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Alexxx [7]
2 years ago
7

Thornbrough Corporation produces and sells a single product with the following characteristics: Per Unit Percent of Sales Sellin

g price $ 220 100 % Variable expenses 44 20 % Contribution margin $ 176 80 % The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Management is considering using a new component that would increase the unit variable cost by $11. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change
Business
1 answer:
DaniilM [7]2 years ago
6 0

Answer:

-$5,500

Explanation:

The computation of the overall effect on the company net operating income is as follows:

New Variable cost per unit is

= $44 + $11

= $55

Now the new contribution margin per unit is

= $220 - $55

= $165

New unit Monthly sales is

= 7,000 units + 500 units

= 7,500

Now

New total contribution margin :

= 7,500 units × $165

= $1,237,500

And, the Current total contribution margin is

= 7,000 units × $176

= $1,232,000

So, the change would be

= $1,232,000 - $1,237,500

= -$5,500

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Fill in the blanks:
podryga [215]

Answer:

(i) Base year prices

(ii) between two consecutive years

Explanation:

formula for GDP deflator is (real GDP)/(nominal GDP) x 100 which is the numerator real GDP where prices are valued at the current year adjusted to inflation or deflation and then the denominator where prices are valued at a base year where prices are valued at a nominal year which are not adjusted to any inflation or deflation.

The CPI ( consumer price index) is calculated by determining the rise or fall in price of a good or goods in two consecutive periods which in turn gives us the increase or decrease in price percentage.

4 0
3 years ago
In an organization, project managers report directly to the head of a PMO. In this case, which statement is probably not true
snow_tiger [21]

Answer:

Projects will be run by the functional organization and project managers expedite change control.

Explanation:

A project management office or PMO is a department within an organisation that is tasked with maintaining the standard of project management. They also make sure there is economies of repitition in project execution (ensure success of projects is replicated).

In the given scenario if project managers report to the head of a PMO it means that the project management team is independent of the functional organisation.

So the statement - Projects will be run by the functional organization and project managers expedite change control.

Is false.

3 0
3 years ago
Suppose that you have the option to lease a new car, which you otherwise intend to purchase for $21,000. The lease terms: $3000
slava [35]

Answer:

The amount that will be paid to buy the car is $18,539.43.

Explanation:

This can be calculated using the following 3 steps:

Step 1: Calculation of the present of the monthly payment

Since the payments are made at the beginning of each month, this can be calculated using the formula for calculating the present value (PV) of annuity due given as follows:

PVM = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) .................................. (1)

Where;

PVM = Present value monthly payments = ?

P = Monthly withdraw = $298

r = monthly financing rate = Financing rate / Number of months in a year = 5.4% / 12 = 0.054 / 12 = 0.0045

n = number of months = 48

Substitute the values into equation (1), we have:

PVM = $298 * ((1 - (1 / (1 + 0.0045))^48) / 0.0045) * (1 + 0.0045) = $12,896.55

Step 2: Calculation of the present of the purchase amount at lease expiration

This can be calculated using the present value formula as follows:

PVP = P / (1 + r)^n  .................................. (2)

Where;

PVP = Present value of the purchase amount at lease expiration = ?

P = Purchase amount at lease expiration = $7000

r = monthly financing rate = Financing rate / Number of months in a year = 5.4% / 12 = 0.054 / 12 = 0.0045

n = number of months = 48

Substitute the values into equation (2), we have:

PVP = $7000 / (1 + 0.0045)^48 = $5,642.88

Step 3: Calculation of the amount that will be paid to buy the car

This can be calculated as follows:

Amount to pay to buy car = PVM + PVP ............... (3)

Where:

PVM = Present value monthly payments = $12,896.55

PVP = $5,642.88

Substitute the values into equation (3), we have:

Amount to pay to buy car = $12,896.55 + $5,642.88 = $18,539.43

Therefore, the amount that will be paid to buy the car is $18,539.43.

5 0
2 years ago
Tutak Industries issued a $1,000 face value bond a number of years ago that will mature in eight years. Similar bonds are yieldi
s2008m [1.1K]

Answer: The coupon rate is 13%

Explanation:

We would first calculate the Coupon Payment and then later using the coupon payment we would compute the Coupon rate.

PV = \frac{FV}{(1+r)^{N} } + A [[\frac{1-\frac{1}{(1+r)^{N} } }{r} ]]

Where,

FV = $1,000

PV = $1,291.31

r = 8%

N = 8 Years

A = Coupon Payment

1291.31 = \frac{1000}{(1+0.08)^{8} } + A [\frac{1-\frac{1}{(1+0.08)^{8} } }{0.08} ]

Solve for A

A = 130.69

The coupon payment is $130

Coupon rate = (Coupon payment / Face value) x 100

                     = \frac{130}{1000} x 100

                     = 13 %

7 0
3 years ago
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6 0
2 years ago
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