Morgan Inc. manufactures ergonomically correct office chairs. They have a contribution margin of $110,000 and fixed expenses of $28,500. They are adding a warehouse space that will add $20,000 to their fixed expenses. What is their DOL after adding this new expense? O 2.50 O 1.35 O 1.79 O 2.27
Q: How long will it take $13,000 to grow to $17,000 if the investment earns interest at the rate of…
A: P = $13,000,A = $17,000,r=0.02 (2% as a decimal),n=12 (compounded monthly).
Q: Wandering RV is evaluating a capital budgeting project that is expected to generate $36,600 per year…
A: Cash Flow = cf = $36,600Time = t = 5 YearsRequired Rate of Return = r = 14%
Q: 43. The Bluebird Company has a $10,000 liability it must pay three years from today. The company is…
A: Present Value is the current price of future value which will be received in near future at some…
Q: Nonconstant Dividend Growth Valuation Assume that the average firm in C&J Corporation's industry is…
A: Constant growth rate = 4%Dividend yield = 7%Dividend (D0) = $2Growth rate in year 1 (G1) = 50%Growth…
Q: you are scheduled to recieve $40,000 in two years. When you recieve it, you will invest it for 9…
A: Amount received in 2 years = $40,000Interest rate = 6%Number of years = 9 years
Q: Two years ago, Donald invested $1,560.00. He has earned and will earn compound interest of 8.76…
A: Compound interest refers to the method of calculation of the interest earned on an investment where…
Q: A 7.5 percent coupon bond with 13 years left to maturity is priced to offer a 6.25 percent yield to…
A: Bonds are debt securities issued by governments, municipalities or companies to raise money.…
Q: A company produces and sells a product. The company has found that the costto produce x units of the…
A: The objective of the question is to find the number of units the company should produce and sell to…
Q: Current Attemat in Prog Kelvy & Sons has a current ratio of 1.2, current assets of $508,315, and…
A: Quick ratio is the ratio of quick assets (current assets less inventory) and current liabilities.
Q: The discounted payback method takes into account the Time Value of Money and is therefore an…
A: The time value of money is a financial concept which states that the money value is not constant…
Q: What is the annual percentage rate ( APR) of the loan?
A: The annual percentage rate is an annual interest rate used to represent the cost of borrowing. It…
Q: The balance sheet provides a snapshot of the financial condition of a company. Investors and…
A: ----------
Q: You just finished the first quarter managing a portfolio for a client. The initial investment was…
A: The alpha of a portfolio refers to the measure of excess return that the portfolio provides over its…
Q: Suppose your expectations regarding the stock price are as follows: HPR (including dividends) State…
A: The objective of the question is to calculate the mean and standard deviation of the Holding Period…
Q: Mary started a new job and wants to verify her net pay has been computed correctly. Her gross pay…
A: Net pay represents a person's gross income minus various deductions. Gross income is the total…
Q: What must the annual earnings be from a new piece of equipment that costs $10 million and has a…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: Determining Bond Prices, Interest Rates, and Financial Statement Effects Deere & Company's 2018 10-K…
A: Interest rates have declinedReason : The price and Interest rates are inversely related to the price…
Q: Cupcake World Factory plans to open a new retail store in St. Louis, Missouri. The store will sell…
A: Lease for month $2000Another option monthly lease=800 +5% of sales revenue.
Q: kpoint 9.3) (Bond vait The current market price for the bond is $1,080. 1,000 par bonds a…
A: Par value = $1,000Coupon rate = 11%Years to maturity = 12 yearsRequired yield = 8%Current price of…
Q: 4) Find the account balance at the end of 10 years, if you deposit 15,000 in an account today if a.…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: Hi, I'm working on this corporate finance question from my textbook. How do I solve it using…
A: The bond promises a risk-free payment of $1000 in one year.The risk-free rate of interest is 2.64%.
