Answer:
$457,300
Explanation:
FVI purchased a land and warehouse at the cost of $410,000
The following expenditures were incurred
Broker's commission = $21,000
Title insurance= $1,100
Miscellaneous closing costs= $4,200
Demolition of the warehouse= $21,000
Therefore, the amount in which FVI should record as cost of the land can be calculated as follows
=$410,000+$21,000+$1,100+$4,200+$21,000
= $457,300
Hence the amount that FVI should record as the cost of the land is $457,300
GDP can be calculated by summing _____. rev: 04_09_2018 Multiple Choice consumption, investment, government purchases, and net exports consumption, investment, government purchases, and imports consumption, investment, wages, and rents consumption, investment, government purchases, exports, and imports
Answer:
consumption, investment, government purchases, and net exports
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
Imports is subtracted from GDP and not added
Suppose that in 1969, the U.S. economy was operating close to potential. The budget deficit experienced by the United States in 1969 was:
Answer: primarily cyclical deficit
Explanation:
Budget deficit occurs when the government expenditure for a certain year is more than the revenue the government makes.
Since the the United States economy was operating close to potential. The budget deficit experienced by the United States in 1969 was primarily cyclical deficit.
What are Red Bull's greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share?
Answer:
like that's Bom pom and manster also ĺine red if you need to visit a super market you can get a anergy drink and ask them for what do you need exactly.
An investor holds a 10 year bond pays a coupon rate of 9%. The yeid to maturity of the bond is 10% . The bond is trading:
Answer:
the bond is trading at a discount
Explanation:
There is an inverse relationship between the yield and the price of the bond.
As the yield goes up, the price of the bond goes down and as the yield goes down, the price of the bond goes up.
The yield - 10%, is greater than the coupon rate - 9%, the price will be less than the par value, and we say that the bond is trading at a discount.
Take a real business activity example and relate with the concept of commission depreciation and simple and compound interest rate?
Answer & Explanation: Commission: This is a percentage earned on total sales. Using a health insurance company as an example, brokers earn commission on premium received by the company.
Depreciation: This relates to the wear and tear of an asset. The health insurance company fixed assets such as motor vehicle, furniture and equipments will be depreciated and expensed periodically.
Simple and compound interest rates: Simple interest rate is a rate charged directly on the principal amount deposited. If the health insurance company decides to invest in fixed income or call deposits with a bank for a period of 1 year. The bank can put a specific rate that will be paid to the company as an interest earned.
Compound interest rate on the other hand is beneficial to the financier. It is a rate charged on both the principal amount and the interest earned. For instance if the company decides to take a loan with the bank, the bank can charge a compound interest rate.
Financial capital markets bridge the gap between savers and investors: that is, they find ways to take the inflow of funds from many separate financial capital suppliers and transform it into the funds of financial capital demanders desire. Such financial markets include:_______
Answer: stocks, bank loans, bonds, and other financial investments.
Explanation:
A capital market is a financial market whereby lequity-backed securities are purchased by individuals or firms and also sold.
Financial capital markets bridge the gap between savers and investors: that is, they find ways to take the inflow of funds from many separate financial capital suppliers and transform it into the funds of financial capital demanders desire.
Such financial markets consists of stocks, bank loans, bonds, and other financial investments.
Zhao Co. has fixed costs of $286,200. Its single product sells for $163 per unit, and variable costs are $110 per unit. Compute the level of sales in units needed to produce a target (pretax) income of $106,000.
Answer:
Break-even point in units= 7,400 units
Explanation:
Giving the following information:
Fixed costs= $286,200
Selling price= $163 per unit
Unitary variable costs= $110
Desired profit= $106,000
To calculate the number of units to be sold, we need to use the break-even point formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (286,200 + 106,000) / (163 - 110)
Break-even point in units= 7,400 units
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $620,000, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $90 $50 Gloves 105 65 a. Compute the break-even sales (units) for the overall enterprise product, E.
