Answer:
Can be fined upto an amount of $1,000
Explanation:
The first code violation with respect to replacement by the insurance agent can result in fine upto an amount of $1000.
What is the role of the three questions of economics? A. To assess product profitability B. To aid in production decisions C. To offset a poor economy D. To determine quality and cost
Answer:
B. To aid in production decisions
Explanation:
Remember, the three questions of economics are–
what to produce?
how to produce?
for whom to produce?
These questions are asked ultimately to aid in making production decision. A producer needs to determine the specific product demanded by the market in which he or she operates, while also considering how to produce his selected product in order to achieve cost and quality efficiency. Finally, the producer should know who his product are made for so as customize them accordingly.
Answer:
B
Explanation:
Privott, Inc., manufactures and sells two products: Product Z9 and Product N0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated Expected Activity
Activity Cost Pools Activity Measures Overhead Cost Product Z9 Product N0 Total
Labor-related DLHs $ 335,018 7,500 4,100 11,600
Product testing tests 51,247 950 1,050 2,000
Order size MHs 476,608 5,100 5,400 10,500
$ 862,873
The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:_______
a. $28.88 per DLH
b. $48.81 per DLH
c. $53.94 per DLH
d. $431.44 per DLH
Answer:
Predetermined manufacturing overhead rate= $28.88 per direct labor hour
Explanation:
Giving the following information:
Labor-related DLHs $335,018 11,600
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 335,018/11,600
Predetermined manufacturing overhead rate= $28.88 per direct labor hour
The activity rate for the Labor-Related activity cost pool is option A. a. $28.88 per DLH
Calculation of the active rate:We know that
Activity Rate for Labor - Related Activity Cost Pool = Estimated Cost / Expected Activity
= $ 335,018 / 11,600 DLHs
= $ 28.88 per DLH
Hence the option a is correct.
And, the rest of the options are wrong.
learn more about rate here: https://brainly.com/question/24347131
Power and influence (Connect, Perform)
Complete the following sentences with the correct term.
1. When a manager uses relationships and formal authority to cause other people in the organization to change their behavior, the manager _______.
2. The homeroom teacher has ______ because she can choose to give the best-behaving students passes to the school library, which students find a more pleasant place to study than the classroom.
3. Management at Work As the training and development manager at the Anderson Windows and Doors Company, part of your job involves helping managers learn to become better leaders. You are thinking about starting a class titled "Power and Influence for Managers," and you’ve been gathering some examples to use during the training session. Select which type of power the manager is using in the following example.
Example--- Type of Power Used Jeffrey has 20 years of management experience, and he can answer any question. Because Jeffrey is one of the most knowledgeable managers in the company, people naturally follow his advice when making complicated decisions. In reviewing research on power, you discover that there are three other common sources of power in organizations.
Which of the following are included in that list? Check all that apply.
A. Network of relationships
B. Personal effort
C. Locus of control
D. Information
4. Select the type of influence principle that best describes each of the following examples.
Example- Type of Influence Principle. A real estate agent gets new clients by being known as a "good guy" whose clients trust and respect him. A parent smiles at a child whenever the child is being quiet. In turn, the child is quiet more often. When discussing influence tactics with your managers, you should tell them that:
A. The best managers use a variety of influence tactics
B. The best managers avoid the use of influence tactics
C. The best managers use hard tactics, such as asking for what they want and using rational persuasion
D. The best managers use soft tactics, such as making people like them and developing allies
Answer:
1. Is exercising influence.
2. Reward power.
3a. Referent power.
3b. A, B and D.
4a. Make people like you.
4b. Reward the behaviors you want.
5. A. The best managers use a variety of influence tactics.
Explanation:
1. When a manager uses relationships and formal authority to cause other people in the organization to change their behavior, the manager is exercising influence.
2. The homeroom teacher has reward power because she can choose to give the best-behaving students passes to the school library, which students find a more pleasant place to study than the classroom.
3a. Jeffrey has 20 years of management experience, and he can answer any question. Because Jeffrey is one of the most knowledgeable managers in the company, people naturally follow his advice when making complicated decisions. The type of power used by Jeffrey is referent power.