Q: 6. Loan Amortization Assume that your aunt sold her house on December 31, and to help close the sale…
A: The objective of the question is to calculate the total amount of interest paid during the first…
Q: a) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years.…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: At the beginning of January 2019, you placed $5,200 in a CD (certificate of deposit) account with an…
A: Interest rate compounded monthly =1%Number of compounding in a year =12Since the interest rate is…
Q: XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $ 3 3 3 3 Year 2018…
A: The objective of the question is to calculate the arithmetic and geometric average time-weighted…
Q: 1) Unlike equity holders, creditors are owners of the firm. Answer:
A: Equity holder is a shareholder or any person having ownership interest in a business.Creditors- A…
Q: You estimate that by the time you ret years, you will have accumula a. If the interest rate is 9.5%…
A: The real rate of return is a financial measure of the profit or loss of an investment that takes…
Q: 6. Suppose Company X has a stock that delivers cash flows every year. The amount of the first cash…
A: Growing perpetuity: It is a series of cash flows that continues indefinitely, and each cash flow…
Q: A consumer loan requires monthly payments, in e amounts, $700.00. The next payment is due in or…
A: Effective rate is the rate after considering the impact of compounding on the interest rate.
Q: The December 31, 2021, balance sheet of Chen, Incorporated, showed long-term debt of $1,460,000,…
A: Particulars20212022Long-term debt$1,460,000$1,700,000Common stock account$152,000$162,000Additional…
Q: QUESTION 5 You own two investments, A and B, that have a combined total value of $17,400.00.…
A: The PV of an investment refers to the combined value of the investment's cash flows assuming that…
Q: On January 1, 2025, Crane Co. issued ten-year bonds with a face value of $5,500,000 and a stated…
A: Lets understand the basics.Bond can be issued at,(1) Par value(2) At premium(3) At discount If bond…
Q: Use graphical approximation techniques to answer the question. When would an ordinary annuity…
A: Future value:The term "future value" refers to the expected value of an investment at a future…
Q: QID 204. 8 years from now you will need $750,000 to renovate a rental property. At an interest rate…
A: Amount required in 8 years = $750,000Interest rate = 9% (Compounding semi-annually)Number of years =…
Q: QUESTION 10 Beatrice owns two investments, A and B, that have a combined total value of $28,100.00.…
A: Future value is the amount that existing assets are worth at a specific future date after they have…
Q: A firm has a long-term debt-equity ratio of 0.5. Shareholders' equity is $1.04 million. Current…
A: We need to use the following ratios to calculate total debt ratioLong-term debt= Shareholders…
Q: Duncan Multinational Corporation is a global manufacturer and distributor of household appliances.…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: A
A: Revenue from book sales: $15,000.$5,000 was the cost of goods sold (cost of books purchased).Total…
Q: JD Sdn Bhd has developed a new industrial detergent that can be used in motor vehicle garages. It…
A: The objective of the question is to evaluate the financial feasibility of a project by calculating…
Q: Last Price Maturity Coupon Rate Analyst Rating Industry Pay Dates Bond #1 $1255.12 10/2029 3.75% AAA…
A: Bond credit rating:A bond credit rating, sometimes known as a bond rating, is an important…
Q: You need to accumulate $10,000. To do so, you plan to make deposits of $1,300 per year with the…
A: The FV of an investment refers to the combined value of the cash flows of the investment after they…
Q: A firm has a long-term debt-equity ratio of 0.3. Shareholders' equity is $0.90 million. Current…
A: Long-term debt-equity ratio0.3Shareholder equity$900,000Current assets$360,000Current ratio1.8
Q: The Dakota Corporation had a 2021 taxable income of $27,500,000 from operations after all operating…
A: Operating income - Interest charges equal taxable income before interest charges.Before interest…
Q: If the intrinsic value of a stock is greater than its market value, which of the following is a…
A: Intrinsic value of a stock means the present value of all the future dividends. It is the current…
Q: It is 2016, you've just graduated college, and you are contemplating your lifetime budget. You think…
A: Inflation:The gradual rise in the average price of goods and services over time in an economy is…
Q: Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the…
A: First Cost (C) = $ -570000Replacement Cost,(R) Year 2 (n1) = $…
Q: You are concerned about whether your savings and investments are adequate to meet your retirement…
A: Here,Saving Amount of Last Year (A) is $1,500Growth Rate for next 15 years (g) is 5%Required Return…
Q: Problem 3-13 Internal Growth Rate (LG3-6) Last year, Lakesha's Lounge Furniture Corporation had an…
A: Internal growth rate refers to that growth rate of sales for a company that will not need any form…
