Answer:
It is cheaper to produce in-house. Cost savings= $3500
Explanation:
We need to find whether it is better to produce in-house or to purchase to a supplier.
Q= 175000
Produce in house:
Direct Materials $15,000
Direct Labor $5,000
Variable overhead $6,000
Fixed overhead $9,000
Total cost= $35000
Outsource:
Purchase Cost= 175000q*$0.18= $31500
Fixed Cost= (9000-2000)= $7000
Total cost=$38500
It is cheaper to produce in-house. Cost savings= $3500
Answer:
<u>$841 approx</u>
Explanation:
Bonds refer to debt instruments whereby the issuer raises long term finance, agreeing to pay the lenders, a fixed rate of coupon payments at regular intervals and repayment of principal upon maturity.
The present value of a bond is represented as:

where
Present value of a bond
C = Annual coupon payments
k = yield to maturity/ cost of debt
n = years to maturity
RV = Redemption value
here, C = 1000 × 9% = $90
K = 11%
n = 20 years
RV = $1000
putting these values in the above equation, we have,

= 7.9633 × 90 + 0.124 × 1000
= 716.699 + 124.033
= $ 840.73 OR $ 841 approx.
Thus, the bond will sell at $841 today.
Answer:
Explanation: TVC is the total variable cost curve. It slopes upward left to right, as inverse S-shaped. This slope of TVC curve shows that the total variable cost increases initially at a decreasing rate as the total output increases and subsequently it increases at an increasing rate with the increase in the output.
Explanation:
Answer: Customer Equity.
Explanation:
Craig's Craft Beer company is building their customer equity, as they seek to maintain current customers and increase customer base. Customer Equity is the total value a business company benefits from all their customers, during their period of active patronage.