3b. The three (3) common sources of power are;
I. Network of relationships.
II. Personal effort.
III. Information.
4a. A real estate agent gets new clients by being known as a "good guy" whose clients trust and respect him. The type of influence principle here is, make people like you because he is termed a "good guy" meaning he his trustworthy, respectful and nice. Hence, people would like his personality and by extension be his clients.
4b. A parent smiles at a child whenever the child is being quiet. In turn, the child is quiet more often. The type of influence principle used here is, reward the behaviors you want because the parent is happy that the child isn't crying or disturbing. Therefore, to reinforce the child's quietness; the parent smiles at the child.
5. When discussing influence tactics with your managers, you should tell them that: the best managers use a variety of influence tactics. In order to be able to lead your subordinates effectively, efficiently and successfully as a manager, you will have to know how and when to use a variety of influence tactics such as rational persuasion, consultation, ingratiation, legitimating, pressure, personal appeals, coalitions, exchange and inspirational appeals depending on the context or situation.
Hence, the more tactics you have as a manager, the higher your chances of achieving your influence goals.
Use the following information to calculate cash paid for income taxes: Income tax expense $ 58,000 Income tax payable, January 1 13,600 Income tax payable, December 31 16,200
Answer:
Calculation of Cash Paid:Income tax payable, January 1 $ 13,600
Income tax expense 58,000
Total amount due 71,600
Income tax payable, December 31 16,200
Cash Paid $ 55,400
Explanation:
The Income tax payable on January 1 is added to the income tax expense for the year to obtain the amount that is due for payment this year, and then the December 31 Income tax payable is deducted to get the cash paid during the year. This arrangement can be reversed in its proper and normal order thus:
Income tax payable, January 1 $ 13,600
Income tax expense 58,000
Total amount due 71,600
Cash Paid 55,400
Income tax payable, December 31 16,200
Bee Inc. is working on its cash budget for March. The budgeted beginning cash balance is $55,000. Budgeted cash receipts total $139,000 and budgeted cash disbursements total $134,000. The desired ending cash balance is $80,000. To attain its desired ending cash balance for March, the company needs to borrow:
Answer:
$20,000
Explanation:
The computation of the borrowed amount is shown below:
As we know that
Ending cash balance = beginning cash balance + cash receipts - cash disbursements + cash borrowings
$80,000 = $55,000 + $139,000 - $134,000 +cash borrowings
$80,000 = $194,000 - $134,000 + cash borrowings
So, the borrowing is $20,000
A discount on bonds payable: Multiple Choice Occurs when a company issues bonds with a contract rate less than the market rate. Occurs when a company issues bonds with a contract rate more than the market rate. Increases the Bond Payable account. Decreases the total bond interest expense. Is not allowed in many states to protect creditors.
Answer:
Occurs when a company issues bonds with a contract rate less than the market rate.
Explanation:
As we know that
The premium on bond payable arise when the company issued the amount more than the face value amount this result in high interest rate as compared with the market interest rate
While on the other hand, the discount on note payable arise when the issued amount is less than the face value that results in low interest rate as compared with the market interest rate
Hence, the first option is correct
Incremental costs are the additional costs incurred if a company pursues a certain course of action. true or false
Answer:
The correct answer is the first option: True.
Explanation:
To begin with, the term of "Incremental Costs" is understood as the costs that are added to the total manufactured costs during the production when the company decides to produce one more unit and that action will cause that the whole costs increase a bit more and the complete sum of all the new costs that were aggregate due to that decision make are called incremental costs because as they name indicates, they increment the costs of production of the goods.
Use the following information for Jett Co. to answer the following question: 2015 2014 Sales 1,200 1,000 COGS 850 700 Operating Expenses 200 200 Income Taxes 30 35 Jett Co.'s average tax rates for 2015 and 2014 are: A. 15.5% and 10.0% B. 20.0% and 35.0% C. 25.8% and 35.4%. D. 31.4% and 36.8%.
