Futaba photo shop has three services, print, enlargement, frame. The shop owner thinks these two services can be sold as a bundle, Print 3, Enlarge 4 and Frame 1. The company spends 10% of selling price as variable advertising expenses. Fixed cost for the shop is $129,320. The following information related to these three services is given.
|
|
Enlarge |
Frame |
||
|
Selling price |
0.8 |
1.2 |
4.5 |
|
|
Direct material and labor costs per unit |
0.17 |
0.31 |
1.8 |
|
|
Variable manufacturing costs |
0.10 |
0.22 |
0.5 |
|
|
Expected sales units |
45,000 |
60,000 |
15,000 |
|
Determine the contribution margin per unit of each product
Compute the breakeven point volume for each service. Present supporting calculations
What is the total sales units required to earn profit of $252,000 on after tax, the above assumption and a tax rate of 40%?
In: Accounting
The Federal Government distributed a recovery relief fund to all households with $600 for all individuals filing and $1,200 for all households filing jointly and $500 for each children in each household. This was part of the $2.2 Trillion stimulus package under CARES Act of March 2020 that also included employee job protection plan for small business owners and restaurants, travel related businesses, unemployment insurances and households with no taxes filed. What would be the overall impact on AD of this recovery relief fund caused by COVID19 public health crisis and its effect on change in real GDP? Assume that the Marginal Propensity to Consume (MPC) for all American consumers is 0.8 in March 2020. Explain your answer briefly as well in your own words. Make sure you use your understanding of the concept of expenditure multiplier in estimating this problem
In: Economics
5a. The price of chicken in January is $3 and 12 pounds are purchased. The price of chicken in December is $6 and 11 pounds are purchased. Calculate the own price elasticity of demand. Explain to the delivery person so that they can understand if the demand for chicken is elastic or inelastic.
5b. The price of beef in May is $4.0 per pound and falls to $3.5 in July. The quantity of chicken consumed in May is 4,000 pounds and falls in July to 3,800 pounds. Calculate the cross price elasticity of demand. Explain to the delivery person so that they can understand if beef and chicken are substitutes or complements.
5c. A coffee cup costs $12 and people buy 5 coffee cups. The price elasticity of demand for coffee cup is -0.8. If the firm increases the price of a coffee cup by 5%, calculate the change in total expenditure. Explain your answer so that the person selling coffee would understand.
In: Economics
You have $9,000 to invest. You've done some security analysis and generated the following data for three stocks and Treasury bills, including weights in the optimal risky portfolio (ORP) from doing Markowitz portfolio optimization:
| Security | Stock A | Stock B | Stock C | T-bills |
| Expected return (%) | 12 | 8 | 5 | 4 |
| Variance | 0.04 | 0.03 | 0.02 | 0 |
| Beta | 1.2 | 1.5 | 0.8 | 0 |
| Weight in ORP (%) | 44 | 18 | 38 | 0 |
Part 1
What is the expected return of the optimal risky portfolio (ORP)?
Part 2
How much money should you invest in the ORP to achieve an expected return of 8% for the complete portfolio (in $)?
Part 3
If you want to achieve an expected return of 8% for the complete portfolio, how much money should you invest in stock A (in $)?
In: Finance
Suppose you’re eating in yet another restaurant where the dishes are shared at the table and all placed uniformly on a rotating disk-like surface. Model this surface as a thin disk of radius 45.3 cm. Someone else has spun the surface, such that it is initially at an angular speed of 0.4 rev/s. The surface and food has a combined mass of 3.3 kg. The waiter, to show off, throws a new dish of dumplings (mass 0.8 kg) onto the surface at a speed of 0.5 m/s, such that the dish lands on and sticks to the very edge of the surface moving in the same direction as the rotating food. While this is happening, you quickly calculate the final angular speed of the food so that you can predict its location at any time before others have a chance to eat the dumplings. What is this speed, in rad/s?
In: Physics
Suppose you’re eating in yet another restaurant where the dishes are shared at the table and all placed uniformly on a rotating disk-like surface. Model this surface as a thin disk of radius 45.3 cm. Someone else has spun the surface, such that it is initially at an angular speed of 0.4 rev/s. The surface and food has a combined mass of 3.3 kg. The waiter, to show off, throws a new dish of dumplings (mass 0.8 kg) onto the surface at a speed of 0.5 m/s, such that the dish lands on and sticks to the very edge of the surface moving in the same direction as the rotating food. While this is happening, you quickly calculate the final angular speed of the food so that you can predict its location at any time before others have a chance to eat the dumplings. What is this speed, in rad/s?
In: Physics
Consider the following two investors’ portfolios consisting of
investments in four stocks:
Stock Beta Jack's Portfolio Nelson's Portfolio
A 1.3 $2,500 $10,000
B 1.0 $2,500 $5,000
C 0.8 $2,500 $5,000
D -0.5 $2,500 $2,500
Portfolio Expected Return 10% 9%
(a)
Calculate the beta on portfolios of Jack and Nelson
respectively.
(b) Assuming that the risk-free rate is 4% and the expected return
on the
market is 12%, determine the required return on portfolios of Jack
and
Nelson respectively.
(c) From your answers in part (b), explain whether portfolios of
Jack and
Nelson are over-priced, under-priced or correctly priced.
