A small coffee shop currently offers a cup of cafe latte for P106. The variable costs are P58 per cup, and 10,113 cups are sold annually and a profit of P200,617 is realized per year. A new design in making the coffee will increase the variable costs by 10% and Fixed Costs by 20% but sales will increase to 12,043 cups per year. If we employ the new design, at what selling price do we break even?

Q: Jimmy and Mickey are interested to purchase their first boat. They have decided to borrow the boat's…

A: Purchase price Boat = $100,000 Income tax = 28% Cost of borrowing from boat dealer = 8% Cost of…

Q: Consider a European Call Option with a strike of 82. The current price of the underlying asset is…

A: Call option price is 6.22 Risk free rate is 4.1% TIme to expiry is 5 months Strike price is 82 Stock…

Q: The risk-free rate of interest, kRF, is 6 percent.  The overall stock market has an expected return…

A: The required return on the stock can be calculated as per the CAPM equation

Q: Riley Co. has a DOL of 140% and a DFL of 113%. If sales decrease by 12%, what is the expected…

A: Solution: We know, Degree of Operating Leverage (DOL) measures the percentage change in operating…

Q: maturity value of the CD?

A: Amount deposited = $100,000 Time period = 3 years Interest rate = 12% compounded quarterly   Points…

Q: Consider the following term structure of interest rates: Maturity Interest Rate 1-year 4.6% 2-year…

A: Forward rates are the rates that would be applicable after a specified number of years, whereas spot…

Q: ou bought a stock on 1 January 2018 for $135.5 and below are the year-end price data and annual…

A: The stock price at the beginning = $135.5 Standard deviation is computed by computing the return…

Q: 1. Determine the amount of money invested today at 12% interest can provide the following…

A: Interest rate = 12% Cash flows at end of each year for first 6 years = 312,000 Cash flows at end of…

Q: Debt ratio of JFC * STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3 COMIPANIES AS DECEMBER…

A: Solution:- Debt ratio means the ratio of total debt of a company to its total assets. So, Debt ratio…

Q: You purchase an RV by making a down payment of $10,700. The terms of your finance agreement have an…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: You are interested buying a business and the current owner is asking $180,000 for it. You require a…

A: As per Bartleby guidelines, If multiple questions are posted , only first 1 question will be…

Q: the trade discount and trade discount rate.

A: List Price Net Price Trade Discount Trade Discount Rate 65.00 50.00 15.00 23.08% 115.00 98.00…

Q: Western Electric has 21,000 shares of common stock outstanding at a price per share of $61 and a…

A: The question is related Weighted Average Cost of Capital.The term cost of capital refers  to the…

Q: Cash price of Mazda3 2.0 Skyactiv-G is 23 751.66 €. Down payment is 7125 € and the term of the…

A: Down Payment = 7125€ Term Period =36 Months Service Fee = 6€/Payment Last Payment = 13300€

Q: Machine A Machine B R100 000 R110 000 Initial cost 5 years 5 years Expected economic life R10 000 0.…

A: Payback period- It represents the time period required for recovery of the initial investment made…

Q: You are considering buying below corporate bonds for income generation: Tesla 4% per year…

A: We need to calculate bond price using PV function in excel. The formula is =-PV(RATE,NPER,PMT,FV)

Q: NC Corp. holds three stocks in her portfolio: A, B, and C. The portfolio beta is 1.40. Stock A…

A: The new portfolio beta can be calculated by subtracting the beta contribution of Stock A in the…

Q: 8d. A large profitable corporation is considering a capital investment of $50,000. The equipment has…

A: Cash flow of a project evaluates how cash flows in and out of a business. Inflation is the general…

Q: has a debt ratio of 55% What is its debt/equity ratio?

A: Given, Debt ratio = 55% Equity ratio = ( 1 - Debt ratio) = 1 - 0.55 = 0.45

Q: Average payment period of PETRON STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3 COMPANIES…

A: Average payment period is the time taken to pay accounts payable dues. It can be calculated Average…

Q: Consider the following two securities X and Y. Security Retum Standard deviation Beta 1.5 20% 10%…

A: The systematic risk of the portfolio is a measure of the beta of the portfolio

Q: The price of a condominium is $88,000. The bank requires a 5% down payment and one point at the time…

A: Price of Condominium is $88,000 Down payment is 5% Time period is 30 years or 30×12 = 360 months…

Q: Consider the following cash flows. The interest rate is 10%. What is the duration (hint: you need…

A: Duration measures the sensitivity of an asset's price to changes in interest rates. Duration can be…

Q: Sara met with a financial planner and has determined that she will need $1,250,000 when she retires…