Answer:
B. 20.0% and 35.0%
Explanation:
Jett Co.'s Average tax rates for 2015 = Income taxes paid / Taxable income
When, Taxable Income = Sales - Cost of goods sold - Operating expenses
= $1,200 - $850 - $200
= $150
Hence, Jett Co.'s Average tax rates for 2015 = $30 / $150
= 20%
Jett Co.'s Average tax rates for 2014 = Income taxes paid / Taxable income
When Taxable Income = Sales - Cost of goods sold - Operating expenses
= $1,000 - $700 - $200
= $100
Hence, Jett Co.'s Average tax rates for 2014 = $35 / $100
= 35%
g Aggregate demand A. increases if the expected inflation rate increases. B. increases if aggregate supply increases. C. increases if the exchange rate rises. D. decreases if expected future income rises. E. increases if government expenditures decrease.
Answer:
A. increases if the expected inflation rate increases.
Explanation:
if it is expected that inflation would increase, consumers would want to buy goods at a cheaper rate, thus, they would increase demand now and a result aggregate demand would rise.
for example, if the price of bread is $10 dollars now and it is expected that price would increase to $12 next month. the demand for bread would increase now
Arbitration may be used when: A. The parties submit to it. B. The contract calls for it instead of litigation. C. When a statute requires it. D. All of the above.
Answer:
D. All of the above.
Explanation:
Arbitration refers to a process where a legal dispute is solved by using an impartial third party called the arbitrator (or arbitrators) that acts like a judge that will decide which party is correct. Since the arbitration process is generally voluntary, all the parties involve must agree to follow and respect the arbitrator's decision.
In order for an arbitration process to take place, the contract between the parties must include the arbitration clause and all the parties involved must have agreed to it by signing the contract. Rarely, arbitration can be mandatory because certain legal statues require it.
What represents a difference in the process by which a monopolistic competitor and a monopolist make their respective decisions about quantity and price?
Answer:
There is no need for the monopolists to have the fear for entry
Explanation:
So, this particular problem or question is what is the part of economics known as the microeconomics. So, let us take the definitions of some important terms in the question which is going to assist us in solving this particular problem or question.
=> MONOPOLISTIC COMPETITOR: the term monopolistic competitor will also mean to say imperfect competitor. That is to say the kind of competition in which sellers or competitors compete in order for them to get some kind of advantage over the prices of goods and services in the market. The demand curve thus now has a download slope.
=> MONOPOLIST: Monopolists have advantage over the price of products or services in the market.
Foyle Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2008: Book income before income taxes $1,200,000 Add temporary difference Construction contract revenue which will reverse in 2009 160,000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years (640,000) Taxable income $720,000 Foyle's effective income tax rate is 34% for 2008. What amount should Foyle report in its 2008 income statement as the current provision for income taxes
Answer:
$244,800
Explanation:
Calculation for the amount that Foyle should report in its 2008 income statement as the current provision for income taxes
Using this formula
Amount to reported =Taxable income*Effective income tax rate
Let plug in the formula
Amount to be reported=($720,000 × 34%)
Amount to be reported = $244,800
Therefore the amount that Foyle should report in its 2008 income statement as the current provision for income taxes should be $244,800
The centralized purchasing department for Ridgewood, Inc. has monthly expenses of $42,000. The department has prepared 3,500 purchase requisitions this month. Division L initiated 700 purchases and Division G initiated 500 purchases. How much Division G should be charged for purchases
Answer:
Division G should be charged $6,000
Explanation:
cost per purchase requisition = $42,000 / 3,500 = $12 per purchase requisition
Division G initiated 500 purchases, so it should be charged 500 x $12 = $6,000
Division L initiated 700 purchases, so it should be charged 700 x $12 = $8,400
The other departments should be charged the remaining amount = $42,000 - ($6,000 + $8,400) = $27,600
The overhead costs for a company are presently $X per month. The management team of the company in cooperation with the employees is ready to implement a comprehensive improvement program to reduce these costs. If you (a) consider an observation of actual overhead costs for one month analogous to an output unit, (b) estimate the overhead costs for the first month of program implementation to be 1.15X due to extra front-end effort, and (c) consider a 90% improvement curve applicable to the situation, what is your estimate of the percentage reduction in present overhead costs per month after 30 months of program implementation
Answer:
31.42%
Explanation:
The computation of the estimate of the percentage reduction in present overhead costs per month is shown below:-
n = log s ÷ log2
= log 0.90 ÷ log 2
= -0.152
Now we will use the learning curve equation which is here below:
Z30 = 1.15X × 30^(-0.152)
= 0.685765148
So, the cost is reduced by
= 1 - 0.685765148
= 0.314234852
or
= 31.42%
Based on the HEADLINE article titled "Inflation and the Weimar Republic," which of the following is the best illustration of the wealth effect of inflation?
