The owner of a local restaurant wants to enhance consumers' attitudes toward his restaurant by changing the affective component
1 answer:
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Answer:
37% compounded annually
Explanation:
To find the answer we need to follow this formula:
Where:
- P = Present value of the stock
- I = Initial value of the stock
- r = Interest rate
- n = number of compounding periods
Now we plug the amounts into the formula:
900,000 = 150,000 (1 + r)^13
900,000 / 150,000 = (1 + r)^13
60 = (1 + r)^13
Ln60 = 13 Ln(1 + r)
4.09 / 13 = Ln(1 +r)
0.31 = Ln(1 + r)
e0.31 = Ln(1 + r)
1.37 = 1 + r
1.37 - 1 = r
0.7 = r
Thus, the annual interest rate is 37%
Answer:
It will increase
Explanation:
Before the purchase of the automated machine, break even point is computed as follows:
Sale price: $40
Less variable cost: $18
Therefore, contribution per unit = $40 - $18 = $22.
With fixed cost at $16,000, breakeven point in units =
= 16,000/22
Break even cost = 727.27 units.
With the purchase of the automated machine, break even point is computed as follows:
Sale price: $40
Less variable cost: ($18 - $2) = $16
Therefore, contribution per unit = $40 - $16 = $24.
Fixed cost = $16,000 + $5,000 = $21,000.
Breakeven point in units = 21,000/24
Break even cost = 875 units.
Therefore, breakeven point will increase as a result of the purchase of the automated machine.