Answer:
$15,500 units
Explanation:
For the computation of break-even sales (units) for the overall enterprise product, E first we need to follow some steps which is shown below:-
Contribution margin = (Selling price - Variable costs)
For Bats $90 - $50
= $40
For Gloves = $105 - $65
= $40
Overall contribution margin = (40 × 40%) + (40 × 60%)
= $40
a.Break-even point = Fixed costs ÷ Contribution margin
= $620,000 ÷ 40
= $15,500 units
What is the latest actual share count reported in the 2013 Colgate-Palmolive 10-K? Please provide your answer without comma separator or decimal.
Answer:
The latest actual share count reported in the 2013 Colgate-Palmolive 10-K:
1465706360 shares
Explanation:
Colgate-Palmolive actual share count as reported in the 2013 10-K is One Billion, Four Hundred and Sixty-Five Million, Seven Hundred and Six Thousand, Three Hundred and Sixty (1,465,706,360) shares. This figure represents the outstanding shares of the company, which are issued and fully paid, out of the 2 billion authorized shares. The outstanding shares multiplied with the market share price gives the market capitalization of Colgate-Palmolive.
Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows:
Year Plant Expansion Retail Store Expansion
1 $ 450,000 $ 500,000
2 450,000 400,000
3 340,000 350,000
4 280,000 250,000
5 180,000 200,000
Total $1,700,000 $1,700,000
Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis.
Present Value of $1 at Compound Interest
Year 6% 10% 12% 15% 20%
1 0.943 0.909 0.893 0.870 0.833
2 0.890 0.826 0.797 0.756 0.694
3 0.840 0.751 0.712 0.658 0.579
4 0.792 0.683 0.636 0.572 0.482
5 0.747 0.621 0.567 0.497 0.402
6 0.705 0.564 0.507 0.432 0.335
7 0.665 0.513 0.452 0.376 0.279
8 0.627 0.467 0.404 0.327 0.233
9 0.592 0.424 0.361 0.284 0.194
10 0.558 0.386 0.322 0.247 0.162
Required:
1a. Compute the cash payback period for each project.
Cash Payback Period
Plant Expansion < >1 year2 years3 years4 years5 years
Retail Store Expansion < >1 year2 years3 years4 years5 years
1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar.
Plant Expansion Retail Store Expansion
Present value of net cash flow total $ $
Less amount to be invested $ $
Net present value $ $
2. Because of the timing of the receipt of the net cash flows, the
plant expansion
retail store expansion
Answer:
the cash payback period for both projects is 2 years
NPV for plant expansion = $304,707.24
NPV for Retail Store Expansion = $309,744.41
retail store expansion has the greater NPV
Explanation:
Here is the full question for question 2
. Because of the timing of the receipt of the net cash flows, the
plant expansion
retail store expansion
has the higher net present value
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Please check the attached image for a calculation of how the payback period was calculated.
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
for Plant Expansion
Cash flow in year 0 = -900,000
Cash flow in year 1 = 450,000
Cash flow in year 2 = 450,000
Cash flow in year 3 = 340,000
Cash flow in year 4 = 280,000
Cash flow in year 5 = 180,000
I = 15%
NPV = $304,707.24
For retail store expansion
Cash flow in year 0 = -900,000
Cash flow in year 1 = 500,000
Cash flow in year 2 = 400,000
Cash flow in year 3 = 350,000
Cash flow in year 4 = 250,000
Cash flow in year 5 = 200,000
I = 15%
NPV = $309,744.41
retail store expansion has the greater NPV
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On January 1, a company issued 5%, 15-year bonds with a face amount of $80 million for $59,249,660 to yield 8%. Interest is paid semiannually. What was the interest expense at the effective interest rate on the December 31 annual income statement
Answer:
$3,565,174.18
Explanation:
Firstly, we need to calculate discount on the bond
Discount = $80,000,000 - $59,249,660
= $20,750,340
Since interest is paid semi-annually,
= 15 × 2
= 30 periods
Finding the amortized discount per period, we have;
= $20,750,340 ÷ 30
= $691,678
Therefore, interest expense on June 31;
Interest expense = Interest paid + discount amortized per period
= $80,000,000 × 0.05 × 6/22 + $691,678
= $1,090,909.09 + $691,678
= $1,782,587.09
Interest expense on December 31;
= $80,000 × 0.05 × 6/12 + $691,678
= $1,090,909.09 + $691,678
=$1,782,587.09
Total expense on December 31 = Interest expense on June 30 + Interest expense on December 31
= $1,782,587.09 + $1,782,587.09
= $3,565,174.18
A__________produces finished-goods inventory in advance of customer demand using a forecast of sales.
