Question

1. Given S = P(1+rt), solve for t.
2. What is the meaning of the y-intercept in a cost function graph?    
3. What is the purpose of the consumer price index?
4. If a company is operating beyond the breakeven point, then does each additional dollar of revenue add a dollar to the net income?   
5. Is the break-even volume, in units, a) the ratio of fixed cost per unit contribution margin or b) the ratio of selling price per unit contribution margin?  
6. In ordinary dating, are both the credit and discount periods measured with Day 1 being the invoice date orthe day after?  
7. Is the contribution rate the difference between the selling price and the variable cost per unit?   
8. Is markup the difference between selling price and cost of buying plus expenses, or the sum of expenses and profit?
9. Is the face value of a Treasury bill the present value or the future value?
10. If an investment loses 30% in one year and gains 30% the following year, is there a net change in value?

Answer 1

(1): Given S = P(1+rt), solve for t.

Answer: ELABORATE THE FORMULA-

S is Sum of amount, P is Principal, r is rate of interest, t is time (number of periods).

This formula belongs to "Simple Interest".

If S = P(1+rt) then

t = S/r - P/r

t = P/Sr - 1/r

t = S/r - P/r - 1/r

t = S/Pr - 1/r

(2): What is the meaning of the y-intercept in a cost function graph?    

Answer: y intercept in a cost function graph is, "Fixed cost of operations". It happens when x = 0.

(3): What is the purpose of the consumer price index?

Answer: Consumer price index (CPI) measures the weighted average of prices of a basket of consumer goods and services. Items that are included in CPI are: Transportation, food, medical services. CPI is most important tool of identifying and measuring the inflation. CPI measures average changes in prices of the basket of good, consumed by people. CPI is important to know the purchasing power of the people of a country for a given period of time.

(4): If a company is operating beyond the breakeven point, then does each additional dollar of revenue add a dollar to the net income?

Answer: No, If a company is operating beyond breakeven point, it does not mean that additional dollar of revenue add a dollar to the net income.

Break even point- It is a no profit, no loss point. It is the point at which company is neither in profit nor in loss, after break even point, company starts achieving profit.

After reaching breakeven point, each dollar revenue does not count as net income because company has to subtract variable cost from the sales to get the contribution margin and then subtract the fixed cost to know the final profit.

Sales	Amount
-Variable cost
Contribution margin
-Fixed cost
Profit

Breakeven point (in units) = Fixed cost per unit / Contribution margin per unit

(5): Is the break-even volume, in units, a) the ratio of fixed cost per unit contribution margin or b) the ratio of selling price per unit contribution margin?  

Answer: Option "a" is correct.

Break even point (in units) = Fixed cost per unit / Contribution margin per unit.

BEP (In volume) = Total fixed cost (in dollar) / Contribution margin (in dollar)