A: Funds needed after 30 years (FV) = $1,250,000 Monthly interest rate (r) = 0.00470833333333333 (i.e.…

Q: Consider the following cash flows. The interest rate is 10%. What is the total wealth after 2 years…

A: Given, we are supposed to find out the cashflow price and the  amount which is to be received after…

Q: Find the amount at the end of 4 years and 5 months if P7,000 is invested at 23% compounded…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: 15% n=7 Initial Cost (A)100 (B)60 (C)80 Uniform Annual Benefit (A)26 (B)15 (C)17 a)…

A: Budget is the process by which a firm assesses truly massive projects or investments.A new plant's…

Q: . $122.72 million

A: Net present value is useful for calculating the current total value of all the future streams of…

Q: Compute the interest paid on a 4-year lease for a $25,894 car if the annual rate of depreciation is…

A: Present Value of lease is $25,894 Time period is 4 years Annual interest rate is 3% To Find:…

Q: 2) Since must be 1. The measures the stock's reactions to movements in the market, the beta for the…

A: Beta is measure of change in stock price with regard to change in market.  There are 2 types of…

Q: Given the following information, what is the financial break-even point? Initial investment =…

A: Given that: Fixed cost=$58000 price=$130 variable cost per unit=$95 Thus formula of financial break…

Q: 3b. Inflation is expected to average 2.4% per year for the next 44 years. What percentage of the…

A: We have to find the % loss in the purchasing power of the dollar under the given inflation scenario.

Q: The difference between a merchant wholesaler and an agent/broker is based on O the type of goods…

A: Merchant wholesalers buy from manufacturers and sell to other businesses. Agents and brokers are…

Q: oju Ltd is currently trading at $39, and recently paid an annual dividend of $4.5. If it is expected…

A: Current stock price (P0) = $39 Recent dividend (D0) = $4.5 Retention ratio = 30% ROE = 8% Annual…

Q: What is the systematic risk for a portfolio with two-thirds of the funds invested in X and one-third…

A: The systematic risk of a portfolio is measured by the beta of the portfolio

Q: Joshua Industries is considering a new project with revenue of $478,000 for the indefinite future.…

A: Adjusted present value means that we have to determine the NPV (net present value) of a project in…

Q: Cooper Grant is the president of Acme Brush of Brazil, the wholly owned Brazilian subsidiary of…

A: In practice, financial statement consolidation involves a corporation integrating and combining all…

Q: She arranged to receive $45,000 the first year. Because of inflation each year she will get $580…

A: A regular payment received by retired people is called pension. Inflation is the increase in general…

Q: You are going to invest P20,000 in a portfolio consistin g of assets X, Y, and Z, as follows:…

A: The beta of the portfolio is calculated as sum of weight of each stock and the respective betas

Q: Suppose that a man lends $1000 for four years at 12% per year simple interest. At the end of the…

A: Future value with simple interest With principle amount (PV), period (n) and simple interest rate…

Q: What does it mean for markets to be efficient? What are the differences in the degree of efficiency,…

A: The markets are considered to be efficient if the information related to various aspects that create…

Q: I need some research gaps in the existing literature for the impact of covid-19 on the UK's supply…

A: From the initial step of acquiring raw materials through the ultimate delivery of the product or…

Q: How do you take the present value of a stream of cash flows. How does it work for annual payments,…

A: Present value of cashflows is the value of money that is to be received in future.

Q: Mark invests $75,000 annually for each of 5 years for a particular period. The rate of return is…

A: The value of investment today is calculated as present value of annuity

Q: You are offered a job that pays $37,000 during the first year with an annual increase of 9% per year…

A: Solution:- When an amount increases by same rate of growth, the amount at nth year can be computed…

Q: 4. Suppose a $1000 EOY loan payment was made today for money that was borrowed five years ago. If…

A: Loan payment is $1,000 made today Time period is five years Inflation rate is 2% To Find: Value of…

Q: Future Value Computation You deposit $3,000 at the end of every year for three years. How much will…

A: Solved using Financial Calculator  PMT = 3000 N = 3 I/Y = 8 CPT FV = 9739.20

Q: The answer is wrong and I don't know why... can you please help me?

A: Total price is $10 million Maturity is 20 years. The rate of interest is 5%.

Q: Suppose that we make contributions to a fund of $125 today and $750 in two years for a return of…

A: We have to write the NPV as function of the discount factor ν and then proceed to calculate the…

Q: . Ji-Hoon wants to get a $500,000 3% 30-year mortgage in order to buy his first home. How much…

A: Loan amount (PV) = $500,000 Interest rate = 3% Monthly interest rate (r) = 3%/12 = 0.25% Period = 30…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.