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Anuta_ua [19.1K]
3 years ago
10

The Foundational 15 [LO10-1, LO10-2] [The following information applies to the questions displayed below.] Westerville Company r

eported the following results from last year’s operations: Sales $ 2,300,000 Variable expenses 670,000 Contribution margin 1,630,000 Fixed expenses 1,170,000 Net operating income $ 460,000 Average operating assets $ 1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales $ 460,000 Contribution margin ratio 50 % of sales Fixed expenses $ 161,000 The company’s minimum required rate of return is 15%. Foundational 10-4 4. What is the margin related to this year’s investment opportunity?
Business
1 answer:
Degger [83]3 years ago
8 0

Answer:

Margin = 1%

Explanation:

To calculate the margin related to these year investment opportunity, we use the following method.

Margin = net operating income/ sales

Margin = $460,000/ $ 460,000

Margin = 1%

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Sleep Cheap is a private camping ground near the Boulder Peak Recreation Area. It has compiled the following financial informati
Fittoniya [83]

Answer and Explanation:

a. The net income should be

Service Revenue $132,000  

Sales Revenue $25,000  

Total revenues $157,000  

Less: Total expense -$133,000  

Net income $24,000  

b.  

The preparation of the retained earning statement is presented below:

<u>Retained Earnings Statement   </u>

<u>For the year ended December 31,2022 </u>  

Retained Earnings, January 1 $5,000  

Add: Net income $24,000  

Less: Dividends -$8,000  

Retained Earnings, December 31 $21,000  

The preparation of the balance sheet is presented below:

<u>Balance Sheet   </u>

<u>December 31,2022</u>

Assets  

Cash $13,500

Supplies  $2,500

Equipment $108,000

Total Assets $124,000

Liabilities and Stockholders' Equity  

Liabilities  

Accounts Payable $13,000  

Notes Payable $50,000  

Total Liabilities $63,000

Stockholders' Equity  

Common Stock $40,000  

Retained Earnings $21,000  

Total Stockholders' Equity  $61,000

Total Liabilities and Stockholders' Equity $124,000

6 0
2 years ago
All states withhold state income taxes. true false
weeeeeb [17]
False is the answer.
3 0
3 years ago
All else equal, when investors consider a firm's return on equity (ROE) they consider less risky a firm that earns proportionate
egoroff_w [7]

Answer:

True

Explanation:

Return from operating activities are returns made from the regular and recurring operations of a business. Since they are from the normal operations of a company, they are less risky than returns made from the non-operating activities of a company which do not re-occur.

As such, a firm that earns more of its return from operating activities which are recurring is usually considered less risky than a firm than earns more of its return from non-operating activities which are usually one-off.

8 0
2 years ago
George and Dan's political consulting firm is losing money, but it is more than covering its variable costs. What is the most ac
aniked [119]

Answer:

- It will go out of business in the long run.

Explanation:

If George and Dan's political consulting firm is losing money, but it is more than covering its variable costs, then the most accurate statement we can make about it is that: It will go out of business in the long run.

In the SHORT RUN, as long as the firm is covering variable costs, it means that the firm is able to generate normal profit or contribution that takes care of part or all of its fixed costs. It will stay in business

<u>In the LONG RUN, the firm will only continue to operate if it can make normal profits</u>

<u>Normal profit occurs when the difference between a company's total revenue and combined explicit and implicit costs are equal to zero.</u>

<u>Since George and Dan's political consulting firm cannot cover fixed costs, it will go out business in the long run.</u>

3 0
2 years ago
The following information is available for Sunland Company:
vladimir1956 [14]

Answer:

Contribution margin= 250,000

Explanation:

Giving the following information:

Sales $590,000

Total fixed expenses $150,000

Cost of goods sold $390,000

Total variable expenses $340,000

<u>A CVP income statements provides the following structure:</u>

<u></u>

Sales= 590,000

Total variable costs= (340,000)

Contribution margin= 250,000

6 0
3 years ago
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