Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $30,5
1 answer:
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Answer:
$656.82
Explanation:
The calculation of required return is shown below:-
Face value (FV) = $1,000
Coupon rate = 12.00%
Number of compounding periods per year = 4
Interest per period (PMT) = $1,000 × 12.00 ÷ 4
= $30.00
Number of years to maturity = 10
Number of compounding periods till maturity (NPER) = Number of compounding periods per year × Number of years to maturity
= 40
Required rate of return = 20.00%
Required rate of return per period (RATE) = 5.00%
Bonds value = -PV(RATE,NPER,PMT,FV)
= $656.82
Therefore we applied this formula into excel.
Answer: Karl must sell 1350 small heaters and 450 large heaters to break even.
We follow these steps to arrive at the answer:
No. Small Large Total
1 Selling Price per unit 80 250
2 Variable Cost per unit 30 120
3 Number of units sold 2100 700 2800
4 Sales mix 3 1
5 Total sales (1*3) 168000 175000
6 Total Variable Cost (2*3) 63000 84000
7 Contribution Margin (5-6) 105000 91000 196000
Next we compute the Weighted Average Contribution Margin as follows:
Now, Break even point (BEP) is computed as
Since the large and small heaters are sold in the 3:1 ratio, we can find the number of large and small heaters to be sold in order to achieve the break even point at 1800 units.