a. Workers were often paid daily and sometimes two or three times a day.
b. Debtors sought out creditors to pay them in valueless currency.
c. Profits fell as employees demanded frequent wage adjustments.
d. Businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way. The cash they'd allocated for the entire trip barely sufficed to pay the way to the next stop."
Answer: Businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way. The cash they'd allocated for the entire trip barely sufficed to pay the way to the next stop."
Explanation:
Inflation is when there is a general increase in the prices of goods and services on the economy.
The best illustration of the wealth effect of inflation based on the article titled "Inflation and the Weimar Republic," is that businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way. The cash they'd allocated for the entire trip barely sufficed to pay the way to the next stop."
This is because when there is inflation, theee will be rise in price and hence, the money the businessmen wanted to use won't be enough to get meet their needs hence they'll need more funds.
With an increase in product advertising of $50 million you expect to increase sales by 10,000 units. If unit grow margin is $4,800, will the additional advertising increase product contribution?
Answer:
Income will decrease by $2,000,000.
Explanation:
Giving the following information:
Advertising increase= $50,000,000
Units increase= 10,000 units
Unit contribution margin= $4,800
To calculate the total effect on income, we need to use the following formula:
Effect on income= total contribution margin - increase in fixed costs
Effect on income= 10,000*4,800 - 50,000,000
Effect on income= $2,000,000 decrease
Income will decrease by $2,000,000.
One of the similarities between product focus and mass-customization is: the use of modules. the variety of outputs. the volume of outputs. many departments and many routings. All of these are similarities.
Answer: the variety of outputs
Explanation:
Process focus is a startegy on low volume, high variety. Mass customization is the ability of a company to mass produce products efficiently in order to meet the wants and needs of the customers.
One of the similarities between product focus and mass-customization is the variety of product.
Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.
Required:
What is the total amount to be budgeted for manufacturing overhead for the month?
Answer:
Budgeted overhead= $2,877.6
Explanation:
Giving the following information:
Direct labor required:
Production= 870 units
Direct labor hours= 870*0.25= 218 hours
Direct labor cost= $12 an hour
Manufacturing overhead is applied at a rate of 110% of direct labor costs.
To calculate the allocated overhead for the period, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Direct labor cost= 218*12= $2,616
Allocated MOH= 1.1*2,616= $2,877.6
Shenshen Zhongxing Telecom (ZTE) is a Chinese company that is the only telecommunications company in China that produces and markets an inexpensive camera phone to sell to middle-class Chinese living in urban areas. Because ZTE targets a single segment within a limited geographical area, it can be said to have a(n):
Answer:
Niche competitive advantage
Explanation:
In this scenario, Shenshen Zhongxing Telecom (ZTE) is a Chinese company which is the only telecommunications company in China that produces and markets an inexpensive camera phone to sell to middle-class Chinese living in urban areas. Because ZTE targets a single segment within a limited geographical area, it can be said to have a niche competitive advantage.
Generally, companies using a niche competitive advantage are only seeking or interested in targeting and reaching a single but unique segment within a limited geographical area or market. ZTE specialize in producing a unique inexpensive camera phone which would avail them a competitive advantage over other companies in the industry.
Hence, the niche competitive advantage allow companies to specialize in a unique product, innovations, narrow competition from rival businesses, reaching target audience effectively and ability to take price decisions.
Compare and contrast the views of management and accountants regarding the changes required by the Sarbanes-Oxley Act on internal controls and how these changes have affected corporations, accounting firms, and investors?
