Financial Analysis * The tax rate is approximately 30% 5.618.8=29.79% 5.418.1=29.83% 5.418=30% * Based on the industry average, a sports store of similar size should be making around $21000 or 67% more profitable than Rhodes’ store. * Assuming the lots are of the same size and bear the same tax burden, if the unused lot is sold off property taxes would be reduced by $6000 at the 2008 rate. All else being equal, this would increase net profit by 6000×0.30=$1800, for a total of $14400. Profit as a percentage of sales would increase from 2.1% to 2.4%. * Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest.
What volume is required to provide a pretax profit of $100,000? A pretax profit of $200,000? (100 X vol) – (25 X vol) – 500,000=100,000 (75 X vol) – 500,000 = 100,000 75 X vol – 600,000/75 = 8,000 Total volume = 8,000 d. Sketch out a CVP analysis graph depicting the base case situation e. Now assume that the practice contracts with one HMO, and the plan proposes a 20 percent discount from charges. Redo questions a, b, c, d, under these condition. 2.
,Sarah L. G January 6, 2013 Written Assignment #1 1. A) $1,000 with 5% interest after 10 years gives you $1,628. Therefore, you would gain $628 in interest. B) If the interest is withdrawn each year, a total of $500 would be earned because the $1,000 investment would earn $50 of simple interest each year. C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years.
7 Chapter 7 Consumer Choice and Elasticity QUESTIONS 1 THROUGH 10 ARE A SUGGESTED CHAPTER QUIZ. 1. If Mr. Smith thinks the last dollar spent on shirts yields less satisfaction than the last dollar spent on cola, and Smith is a utility-maximizing consumer, he should a. decrease his spending on cola. b. decrease his spending on cola and increase his spending on shirts. c. increase his spending on shirts.
If the sales outlook for the coming three years was only 20,000,000 and B.E. continued producing at the rate of 30,000,000 units, a total of 10,000,000 units would be dumped into ending inventory at the end of each year once again reducing costs of goods sold and falsely increasing income. By the end of year 2013, B.E. Company would have 35,000,000 units sitting in ending inventory taking up space and costing money to store. Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income.
This is partly a practical decision given that we have not provided rates beyond 20 year term in the book. We use the quoted value for $250,000 policies pro-rated to the size of policy we need, and this is incorrect — policy premiums per dollar decline as the size of the policy rises, since some costs are fixed. However, it is the best we have, and the difference will not be
Adding to that the lows median income (lowest among the 5 projects) can be among the reasons why Walmart has performed well with its low price policy. Brand Awareness impact: While the closes Target is 80 miles away from the project store, it can be assumed that Target brand dose not have a well-known brand awareness. It will take time and investment for Target to increase the brand awareness and also compete with established brand such as Walmart; all expected marketing investment on brand awareness would contribute to 25% sales increase in 5 years. Further comparison with other projects in
| | | | | * Question 4 2 out of 2 points | | | Using the data below, determine the amount of consumer surplus, if any, in the market. The market clearing price for matinee tickets is $3 | Matinee TicketsWilling to Pay(WTP) | Tony | $1 | George | $2 | Deshon | $3 | Mario | $4 | Antonio | $5 | Brittney | $6 | | | | | | Selected Answer: | $6 | | | | | * Question 5 2 out of 2 points | | | Examine the graph below. The government has placed a $200 tariff on product z. The new equilibrium price is $600. What has happened to consumer surplus?
What is it's breakeven point? Contribution Margin = Sale price – Variable cost = $100 - $25 = $75 Breakeven Point = Fixed Cost ÷ Contribution per unit = $500,000 ÷ $75 = 6,667 procedures c) what volume is required to provide a pretax profit of $100,000? A pretax profit of $200,000? Volume required to provide a pretax profit $100,000 = (Fixed cost + Desired profit) ÷ Contribution margin = (500,000 + 100,000) ÷ 75 = 8,000 Volume required to provide a pretax profit $200,000 = (Fixed cost + Desired profit) ÷ Contribution margin = (500,000 + 200,000) ÷ 75 = 9,334 d) Sketch out a CVP analysis graph depicting the base case situation? ------------------------------------------------- Revise
Capital is mobile: when it is taxed heavily here, it flees somewhere else, meaning lower investment and employment in the United States, and because capital income taxes discourage investment or drive it overseas, they generate little if any tax revenue. Bush's tax cut substantially increased economic growth, boosted the stock market, and increased business investment. The jewel of Bush tax plan was the elimination of the dividend tax on individuals. Another key economic growth provision of the tax plan was the acceleration of income tax rate reductions. According to economic experts, if fully implemented, the Bush tax cut would increase stock values immediately by 5% to 15% and would reduce the cost of capital for businesses by 10% to 30%, depending on the industry.