1. Question: (TCO4) In a merchandising business, gross profit is equal to sales revenue minus: Your Answer: Instructor Explanation: Merchandising companies are those that buy products and resell them to the end consumer, so the cost of the product sold is usually their largest cost. Their income statement should start with revenues minus cost of goods sold equals gross profit. Points Received: 5 of 5 Comments: 2. Question: (TCO4) BMX Co. sells item XJ15 for $1,000 per unit, and has a cost of goods sold percentage of 80%.
If this project would cannibalize other projects by $1 million of cash flow before taxes per year. How would this change your answer to part a? c. Ignore part b. if the TR dropped to 30%, how would that change your answer to part a? a. [pic] b. b.
Question 1 (10 marks) Waccer Industries — transfer pricing, responsibility centres Requirement a) Will Arianna accept Marco’s quote of $220? Why or why not? (2 marks) Because the Mechanical Division can purchase the pumps from an outside supplier for C$200 each, The maximum transfer price Arianna will accept from the Pump Division is indeed C$200 per pump. Also, considering the PD is not operating at full capacity, Marco can more than afford a minimum transfer price of $134.36. Based on the aforementioned, the quoted price by the Pump Division will more than likely not be accepted by Arianna.
| | | | Ratio | Formula | Amazon 2013 | eBay 2013 | Current Ratio | CA/CL | 1.07 | 1.84 | I use current ratio to compare two companies liquidity, it shows eBay and Amazon are 1.84 and 1.07, from current ratio, both of them are able to pay off their liabilities. The ratio of eBay is much higher than Amazon in the last fiscal year, means it has more cash and cash equivalents to cover its short-term liability than Amazon has. On the other hand, it also shows that eBay might not invest enough to enlarge its assets such as labor and merge and acquisition. In eBay, there is no inventory, we cannot use Quick ratio to compare between the two companies. In leverage ratio, I choose debt ratio, eBay is 24.6% while Amazon is 54.8%.
Bonuses were based 100% on corporate EVA while the information reports were rewarded on a mixture of corporate EVA, business unit EVA and team EVA goals. Why the introduction of EVA system at Vyaderm? To maximize firm value, a firm must earn more than its cost of capital. The third performance metric is in %, but captures the spirit of two important (and essentially similar) metrics: Residual income, and Economic Value Added (EVA). These differ only in certain details.
Using these figures and assuming that both heavy and medium users (those buying between 1-9 pounds of cyano-acrylates per year) are potential customers; the maximum size of this market is estimated at 81,000 purchases. At 157.50 per unit, even with 100% penetration the market will not be worth more than $12.77 million in sales, with a more realistic estimate being $ 4 million in sales. The disparate nature of usage patterns across firms make it difficult to identify critical variables that can form the basis of segmenting the market. Possible ways to segment customers is on the basis of nature of the firm (small firm vs. large firm); sector of business (which industrial markets to target), current usage behavior (heavy CA usage vs low CA usage), nature of work (OEM vs MRO), and brand loyalty (SuperBonder usage vs competitors). Given that data about
In 2004, China’s GDP was $1938 billion and Denmark’s was $220 billion, but Denmark’s GDP per capita was $40,750 while China’s was $1500. Therefore we are able to depict that Denmark’s living standards are significantly higher than those in China, since the average income for each person in Denmark is much higher. This then tells us that GDP alone is not the appropriate measure of living standards, as it measures the total output of the economy – whereas GDP per capita focuses solely on the income of the citizens as a whole. There are some limitations of using GDP per capita as a measurement for standard of living. For example it is a mean value and does not reflect income distribution, therefore meaning that it doesn’t take into account the fact that there are significantly higher earners than others, as wealth is not distributed equally within an economy.
How could the introduction of new models that achieve greater unit sales actually reduce profits earned by the Audi division (or any luxury brand manufacturer/retailer)? 3. What factors are likely driving Audi to invest in production facilities outside of Germany? This assignment is worth 10 points. 1.
If a fund has 100 percent turnover rate that means the fund manager, in theory has sold every single stock position once. Portfolio turnover is an important component to assess the management style of a fund. Each trade (buy/sell) costs brokerage commissions, even though mutual funds pay lower commissions than individual investors, it was observed that brokerage costs can account for 0.5% to 2% assets managed; smaller funds with high rates of portfolio turnover have higher costs. For tax purposes, brokerage commissions are considered as “capital costs” as they are considered part of the cost of the securities purchased and hence are not part of the Management Expenses Ratio. Trading expenses, which include brokerage
Computed by deducting the cost of capital from the after-tax profit, it is said to be the best measure of the true profitability of an enterprise because it is tied to cash flow and not earnings per share. Many analysts would agree that EVA is more positively associated with a company’s stock price than ROE or EPS. Keith confirmed his findings with an industry analyst, which posed him with the decision of whether of not to implement this calculation into OSI accounting practices. Furthermore, would it be a beneficial tool to be used for evaluating the new manager’s incentive compensation plans? The EVA trend seems to be almost mandatory for the larger companies, but there is no reason that it shouldn’t work just as well for their smaller firm.