Answer and Explanation:
The SoX sarbanes oxley act of 2002 was enacted to address company fraud that was exemplary of Eron and worldcom and bring back the confidence held in the financial market
It was meant to increase the effectiveness of internal control in companies in keeping accounting records or financial reports reliable and fraud-proof. The SOX act increased the independence of company auditors making their reports more reliable as they didn't have to compromise because they were dependent on top managers. In addition top managers were held responsible for any fraud in accounting statements and so were to certify the reliability of reports released to the public
Jervis sells $3,900 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 3% factoring fee. What entry should Jervis make to record the transaction
Answer:
Dr cash $3783
Dr factoring fee expense $177
Cr accounts receivable $3900
Explanation:
The cash proceeds from the factoring arrangement would be 97% of the value of the receivables since 3% is the factoring fees expenses to be incurred.
Cash proceeds=$3900*97%=$ 3,783.00
Factoring fees expense=$3,900.00-$3,783.00=$117
Cash account and factoring fees expense would be debited with $3783 and $117 respectively, while accounts receivable is credited with $3900
The exercise price on one of Chrisardan Companies call options is $20, its exercise value is $27, and its time value is $8. What are the options market value and the price of the stock
im gunna say say invest 15 dollars. i am not sure if thats what it wanted?
Suppose the economy was experiencing a negative real shock and high unemployment and high inflation at the same time. Furthermore suppose the Federal Reserve decided to address the problem by decreasing the money supply money. Assuming the policy is effective what can we expect to occur as a result (in the short run)
Answer: b. We should expect less inflation but more unemployment
Explanation:
A high supply of money leads to higher inflation. This is because the citizens will have more money to spend on goods and services and so will demand more of them. As a result, the increased demand pulls prices upward. Reducing the money supply therefore will have the effect of reducing the amount of money that people have on hand. This will reduce their demand for goods and services which will then see their prices decrease as a result.
High money supply in the market however means that loans are easier to get because there is more money to give. This means that companies can embark on more projects. With a lower money supply, companies as well as individuals will reduce their borrowing. This will mean less capital projects which create employment. Lowering the money supply will therefore lead to higher unemployment.
Pendleton Company, a merchandising company, is developing its master budget for 2015. The income statement for 2014 is as follows:
Gross sales $2,000,000
Less: Estimated uncollectible accounts (40,000)
Net sales 1,960,000
Cost of goods sold (1,100,000)
Gross profit 860,000
Operating expenses (including $25,000 depreciation) (500,000)
Net income $360,000
The following are management’s goals and forecasts for 2015:
a. Selling prices will increase by 6 percent, and sales volume will increase by 4 percent.
b. The cost of merchandise will increase by 3 percent.
c. All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be 10 percent. The company uses straight-line depreciation.
d. The estimated uncollectibles are 2 percent of budgeted sales.
Required
Prepare a budgeted functional income statement for 2015.
Answer:
Budgeted functional income statement for 2015
Gross sales ($2,000,000 × 1.04 × 1.06) $2,204,800
Less: Estimated uncollectible accounts ($2,204,800 × 2 %) ($44,096)
Net sales $2,160,704
Cost of goods sold (1,100,000 × 1.03) ($1,133,000)
Gross profit $1,027,704
Operating expenses (475,000 × 1.10) ($522,500)
Depreciation ($25,000)
Net income $480,204
Explanation:
Make the adjustments stated on the 2014 Income Statement.
For Operating Expenses, it is wise to first remove the depreciation expense and apply the increment of 10% to reflect Operating Costs for 2015.
Treat Depreciation Expense separately and at the same amount as for 2014, since depreciation is calculated on straight line method.
Preston Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return
Answer:
Expected return = 9%
Explanation:
A portfolio is a collection of assets/ investment. The expected return on the stock would be the weighted average of all the return of the possible return weighted according to their probability.
Expected return on portfolio:
E(R) =( Wa*Ra) + (Wb*Rb) + (Wc*Rc)
R- possible return,W- probability
E(R) = (30%× 0.25) + (12%× 0.5) + (-18%× 0.25) = 9 %
Expected return = 9%
Note that the negative sign in the last possible return implies a loss.
