A proposed project has fixed costs of $34,709 per year. The operating cash flow at 12,000 units is $56,900. Ignore taxes. What will be the new degree of operating leverage if the number of units sold rises to 12,300

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Answer 1

The new degree of operating leverage, if the number of units sold rises to 12,300, is approximately 2.21.

To calculate the new degree of operating leverage (DOL) when the number of units sold rises to 12,300, we need to find the new operating cash flow and then use the DOL formula. Here are the steps:
Calculate the variable cost per unit:
Operating cash flow at 12,000 units = Fixed costs + (Variable cost per unit * 12,000 units)
$56,900 = $34,709 + (Variable cost per unit * 12,000)
Variable cost per unit = ($56,900 - $34,709) / 12,000 ≈ $1.85

Calculate the net operating cash flow at 12,300 units:
New operating cash flow = Fixed costs + (Variable cost per unit * 12,300 units)
New operating cash flow = $34,709 + ($1.85 * 12,300) ≈ $57,654.50

Calculate the new degree of operating leverage (DOL):
DOL = (Sales - Variable costs) / (Sales - Variable costs - Fixed costs)
DOL = ($1.85 * 12,300 - $1.85 * 12,300 - $34,709) / ($1.85 * 12,300 - $34,709)
DOL ≈ 2.21

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Related Questions

You purchased PCJ Inc. stock one year ago at a price of $184.35. The stock has a beta of 1.43 and a high standard deviation. You received quarterly dividends of $2.15/share. You sold the stock for $188.45 today. What was your capital gain on your investment in PCJ

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The investor had a negative capital gain of -4.74% on the investment in PCJ.

To calculate the capital gain on the investment in PCJ, we need to determine the total return on the investment, which includes both the capital appreciation and the dividends received.

First, let's calculate the total dividends received over the one-year holding period:

Dividends received per share = $2.15 x 4 = $8.60 per share

Total dividends received = $8.60 x number of shares owned

Next, let's calculate the total return on the investment, which is the sum of the capital gain and the dividends received:

Total return = (Sale price - Purchase price) / Purchase price + Dividends received / Purchase price

Total return = ($188.45 - $184.35) / $184.35 + $8.60 / $184.35

Total return = 0.0231 or 2.31%

Finally, let's calculate the capital gain on the investment:

Capital gain = Total return - Dividends received / Purchase price

Capital gain = 2.31% - $8.60 / $184.35

Capital gain = -0.0474 or -4.74%

This means that the investor lost money on the investment.

The high standard deviation and beta of 1.43 suggest that the stock was volatile, and the negative capital gain indicates that the stock price was not able to overcome this volatility and provide a positive return to the investor.

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A g traffic count of 25,000 cars daily, expected to increase by 1,000 cars/day annually. The State Department of Transportation has estimated that a new set of traffic signal systems for the intersections will cost $500,000 and save each car passing through an average of $0.025 in fuel, wear and tear, and time. It will cost $25,000/year to operate the systems. If the interest rate is 6% and the systems are expected to last for 15 years, what is the net present worth of the projects

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The net present worth of the traffic signal system project can be calculated using the present value formula, which takes into account the initial cost, annual savings, and operating costs, while factoring in the interest rate and the project's lifespan.

To start, we need to calculate the total annual savings generated by the project. Based on the given information, each car passing through the intersection will save $0.025 in fuel, wear and tear, and time. With a daily traffic count of 25,000 cars and an annual increase of 1,000 cars, the total number of cars passing through the intersection in year 1 will be 9,125,000 (25,000 cars/day x 365 days) with a total annual savings of $228,125 (9,125,000 cars x $0.025).

Next, we need to calculate the total cost of the project over the 15-year lifespan, including the initial cost and annual operating costs. The initial cost is $500,000, and the annual operating cost is $25,000, making the total cost of the project over the lifespan $875,000 ($500,000 + 15 years x $25,000).

