Calculation of total number of budgeted direct labor hours for the year:
It is given that Martin manufactures two garden products. These products each require four direct labor hours (dlh) to manufacture. Each product is budgeted for 2,500 units of production for the year.
Hence, the total number of budgeted direct labor hours for the year shall be = 2 Products *2500 units * 4 dlh = 20,000 dlh.
Answer:
a. sunk costs.
Explanation:
Sunk cost is the amount which is already invested or incurred before any project is initiated. This cost is permanently lost and cannot be recovered. The business managers avoid incorporating sunk cost in decision making process.
The correct answer is sunk cost because it doesn't complicate capital investment analysis. These costs are not considered when making business decisions or analysis of capital investments.
Answer:
Sam: Supply decreased, but demand was perfectly elastic.
Explanation:
Sam is right because the only possible explanation is that the demand is perfectly elastic and the supply decreased. When the price elasticity of demand is perfectly elastic, the demand curve is completely horizontal. Since the price of coffee remained the same, that means that the quantity demanded will decrease only if the supply of coffee decreased.
Answer:
IRR = 12.92%
Explanation:
<em>The IRR is the discount rate that equates the present value of cash inflows to that of cash outflows. At the IRR, the Net Present Value (NPV) of a project is equal to zero
</em>
<em>If the IRR greater than the required rate of return , we accept the project for implementation </em>
<em>If the IRR is less than that the required rate , we reject the project for implementation </em>
A project that provides annual cash flows of $24,000 for 9 years costs $110,000 today. Under the IRR decision rule, is this a good project if the required return is 8 percent?
Lets Calculate the IRR
<em>Step 1: Use the given discount rate of 10% and work out the NPV
</em>
NPV = 9000× (1-1.10^(-4)/0.1) - 27,000 =1528.78
<em>Step 2 : Use discount rate of 20% and work out the NPV (20% is a trial figure)
</em>
NPV = 9000× 1- 1.20^(-4)/0.2 - 27000 = -3701.38
<em>Step 3: calculate IRR
</em>
<em>IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%</em>
IRR = 10% + 1528.78/(1528.78+3701.38)× (20-10)%= 0.12923
= 0.129230153 × 100
IRR = 12.92%
Answer:
Burberry is pursuing an umbrella branding strategy
Explanation:
Based on the scenario being described it seems that Burberry is pursuing an umbrella branding strategy. This type of strategy focuses on having a single brand name for the sale of two or more related products with different specs. Which Burberry is doing by having separate category of items made specifically for different target populations, such as entry-level price point items and couture items, even though they are all under the Burberry brand.
