You are considering an investment for which you require a 14 percent rate of return. the investment costs $61,900 and will produce cash inflows of $26,000for three years.You should not accept this project based on its internal rate of return, because the IRR is 12.51 percent
Answer:
(1) $1,230,000
(2) 110,000 customers
Explanation:
Given that,
Fixed cost = $451,000 per year
Average sales check per customer = $ 8.20
Average cost of food and other variable costs for each customer = $ 4.10
Income tax rate = 30%
Target net income = $114,800
(1) Contribution margin ratio:
= (Selling price - Variable price) ÷ Selling price
= ($ 8.20 - $ 4.10) ÷ $ 8.20
= 0.5
Income before tax:
= Net income ÷ (1 - Tax rate)
= $114,800 ÷ (1 - 0.3)
= $164,000
Desired revenue (dollars):
= (Fixed cost + Income before tax) ÷ Contribution margin ratio
= ($451,000 + $164,000) ÷ 0.5
= $1,230,000
(2) Customers are needed to break even:
= Fixed cost ÷ contribution per unit
= $451,000 ÷ ($8.20 - $4.10)
= $451,000 ÷ $4.10
= 110,000 customers
Answer:
I would propose a business process improvement (BPI) where management will analyze business procedures and try to determine which ones can be improved and how they should be improved. The advantage of using BPI is that it focuses on organizing work around business processes and not individual tasks which makes it non-disruptive, and it is also incremental in nature.
Answer:
Fraud Investigators Inc.
Date Particulars Debit Credit
31 Mar Accounts Receivable $ 17,000
Service Revenue $ 17000
On March 31, 10 customers were billed for detection services totaling $17,000
31 October Bad Debts $1100 Dr.
Allowance for Doubtful Debts $ 1100 Cr
When Allowance for Doubtful Debts is created .
<em>At the year end this adjusting entry would be passed . This is an adjusting entry and is not passed on 31st October. It is recorded on the year end.</em>
<em> Allowance for Doubtful Debts $ 1100 Dr.</em>
<em> Accounts Receivable $ 1100 Cr</em>
<em />
<em />
Dec 15 Allowance for Doubtful Debts $ 720 Dr
Bad Debts $ 720 Cr
Recovery Of Bad Debts
<em />
Dec 31 Bad debts $ 420 Dr
Allowance for Doubtful Debts $ 420 Cr
On December 31, $420 of bad debts were estimated and recorded for the year
<span>Scientific management has evidently made business operations and efficiencies far more successful in their strategies and processes, due to the ability to quantify specific data sets and analyze this information to understand how best to implement a more effective and growing strategy.</span>
