Q: hedge
A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts ...
Q: Capi of PHP 1.5M. The manufacturing company can produce an annua evenue of PHP250,000 for 7 years, b...
A: If the net present value is positive than project is acceptable and if the net present value is nega...
Q: Cash Conversion Cycle. Will each of the following events increase or decrease cash conversion cycles...
A: Cash conversion cycle represent the number of days taken by the company to convert its goods into ca...
Q: the cash flows for this project be?
A: Cash flow shows the amount of cash inflow and outflow from the company. The cash flow statement repr...
Q: You have been asked to value a firm with expected annual after-tax cash flows, before debt payments,...
A: Capital structure of the firm consists of both debt and equity. Cost of raising funds from each sour...
Q: We are considering the purchase of a $760,000 computed based inventory management system. It is in c...
A: CCA is the deduction from the value of the asset over the years of its life. It has a set of rates d...
Q: Financial institutions (Fls)
A: Economics refers to the sale and purchase of goods and services by proper utilization of resources a...
Q: Describe how NPV is calculated and describe the information this measure provides about a sequence o...
A: NPV net present value is very important factor in deciding the feasibility analysis of projects. It ...
Q: les Galactic Industries is choosing a steel production process. Their first option "Alpha" has a fir...
A: The procedure through which a company evaluates possible big investments is known as capital budgeti...
Q: You have saved $22,000 for a down payment on a house. Your bank requires a minimum down payment of 1...
A: Down payment amount = $22,000 Down payment ratio = 11%
Q: You want to buy a house that has a purchase price of $190,000. You plan to make a down payment of 10...
A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount...
Q: If money is worth 8% compounded quarter ly, determine tne present value of the following: a. An annu...
A: Discounting is a technique which is used to compute the PV of future cashflows by using an appropria...
Q: equipment. The purchase of a new, medium-sized truck-mounted crane is economic estimates for the two...
A: AWC is in this we find out the annual cost of each method which includes all cost and select the lea...
Q: The sum of P15, 000.00, deposited in an account earning 4% per annum compounded quarterly, will beco...
A: Deposit amount (D) = P 15000 r = 4% per annum = 1% per quarter
Q: 45. Retirement Savings. A couple thinking about retirement decide to put aside $3 in a savings plan ...
A: Future value is calculated by multiplying the present value with the 1+r factor for the given rate o...
Q: Big Rock has several investment portfolios with a local mutual fund company. One of the company’s di...
A: Sharpe ratio is calculated by dividing the difference of return on asset with risk free return by st...
Q: Yawi has a medium-size trucking company that distributes appliances within Metro Manila. Fuel consum...
A: The discounted cash inflows or outflows of future payments or receipts are known as the equivalent p...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Cost of equity can be calculated by using this equation Cost of equity =(Dividend/current stock pric...
Q: How should the capital structure weights used to calculate the WACC be determined?
A: Company requires funding for their investment which can be obtained from broadly two sources. Equit...
Q: Find the effective annual interest rate r of the given nominal annual interest rate. Round your answ...
A: Effective interest rate is interest rate considering the impact of compounding on interest rate.
Q: A bank offers all savings accounts 5% interest compounded annually. If one account has a principal o...
A: An account doubles when the present value becomes 2 times of itself. In order to become two times, i...
Q: A civil engineer plans to own a 300 m² lot after 5 years for an estimated cos 570,000. To accumulate...
A: We will first have to determine the future value of the deposits made in years 1 and 2. Then this am...
Q: Cris Li decided to go into the business at the age of 23, he deposits a certain amount and will incr...
A: Depositing a fixed amount of money in equal intervals of time for a certain period is called annuity...
Q: a. Calculate the interest component of Payment 13. Interest b. Calculate the principal component of ...
A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount...
Q: Lucus Laboratories' last dividend was $1.50. Its current equilibriuem stock price is $15.75 and is ...
A: We need to use the following equations for dividend yield and capital gain yield Dividend yield =Div...
Q: Find the present value PV of the annuity account necessary to fund the withdrawal given
A: Present Value of Annuity: It represents the present worth of the future annuity periodic payments m...
Q: Sam Melendez deposits P625.00 into an annuity at the beginning of every quarter for 2.5 years. The a...
A: Future value of annuity is calculated by compounding all the cash flows at a future date and. It cal...
Q: Big Rock has several investment portfolios with a local mutual fund company. One of the company's di...
A: The formula for the calculation of Sharpe ratio is as follows: Sharpe ratio=Expected return on portf...
Q: A debt of $28,400 is repaid by payments of $2,980 made at the end of every six months. Interest is 5...
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for...
Q: To be able to take her dream vacation, Maya decides to save for 4 years. She opens a savings account...
A: We need to use simple interest formula to calculate simple interest Simple interest =Principal*Rate*...
