_____________ tends to discourage firms from making physical capital investments.

For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price

Shtirlitz [24]

Answer:

a) 4.800 units: Operational loss area (L)

12,000: Break even point (BEP)

$1,500,000: BEP

20,000 units: Operational profit area (P). Also, the maximum amount of units.

$2,500,000: Operational profit area (P). Also, the maximum amount of sales.

b) BEP: 12,000 units or $1,500,000 in sales.

Explanation:

The graph is divided in two sections:

1 - The operational loss area (L)

2 - The operational profit area (P)

The interface between both regions is the breakeven point.

a) 4.800 units: Operational loss area (L)

12,000: Break even point (BEP)

$1,500,000: BEP

20,000 units: Operational profit area (P). Also, the maximum amount of units.

$2,500,000: Operational profit area (P). Also, the maximum amount of sales.

b) The breakeven point is where sales equal total cost (or the level at which profits are zero). This breakeven point (BEP) is at 12,000 units:

$BEP=\frac{FC}{price-VC} =\frac{600,000}{125-75}=\frac{600,000}{50}=12,000$

This corresponds to $1,500,000 in sales.

$S_{BEP}=125*12,000=1,500,000$

7 0

2 years ago

Suppose that the standard deviation of quarterly changes in the prices of a commodity is $0.65, the standard deviation of quarte

Natasha_Volkova [10]

Answer:

The optimal hedge is 0.642 and it means that the size of the future positions should be 64.2% of the exposure of the company in a 3 month-hedge.

Explanation:

optimal hedge ratio

= coeﬃcient of correlation*(standard deviation of quarterly changes in the prices of a commodity/standard deviation of quarterly changes in a futures price on the commodity)

= 0..8*(0.65/0.81)

= 0.642

Therefore, The optimal hedge is 0.642 and it means that the size of the future positions should be 64.2% of the exposure of the company in a 3 month-hedge.

6 0

2 years ago

How would you write a business memorandum to this topic?

Artyom0805 [142]

Answer:

To ,

The Concern specialists/Editor/Citizens

Subject: To Generate Cash for social assistance right now tempest and debacle .

Dear partners ,

We are confronting an incredible test to loss of our home and harms to our infrastructural improvement . As, I am another business visionary . I wish to contribute cash to greatest individuals with the goal that they can fix their home. This can not be conceivable without your important commitment and backing. I demand each resident , understudies, clients of treats, specialists and so forth to contribute wilfully at all you wish to do right now cause and at the hour of crisis.

Looking for your gifts and an important commitment.

Yours Sincerely,

SALLY

Proprietor AND SOLE PROPRIETOR

CALIFORNIA COOKIES

USA

3 0

2 years ago

Omicron Technologies has $60 million in excess cash and no debt. The firm expects to generate additional free cash flows of $48

blondinia [14]

Answer:

The correct answer is $ 4.5714 which is not in the answer choice but is close to $432.00 million

Explanation:

Solution

Given that:

let us Assume that Omicron uses the entire $60 million to repurchase shares. The amount of the regular yearly dividends in the future is closest to is:

The Enterprise value =$48/0.10 = $480 million

Then,

The Market value = Enterprise value + cash = $480 + $60 = $540 million

Thus,

The Share price = market value / shares outstanding = $480 million / 12 million = $40

The Number of shares repurchased = $60 million / $40 = 1,500,000 shares

The Shares outstanding = 12,000,000 - 1,500,000 = 10,500,000

Dividend = $48 million free cash flow / 10,500,000 = $4.571

8 0

2 years ago

Johnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently.

kipiarov [429]

Answer and Explanation:

As per the data given in the question,

1)

Cash flow Amount PV Factor at 10% for 8 annual installments Present Value

Installments $4,000 5.3349 $21,339.60

Down Payment $27,000 1 $27,000

Value of equipment $48,339.60

Refer to the PVIFA factor

2)

Table or calculator function FVAD of $ 1

Future value $570,000

n = 5

i = 7.00%

Divided it by FV factor 6.1533

Annual Deposit $92,633.22

Refer to the FVAD table

3)

Table or calculator function PVAD of $ 1

Payment $137,000

n = 20

i = 10.00%

Multiplied by PV factor 9.36492

Liability $1,282,994.04

Refer to the PVAD table

5 0

2 years ago