Answer:
b. 51,429 units
Explanation:
If x = Number of units
Net Income = Sales Revenue - Variable Cost - Fixed Cost
or
Net Income = Contribution Margin - Fixed Cost
where,
Net Income = $80,000
Contribution Margin per unit = $3.50
Fixed Cost = $100,000
Contribution Margin = Net Income + Fixed Cost
$3.50x = $80,000 + $100,000
$3.50x = $180,000
Dividing the above equation by $3.50 we get
x = $180,000 / $3.50
x = 51,429 units
Hence 51,429 number of units must be sold to generate the net income of $80,000.
Answer and Explanation:
The journal entries and the impact on the net income is as follows:
1 Call option $300
To Cash $300
(To record the purchase of the call option
2 Unrealized gain or loss -income $100 ($300 - $100)
To Call option $100
Call option $3000 (
($53 - $50) × 1000) $3,000
To Unrealized gain or loss- income $3000
(Being the change in fair value is recorded)
3. The impact would be
Unrealized holding gain is
= $3,000 - $100
=$2,900
Answer:
Equipment account increases , and cash decreases with same amount
Explanation:
In the case of acquisition of a new equipment , the equipment account is debited (increase) while the cash account is credit with the same amount of money used for the purchase .
Purchase of an equipment is a balance sheet item , which means it is recorded in the balance sheet and not the income statement as it is not an expense.
The asset register must also be updated with the value of the newly acquired item
Answer:
These are the options for the question:
A. They should be more willing to tear down the $5 million stadium, because it cost less to build.
B. They should be more willing to tear down the $50 million stadium, because it cost more to build.
C. The cost to build the old stadium shouldn’t be considered.
And this is the correct answer:
A. They should be more willing to tear down the $5 million stadium, because it cost less to build.
Explanation:
City A will likely be more willing to tear down its old stadium because it costed $5 million to build. City B, on the other hand, will have to think twice because a stadium that costed $50 billion to build could have more value than it seems, or the City could simply not have enough money to build a better new stadium (something that would probably cost more than $50 billion to do).
Answer:
A. 85% stocks and 15% bonds/cash equivalents.
Explanation:
Being that Miguel is 25 years old, he has a very long time horizon over which his investments can grow. The fact that he has a low financial health means that he needs to adopt an aggressive investment strategy and that complements his high tolerance for risk. Investing majority of his assets should be in stocks since stocks are riskier than bonds and a small proportion in the latter. Therefore, 85% in stocks and 15% in stocks and cash equivalents would be ideal.
