Contribution margin is the difference between the selling price and the variable cost. Contribution Margin Ratio is the ratio of contribution per unit divided by the selling price per unit.
So at $70 per unit of sales, the contribution per unit is
Contribution Margin = Selling Price - Variable Cost
Contribution Margin = $70 - ($70 × 40%)
Contribution Margin = $70 - $28
Contribution Margin = $42 per unit
Contribution Margin Ratio = Contribution Margin ÷ Sales Price per unit
Contribution Margin Ratio = $42 ÷ $70
Contribution Margin Ratio = 60%
Hence the Contribution Margin Ratio is 60%.
Answer:
Required return 10.27%
Dividend yield 5.77%
Expected capital gains yield 4.5%
Explanation:
Calculation for required return using this formula
A. R = (D1 / P0) + g
Let plug in the formula
Required return = ($2.30 / $39.85) + .045
Required return = .1027*100
Required return= 10.27%
Therefore Required return is 10.27%
Calculation for dividend yield using this formula
Dividend yield = D1 / P0
Let plug in the formula
Dividend yield = $2.30 / $39.85
Dividend yield = .0577*100
Dividend yield = 5.77%
Therefore Dividend yield is 5.77%
Calculation for the expected capital gains yield
Using this formula
Expected capital gains yield=Required return-Dividend yield
Let plug in the formula
Expected capital gains yield=10.27%-5.77%
Expected capital gains yield=4.5%
Therefore Expected capital gains yield is 4.5%
Answer:
Making inquiry and research
Explanation:
When one is faced with the need to validate if an idea is the need of the customer, an inquiry and research should be made.
Meeting the need of the customers the the goal of all businesses so as to generate more revenue. This is the reason why most companies invest heavily on Research and Development.
There is need to research into the needs of the customers and the best means of meeting those needs.
Also, one can also study the industry as a whole to deduce how other firms are satisfying the needs of the customers.
Answer:
E. Preacquisition earnings are ignored in the consolidated income statement.
Explanation:
This is the statement that is true about the presentation of a consolidated financial statement. A consolidated financial statement is a statement of an entity that has several divisions or subsidiaries. Therefore, this statement would aggregate the reporting of an entity structured with a parent company and subsidiaries.