Answer:
B. total revenue will decrease.
Explanation:
The initial revenue for breakfast cereal is given by the product between the price of cereal (P) and the demanded quantity (D):
After a 25% decrease in price and a 20% increase in demand, the new revenue will be:
The new revenue is 90% of the original revenue; therefore, total revenue will decrease.
Answer:
$171,619.20
Explanation:
The computation of the budgeted accounts payable balance at the end of November is shown below:
= Budgeted cost of raw materials purchases in November × following month percentage
= $286,032 × 60%
= $171,619.20
As 40% is paid in the month of purchase whereas 60% is paid to the following month. So, we recognized 60%, not 40%
In a situation where production capacity is maxed out (200%
plant utilization) and the company is stocking out of the product, it is not advisable
in the short run to increase the promotional budget for the product in a bid to
increase awareness.
Answer:
Future value= $151,018.51
Explanation:
Future value of money measures how much a present amount of money will be in the future at a given interest rate.
The interest gained on money shows the time value of money. One dollar today is less than one dollar in one year's time
The formula for future value is
Future value = Present value * (1 + rate)^time
As we have two periods in this case (10 years and 20 years)
Future value = Present value * {(1 + rate1)^time1} * {(1 + rate2)^time2}
Future value = 12,500 * {(1 + 0.07)^10} * {(1 + 0.095)^20}
Future value= $151,018.51
