Imaging that you are operating a chain of GYMS in Valencia and you are looking at 2 (two) options to increase revenue across your GYM chain. The estimated impact of the 2 (two) options on result (*) in year 1 and one-off associated costs of each option are given in the table below. Launch Loyalty Card € 100,000 Cut Prices € 150,000 Cost of option (one off cost) Probability of high GYM attendance 0.55 0.75 Probability of low GYM attendance Result (*) of high GYM attendance 0.45 0.25 € 850,000 € 250,000 € 800,000 Result (*) of low GYM attendance € 250,000 In addition, you have been told by your accounting department that the cost

Imaging that you are operating a chain of GYMS in Valencia and you are looking at 2 (two) options to increase revenue across your GYM chain. The estimated impact of the 2 (two) options on result () in year 1 and one-off associated costs of each option are given in the table below. Launch Loyalty Card € 100,000 Cut Prices € 150,000 Cost of option (one off cost) Probability of high GYM attendance 0.55 0.75 Probability of low GYM attendance Result () of high GYM attendance 0.45 0.25 € 850,000 € 250,000 € 800,000 Result (*) of low GYM attendance € 250,000 In addition, you have been told by your accounting department that the cost

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 3TP: Brindis Babysitting Center currently rents a 1200 sq foot facility for her 20-child facility. Her...

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Thomas Consultants provided Bran Construction with assistance in implementing various cost-savings initiatives.Thomas’s contract specifies that it will receive a flat fee of $50,000 and an additional $20,000 if Bran reaches aprespecified target amount of cost savings. Thomas estimates that there is a 20% chance that Bran will achieve thecost-savings target.Required:1. Assuming Thomas uses the expected value as its estimate of variable consideration, calculate the transactionprice.2. Assuming Thomas uses the most likely value as its estimate of variable consideration, calculate the transaction price.3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of thatestimate due to a lack of experience with similar consulting arrangements. Calculate the transaction price.
NEED ASAP with a complete solution! A particular university was considering whether to offer a seminar for executives. The tuition would be USD 650 per person. Variable costs, including meals, parking, and materials, would be USD 80 per person. Certain costs offering the seminarIncluding advertising, instructors' fees, room rent, audiovisual equipment rent would not be affected by the number of people attending Such costs. which could be thought of as fixed costs amounted to USD 8,000 for the seminar. • Given this information. If the school wanted at least to break even on this program, how many students should they expect to attend? a) 15 b) 14 c) 20
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To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3000, and the average first-year commission for each new account opened is $5800. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account. Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.Profit = (New Accounts Opened × $( ) – $ ( ) What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)The number of new accounts opened is a random variable with fill in the blank 4 trials and fill in the blank 5 probability of a success on a single trial. Assume that the number of new accounts…
To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3000, and the average first-year commission for each new account opened is $4600. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account. Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.Profit = (New Accounts Opened × $ fill in the blank 1) – $ fill in the blank 2 What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)The number of new accounts opened is a random variable with fill in the blank 4 trials and fill in the blank 5 probability of a success on a single trial. Assume that the…
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To generate leads for new business, Gustin Investment Services offers free financial planningseminars at major hotels in Southwest Florida. Gustin conducts seminars for groupsof 25 individuals. Each seminar costs Gustin $3,500 and the average first-year commissionfor each new account opened is $5,000. Gustin estimates that for each individualattending the seminar, there is a 0.01 probability that he/she will open a new account. a. Determine the equation for computing Gustin’s profit per seminar, given values of therelevant parameters.
Thornton Painting Company is considering whether to purchase a new spray paint machine that costs $5,400. The machine is expected to save labor, increasing net income by $810 per year. The effective life of the machine is 15 years according to the manufacturer’s estimate. Required Determine the unadjusted rate of return based on the average cost of the investment. (Enter your answer as a whole percentage (e.g. 0.55 should be entered as 55).)
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