate this we must assume that the economy entered a recession:
degree of operating leverage = [($20 - $70)/$70] / [($260 - $520)/$520] = -0.7143 / -0.5 = 1.43
b. $14 million
Explanation:
strong economy:
total sales $520 million
<u>variable costs $420 million</u>
gross profit $100 million
<u>fixed costs $30 million</u>
EBIT $70 million
<u>income taxes $21 million</u>
net income $49 million
weak economy:
total sales $260 million
<u>variable costs $210 million</u>
gross profit $50 million
<u>fixed costs $30 million</u>
EBIT $20 million
<u>income taxes $6 million</u>
net income $14 million
When a firm is experiencing lesser profit it can come up
with different strategy to improve its present product rather than developing
new product because improving present product involves lesser cost therefore
more profit. The answer is B. Product Extension and C. New product placement.
Reintroduction is one way, it is launching the product
using more creative sales and marketing strategy. It can target a new market segment,
provide more information about the product and use more appealing
advertisements. The product’s packaging can also be changed to make it look
more attractive and fresh.
Product
extension can be use as it is targeting a new market. It can
involve exporting the products. This strategy may be costly but when successful
will level up your product’s quality as it passed exporting quality. It is
changing the market NOT the product.
New
product Placement is a strategy where in the products are
advertised by placing it in media. The products are shown for example in
movies, the character uses the products that way it can give awareness to the
viewers how the products can be used and also the brand and name of the
products are advertised without direct reference to the product. It doesn’t
involve changing the product’s feature only the product placement is changed to
a new one.
<span>Rebranding can also be used. It is introducing your
product with a new name, changing the product’s name not only its packaging but
the total appearance. It gives the product a whole new image to target new
image audience or expand its audience.</span>
