Answer and Explanation:
Answer and explanation attached
Answer:
Direct material purchase budget = 546,000 pounds
Explanation:
<em>Raw material purchase budget is determined by adjusting the raw material usage budget for opening and closing inventory of materials.
</em>
Purchase budget = usage budgeted + closing inventory - opening inventory
Usage budget = Production budget × standard materials per unit
= 172,000 × 3 pounds= 516,000
Purchase budget =516,000 + 380,000 - 350,000=546,000
Direct material purchase budget = 546,000 pounds
It is an elastic good and to increase the revenue, the producer should decrease the price of the good.
<u>Explanation:</u>
The good that has a price elasticity of demand with a coefficient of 1.6, the good is said to have elastic demand. For such a good, the producer should decrease the price of that good to increase its revenue. With the decrease in the price, the demand of the good will increase significantly. This will help him increase his revenue.
Answer:
The yield to maturity is 8.50%
Explanation:
The computation of the yield to maturity is shown below:
Given that
NPER = 8
PMT = $1,000 × 10.8% = $108
PV = $1,129.70
FV = $1,000
The formula is shown below:
= RATE(NPER,PMT,-PV,fV)
After applying the above formula, the yield to maturity is 8.50%
And, the same is to be considered
hence, the yield to maturity is 8.50%
Answer:
II, III, and IV only
Explanation:
The first statement is wrong. IRR is the rate that causes the net present value of a projects cash-flows to exactly equal zero, and therefore a project with a required rate of return higher than the IRR would mean that the cash-flows have to be discounted by a higher rate, which would yield a negative net present value. Such a project would reduce shareholder wealth and should be rejected. The other 3 statements are correct.