Answer:
Option C. 30,000 decrease
Explanation:
At the moment Product G is covering its own variable cost which is 180,000 from its sale figure of 210,000. So there is a balance of 30,000 which product G is contributing to offset the Fixed costs of the company.
It will be inadvisable for management to discontinue the production of Product G because it appears to be making a loss. The loss is as a result of the fixed cost of 50,000 imposed (apportioned) to the product. So product G can only cover 30,000 out of this 50,000 which is resulting in the 20,000 loss.
If the product is discontinued, the 30,000 contribution of product G will be lost which will lead to a decrease in profit of that amount.
The answer would be : A. dollar cost averaging
Dollar-cost averaging technique is a long-term technique to buy a fixed dollar amount of a particular investment, regardless of it's market price fluctuation. Since we invest in a fixed amount investment, the investment will eventually lead to profit, ( though it may take a longer time than those who affected by market's fluctuation)
Answer:
c. Risk is higher if a company has more assets.
Explanation:
Financial leverage is the measurement of risk based on the debt of the company. More liabilities involves high risk because company does not have enough to pay for the it's liabilities. If company has more assets then the risk if lower because company is able to pay its liabilities from its assets. The statement " Risk is higher if a company has more assets" is incorrect.
Answer:
The perpetuity payment per year was $2030
Explanation:
A perpetuity is a series of cash flows that are constant, occur after equal intervals of time and are for infinite period of time or are perpetual. Thus, it is like and annuity but with an infinite time period. The formula for the present value of of perpetuity is,
PV of Perpetuity = Cash Flow / r
Where,
- r is the required rate of return
As we already know the present value of perpetuity and the required rate of return, we can input these values in the formula to calculate the annual perpetuity payment or cash flow.
29000 = Cash Flow / 0.07
29000 * 0.07 = Cash Flow
Cash Flow = $2030
Answer:
The Journal entry will Increase cash and as well Increase Common stock
Explanation:
Based on the information given where we have Cash of the amount of $22,000 and Common Stock of the amount $22,000 on May 23 this means that the journal entry will Increase cash and as well Increase Common stock. And since cash is an asset this mean that it will increased by debit While Common stock will increased by Credit becauee Common stock is a Capital .
