The big C is considering a change in its cash-only sales policy. The new terms of sale would be one month. The required return is 1.6 percent per month. Based on the following information, what is the cost of switching to the new policy? Current policy New policy 800 800 425 1,150 Price per unit (RM) Cost per unit (RM) Unit sales per month 425 1,110

The big C is considering a change in its cash-only sales policy. The new terms of sale would be one month. The required return is 1.6 percent per month. Based on the following information, what is the cost of switching to the new policy? Current policy New policy 800 800 425 1,150 Price per unit (RM) Cost per unit (RM) Unit sales per month 425 1,110

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question Part Score If it holds the sales price constant and makes the suggested changes, how many units of product will Wildhorse have to sell to make the same operating Income before taxes as last year? Required sales units If Wildhorse wishes to maintain the same contribution margin ratio, what selling price per unit of product must it charge next year to cover the increased materials costs? (Round answer to 2 decimal places, e.g. 15.25) Selling price per unit $
XYZ company is studying the profitability of a change in operation and has gathered the following information. Anticipated Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost $10, and Sales (Units): 9,000. Current Operation: Fixed Costs: $48,000, Selling Price: $22, Variable Cost: $12, and Sales (Units): 6.000. Should XYZ company make the change? Select one Oa.No. because sales will drop by 3.000 units. Ob.Yes, the company will be better off by 54,000. 2E No. because the company will be worse off by $22,000. Od itis impossible to judge because additional information is needed. Oe.No. because the company will be worse off by 54.000.
flash city inc manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. With a 75 -cent price increase demand is expected to fall 7000 units. Demand 76,000 units 69,000 units Selling price $8.75 $9.50 Incremental cost per unit $4.80 $4.80 Would you recommend the 75 - cent price increase?
XYZ, Inc., produces and commercializes engines for cars. To stimulate sales, the financial manager is contemplating lengthening its credit period from the existing net 30 terms to net 35 terms. The credit analyst estimates that the new credit policy increases sales by 15 percent. The financial manager asks you to analyze the impacts of the proposed credit change on the firm's value. The variable costs, as a percent of sales, equal 70%. The existing monthly credit sales is $90 million. The existing bad debt loss rate is 29% and will increase by o.75% after lengthening the credit period. The existing credit & collection expenses equal 2.5% of sales and those under 35-day terms will be 3% of sales. The company's cost of capital is presently 10 percent Under the new credit policy, the firm offers a 2% cash discount if they pay within one week and the percent of sales made to cash discount-takers will be 15%. 1) Calculate the NPV of one day's sales under the existing credit policy
A company is assessing granting credit to a new customer. The variable cost per unit is $88, the current price is $115, the probability of default is 34% and the monthly required return is 4.0%. Calculate the NPV of the switch. Assume the customer will purchase once.
PAGE 1.1 NUBD Co. plans to market a new product. Based on its market studies. It estimates that it can sell 70,000 units in 2021. The selling price per unit is P2.00. Variable cost ratio is 40% of sales. Fixed costs are estimated to be P60,000. A.Compute the break-even point in units. B.Compute the break-even point in sales pesos.
The budget of a company for next period shows that it would breakeven at a sales value of GHC800000 with fixed cost of GHC320000. What sales value should the company target to derive a profit of GH¢200000 in the next period? OA. GHC1320000 O B. GHC1300000 OC. GHC1000000 OD. GHC866667
Question 2: Muscat Company has the following information. OMR Fixed Cost 8750 Break even Sales 16000 a) PV Ratio b) Profit when sales are 20000 c) New BE point if selling price is reduced by %25 Question 3: Sohar Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs Variable Costs 2019 405000 90000 225000 2020 450000 120000 240000 Calculate: a) P/V ratio, b) В.Е.Р. c) Sales required to earn a profit of OMR 40000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 200000.
1. If you have the following information about ice-cream manufacturing unit Year Net Discount rate Returns 10% 2500 1. 700 0.909 -1000 0.826 3. 1450 0.751 1200 0.683 1700 0.621 6. 1350 0.564 7. -750 0.513 450 0.467 6. 1300 0.424 10 900 0.386 Calculate a) Discounted Payback period b) IRR and if the hurdle rate 35%, shall we accept the project or not ? Why? ) NPV
Cullumber Bucket Co., a manufacturer of rain barrels, had the following data for 2019. Sales 2,990 units Sales price $40 per unit Variable costs $20 per unit Fixed costs $35,880
a seller has offered credit terms of 2.5/5 net 50 to a customer that has agreed to immediately purchase 500 units at a sales price per unit of $100. variable costs are $65 per unit and involve an immediate cash outflow. the seller has an annual opportunity cost rate of 7.3%. based on this information, what is the present value of the net flows associated with the cash discount terms? is it - 16,201; 26,750; 81,201; 32,500
Assuming NUBD incorporate these changes in its 2021 forecast, what should be the net income after tax from product Excellence?

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