To calculate the net present worth, we use the formula:

NPW = -C + (S / i) x (1 - (1 + i)^-n)

Where:
- C = total cost of the project ($875,000)
- S = total annual savings ($228,125)
- i = interest rate (6%)
- n = project lifespan (15 years)

Plugging in the numbers, we get:

NPW = -875,000 + (228,125 / 0.06) x (1 - (1 + 0.06)^-15)
NPW = -$2,402.89

Therefore, the net present worth of the project is -$2,402.89, which means that the project is not economically feasible as it generates a negative net present value. In other words, the cost of the project exceeds the savings generated, even when factoring in the time value of money.

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The risk-free rate of return is 1.6 percent and the market risk premium is 8.5 percent. What is the expected rate of return on a stock with a beta of 1

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The expected rate of return on a stock with a beta of 1 is 10.1%.

The expected rate of return on a stock with a beta of 1 can be calculated using the Capital Asset Pricing Model (CAPM). The CAPM formula states that the expected return on an asset is equal to the risk-free rate plus the product of the asset's beta and the market risk premium.

Using the given values, we can calculate the expected rate of return as follows:

Expected Rate of Return = Risk-Free Rate + (Beta x Market Risk Premium)

Expected Rate of Return = 1.6% + (1 x 8.5%)

Expected Rate of Return = 1.6% + 8.5%

Expected Rate of Return = 10.1%

Therefore, the expected rate of return on a stock with a beta of 1 is 10.1%. This means that an investor who is willing to invest in this stock should expect to earn a return of 10.1% annually, assuming that the market risk premium and the risk-free rate remain constant.

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he primary reason that business people must be involved in the development of information systems is

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The primary reason that business people must be involved in the development of information systems is that they have the knowledge and understanding of the business processes and operations.

They can provide valuable insights into the needs and requirements of the organization, which is essential for designing and developing effective information systems that support business goals and objectives.

Additionally, involving business people in the development process helps to ensure that the system is user-friendly and aligned with the needs of the end users. This collaboration between business and IT professionals helps to ensure that the information systems are successful and deliver measurable business value.

In summary, involving business people in the development of information systems is essential to ensure that the systems are aligned with the business requirements and goals, designed with the end-users in mind, and can contribute to the success of the organization.

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The conflict between sales and customer service is mainly an example of conflict due to: Group of answer choices rule ambiguity. communication problems. pooled task interdependence. differentiation goal incompatibility.

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The conflict between sales and customer service can be mainly attributed to differentiation goal incompatibility.

Sales and customer service are two crucial departments that play a significant role in the success of any business. Sales teams are responsible for generating revenue by attracting new customers and increasing sales, while customer service teams focus on ensuring customer satisfaction and addressing their concerns. However, the goals of these two departments may not always align, leading to conflict.

For instance, sales may prioritize closing deals quickly, while customer service may prioritize resolving customer issues thoroughly. This can lead to a clash in priorities, which can cause tension and conflict between the two departments. To mitigate this conflict, it is essential to establish clear goals and objectives for both departments and ensure that they are aligned with the overall business strategy.

Effective communication and collaboration between sales and customer service can also help to address any issues and foster a more cohesive and productive work environment.

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2. After a company's corporate culture is established, what are four approaches that can be used to perpetuate the culture

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After a company's corporate culture approaches that can be used to perpetuate the company culture relying on the strength of tradition and word-of-mouth indoctrination.

As well as frequent repetition of fundamental ideals by senior management and group members, and regular rituals rewarding members who show desired cultural behaviours to establish the principles of the culture.

Workplace cultures can be maintained by the sharing and retelling of business lore, regular rituals honouring employees who display desired cultural behaviours, and public praise and reprimanding of those who transgress cultural norms. A few of the many factors that determine organisational cultures include market needs, early values, goals, and assumptions, as well as the founders' preferences and opinions. Culture maintenance include factors including leadership, organisational reward systems, new hire onboarding, attraction-selection-attrition, and new hire onboarding.