Q: An initial investment amount P, an annual interest rate r, and a time t are given. Find the future v...
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for you...
Q: Lisa has a $37,500 student loan at 3.15% compounded quarterly amortized over 16 years with payments ...
A: Given: Particulars Amount Loan(PV) $37,500 Interest rate 3.15% Years 16
Q: A special power tool for plastic products costs $400,000 and has a four-year useful life, no salvage...
A: The period in which the cost of asset including working capital investment is fully recovered from t...
Q: Bausch Company is presented with the following two mutually exclusive projects. The required return ...
A: Net Present Value discounts all the future cash flows by the rate of return and is used to find the ...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: NPV is the difference between present value of all cash inflows and initial investment NPV =PV of al...
Q: A bank makes a 30 year Fully Amortizing, Fixed Rate Mortgage (FRM) for $2,000,000 at an annual inter...
A: Here, Value of Loan is $2,000,000 Annual Interest Rate is 4.125% Time Period of Loan is 30 years Ann...
Q: The higher the interest rate, the higher my future value will be. O True False
A: The given statement is correct. The future value is a concept of time value of money which states th...
Q: Elona Zuckerberg is the CFO of Facenote company. made the following statements in a conference call ...
A: The firm capital structure consists of sources of capital which include debt, preference and equity ...
Q: A house and lot costing P2 million was bought at down payment of P500,000. He paid 1 million after 1...
A: Future Value The future value is the amount that will be received at the end of a certain period. Th...
Q: Name Symbol Close Net Chg Volume 52 Wk High 52 wk low Div Yield P/E YTD %Chg Gen Dyn GD 142.97 -0.47...
A: P/E ratio Price to earnings (P/E) ratio is calculated as shown below. PE=Price per shareEarnings per...
Q: Complete the table:
A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts fo...
Q: Cross-Ocean Boats Ltd. is in the 30% tax bracket. It is interested in determining the minimum return...
A: Here, Details of Bonds: Details of Equity Shares: Details of Preference Shares:
Q: In the credit market model with asymmetric information, determine how a consumer will respond to an ...
A: Asymmetric information In credit market, asymmetric information means the lenders or the borrowers h...
Q: An investment project provides cash inflows of $850 per year for five ears. What is the project payb...
A: Annual cash inflow = $850 Initial cost = $5,6004
Q: In 1983 the average tuition for one year at an Ivy League school was $11,800. Thirty years later, in...
A: Current tuition fee (P) = $11,800 30 years later tuition fee (F) = $23,700 Period (n) = 30 Years
Q: 12. A 20-year 1000 par value bond is purchased at a discount. The bond pays annual coupons of 4%. Th...
A: Bond is a debt-backed security which is used by investors to reduce risk and increase stable income ...
Q: The selling price of the preference shares is P150. the business is subject to a 30% income tax rate...
A: The cost of preference share = Annual dividend/Current price of the share Annual dividend = Par valu...
Q: 29. Annuities. You can buy a car that is advertised for $24,000 on the following terms: (a) pay $24,...
A: The decision to pay now or consider annuity payments can be taken by comparing present value of both...
Q: * Shara Jane Mariano buys a 137,000 laundry business by paying 26,000 at the end of each year. At 8%...
A: The amortization table means a table showing the schedule of payments in each period including the i...
Q: This is known as:
A: Fund refers to the money which should be kept aside for meeting some specific purpose. In this, the ...
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
- Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Required: 1. What is Hammonds variable cost ratio? Its contribution margin ratio? 2. Suppose Hammonds actual revenues are 200,000 greater than budgeted. By how much will before-tax profits increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? What is the expected margin of safety? (Round your answers to the nearest dollar.) 4. How much sales revenue must Hammond generate to earn a before-tax profit of 130,000? An after-tax profit of 90,000? (Round your answers to the nearest dollar.) Prepare a contribution margin income statement to verify the accuracy of your last answer.Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
- Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company Bs fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? Explain why.Cost-Volume-Profit, Margin of Safety Victoria Company produces a single product. Last years income statement is as follows: Required: 1. Compute the break-even point in units and sales dollars calculated using the break-even units. 2. What was the margin of safety for Victoria last year in sales dollars? 3. Suppose that Victoria is considering an investment in new technology that will increase fixed cost by 250,000 per year but will lower variable costs to 45% of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming that Victoria makes this investment. What is the new break-even point in sales dollars, assuming that the investment is made?Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
- Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
- Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?Caribbean Hammocks currently sells 75.000 units at $50 per unit. Its expenses are: Management believes it can increase sales by 5,000 units for every $5 decrease in sales price. It also believes the additional sales will allow a decrease in direct material of $1 for each additional 5,000 units. Prepare a flexible budgeted income statement for 75,000-, 80,000-, and 85,000-unit sales.Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.