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Viktor [21]
3 years ago
8

We are evaluating a project that costs $714,400, has an eight-year life, and has no salvage value. Assume that depreciation is s

traight-line to zero over the life of the project. Sales are projected at 90,000 units per year. Price per unit is $51, variable cost per unit is $36, and fixed costs are $745,000 per year. The tax rate is 25 percent, and we require a return of 11 percent on this project. a-1. Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a-2. What is the degree of operating leverage at the accounting break-even point
Business
1 answer:
kifflom [539]3 years ago
6 0

Answer:

a-1. 55,620 units

a-2. 9.34

Explanation:

a-1. The accounting break-even point is calculated by;

= (Fixed costs + Depreciation) / (Sales - Variable costs)

Depreciation = 714,400/8 = $89,300

Accounting breakeven = (745,000 + 89,300) / (51 - 36)

= 55,620 units

a-2. Degree of Operating Leverage

= 1 + (Fixed Costs/ Operating Cashflow)

= 1 + (745,000 / 89,300)

= 9.34

<em>At this point, the only given Operating cashflow figure is Depreciation. </em>

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Alex17521 [72]

Answer:

Aftermarketing

Explanation:

Aftermarket IMG is defined as the set of activities a business undertakes after making a product sale to retain customers and to foster repeat sales.

For example following up on the customer to ascertain level of satisfaction with the purchase, after sale technical support, and complaint management.

In the given scenario ID Groups Corp maintains a database that contains customer information and a history of each of their purchases, offers ongoing guidance on product maintenance, and responds quickly to complaints and seeks customer satisfaction.

These are aftermarketing activities.

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4 years ago
Why it is important that a chemical equation be balanced.. list three types of physical evidence that indicate a chemical reacti
Katarina [22]
Color change, bubbles, precipate.....
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3 years ago
Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co
Ivahew [28]

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate <em>0.052787474</em>

5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\

PV $99.4338

PV of the maturity

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   100.00

time   60.00

rate  <em>0.052787474</em>

\frac{100}{(1 + 0.0527874736258532)^{60} } = PV  

PV   4.57

<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>

PV coupon $99.4338 + PV maturity  $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

5 0
3 years ago
using pricing, a company initially charges a low price, both to discourage competition and to grab a sizeable share of the marke
OleMash [197]

Using penetration pricing, a company initially charges a low price, both to discourage competition and to grab a sizeable share of the market.

In order to attract customers, the penetration pricing approach entails launching a new good or service at a cheap price. Gaining market share and aggressively attracting clients through low costs are the objectives. In a pricing strategy known as penetration pricing, a product's price is first set very low to quickly reach a large portion of the market and spread word of mouth. The tactic relies on the notion that consumers will transfer to the new brand as a result of the price reduction.

When companies launch a low price for a brand-new good or service, this is known as penetration pricing. Competitors are compelled to match the offer or immediately implement alternative techniques since the first price undercuts it. Customers of rivals could switch to the less expensive product.

Learn more about penetration pricing here: brainly.com/question/3521758

#SPJ4

5 0
1 year ago
Paola and Isidora are married; file a joint tax return; report modified AGI of $148,000; and have one dependent child, Dante. Th
Alinara [238K]

Answer:

$2,500

Explanation:

The computation of the amount is shown below;

In the case when the modified AGI upto $180,000 so it would be credit by $2,500 per eligible student

As we can see that in the given situation there is modified AGI that reported $148,000 so here the amount of  the American Opportunity credit for 2020 is $2,500 also we assume that the eligibility condition would be satisfied

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3 years ago
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