Give true answer At an output level of 16,500 units, you havecalculated that the degree of operatingleverage is 2.80. The operating cash flow is$63,500 in this case. Ignoring the effect oftaxes, what are fixed costs? What will theoperating cash flow be if output rises to17,500 units? What will the operating cashflow be if output falls to 15,500 units?

The problem requires the determination of the fixed costs and operating cash flows. A fixed cost is…

Answered: At an output level of 16,500 units, you…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EB: Assume a company is going to make an investment in a machine of $825,000 and the following are the...

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Imagine that you could increase the price for a product that has a profit margin of 8% on its price. If you could increase the price by 1% AND simultaneously keep the sales volume (in unit terms) at the same level as before the price increase, calculate the impact of this price increase on the profit margin. (For this question, assume there are no fixed costs. You just need to calculate the PERCENTAGE CHANGE in profit margin)
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Consider the basic setup of the Diamond-Dybvig (1983) model. Specifically, there are three periods, denoted t = 0, 1, 2, a single consumption good, and an illiquid investment opportunity that pays gross return 1 if liquidated at t = 1, or gross return 2.2 if liquidated at t = 2. There are 500 people in the economy, each endowed with 1 unit of the consumption good at t = 0. At t = 1, exactly 200 will randomly realize that they need to consume at t = 1 (the early consumers), the remaining 300 people will need to consume at t = 2 (the late consumers). The utility derived from consumption is 1 − (1/c1) 2 for early consumers, 1−(1/c2) 2 for late consumers, where the subscript denotes the time of consumption. Suppose a bank can offer an asset that is more liquid, with gross returns Rd 1 = 1.33 and Rd 2 = 1.71 (depending on the time of liquidation). (i) Calculate the bank’s profit after t = 2. In other words, what amount of funds remains at the bank once all depositors have withdrawn? Now…
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As in the numerical example we discussed in our presentations, the inverse demand function for the depletable resource is given by P = 10-0.4qt, where P is the price in dollars and qt is the quantity in period t. The marginal cost of extraction is constant at $3. A total of 25 units of the resource is available to be allocated between two periods. Given a discount rate of 10%, answer the following questions: (a) In a dynamically efficient allocation, how much of the resource would be allocated to the first period and how much to the second period? (b) Given this discount rate, what would be the efficient price in the two periods? • First period price Po: 2.685 • Second period price P₁: 2.315 (c) Can you graphically represent the efficient allocation? (d) What would be the marginal user cost in each period? Can you explain the path of the MUC?
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Part 2. Bhiner Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units). Sales $25,000 Variable expenses 10.000 ontribution margin 15,000 +Fixed expenses 8.000 Net operating income $ 7.000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise.) (Show all work/calculations. No credit will be given without
Assume a sales price per unit of $25, variable cost per unit $15, and total fixed costs of $14400. What is the breakeven point in dollars? $24000 $36000 $20160 $23040
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