Complete question:

2. After a company's corporate culture is established, what are four approaches that can be used to perpetuate the company culture?

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The use of alternative media venues, especially _________________, has grown in marketing communications programs.

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The use of alternative media venues, especially digital media, has grown significantly in marketing communications programs.

Digital media has become a major source of communication with customers as they are constantly connected to their devices.

Marketers have realized the potential of social media for promoting their products and services to a wider audience. These platforms offer targeted advertising options, and the ability to engage with customers directly through comments and messages.

In addition to social media, other forms of digital media like email marketing, podcasts, and online display advertising have also become popular. With the rise of mobile devices and the internet, it has become crucial for businesses to incorporate digital media into their marketing strategies to stay competitive in the market.

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On January 2 of the current year, Black acquired a 50% interest in New Partnership by contributing property with an adjusted basis of $7,000 and a fair market value of $9,000, subject to a mortgage of $3,000. What was Black's basis in New at January 2 of the current year

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Black's basis in New Partnership at January 2 of the current year can be calculated as follows:
1. Adjusted basis of the contributed property: $7,000
2. Fair market value of the contributed property: $9,000
3. Mortgage on the contributed property: $3,000

To determine Black's basis in New Partnership, we need to consider the adjusted basis of the contributed property and the mortgage associated with it. Black's initial basis would be the adjusted basis of the property, which is $7,000. However, since the property is subject to a mortgage of $3,000, this liability must be taken into account.
Black's basis in New Partnership would be the adjusted basis of the contributed property ($7,000) minus the mortgage ($3,000), which equals $4,000.
So, Black's basis in New Partnership at January 2 of the current year was $4,000.

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When a subsidiary company has outstanding bonds payable that are convertible to common shares, it must assume conversion in computing diluted EPS. Assuming the convertible bonds are dilutive, what are the effects of the conversion on the subsidiary's diluted EPS ratio

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It is important to assume conversion in computing diluted EPS to provide a more accurate representation of the potential impact on the company's earnings per share.

EPS stands for Earnings Per Share, which is a financial metric used to evaluate a company's profitability. EPS represents the amount of net income earned per outstanding share of common stock over a specific period, usually a quarter or a year. EPS is calculated by dividing a company's net income by the total number of outstanding shares of its common stock.

The resulting number reflects how much profit is being generated for each share of stock held by investors. Investors use EPS to assess a company's financial health and to compare its profitability with that of other companies in the same industry. A higher EPS indicates that a company is generating more profit for each share of stock, which can lead to an increase in the stock's price.

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Aldo Company plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 44.00%, but Congress is considering a change in the corporate tax rate to 36%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted

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The component cost of debt is a crucial factor in determining the weighted average cost of capital (WACC) of a company.

In the given scenario, Aldo Company plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is currently 44.00%. However, Congress is considering a change in the corporate tax rate to 36%. If the new tax rate is adopted, the component cost of debt used to calculate the WACC would decrease.

This is because the interest paid on debt is tax-deductible, so a lower tax rate means that the company would pay less in taxes, resulting in a lower cost of debt. Therefore, the WACC of the company would decrease, which would be beneficial for Aldo Company as it would reduce its overall cost of capital.

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The text book discusses many different financial ratios. What is their purpose? Can any ratio or combination of ratios predict a company's long-term viability? Can you think of an example whereby one ratio incorrectly looks "good" only because another ratio is "bad"?

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The purpose of financial ratios is to provide a quantitative analysis of a company's financial health and performance. By examining a company's financial statements and calculating various ratios, investors and analysts can gain insight into the company's profitability, liquidity, solvency, and efficiency.

While financial ratios can provide valuable information, no single ratio or combination of ratios can predict a company's long-term viability with complete accuracy. It is important to consider multiple factors and perform a thorough analysis before making investment decisions.
As for an example of a misleading ratio, consider a company that has a high return on equity (ROE) but a low profit margin. ROE measures a company's profitability relative to its equity, while profit margin measures the percentage of each sale that results in profit. A high ROE might seem like a positive indicator of a company's financial health, but if the profit margin is low, it could mean that the company is relying on debt financing to boost its earnings. In this case, the high ROE could be misleading and not a true reflection of the company's long-term viability.

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Contractionary fiscal policy is used to decrease the Aggregate Demand and reduce inflationary pressures True False

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It is True that the Contractionary fiscal policy involves reducing government spending, increasing taxes or both in order to decrease the amount of money circulating in the economy.

This, in turn, reduces the aggregate demand for goods and services, which helps to decrease inflationary pressures in the economy. By decreasing government spending, there will be less demand for goods and services produced in the economy, which leads to lower prices. Similarly, by increasing taxes, people will have less disposable income to spend, which reduces the aggregate demand.

The reduction in aggregate demand leads to a decrease in the overall price level, which helps to control inflation. Therefore, contractionary fiscal policy is an effective tool to help reduce inflationary pressures in the economy. However, it can also lead to decreased economic growth, which is why policymakers need to carefully balance their use of contractionary fiscal policy with the need for economic expansion.

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According to the VALS2 system, consumers that have strong principles and favor brands are considered ________.

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According to the VALS2 system, consumers who have strong principles and favor brands are considered "Achievers."

Achievers are driven by a desire for career success, financial stability, and a comfortable lifestyle. They are responsible and conservative in their spending habits, preferring to invest in well-established, high-quality brands that reflect their values and enhance their status. Achievers tend to be family-oriented, educated, and community-minded, and they are motivated by a sense of accomplishment and recognition.

They value traditional institutions and uphold societal norms, often seeking out products and services that align with their beliefs and ideals. As such, marketers targeting Achievers must emphasize the quality, reliability, and prestige of their offerings, as well as their social responsibility and ethical practices. By tapping into the Achiever mindset, companies can build strong relationships with this influential consumer segment and create lasting brand loyalty.

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When Maya purchased a full-size bottle of Purell Hand Sanitizer, she received a free, purse-sized bottle as well. The purse-sized bottle is an example of a:

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purse-sized bottle that Maya received for free is an example of a promotional product and a sampling strategy that Purell is using to promote their hand sanitizer and encourage customers to purchase their product.

The purse-sized bottle that Maya received for free when she purchased a full-size bottle of Purell Hand Sanitizer is an example of a promotional product or a giveaway. Promotional products are items that are given away for free by companies as a way to promote their brand or products. They are usually used to create brand awareness, to encourage customers to make a purchase or to reward them for their loyalty.
In this case, Purell is using the purse-sized bottle as a promotional product to encourage customers to purchase their full-size bottle of hand sanitizer. By offering a free purse-sized bottle, Purell is giving customers an extra incentive to purchase their product over others that may not have a similar promotion.
The purse-sized bottle is also an example of a sampling strategy. This marketing technique involves giving customers a free sample of a product to try before making a purchase. In this case, Purell is giving customers a sample of their product in the form of a purse-sized bottle. This allows customers to try the product before purchasing it, which can increase the likelihood of a purchase in the future.
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Think about the Balance Sheet Equation: Scotty's end-of-year 2019 balance sheet lists current assets of $250,000, fixed assets of $800,000, current liabilities of $195,000, and long-term debt of $300,000. What is Scotty's total shareholders' equity

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Scotty's total shareholders' equity is $555,000, which represents the residual value of the assets after deducting all liabilities, and it can be used as an indicator of the financial health and strength of the business.

Scotty's balance sheet equation is Assets = Liabilities + Shareholders' Equity. The equation represents the fundamental accounting identity that must hold for any company at any point in time.

To find the total shareholders' equity, we need to subtract the total liabilities from the total assets. Scotty's total assets are $1,050,000, which is the sum of current assets ($250,000) and fixed assets ($800,000). Scotty's total liabilities are $495,000, which is the sum of current liabilities ($195,000) and long-term debt ($300,000).

Therefore, Scotty's total shareholders' equity can be calculated as follows:

Shareholders' Equity = Total Assets - Total Liabilities

Shareholders' Equity = $1,050,000 - $495,000

Shareholders' Equity = $555,000

Scotty's total shareholders' equity is $555,000. This represents the residual value of the assets after deducting all liabilities. It shows the amount of investment that has been made by shareholders in the company, and it can be used as an indicator of the financial health and strength of the business.

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Investment costs related to franchising include all of the following except Group of answer choices insurance premiums and legal fees. inventory and supply costs. building and equipment costs. royalty payments.

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Investment costs related to franchising include all of the following except royalty payments. The fourth option is correct.

When investing in a franchise, there are several costs to consider, such as:

a. Insurance premiums and legal fees: These are necessary to cover potential risks, legal obligations, and to maintain compliance with regulations.

b. Inventory and supply costs: Franchisees need to purchase the necessary inventory and supplies to operate the business according to the franchisor's guidelines.

c. Building and equipment costs: These involve acquiring a suitable location and outfitting it with the required machinery, tools, and fixtures.

However, royalty payments are not considered investment costs related to franchising. Royalties are ongoing fees paid by the franchisee to the franchisor, typically as a percentage of the franchisee's revenue, for the continued use of the franchisor's brand, support, and services. While these payments are an essential part of the franchising model, they are separate from the initial investment costs incurred when setting up the franchise.

Thus, the fourth option is correct.

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How would buying put options allow an investor to protect his or her gains made from an increase in stock prices

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Buying put options can allow an investor to protect their gains made from an increase in stock prices by providing a form of insurance against potential losses if the stock price were to decrease.

When an investor buys a put option, they are purchasing the right (but not the obligation) to sell a certain number of shares of the underlying stock at a specified price (the strike price) within a certain timeframe. If the stock price were to decrease below the strike price, the investor could exercise their option to sell the shares at the higher strike price, thereby limiting their potential losses.

For example, suppose an investor purchased 100 shares of XYZ stock at $50 per share and the stock price increased to $75 per share. The investor has a gain of $25 per share, or $2,500 total. However, the investor is concerned that the stock price may decline and wants to protect their gains. They could buy a put option with a strike price of $70 and an expiration date several months in the future for a premium (the cost of the option) of $200.

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Identify the environmental factor that is a characteristic of an attractive environment. a) many substitutes b) complementary products c) few entry barriers d) low customer bargaining power e) many competitors

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b) complementary products .

Complementary products are an environmental factor that is a characteristic of an attractive environment.

Complementary products are products that are used together with a specific product or service, and their availability can enhance the value of the original product. When complementary products are available, it can attract more customers to the original product or service, and increase customer satisfaction. This can lead to increased sales and profits for the company. For example, a company that sells smartphones can benefit from the availability of complementary products such as phone cases, screen protectors, and wireless chargers. When customers see that these complementary products are available, it can make the original product more attractive to them. Therefore, the presence of complementary products is an environmental factor that can contribute to an attractive environment.

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Within Year, Inc. has bonds outstanding with a $1,000 par value and a maturity of 27 years. The bonds have an annual coupon rate of 20.0% with quarterly coupon payments. You would expect a quoted annual return of 10.0% if you purchased these bonds. What are the bonds worth to you

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The bonds are worth $1,568.53 to you if you expect a quoted annual return of 10.0%.

To calculate the value of the bond, we can use the present value formula for a bond:

Bond value =[tex](C/r) x [1 - (1/ (1+r)^n)] + F/(1+r)^n[/tex]

Where:

C = the coupon payment

r = the required rate of return

n = the number of coupon periods remaining

F = the face value or par value of the bond

In this case, the bond has a $1,000 par value, a 20.0% annual coupon rate, and quarterly coupon payments, so the coupon payment per quarter is:

C = (20.0% x $1,000) / 4 = $50

The bond has 27 years to maturity, and since it pays quarterly coupons, there are 27 x 4 = 108 coupon periods remaining.

The required rate of return is 10.0% per year, or 2.5% per quarter.

Using these values in the formula, we get:

Bond value =[tex]($50/0.025) x [1 - (1/ (1+0.025)^108)] + $1,000/(1+0.025)^108[/tex]

Bond value = $1,568.53

Therefore, the bonds are worth $1,568.53 to you if you expect a quoted annual return of 10.0%.

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What is the cost per person if the national government pays for gold asphalt? What is the cost per person if the state of Oz pays for gold asphalt?

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The cost per person for gold asphalt would depend on several factors, including the amount of gold asphalt required, the size of the population that will benefit from the gold asphalt, and who is paying for the gold asphalt.

If the national government is paying for the gold asphalt, the cost per person would be determined by dividing the total cost of the gold asphalt by the total population of the country.

For example, if the cost of the gold asphalt is $10 million and the population of the country is 100 million, the cost per person would be $0.10.

If the state of Oz is paying for the gold asphalt, the cost per person would be determined by dividing the total cost of the gold asphalt by the population of the state.

For example, if the cost of the gold asphalt is $1 million and the population of the state of Oz is 10 million, the cost per person would be $0.10.

It is important to note that these calculations are based on the assumption that the cost of the gold asphalt is being spread evenly across the entire population.

In reality, the cost per person could vary depending on factors such as the location and amount of gold asphalt being used, and the distribution of the population across the country or state.

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You are looking to buy a laptop on a budget that requires you to service and repair the laptop yourself, and you want to save money by not purchasing an extended service agreement beyond the first year. To limit your search, what should you consider when choosing manufacturers

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The choosing a manufacturer that offers a good warranty, repairability, quality, and price can help you find a budget laptop that you can service and repair yourself without the need for an extended service agreement beyond the first year.

When choosing a manufacturer for a budget laptop that requires self-service and repair, there are several factors to consider:

Warranty: Look for manufacturers that offer a standard one-year warranty, which covers parts and labor. This can provide some protection and reassurance in case of any defects or malfunctions within the first year.

Repairability: Choose a manufacturer that provides clear and accessible instructions for repairing and replacing parts, and offers easy-to-find replacement parts. This can help reduce the overall cost of repairs and make it easier for you to service the laptop yourself.

Quality: Look for manufacturers that have a good reputation for producing reliable and durable laptops. Check online reviews and customer feedback to get an idea of the quality of the laptops they produce.

Price: Compare prices from different manufacturers to find the best value for your budget. Keep in mind that some manufacturers may offer more affordable laptops but with lower-quality components or features.

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In addition to losing the benefit of a bargain, a plaintiff may suffer other losses caused directly by a breach. These losses may be compensated as ______ damages.

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These losses may be compensated as consequential damages.

Consequential damages, also known as special or indirect damages, are damages that arise from the consequences of the breach but are not a direct result of the breach itself. Unlike direct damages (which compensate for the loss of the bargain), consequential damages compensate for other losses or damages that were caused by the breach but are not necessarily foreseeable or certain at the time the contract was made. Examples of consequential damages might include lost profits or lost opportunities resulting from the breach.

Consequential damages are a type of compensatory damages that aim to put the non-breaching party in the position they would have been in if the contract had been fulfilled. These damages are awarded to compensate the non-breaching party for losses that are not a direct result of the breach but instead result from the consequences of the breach.

Consequential damages are more difficult to prove than direct damages because they are often speculative in nature and may require evidence of causation.

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In one year, spot rate happens to be 0.85 $/C$. If you use a money market hedge, what will be the total profit of the hedge?

