1/1gageNOWv2 | Online teachir xEcom/ilm/takeASsignment/takeAssignmentMankao?invoker=&takeAssignmentSessiontocator=&inprogress%3DfalseGarrison 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 thenew 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$15 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 poloshirts 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?OA. Relevant costs: benefits: $2 x 40 hours; uniforms: S10 x 2 shirts. Relevant revenues: None. Sunk costs: $4,000 for software. Opportunity costs: $4,000.OB. Relevant costs: benefits: $10 x 40 hours; uniforms: $2 x 2 shirts. Relevant revenues: Cannot be determined. Sunk costs: None. Opportunity costs: None.CC. Relevant costs: benefits: $2 x 40 hours; uniforms: $10 x 2 shirts. Relevant revenues: None. Sunk costs: $4,000 for software. Opportunity costs: None.OD. Relevant costs: benefits: $10 x 40 hours; uniforms: $2 x 2 shirts. Relevant revenues: Cannot be determined. Sunk costs: None. Opportunity costs: $4,000.Next

Relevant cost are those cost that would impact decision making and would be affected by it Sunk…

rts. Relevant revenues: None. Sunk costs: S4,000 for software. Opportunity costs: $4,000. rts. Relevant revenues: Cannot be determined. Sunk costs: None. Opportunity costs: None. rts. Relevant revenues: None. Sunk costs: $4,000 for software. Opportunity costs: None. rts. Relevant revenues: Cannot be determined. Sunk costs: None. Opportunity costs: $4,000.

rts. Relevant revenues: None. Sunk costs: S4,000 for software. Opportunity costs: $4,000. rts. Relevant revenues: Cannot be determined. Sunk costs: None. Opportunity costs: None. rts. Relevant revenues: None. Sunk costs: $4,000 for software. Opportunity costs: None. rts. Relevant revenues: Cannot be determined. Sunk costs: None. Opportunity costs: $4,000.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter16: Financial Planning And Forecasting

Section: Chapter Questions

Problem 2TCL: FORECASTING THE FUTURE PERFORMANCE OF ABERCROMBIE FITCH Use online resources to work on this...

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FORECASTING THE FUTURE PERFORMANCE OF ABERCROMBIE FITCH Use online resources to work on this chapters questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. Clothing retailer Abercrombie Fitch enjoyed phenomenal success in the late 1990s. Between 1996 and 2000, its sales grew almost fourfoldfrom 335 million to more than 1.2 billionand its stock price soared by more than 500%. However, in 2002, its growth rate had begun to slow down, and Abercrombie had a hard time meeting its quarterly earnings targets. As a result, the stock price in late 2002 was about half of what it was 3 years earlier. Abercrombies struggles resulted from increased competition, a sluggish economy, and the challenges of staying ahead of the fashion curve. From late 2002 until November 2007, the companys stock rebounded strongly; however, its stock price declined during the 2008 economic downturn. Its stock price rebounded until late October 2011, when it began a downward trend again. Questions remain about the firms long-term growth prospects. However the company has been cutting costs and trying to improve productivity with its focus on the supply chain. In addition, it has been actively repurchasing shares, indicating that management believes its shares are undervalued. The company continues to steadily expand stores abroad while closing under-performing domestic stores. Given the questions about Abercrombies future growth rate, analysts have focused on the companys earnings reports. Financial websites such as Yahoo! Finance, Morningstar, and MSN Money (www.msn.com/en-us/money/markets) provide information on the companys recent earnings history along with a summary of analysts earnings forecasts. DISCUSSION QUESTIONS Based on analysts forecasts, what is the expected long-term (5-year) growth rate in earnings?
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EA1. 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 $15 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 opportunity costs for Garrison?
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