Answer:
Push system.
Explanation:
A push system produces finished-goods inventory in advance of customer demand using a forecast of sales and as such it is categorized as a make to stock because the production of goods are not based on actual demand by the consumers.
Under a push system, manufacturing is strictly based on a projected production plan and the flow of information between the manufacturer and the market is in the same direction with those of raw materials used.
Irene’s Dairy is deciding whether or not to enter the market for ice cream, currently monopolized by Mattie’s Ice-cream. If it enters the market, Mattie’s can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war. What would the profits be for Mattie’s Dairy if Irene does not enter the market?
Answer:
"Threaten to always accommodate" is the correct choice.
Explanation:
As we acknowledge accommodation seems to be the phase wherein we change current understanding in anything other than a sense that new information of interest is integrated. And then we can tell whether Mattie won't try to compromise Irene and will therefore surely consider to "intimidate to accommodate" Irene throughout all times. Accommodate means, for example, introducing a piece of different information about what another person asks mother in some kind of a railway station what it's really. Mother says this is train and starts running on what seems like a device like buses running on roadways.There are two preferred methods to accessing the database. One is to have newly instantiated object call the data access object. The other is to let the controller access the data access object.
a. True
b. False
A company sold equipment that originally cost $290,000 for $145,000 cash. The accumulated depreciation on the equipment was $145,000. The company should recognize a:
Answer:
$0 gain/loss
Explanation:
A company sold an equipment that originally cost $290,000 for $145,000
The accumulated depreciation on the equipment was $145,000
The first step is to calculate the book value of the equipment
Book value of the equipment= Cost of equipment-accumulated depreciation
= $290,000-$145,000
= $145,000
Therefore, the gain/loss on the equipment can be calculated as follows
= Selling price-book value
= $145,000-$145,000
= 0
Hence there is no recognized gain or loss on the equipment
Answer:
Company would recognize a no loss or gain on the disposal i.e Nil
Explanation:
The gain or loss on disposal is the difference between the carrying value of an assets at the point of disposal and the the disposal value.
Gains/(Loss)= Disposal value - carrying value
The carrying value is the difference between the historical cost and the accumulated depreciation till date.
Carrying value = Historical cost - Accumulated depreciation till date
Carrying value = 290,000 - 145,000 = 145 ,000
Gains/Loss= 145,000 - 145,000 = 0.
Company would recognize a no loss or gain on the disposal i.e Nil
Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of 8,588. The FICA tax for social security is 6.2% of the first $118,500 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,424.97. Her net pay for the month is: (Round your intermediate calculations to two decimal places.)
a) $7,038.50
b) $5,141.03
c) $6,072.04
d) $6,566.00
e) $6,506.04
Answer: e) $6,506.04
Explanation:
Employees do not pay FUTA or SUTA. Employers pay those.
Ms. Grant's net pay for the month therefore is;
= Gross earnings - FICA Social Security - FICA Medicare - Federal Income tax withheld
= 8,588 - (6.2% * 8,588) - ( 1.45% * 8,588) - 1,424.97
= 8,588 - 532.46 - 124.53 - 1,424.97
= $6,506.04
a stock split increases the number of authorized issued and outstanding shares of stock coupled with a proportionate reduction in the
Answer:
stock price
earning per share
dividends per share
Explanation:
A stock split is when a company increases the number of its shares outstanding.
for example if a company has 4 million shares outstanding at a price of $20, earning per share is $1 and dividend per share is $0.50. this company announces a 2 for 1 split :
the number of outstanding shares becomes 2 x 4 million = 8 million
stock price becomes = $40 / 2 =$20
earning per share = $1 / 2 = $0.50
dividend per share = $0.5 / 2 = $0.25
3. At an oral auction for a lamp, half of all bidders have a value of $50 and half have a value of $70. What is the expected winning bid if there are four bidders
Answer: $60
Explanation:
From the question, we are informed that At an oral auction for a lamp, half of all bidders have a value of $50 and half have a value of $70.
