Answer:
c. Payback is the amount of time to recover the initial investment. No discounting occurs and all cash flows after the payback period are not accounted for. The rule is intuitive and used by small business owners
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested. The NPV does account for all cash flows as well as time value of money.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
. The IRR does account for all cash flows.
The discounted payback period discounts cash flows
Answer:
Inventory turnover in days = 43.59 days
Inventory turnover (No of times)= 8.37 times
Explanation:
<em>Inventory turnover days is the average length of time it takes a business to sell its inventory before replacement.</em>
Inventory turnover in days
= Average inventory /Cost of goods sold × 365 days
<em>Average inventory = (Opening Inventory + closing inventory)/2</em>
<em>Average inventory </em>
= (21,000 + 22,000)/2
= 21,500
<em>Inventory turnover in days</em>
(21,500/180,600) × 365 days
=43.597 days
Inventory turnover (No of times )
= Cost of goods sold/Average inventory
= 180,600/21,500
= 8.37 times
Answer:
$245,000.00
Explanation:
The amount of sales revenue to be made to achieve target profit is computed as follows:
<em>Sales revenue to achieve target income</em>
<em>= Total fixed cost for the period + target profit/ contribution margin</em>
Contribution margin = (Sales - variable cost) / sales × 100
The figure has been given as 40% in the question
Sales revenue to achieve target profit = (83,000 + 15,000)/0.4
$245,000.00
Watson Company has monthly fixed costs of $83,000 and a 40% contribution margin ratio. If the company has set a target monthly income of $15,000, what dollar amount of sales must be made to produce the target income?
Sales revenue to achieve target profit = $245,000.00
Don's monthly social security benefit is $772.73.
Let Don's monthly social security benefit be 'x'.
Don and Maria's monthly drawing from Savings =$500.
Maria's social security = 120% of Don's social security.
Total income = $2200.
So,
Answer:
creates a shortage
Explanation:
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Because price is set below equilibrium price, demand would outstrip supply and this would lead to a shortage
Effects of a price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus