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diamondk2019
08.04.2020 •
Business
Kuzio Corporation produces and sells a single product. Data concerning that product appear below:Per Unit Percent of SalesSelling price $ 130 100 %Variable expenses 52 40 %Contribution margin $ 78 60 %The company is currently selling 6,500 units per month. Fixed expenses are $209,000 per month. The marketing manager believes that a $7,200 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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Ответ:
Income will increase in $2,160
Explanation:
Giving the following information:
The marketing manager believes that a $7,200 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales.
First, we need to determine the actual net operating income:
Sales= 130*6,500= 845,000
Variable cost= 52*6,500= (338,000)
Contribution margin= 507,000
Fixed costs= (209,000)
Net operating income= $298,000
Now, we can calculate the effect on income:
Contribution margin= (6,500 + 120)*78= 516,360
Fixed costs= (209,000 + 7,200)= (216,200)
Net operating income= 300,160
Income will increase in (300,160 - 298,000)= $2,160
Ответ:
$2,160 increase
Explanation:
For 6,500 units:
Contribution margin = (6,500 × 130) - (6,500 × 52) = $507,000
Net operating income = Contribution - Fixed expenses = $507,000 - $209,000 = $298,000
For 6,620 units:
Note that 6,620 units is obtained by adding the 120 unit increase to the current 6,500 units.
Contribution margin = (6,620 × 130) - (6,620 × 52) = $522,600
Net operating income = $522,600 - ($209,000 + $7,200) = $300,160
Change in profit:
Change in profit = $300,160 - $298,000 = $2,160 increase.
Conclusion:
The overall effect on the company's monthly net operating income of this change should be $2,160 increase.
Ответ:
$14.7million
Explanation:
Amount paid by MMC: $200M
Cost incurred by MMC :$60M
Risk free interest rate : 7%
Let's first find the expected cash out flow.
We have:
($10,000,000*0.6)+($30,000,000*0.4)
= $18,000,000
At a credit-adjusted discount rate of 7% and expected cashflow after 3 years is $18million. At the beginning of the extraction, the total amount capitalized by MMC will be:
18,000,000*(7%, 3years)
18,000,000*0.81630
= $14,693,400
=> $14.7 million