The expected winning bid if there are four bidders goes thus:
Since there are four bidders, the probability that the winning bid is $50 is 1/2 and for $70, it's 1/2 as well based on the question.
The expected winning bid will now be:
= ($50 × 1/2) + ($70 × 1/2)
= ($50 × 0.5) + ($70 × 0.5)
= $25 + $35
= $60
An asset has an average return of 10.31 percent and a standard deviation of 22.47 percent. What is the most you should expect to lose in any given year with a probability of 16 percent
Answer:
-34.63
Explanation:
Confidence interval = 1 - probability * 2
= 1 - 0.16 * 2
= 0.71
= 71%
As per 95% rule, range = mean + / -2 * standard deviation.
10.31 +/- 2 * 22.47
10.31 - 2 * 22.47 to 10.31 + 2 * 22.47
10.31 - 44.94 to 10.31 + 44.94
-34.63 to 55.25
Conclusion: -34.63 is the lower bound hence it is the maximum one can expect to lose in any given year.
When the most you should anticipate losing in any given year with a probability of 16 percent is -34.63
Calculation of Probability
Then Confidence interval is = 1 - probability * 2
After that = 1 - 0.16 * 2
Now, = 0.71
= 71%
As per 95% rule, range is = mean + / -2 * standard deviation.
Then, 10.31 +/- 2 * 22.47
After that, 10.31 - 2 * 22.47 to 10.31 + 2 * 22.47
Then, 10.31 - 44.94 to 10.31 + 44.94
Therefore, -34.63 to 55.25
Now, The Conclusion: -34.63 is the lower bound Thus, it is the maximum one can expect to lose in any given year.
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Alpha Industries is considering a project with an initial cost of $9.1 million. The project will produce cash inflows of $1.84 million per year for 7 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.94 percent and a cost of equity of 11.49 percent. The debt–equity ratio is .71 and the tax rate is 40 percent. What is the net present value of the project?
Answer:
NPV = $1.22 million
Explanation:
The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
To work oit the NPV we would need to determine the discount rate i.e cost of capital as follows:
Cost of capital -discount rate -
WACC = We×Ke + Wd×Kd
After cost o debt = 5.94× (1-0.4)=3.56
WACC = (0.71×3.56 %) + (0.29×11.49%)=5.86 %
PV of cash inflow = A× (1- (1+r)^(-n))/r
A- annul cash inflow, r- 5.86%, n- 7
PV of cash inflow= 1.84 million × (1- 1.0586^(-7))/0.0586 =10.32
Initial cost = 9.1 million
NPV = 10.32 - 9.1 = 1.22 million
NPV = $1.22 million
Which of these is true about entrepreneurs? . A. Entrepreneurs are born not made . B. Anyone can start a business . C. Entrepreneurs are gamblers. D. Age is no barrier in entrepreneurship
Answer:
i think it is D
Explanation:
no matter how old you are one can bring up a new business
If a firm is producing so that the point chosen along the production possibility frontier is socially preferred, then that firm is said to have reached its:________
a. allocative efficiency
b. productive efficiency
c. utility-maximizing efficiency
d. minimum price efficiency
Answer:
b
Explanation:
Productive efficiency means that production is been carried out with no waste.
Production possibility frontier is a curve that shows the various combinations of goods that can be produced in an economy when all resources are fully utilised.
On the ppf, all resources are fully utilised, so there is productive efficiency.