A: The profit will be the same as the profit when the spot price is 0.75 $/CS

B: The profit will be the more than the profit when the spot price is 0.75 $/CS

C: The profit will be the less than the profit when the spot price is 0.75 $/CS

Answers

The profit from a money market hedge is not determined by the spot rate alone, so it cannot be determined whether the profit will be more or less than the profit when the spot price is 0.75 $/C$.

The use of a money market hedge involves offsetting the risk of changes in the exchange rate through the use of financial instruments such as forward contracts, options, or futures. The profit from a money market hedge is determined by several factors, including the exchange rate at the time of the hedge, the exchange rate at the time of payment, and the cost of the hedging instrument. Therefore, the profit from a money market hedge cannot be determined solely by the spot rate of 0.85 $/C$ and whether it is higher or lower than 0.75 $/C$. Other factors must be taken into consideration.

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an engineering firm specializes in designing wood-framed houses. which organizations would it be ethical

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As an engineering firm that specializes in designing wood-framed houses, it would be ethical for the organization to be affiliated with professional organizations such as the American Wood Council, the National Wood Flooring Association, or the Forest Stewardship Council.

These organizations provide guidelines and best practices for sustainable and ethical forestry practices, which are important for ensuring that the wood used in construction is sourced responsibly and does not contribute to deforestation or environmental harm. It would also be ethical for the engineering firm to follow building codes and regulations, and to ensure that all designs and construction processes are safe and environmentally friendly. This may involve using alternative materials or construction methods that reduce waste or minimize environmental impact. In addition, the engineering firm should prioritize transparency and honesty in their business practices, and should communicate openly with clients and contractors about any potential risks or ethical concerns related to their designs or construction processes. Overall, an ethical engineering firm specializing in designing wood-framed houses should prioritize sustainability, safety, and transparency in all aspects of their work, and should be committed to minimizing environmental harm and promoting responsible forestry practices.

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When comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that ______. Multiple choice question.

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When comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that: Costs may be higher than expected, resulting in lower profits.

The budget may be unrealistic or not flexible enough to account for changes in activity levels. Variances may be unfavorable, indicating that cost control measures need to be implemented. When comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that there may be a potential shortfall in funds or resources needed to meet the higher level of activity. This means that the budget may not have been adequate in anticipating the actual activity, leading to overspending or a lack of resources to support the increased activity. The organization may need to adjust its budget or seek additional funding to cover the additional expenses. In some cases, the organization may need to revise its plans or strategies to better align with the actual activity levels. Overall, it is important for organizations to regularly monitor their budget and actual activity to ensure they are on track to achieve their goals and objectives. This can help prevent potential shortfalls or other issues that may arise when there is a mismatch between budgeted and actual activity levels.

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Fixed expenses 3,740,000 Net operating income $ 700,000 Average operating assets $ 7,000,000 Last year's return on investment (ROI) was closest to:

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To calculate the ROI, we need to divide the net operating income by the average operating assets. The last year's return on investment (ROI) was closest to 3.7%.

Therefore, the ROI is:

ROI = Net Operating Income / Average Operating Assets

ROI = $700,000 / $7,000,000

ROI = 0.1 or 10%

Now, we can use the ROI formula to find out the last year's return on investment. If we assume that the fixed expenses remained the same as last year, we can use the following formula to find out the net operating income: Net Operating Income = Sales - Variable Expenses - Fixed Expenses

Let's assume that the sales were $10,000,000 and the variable expenses were 60% of the sales or $6,000,000. Then, we can calculate the net operating income as follows:

Net Operating Income = $10,000,000 - $6,000,000 - $3,740,000

Net Operating Income = $260,000

Using this value for the net operating income, we can calculate the last year's return on investment as follows:

ROI = Net Operating Income / Average Operating Assets

ROI = $260,000 / $7,000,000

ROI = 0.037 or 3.7%

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Concord Corporation sells $3000 of merchandise on account to Sarasota Company with credit terms of 2/7, n/30. If Sarasota Company remits a check taking advantage of the discount offered, what is the amount of Sarasota Company's check

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Concord Corporation has sold $3000 of merchandise to Sarasota Company on account, meaning that the payment will be made at a later date. The amount of Sarasota Company's check would be $2,940.