A product sells for $240 per unit, and its variable costs are 70% of sales. The fixed costs are $318,000. What is the break-even point in sales dollars?
Answer:
The Break-Even Point in Sales Dollars will be $1,060,000
Explanation:
Contribution Margin Ratio = 100% - Variable Cost Ratio
= 100% - 70%
= 30%
Therefore, the Break-Even Point in Sales Dollars = Total Fixed Costs / Contribution Margin Ratio
= $318,000 / 0.30
= $1,060,000
The Break-Even Point in Sales Dollars will be $1,060,000
Mercury Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $150,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment. At December 31 Year 2 Year 1 Equipment $ 600,000 $ 750,000 Accumulated Depreciation-Equipment 428,000 500,000
Answer:
Mercury Company
Sale of Equipment account:
Equipment $150,000
Acc. Depreciation 112,000
Book value $38,000
Cash received $38,000
Explanation:
a) Data and Calculations:
Equipment Account:
Beginning balance $750,000
Ending balance 600,000
Sale of equipment $150,000
Accumulated Depreciation - Equipment account:
Beginning balance $500,000
Depreciation expense 40,000
Ending balance 428,000
Sale of Equipment $112,000
b) The Cash received from the sale of Mercury Company's equipment is equal to the book value in Year 2 according to the question. Since the book value (value after accumulated depreciation) is $38,000, that means that the equipment was sold at $38,000 recording no profit or loss for the company on the sale.
The Botosan Factory has determined that its budgeted factory overhead budget for the year is $601,880 and budgeted direct labor hours are 367,000. If the actual direct labor hours for the period are 334,000, how much overhead would be allocated to the period
Answer:
Allocated MOH= $541,200
Explanation:
Giving the following information:
Estimated overhead= $601,880
Budgeted direct labor hours= 367,000
The actual direct labor hours for the period are 334,000
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 601,880/367,000
Predetermined manufacturing overhead rate= $1.64 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.64*334,000
Allocated MOH= $541,200
Analyze Cityscape Hotels Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the weekend. However, the leisure customers on weekends occupy fewer rooms than do business customers on weekdays. Thus, Cityscape plans to provide special weekend pricing to attract additional leisure customers. A hotel room is priced at $180 per room night. The cost of a hotel room night includes the following: Cost Per Room Night (at normal occupancy) Housekeeping service $23 Utilities 7 Amenities 3 Hotel depreciation 55 Hotel staff (excluding housekeeping) 42 Total $130 The special weekend price is proposed for $120 per room night. At this price, it is anticipated that average occupancy for the weekend (Friday, Saturday, and Sunday) will increase from 30% to 50% of available rooms. a. What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff (excluding housekeeping) are assumed fixed for all occupancy levels
Answer:
$147
Explanation:
For the computation of contribution margin for a room night first we need to find out the variable cost per night which is shown below:-
Variable cost per room night = Housekeeping service + Utilities + Amenities
= $23 + $7 + $3
= $33 per room night
Contribution per room night under normal pricing = Normal price per room night - Variable cost per room night
= $180 - $33
= $147 per room night
Therefore for computing the contribution margin for a room night we simply applied the above formula.
Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment? Should you make the investment?
Answer:
Hello some parts of your question is missing attached below are the missing parts
You are considering the purchase of a small income-producing property for $150000 that is expected to produce the following net cash flows
End of year cash flow
1 $50000
2 $50000
3 $50000
4 $50000
Answer : a) $5122.28 (b) 12.59% (c) You should make the investment
Explanation:
Internal rate of return = 11 %
initial cash flows = $150000
period = 4 years
Find the NPV (net present value )( using present value tables)
= preset value of cash flows - initial cash flows
= ∑ present cash flows for 4 years - $150000
= $155122.28 - $150000 = $5122.28
The going-in internal rate of return on investment
N (number of years ) = 4
pv ( present value ) = $150000
PMT = -$50000
Fv ( future value ) = 0
IRR = 12.59% ( making use of the cash flow list in our financial calculator )