5.3] Assume that a Radiologist group practice has the following cost structure - Fixed Costs $500,000; Variable Cost per procedure $25 and Charge per procedure $100. Furthermore, assume that the group expects to perform $7500 procedures in the coming year. a) Construct the group's base case projected P & L statement. b) What is the group's contribution margin? What is it's breakeven point?
At an annual interest rate of five percent, how long would it take for your savings to double? Answer: Future Value Factor = (1 + i)^n or, FVF = (1 + .05)^14.21 or, FVF = 2.000322: Where $1,000 * 2.000322 = $2,000.3221 or, rounded to the nearest whole dollar it would take 14.21 years with a 5% APR to double one’s savings. 3. In the mid-1990s, selected automobiles had an average cost of $12,000. The average cost of those same motor vehicles is now $20,000.
(SP x Q) – (VC x Q) – FC = P $14Q-$4.20Q-$294,000=0 $9.8Q=$294,000 Q=30,000 units D. What is the breakeven point in dollars? Sales Dollars=FC/CM Ratio $294,000/0.7=$420,000 Question 2: Calihan Company has a product contribution margin of $50. The fixed costs are $300,000. Calihan Company desires a target profit before taxes of $150,000 per year. (2 points) A.
Solution: a. $450 1.501 = $675.45 (future value of a single payment) b. $800 14.487 = $11,589.60 (future value of an annuity) c. $1,000 0.747 = $747 (present value of a single payment) d. $500 6.710 = $3,355 (present value of an annuity) 10. Carla Lopez deposits $3,000 a year into her retirement account. If these funds have an average earning of 9 percent over the 40 years until her retirement, what will be the value of her retirement account?
– 133 2013 net sales / base year 2011 net sales = 800,000 / 600,000 = 1.33 1.33 x 100% = 133% 5. In analyzing financial statements, horizontal analysis is a- tool 6. Comparative balance sheets - are usually prepared for at least two years 7. Assume the following cost of goods sold data for a company: 2013 $1,500,000 2012 1,200,000 2011 1,000,000 If 2011 is the base year, what is the percentage increase in cost of goods sold from 2011 to 2013? – 50% = New - Old Old 100 8.
What is the total amount of profit for your IBM investment? $15x $150 = $2250 2. Calculating Rate of Return. Assume that at the beginning of the year, you purchase an investment for $8,000 that pays $100 annual income. Also assume the investment’s value has decreased to $7,400 by the end of the year.
What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants? (Points : 4) $28,800 $33,600 $41,600 $40,000 3. (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $900. Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010.
On January 1, 2010, Roberto Company adopts a compensatory stock option plan and grants 40 executives 1,000 shares each at $30 a share. The fair value per option is $7 on the grant date. The company estimates that its annual employee turnover rate during the service period of three years will be 4%. However, at the end of 2011, the company estimates that the employee turnover will be 5% a year for the entire service period. The compensation expense for 2011 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.)
Its sales are $100 million and it has total assets of $50 million. What is its ROE? ROE = (profit margin) x (total assets turnover) x (equity multiplier) (3%) x ($100 million/$50 million) x (2.0) = .24 or 24% 3-6 Donaldson & Son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the
Q1 -Ocean Carriers uses a 9% discount rate. Should Ms. Linn purchase the $39 million capsize? Assume that Ocean Carriers is subject to 35% taxation To decide whether Ms. Linn should make the purchase, we conducted a Net Present Value analysis to determine the worthiness of the project taking into account the time value of future cash flows. We were given the following information: Three-year time charter starting in 2003 at a rate of $20,000 per day with an annual escalation of $200 per day. Expected inflation rate is 3%.