Metal Industries has monthly fixed costs totaling $90,000 and variable costs of $5 per unit. Each unit of product is sold for $20.

Assume the company expects to sell 11,850 units of product this coming month. What is the margin of safety in units?

Group of answer choices

8,850

6,600

5,850

7,350

Photos Inc. produces two different products with the following monthly data for June:

Assume the sales mix remains the same at all levels of sales.

How many units in total must be sold to break even for the month?

Group of answer choices

3,500

7,000

6,250

17,500

Camera Products Inc. produces two different products with the following monthly data for July:

If the sales mix shifts to 85 percent cameras and 15 percent tripods, what happens to the break-even point in units?

Group of answer choices

It decreases.

It is not affected.

There is not enough information to answer this question.

It increases.

Photos Inc. produces two different products with the following monthly data for June:

Assume the sales mix remains the same at all levels of sales.

How many units in total must be sold to earn a monthly profit of $252,000?

Group of answer choices

6,250

4,500

17,000

10,750

$1000 is deposited into an account at time t=0. The nominal interest rate is 8% compounded semiannually during the first year. An additional $118.40 is deposited into the account at time t=1 and the fund grows at a force of interest 100 2 t  t  during the second year.

1) Calculate the semiannual effective interest rate during the first year.

2) Calculate the account value at time t=1 before the additional $118.40 deposit.

3) Calculate the total account value at time t=2.

7. Which of the following is a method used to track stocks?

a) First In, First Out Method (FIFO)

b) Average Evnater Method

c) Continuous Inventory Method

d) Moving Inventory Method

8. The entity paid TL 1,000.- to the contracted lawyer to cover the fees and expenses of lawsuits. Which of the following accounts will be debited in the relevant accounting record?

     a) 196 Personnel Advances

b) 381 Expense Accruals

c) 770 General Administrative Expenses

d) 195 Business Advances

e) 100 Cash

1. A factory manufactures machines. Each machine is defective with probability 1/100, independently.

The machines get numbered 1, 2, . . . as they’re produced
(a) Out of machines 1, . . . , 1000, what is the probability that none are defective?
(b) Out of machines 1, . . . , 1000, what is the probability that two or fewer are defective? (c) Out of machines 1, . . . , 1000, what is the probability that exactly ten are defective? (d) What is the probability that the first defective machine is number 17?
(e) What is the probability the first defective machine is numbered 18 or higher?

Your firm has EUR 100 million of outstanding equity. It has also issued a 10-year bond in US markets with total face value equal to USD 100 million, which pays a 4% annual coupon and was recently quoted at a price of 100. Your marginal tax rate is 25%.

You observe the market information below.

EUR risk-free rate 2%
Your firm's beta 1.25
Market risk premium 4%
EUR expected inflation 1%
USD expected inflation 3%
Exchange rate 1.10 USD per EUR

Your firm’s weighted average cost of capital (in USD terms) is closest to:

Problem 4

Able sells three products that use the same machine and there is a scarcity of hours available on the machines. Only 50,000 hours are available and total fixed expenses are $1,100,000. Below is information regarding the products:

                                                             A                      B                         C

Sales Price                                     $200                 $180                  $170

Variable Expense                           100                      90                    100

Contribution Margin                     100                      90                      70

Machine Hours/Unit                        4                         5                        2

Demand                                         4,000                  5,000               8,000

Required: Determine the order the products should be made in and how much should be made and what the overall operating income will be.

What should we do and how much income will be earned if the optimum mix is used?

II. Consider a monopolist where the market demand curve for the produce is given by P = 520 – 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50.

a. Given the above information, what is this monopolist’s profit maximizing price and output if it charges a single price?

b. Given the above information, calculate this single price monopolist’s profit.

c. At the profit maximizing quantity, what is this monopolist’s average total cost of production (ATC)?

d. At the profit maximizing quantity, what is the profit per unit for this single price monopolist?

The charter company has the following financing outstanding. What is the WACC for the company?

Debt: 40,000 bonds with a 8% coupon rate and a current price quote of 1200 the bonds have 25 years to maturity. 150,000 zero coupon bonds with a price quote of 185 and 30 years to maturity.

Preferred Stock: 100,000 shares of 5% preferred stock with a current price of $78, and a par value of $100.

Common Stock: 1,800,000 shares of Common Stock; the current price is $75. And the beta of the stock is 1.2.

Market: The corporate tax rate is 40%, the market risk premium is 7%, and the risk free rate is 4%

An investor observes that there is no car polish service available in the town that he has recently moved to and decides to open a shop offering this service. The estimated market demand for the car polish service is given by P = 300 – 5Q. The total cost of the car polish service is TC = 5Q2 +100 and the marginal cost is MC = 10Q.

If the investor engages in perfect price discrimination, how many car polish services will he offer? What would be the deadweight loss?

What will be will be the profit maximizing price and quantity if the investor is not allowed to price discriminate, and is forced to charge a uniform price to all the customers? What will be the profit, deadweight loss and consumer surplus?