1.
Introduction: Financial statements are the position statement of the business that provide information related to the
To identify: The additional annual net income or loss expected under Plan A and Plan B.
2.
Introduction: Financial statements are the position statement of the business that provide information related to the profit earned or loss incurred during the period as well as the assets and liabilities a business owns at the end of the period. It helps in making future business decisions.
The plan that should be considered by the company.
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FINANCIAL AND MANAGERIAL ACCOUNTING
- Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?arrow_forwardOption 1: He needs to rent a kiosk cart in the mall which will cost $600 a month. In addition, there are marketing costs for signage and business cards, which have an initial cost of $1,200. Zach will also need to create a website, Instagram page and Facebook ads that will cost him $200 a month. To start the business, his tools would cost $500. The total repairs would include a flat rate of $30 for an assessment and another $100 to fix the phone. The supplies to complete each phone would cost $40. Option 2: Zach needs a way to source old phones from people who no longer need them. He would pay $50 for a used phone in decent condition and then refurbish it for $40. He would subsequently sell the device for $200. Zach would no longer need to set up a kiosk in the mall, but rather manage everything online. This means that he would need to create a website, Instagram page and Facebook ads which would cost him $200 a month. He would also need to spend $500 on tools to begin. Based on the…arrow_forwardPlease answer correctly, I will upvote Thanks! (If possible please help answer part b below as well).arrow_forward
- Currently I am paying $60.00 a month for my service. I would like to upgrade to the $80.00 service package because my new employee offers a 20% discount with your company. What would be the cost difference compared to what I am paying now if I upgraded? With your discount you would only pay ____ a month more for the upgrade plan.arrow_forwardTo generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3000, and the average first-year commission for each new account opened is $5800. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account. Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.Profit = (New Accounts Opened × $( ) – $ ( ) What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)The number of new accounts opened is a random variable with fill in the blank 4 trials and fill in the blank 5 probability of a success on a single trial. Assume that the number of new accounts…arrow_forwardTo generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3000, and the average first-year commission for each new account opened is $4600. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account. Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.Profit = (New Accounts Opened × $ fill in the blank 1) – $ fill in the blank 2 What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)The number of new accounts opened is a random variable with fill in the blank 4 trials and fill in the blank 5 probability of a success on a single trial. Assume that the…arrow_forward
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- Please try to solve it in 30 minutearrow_forwardAccusoft Systems is offering small business owners a software package that keeps track of many accounting functions from bank transactions to sales invoices. The site license will cost $42,000 to install and will require a fee of $2000 every 3 months. If your company can save $13,500 every quarter and have the security of managing its books in-house, how long will it take for you to recover the investment at an interest rate of 10% per quarter? The time taken to recover the investment is determined to be |quarters.arrow_forwardThe average credit card customer for VISA has a customer life of 5 years. It costs the company $51 to acquire a new customer and by year 5 they produce $30, $42, $44, $49, and $55 in customer profit. Compute the lifetime value using a 10% discount rate. The average credit card customer for VISA has a customer life of 5 years. It costs the company $51 to acquire a new customer and by year 5 they produce $30, $42, $44, $49, and $55 in customer profit. AMEX enters the market and the customer lifetime reduces to 3 years. Compute the lifetime value of VISA using a 10% discount rate. The average credit card customer for VISA has a customer life of 5 years. It costs the company $51 to acquire a new customer and by year 5 they produce $30, $42, $44, $49, and $55 in customer profit. AMEX enters the market and expect similar revenues but a retention rate of 75%. Compute the lifetime value of AMEX using a 10% discount rate.arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College