TB MC Qu. 9-251 Turrubiates Corporation makes a product that ... Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 6.7 liters per unit Standard price $ 1.20 per liter Standard cost $ 8.04 per unit The company budgeted for production of 2,500 units in April, but actual production was 2,600 units. The company used 18,000 liters of direct material to produce this output. The company purchased 18,800 liters of the direct material at $1.30 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:
Answer:
Direct material quantity variance= $696 unfavorable
Explanation:
Giving the following information:
Standard quantity 6.7 liters per unit
Standard price $ 1.20 per liter
Actual production was 2,600 units.
The company used 18,000 liters of direct material to produce this output.
To calculate the direct material quantity variance, we need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 6.7*2,600= 17,420
Direct material quantity variance= (17,420 - 18,000)*1.2
Direct material quantity variance= $696 unfavorable
Your estimate of the market risk premium is %. The risk-free rate of return is %, and General Motors has a beta of . According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Answer:
The correct option is option A) 16.4%.
Explanation:
Note: This question is not complete as all the important data are omitted from it. The complete question is therefore provided before answering the question as follows:
Your estimate of the market risk premium is 9%. The risk-free rate of return is 3.8% and General Motors has a beta of 1.4. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Options:
A) 16.4%
B) 17.2%
C) 14.8%
D) 15.6%
The question is now answered as followed:
Capital asset pricing model (CAPM) can be described as a model that is employed to compute a theoretical required rate of an asset in order decide whether or not to add assets a portfolio of investment that is well-diversified.
According to the Capital Asset Pricing Model (CAPM), the expected return can be calculated using the following formula:
Expected return = Risk-free rate + (Beta * Market ris premium) .......... (1)
Where;
Risk-free rate of return = 3.8%
Market risk premium = 9%
Beta = 1.4
Substitute the values into equation (1), we have:
Expected return = 3.8% + (1.4 * 9%) = 16.40%
Therefore, the correct option is option A) 16.4%.
Imagine that you are the supply chain manager for the Magic Widget company and you need to measure your supply chain performance. The chart shows the financial variables that you will need to perform your task.
Financial Variables
Total Assets (in $ billions) 15.1
Cost of Goods Sold (in $ billions) 14.3
Inventory:
Raw Material Inventory (in $ billions) 0.76
Work-in-progress Inventory (in $ billions) 0.12
Finished Goods Inventory (in $ billions) 0.82
Compute the percentage of assets committed to inventory and inventory turnover.
Answer:
Percentage of assets in inventory = 11.26%
Inventory turnover = 8.41 times
Explanation:
The computation of the percentage of assets committed to inventory and inventory turnover is shown below:-
Total inventory = Raw material + Work in progress + Finished goods inventory
= $0.76 billion + $0.12 billion + $0.82 billion
= $1.7 billion
Percentage of assets in inventory = Total inventory ÷ Total assets
= $1.7 ÷ $15.1
= 11.26%
Inventory turnover = Cost of goods sold ÷ Total inventory
= $14.3 ÷ $1.7
= 8.41 times
As a result of a decrease in the demand for U.S. dollars, there has been depreciation in the value of the U.S. dollar relative to Jamaican dollars. The depreciation in the U.S. dollar has benefitted some groups but harmed others. Indicate which of the groups are winners and which are losers from the standpoint of the depreciation of the U.S. dollar.
A. Todd, an American, going to visit Jamaica for spring break.
B. An investment bank in Jamaica that is interested in purchasing U.S. government bonds.
C. Goodyear, a U.S. based firm, selling car tires in Jamaica.
D. A family from Jamaica visiting relatives in the U.S. E. A firm from Jamaica selling handbags in the U.S.
F. U.S. based Hewlett-Packard, which is purchasing a high tech company in Jamaica.
Answer;
A. Todd, an American, going to visit Jamaica for spring break. - Loser
The US dollar depreciating means that it now takes more US dollars to buy Jamaican dollars. Todd will afford less Jamaican dollars when he goes to Jamaica.
