Answer:
In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.
Explanation:
Asset Turnover = Net Sales / Total Asset
Capital Intensity = Total Asset / Net Sales
According to the above formulas most efficient situation will be to increase the asset turnover and decrease the capital intesity ratio because they are reciprocal to each other, so thses will behave inversly with each other. Higher turnover means the higher sales using total asset and lower capital intensity ratio means asset are lower timesto the net sales which is an efficient use of asset.
Answer:
$86,000
Explanation:
The opportunity cost is an economic concept. It is the cost of the alternative foregone. Accounting profit does not take into cognizance the alternative foregone.
It only considers the explicit cost incurred in the process of making sales or generating revenue.
As such,
Accounting profit = $128,000 - $42,000
= $86,000
Answer:
The problem with variable rates is that they vary, i.e., they might unexpectedly increase and the increase might be pretty significant. One of the main factors leading to the Great Recession was the housing bubble and the increase in mortgage interest rates. Normally, interest rates tend to increase, they might sometimes decrease, but generally they only go up and up.
Even though the fixed interest rate might be higher, it will not change and that guarantees that you will always pay the same amount and that you can prepare your personal budget to cover it.
Generally, it is important to be upfront, express regret that the company can't meet the deadline, and tell the customer how the problem will be fixed.
