Answer:
Amount of inventory = $28,800
Explanation:
Given:
Current ratio = 2.65
Acid test ratio = 2.01
Current liabilities = $45,000
Prepaid expenses = $0
Find:
Amount of inventory
Computation:
Current ratio = Current assets / Current liabilities
2.65 = Current assets / 45,000
Current assets = $119,250
Acid test ratio = [Current assets - Inventory - Prepaid expenses] / Current liabilities
2.01 = [119,250 - Inventory - 0] / 45,000
90,450 =119,250 - Inventory
Amount of inventory = $28,800
Break even analysis determines <span>what sales volume must be reached before the company's total revenue equals total costs and no profits are earned. It is the calculation of the point at which total revenue equals total cost. Break even analysis is helpful in letting businessmen know when their business will turn a profit so the prices of their goods or the amount of goods sold can be adjusted accordingly.</span>
Answer:
Fox Resources
Units of common stock in issue = $5,000,000 divided $20 = 250,000 units
A. Earnings per share = Net income (after deducting preferred stock interest) divided by number of outstanding shares in issue
We assume the Net income provided already has deducted interest on preferred stock
= 600,000/250,000
= $2.4
B. Price Earning Ratio
= share price divided by the Earnings per share
= 20/2.4
= 8.33
C. Dividend Per share
= Dividend paid divided by number of common stock issued & outstanding
= $125,000/250,000
= $0.50
Answer:
They should not be able to successfully negotiate the terms of this loan within these parameters.
Explanation:
It has been provided that RT earns 12% on his current investments and would not like to receive an interest rate of less than 12% on the loan he gives.
if RT gives a loan of $10,000 for one year, he would charge an interest rate of minimum 12%.
Interest = $10,000*0.12
= $1,200
RT requires $1,200 in interest.
It has been provided that Cynthia earns 8% on her investment.
If she borrows $10,000 and invests the amount for one year, she can earn 8% return on such amount.
Earning = $10,000*0.08
= $800
Cynthia is going to earn $800
RT requires a minimum of $1,200 as interest for 1-year loan he gives while Cynthia can pay a maximum of $10,000 as interest for 1-year loan she takes. there is mismatch between the minimum expectation to receive of lender and the maximum expectation to pay of borrower.
Therefore, They should not be able to successfully negotiate the terms of this loan within these parameters.
Answer:
Products Selling price Unit variable cost
$ $
Junior 50 15
Adult 75 25
Expert <u>110 </u> <u> 60</u>
Total <u> 235 </u> <u> 100</u>
The sales price per composite unit = $235
The contribution margin per composite unit
= Composite selling price - Composite unit variable cost
= $235 - $100
= $135
Break-even point in units
= <u>Fixed cost</u>
Contribution per unit
= <u>$114,750</u>
$135
= 850 units
Break-even point in dollars
= Break-even point in units x Composite selling price
= 850 units x $235
= $199,750
Income Statement
$
Total contribution ($135 x 850 units) 114,750
Less: Fixed cost <u>114,750</u>
Net profit <u> 0</u>
Explanation:
Sales price per composite unit is the aggregate of all the selling prices.
Contribution margin per composite unit equals composite selling price minus composite unit variable cost.
Break-even point in units is fixed cost divided per composite contribution margin per unit.
Break-even point in dollars equal break-even point in units multiplied by selling price.
Income statement is prepared by deducting the total fixed cost from the total contribution.