The credit terms offered by Concord Corporation to Sarasota Company are 2/7, n/30. This means that if Sarasota Company pays within 7 days of the invoice date, they will be eligible for a 2% discount on their total amount due.

However, if they do not take advantage of this discount, they are required to pay the full amount within 30 days of the invoice date.

Assuming that Sarasota Company remits a check taking advantage of the discount offered, they would need to pay 98% of the total amount due to Concord Corporation. Therefore, their check would be for $2940, which is calculated as follows:

Total amount due = $3000
Discount offered = 2%
Discount amount = $60 (2% of $3000)
Amount due after discount = $2940 ($3000 - $60)

Therefore, if Sarasota Company remits a check taking advantage of the discount offered by Concord Corporation, their check would be for $2940.

This payment would need to be made within 7 days of the invoice date to be eligible for the discount. If they do not make the payment within 7 days, they would be required to pay the full amount of $3000 within 30 days of the invoice date.

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Assuming the market for office paper is perfectly competitive, the profit level for the firm in the long run would be $ _. (Only enter amount; the dollar sign has been provided for you.)

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Assuming the market for office paper is perfectly competitive, the profit level for the firm, in the long run, would be zero dollars.

In a perfectly competitive market, there are many buyers and sellers and no individual firm has market power. This means that firms must accept the market price for their product and cannot charge a higher price without losing customers to competitors.

In the long run, firms in a perfectly competitive market will earn only normal profits, which is the minimum amount of profit necessary to keep the firm in business. This means that the firm's total revenue will be equal to its total costs, including both explicit costs (such as materials and labor) and implicit costs (such as the opportunity cost of the owner's time and resources).

Therefore, in the long run, the profit level for a firm in a perfectly competitive market, including the market for office paper, would be zero dollars.

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William and Carrie go to the local Farmer's Market every Saturday morning. The market attracts many consumers and has many vegetable stands, many flower stalls, many artisan craft stalls selling handmade soaps and scented oils, and many stalls selling yard ornaments. All of the sellers within a sales category (vegetables, flowers, artisan crafts, and ornaments) sell their goods for essentially the same price, with little variation. Carrie comments to William that the vegetable stands enjoy perfect competition. What factors did she take into consideration when making this comment

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Carrie likely made her comment about the vegetable stands enjoying perfect competition based on the following factors:

Large number of sellers: The Farmer's Market has many vegetable stands, indicating that there are many sellers in the market.Homogeneous products: All the vegetable stands sell essentially the same product, meaning that there is little to no differentiation between the products sold by each seller.Ease of entry and exit: It is relatively easy for new sellers to enter the market and for existing sellers to exit the market, meaning that there are no significant barriers to entry or exit.Price takers: Each seller is a price taker, meaning that they cannot influence the market price of the product they sell.

By considering these factors, Carrie likely concluded that the vegetable stands at the Farmer's Market enjoy perfect competition.

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In a general merchandise store, the Blank______ of product line is large but the Blank______ of products is often limited. Multiple choice question. classification; variety breadth; depth variety; classification depth; breadth

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In a general merchandise store, the variety breadth of the product line is large but the depth variety of products is often limited. Variety breadth refers to the number of different product lines that a store carries, while depth variety refers to the number of different products within each product line.

General merchandise stores typically carry a wide variety of product lines such as clothing, home goods, electronics, and toys, but may only offer a limited selection within each product line. This allows the store to cater to a broad range of customers with diverse needs and interests, while still maintaining a manageable inventory. However, it is important for general merchandise stores to strike a balance between variety breadth and depth variety to ensure that they are meeting the demands of their customers and remaining competitive in the market.

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