Q: In 1880, five aboriginal trackers were each promised the equivalent of 50 Australian dollars for…
A: The future value of the amount is the amount being deposited and the amount of compound interest…
Q: What is the future value of $400 in 15 years assuming an interest rate of 14 percent compounded…
A: Today deposit=$400Period=n=15 years=30 semi annual periodsInterest rate=14%Semi annual rate=r=7%
Step by step
Solved in 3 steps with 2 images
- Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
- 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:Ac Gems in the Rough, a jewelry company, the engraving department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $56,000 per year, to ease the problem. Using the extra worker, the company will be able to engrave 8,000 more units per year. The selling price per unit is $16. The cost per unit currently is $11.85 as shown: What is the annual financial impact of hiring the extra worker for the bottleneck process?Jonfran Company manufactures three different models of paper shredders including the waste container, which serves as the base. While the shredder heads are different for all three models, the waste container is the same. The number of waste containers that Jonfran will need during the following years is estimated as follows: The equipment used to manufacture the waste container must be replaced because it is broken and cannot be repaired. The new equipment would have a purchase price of 945,000 with terms of 2/10, n/30; the companys policy is to take all purchase discounts. The freight on the equipment would be 11,000, and installation costs would total 22,900. The equipment would be purchased in December 20x4 and placed into service on January 1, 20x5. It would have a five-year economic life and would be treated as three-year property under MACRS. This equipment is expected to have a salvage value of 12,000 at the end of its economic life in 20x9. The new equipment would be more efficient than the old equipment, resulting in a 25 percent reduction in both direct materials and variable overhead. The savings in direct materials would result in an additional one-time decrease in working capital requirements of 2,500, resulting from a reduction in direct material inventories. This working capital reduction would be recognized at the time of equipment acquisition. The old equipment is fully depreciated and is not included in the fixed overhead. The old equipment from the plant can be sold for a salvage amount of 1,500. Rather than replace the equipment, one of Jonfrans production managers has suggested that the waste containers be purchased. One supplier has quoted a price of 27 per container. This price is 8 less than Jonfrans current manufacturing cost, which is as follows: Jonfran uses a plantwide fixed overhead rate in its operations. If the waste containers are purchased outside, the salary and benefits of one supervisor, included in fixed overhead at 45,000, would be eliminated. There would be no other changes in the other cash and noncash items included in fixed overhead except depreciation on the new equipment. Jonfran is subject to a 40 percent tax rate. Management assumes that all cash flows occur at the end of the year and uses a 12 percent after-tax discount rate. Required: 1. Prepare a schedule of cash flows for the make alternative. Calculate the NPV of the make alternative. 2. Prepare a schedule of cash flows for the buy alternative. Calculate the NPV of the buy alternative. 3. Which should Jonfran domake or buy the containers? What qualitative factors should be considered? (CMA adapted)
- Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of cost of services sold in good form. 2. How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm?Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $55,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25 and the cost per unit is $7.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of services produced in good form. 2. What if HHH planned to purchase 30,000 of direct materials? Assume there would be no change in beginning and ending inventories of materials. Explain which line items on the statement of services produced would be affected and how (increase or decrease).
- Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. HHH expects to sell 15,000 cleanings at a price of 45 each next year. Total selling expense is projected at 22,000, and total administrative expense is projected at 53,000. Required: 1. Prepare an income statement in good form. 2. What if Jean and Tom increased the price to 50 per cleaning and no other information was affected? Explain which line items in the income statement would be affected and how.At Stardust Gems, a faux gem and jewelry company, the setting department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $67,000 per year, to ease the problem. Using the extra worker, the company will be able to produce and sell 9,000 more units per year. The selling price per unit is $20. The cost per unit currently is $15.85 as shown: What is the annual financial impact of hiring the extra worker for the bottleneck process?Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?