(d) State and explain whether the following statement is true or
false:
“If a security lies above the security market line (SML), then it
must be
over-priced.” (word limit: 150 words)
In: Finance
1- Block 1 (mass 2.0 kg) is moving to right at speed of 5.0 m/s. It collides with block 2 (mass 3.0 kg) that is moving to the right at speed of 3.0 m/s.
a) What is the speed of the blocks if the collision is completely inelastic? How much kinetic energy is lost? (3.8 m/s, 2.4 J)
b) What is the final speed of the blocks if the collision is elastic? (v1 = 2.6 m/s, v2 = 4.6 m/s)
2 - A solid uniform sphere of mass 5.0 kg and diameter 40 cm, rolls down a hill without slipping. If the velocity of the sphere downhill is 2.0 m/s.
a) what is the height of the hill? (29 cm)
b) What is the angular momentum of the sphere downhill? (0.8 kg*m/s)
I know the answers I just need to know how to get to those answers!
In: Physics
Bethesda Mining is a mid-sized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip minds. Most of the coal mined is sold under contract, with excess production sold on the spot market.The coal mining industry, especially high-sulfur coal operations such as Bethesda, has been hard-hit by environmental regulations. Recently, however, a combination of increased demand for coal and new pollution reduction technologies has led to an improved market demand for high-sulfur coal. Bethesda has been approached by Mid-Ohio Electric Company with a request to supply coal for its electric generators for the next 4 years. Bethesda Mining does not have enough excess capacity at its existing mines to guarantee the contract. The company is considering opening a strip mine in Ohio on 5,000 acres of land purchased 10 years ago for $4 million. Based on a recent appraisal, the company feels it could receive $6.5 million on an after-tax basis if it sold the land today.Strip Mining is a process where the layers of topsoil above a coal vein are removed and the exposed coal is removed. Some time ago, the company would remove the coal and leave the land in an unusable condition. Changes in mining regulations now force a company to reclaim the land; that is, when the mining is completed, the land must be restored to near its original condition. The land can then be used for other purposes. Because it is currently operating at full capacity, Bethesda will need to purchase additional necessary equipment, which will cost $95 million. The equipment will be depreciated on a 7-year MACRS schedule. The contract runs for only 4 years. At that time the coal from the site will be entirely mined. The company feels that the equipment can be sold for 60% of its initial purchase price in four years. The contract calls for the delivery of 500,000 tons of coal per year at a price of $86 per ton. Bethesda Mining feels that coal production will be 620,000 tons, 680,000 tons, 730,000 tons, and 590,000 tons, respectively, over the next four years. The excess production will be sold in the spot market at an average of $77 per ton. Variable costs amount to $31 per ton, and fixed costs are $4,100,000 per year. The mine will require a net working capital investment of 5% of sales. The NWC will be built up in the year prior to the sales. Bethesda will be responsible for reclaiming the land at termination of the mining. This will occur in Year 5. The company uses an outside company for reclamation of all the company’s strip minds. It is estimated the cost of reclamation will be $2.7 million. In order to get the necessary permits for the strip mine, the company agreed to donate the land after reclamation to the state for use as a public park and recreation area. This will occur in Year 6 and result in a charitable expense deduction of $6 million. Bethesda faces a 25% tax rate and has a 12% required return on new strip mine projects. Assume that a loss in any year will result in a tax credit.You have been approached by the president of the company with a request to analyze the project. Calculate the NPV, IRR for the new strip mine. Should Bethesda Mining take the contract and open the mine?
In: Finance
Bethesda Mining is a mid-sized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip minds. Most of the coal mined is sold under contract, with excess production sold on the spot market.The coal mining industry, especially high-sulfur coal operations such as Bethesda, has been hard-hit by environmental regulations. Recently, however, a combination of increased demand for coal and new pollution reduction technologies has led to an improved market demand for high-sulfur coal. Bethesda has been approached by Mid-Ohio Electric Company with a request to supply coal for its electric generators for the next 4 years. Bethesda Mining does not have enough excess capacity at its existing mines to guarantee the contract. The company is considering opening a strip mine in Ohio on 5,000 acres of land purchased 10 years ago for $4 million. Based on a recent appraisal, the company feels it could receive $6.5 million on an after-tax basis if it sold the land today.Strip Mining is a process where the layers of topsoil above a coal vein are removed and the exposed coal is removed. Some time ago, the company would remove the coal and leave the land in an unusable condition. Changes in mining regulations now force a company to reclaim the land; that is, when the mining is completed, the land must be restored to near its original condition. The land can then be used for other purposes. Because it is currently operating at full capacity, Bethesda will need to purchase additional necessary equipment, which will cost $95 million. The equipment will be depreciated on a 7-year MACRS schedule. The contract runs for only 4 years. At that time the coal from the site will be entirely mined. The company feels that the equipment can be sold for 60% of its initial purchase price in four years. The contract calls for the delivery of 500,000 tons of coal per year at a price of $86 per ton. Bethesda Mining feels that coal production will be 620,000 tons, 680,000 tons, 730,000 tons, and 590,000 tons, respectively, over the next four years. The excess production will be sold in the spot market at an average of $77 per ton. Variable costs amount to $31 per ton, and fixed costs are $4,100,000 per year. The mine will require a net working capital investment of 5% of sales. The NWC will be built up in the year prior to the sales. Bethesda will be responsible for reclaiming the land at termination of the mining. This will occur in Year 5. The company uses an outside company for reclamation of all the company’s strip minds. It is estimated the cost of reclamation will be $2.7 million. In order to get the necessary permits for the strip mine, the company agreed to donate the land after reclamation to the state for use as a public park and recreation area. This will occur in Year 6 and result in a charitable expense deduction of $6 million. Bethesda faces a 25% tax rate and has a 12% required return on new strip mine projects. Assume that a loss in any year will result in a tax credit.You have been approached by the president of the company with a request to analyze the project. Calculate the NPV, IRR for the new strip mine. Should Bethesda Mining take the contract and open the mine?
In: Finance