When $25,000 of fixed costs will be eliminated by discontinuing, the operating income will increase by $5000.
<h3>How to calculate the operating income?</h3>
From the complete information given, the impact on operating income will be calculated thus:
= Savings fixed cost - Loss on contribution margin
= $25000 - $20000
= $5000
Therefore, the operating income will increase by $5000.
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Answer:
$71,720.
Explanation:
We can find the answer by finding the future value for the two periods (the 15 years under 4.1% interest rate, and the 18 years under 3.5% interest rate) using the future value of an investment formula:
FV = PV (1 + i)^n
Where:
- FV = Future value
- PV = Present value
- i = interest rate
- n = number of compounding periods
Now, for the first period of time, we plug the amounts into the formula:
FV = $21,000 (1 + 0.041)^15
FV = $38,369
Now, we take that result, and apply the same formula:
FV = $38,369 (1 + 0.035)^18
FV = $71,270
So, the total amount you will have in your account after 33 years is $71,720.
Answer:
The correct answer is option b.
Explanation:
An increase in government expenditure will have a smaller effect on the aggregate demand if the MPC is smaller. This happens because the consumers will save the major share of their income and not consume it if MPC is small.
This will not increase consumer spending as much as they should. And thus aggregate demand will increase by a small amount.
The change in aggregate demand will also be smaller if the investment is interest elastic. The government increases spending by borrowing from the loanable funds market.
This increases the demand for loanable funds. The interest rate, as a result, increases. This increase in interest rate makes borrowing costlier for private investors.
This further causes the investment expenditure to increase as much as it should. And thus aggregate demand will increase by a small amount as well.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Raw material= $60,000
Direct labor= $48,000
Overhead= $52,000
Premium Company started and completed 400,000 boxes.
First, we need to calculate the total manufacturing cost and unitary cost:
Total cost= Direct material + direct labor + overhead
Total cost= 60,000 + 48,000 + 52,000= 160,000
Unitary cost= 160,000/400,000= $0.4 per box
Now, we can calculate the selling price:
Selling price= Unitary cost*mark up= 0.4*1.40= $0.56
The Current ratio equals 2.9, the Accounts receivable turnover equals 5.77 and Average collection period equals 63 days.
<h3>What is Current ratio?</h3>
= Current Assets / Current Liabilities
= 145,000 / 50,000
= 2.9
<h3>What is Accounts receivable turnover?</h3>
= Net sales / Average Accounts Receivable
= 375,000 / )(70,000 + 60,000) / 2)
= 5.76923076923
= 5.77
<h3>What is Average collection period?</h3>
= 365 Days /Average Receivable Turnover ratio
= 365 / 5.77
= 63.2582322357
= 63 days
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