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Alona [7]
3 years ago
8

The company recorded $5,000 sales with 60% contribution margin ratio in 2019. According to the sales manager, the company can in

crease the sales volume by 30% this year if the company spends $400 as advertisement expense and decreases the selling price by 10%, while unit variable cost remains the same. If CEO approves the plan, how does it affect the net operating income in 2020
Business
1 answer:
77julia77 [94]3 years ago
8 0

Answer:

$150 Decrease

Explanation:

                  Income Statement

                                      Present    Proposed

Sales                              $5,000    $5,350 [(5000+30%)-10%]

Variable 10%                  <u>$2,000</u>    <u>$2,000</u> (2000*130%)

Contribution Margin      $3,000    $3,250

Fixed cost                       <u>     -      </u>    <u>$400  </u>

Net Operating Income <u>$3,000</u>    <u>$2,850</u>

<u></u>

Effect on Net Operating Income = $2,850 - $3,000 = -$150

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Tri-coat Paints has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth oppo
sammy [17]

Answer:

the present value of its growth opportunities (PVGO) is $0.56

Explanation:

The computation of the present value of growth opportunities is shown below:

= Price per share - (Earnings ÷ required rate of return)

= $41 - ($3.64 ÷ 9%)

= $41 - $40.44

= $0.56

hence, the present value of its growth opportunities (PVGO) is $0.56

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

4 0
3 years ago
High Country Apparel signed a $75,000, two-year, interest-bearing, 5% note on October 1, 20XX. The maturity value of the note is
Ket [755]

Based on the information given the maturity value of the note is: $82,500.

Using this formula

Maturity value of note=Principal amount+(Principal amount× Number of year× Interest rate)

Where:

Principal amount=$75,000

Number of year=2 year

Interest rate=5% or 0.05

Let plug in the formula

Maturity value of note=$75,000+($75,000×2 year×0.05)

Maturity value of note=$75,000+$7,500

Maturity value of note=$82,500

Inconclusion  the maturity value of the note is: $82,500.

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4 0
3 years ago
If a check correclty written and paid by the bank is incorrectly recorded in the company;s's books for $794 how should this erro
worty [1.4K]

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794,  this error be treated on the bank reconciliation--- Subtract $45 from the book balance.

What is bank reconciliation?

Bank Reconciliation is an important process in accounting in which organizations match their bank statements with the transactions that are recorded in their general ledger. Preparing a bank reconciliation statement helps businesses to eliminate possible errors in transactions or bookkeeping

What is the journal entry for bank reconciliation?

The journal entries for the bank fees would debit Bank Service Charges and credit Cash. The journal entry for a customer's check that was returned due to insufficient funds will debit Accounts Receivable and will credit Cash.

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6 0
2 years ago
g In the theory of comparative advantage, a good should be produced in that nation where Multiple Choice the production possibil
Lady_Fox [76]

Answer:

its cost is least in terms of alternative goods that might otherwise be produced

Explanation:

Comparative Advantage

This is simply explained as when an individual has an opportunity cost of performing a task is lower than the other individuals opportunity cost that is it is more efficient. It is the usual fundamental basis for international trade. Its principle includes production at a maximum peak to be achieved if each individual focus on the job or activities for which his or her opportunity cost is lowest.

Opportunity Cost

This is simply known as the highest valued of an alternative that must be given up so as to be involved or engage in an activity/job or task. There are several sources of a comparative advantage. They includes;

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2. Relative abundance of labor and capital

3. Technology

4. External economies etc.

3 0
3 years ago
One form ofâ __________ is when movie theaters charge one price for adults and a different price for senior citizens.
Marina86 [1]
<span>Differential pricing. Also known as discriminatory pricing or multiple pricing, it is a method of charging distinct prices for different customer segments for the same product and for the same quantity. Companies make use of differential pricing methods in order to increase profitability of an organisation.</span>
4 0
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