B. An investment bank in Jamaica that is interested in purchasing U.S. government bonds. - Winner
The Investment bank will see that their domestic currency is stronger than it was therefore they can buy more US dollars. As a result it will be cheaper for the Investment bank to buy U.S. Government bonds.
C. Goodyear, a U.S. based firm, selling car tires in Jamaica. - Winners.
Goodyear will be winners because when they sell their tires in Jamaican dollars and then convert it to USD, they will.get more dollars from the transaction than before.
D. A family from Jamaica visiting relatives in the U.S. - Winners
As the Jamaican family will be able to buy more US dollars than before, they are winners.
E. A firm from Jamaica selling handbags in the U.S. - Losers.
As the firm sells in the US, they sell in US dollars. When they try to convert their sales to Jamaican dollars, they will get less than before.
F. U.S. based Hewlett-Packard, which is purchasing a high tech company in Jamaica. - Losers.
The depreciation of the US dollar means than HP will have to spend more dollars purchasing the company than before because the purchase price of the company will be stated in Jamaican dollars.
If an investor buys enough stocks, he or she can, through diversification, eliminate all of the unique risk inherent in owning stocks, but as a general rule it will not be possible to eliminate all systemic risk.
A. True
B. False
Answer: True
Explanation:
Buying enough negatively correlated stock can indeed help in diversification of a Portfolio and this on its own is very important as it reduces risk. The type of risk that it reduces however is Unsystematic risk. This is the unique risk inherent in owing stocks.
Systematic risk which is also called undiversifiable risk however cannot be so easily eliminated. This risk is inherent in the Market or the Market segment in question and results from a mix of the Economic, Geo-political and Financial factors in the market. As such, it will not be possible to eliminate all systematic risk.
During the current year, Chudrick Corporation expects to produce 10,000 units and has budgeted the following: net income $300,000, variable costs $1,100,000, and fixed costs $100,000. It has invested assets of $1,500,000. The company’s budgeted ROI was 20%. What was its budgeted markup percentage using a full-cost approach?
Answer:
25%
Explanation:
For the computation of budgeted markup percentage using a full-cost approach first we need to find out the profit expected and total cost which is shown below:-
Profit Expected = $1,500,000 × 20%
= $300,000
Total cost = Variable cost + Fixed cost
= $1,100,000 + $100,000
= $12,00,000
Budgeted Markup Percentage = Profit ÷ Total Cost
= $300,000 ÷ $12,00,000
= 25%
Joy Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 25 percent of total sales each month. Historically, sales on account have been collected as follows: 50 percent in the month of the sale, 30 percent in the month after the sale, and the remaining 20 percent two months after the sale.
Gross sales for the quarter are projected as follows:
January $20,000
February $10,000
March $40,000
Accounts receivable on December 31 were $30,000.
Joy's expected cash collections for March would be:________.
A. $37,000
B. $32,000
C. $30,250
D. $47,200
Answer:
Total cash collection= $30,250
Explanation:
Giving the following information:
Cash sales are 25 percent of total sales each month.
Sales on account:
50 percent in the month of the sale
30 percent in the month after the sale
20 percent two months after the sale.
Sales:
January $20,000
February $10,000
March $40,000
We need to calculate the cash collection for March:
Sales on cash March= 40,000*0.25= 10,000
Sales on account March= (40,000*0.75)*0.5= 15,000
Sales on account February= (10,000*0.75)*0.3= 2,250
Sales on account January= (20,000*0.75)*0.2= 3,000
Total cash collection= $30,250
The difference between total sales revenue and total cost of goods sold is the: A. Trade margin B. Gross marketing contribution C. Net marketing contribution D. All of the above
Answer:
A. Trade margin
Explanation:
The profit obtained from trading operations is known as gross profit or trade margin.This is calculated as sales less costs of goods sold.
The difference between total sales revenue and total cost of goods sold is the gross marketing contribution.
The following information is considered:
When the cost of goods sold is deducted from the sales revenue so the gross marketing contribution should come. Neither it is trade margin, nor net marketing contribution.In other words, the difference is called as gross margin.Therefore we can conclude that the correct option is B.
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