Financial Exercise Essay

QUESTION 5: Kai decides to keep his price the same and add color, increasing variable costs by $0.40 per issue. What is the percent increase in unit volume (copies per issue) required to maintain $500 profits and cover the increased fixed and variable

d) Break even sales change that would change the profits by the same amount as a reduction in price.

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

12. Describe an alternative investment that you might invest in someday, and explain why this investment is appealing to you. (2-4 sentences. 2.0 points) Peer-to-peer lending. It's a high return investment but also high risk. There are ways to invest in Peer-to-peer to minimize risk. It's a great alternative investment option.

13. If the selling price is $22 per unit, what is the contribution margin per unit sold?

1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)

1. The financial choices we make impact our economy. Think of a recent item you purchased. What factors influenced your decision in making this purchase? Did this purchase impact your local economy? Explain why or why not.

Because each product has a different contribution margin percentage, the volume required for each break-even point would be different and will not add up to the company’s overall break-even volume of 1,100,000 units; the overall break-even volume assumes that there is only one contribution margin percentage which is :

My parents receive an earned income, meaning they work for it, unlike unearned income like child support and disability. My mom works as a Human Resources Director; she over sees all investigations in her facility and hires and fires people. My dad works as an Operations Sales Manager, so he over sees all of the different sales. They both have salary wages, so their income isn’t based on hours.

Total Sales Dollars (for covering each incremental dollar of advertising) = Absolute increase in dollar sales / Advertising expense = $500,000 / $150,000 = $3.33

-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm's cost of equity?

Life insurance is meant to provide funds to replace a breadwinner's to protect and support dependents. Chad and Haley are dependents, not income providers. Therefore, the purchase of life insurance is unnecessary and not recommended. The Dumonts should use the money they would spend on policies for the children to increase their own coverage.

A retailer with sales of $1 million wants to increase its efficiency rating from 20 percent to 30 percent. To what must it reduce selling expenses?

The $320,000, on the other hand, is a fixed cost associated with the proposed addition.

We are providing below the assumptions and other calculations we used while computing the WACC and the cash flows.