Answer:
The Correct Option is "Economies of scale"
Explanation:
Economies of scale:
Economies of scale explain the reduction in per unit production costs caused by expansion of production. If a economy doubles its output each year causes the production costs to reduce by 30 percent, then it is an example of economies of scale.
Answer: Economies of scale.
Explanation:
Economies of scale is the saving in costs that is gained as a result of an increase in production level. It is the cost advantage that an organization experiences due to its increase in the level of output. The benefit occurs as a result of the inverse relationship that exists between quantity produced and per-unit fixed cost. The higher the quantity of output that is produced, the smaller the per unit fixed cost.
Economies of scale also brings about a reduction in the average variable costs when output increases. This is due to operational efficiencies which occurs as the scale of production increases. When the output is doubled, the reduction in costs by thirty percent is an example of economies of scale.
Answer:
Recommendation : The firm should lease the data center
Explanation:
To determine which option is better, we would compare the upfront cost of option A to the present value of the lease payment.
The present value of the lease payment is given as follows:
PV = A× 1-1+r^(-n) /r
A- semi-annual lease payment - 3,500× 6 = 21,000
r- semi-annual interest rate = 5%/2 = 2.5%
n- number of period = 3× 2 = 6.(note that interest is compounded semi- annually i.e every six month)
PV of the lease payment = 21,000 × (1 - 1.025^(-6))/0.025 =115,670.63.
Comparing the two options, we have :
Purchase cost = 120,000
Lease cost = 115,670.63.
The lease cost is lower and would save the firm 4329.37 i.e (120,000 - 115,670.63)
Recommendation : The firm should lease the data center
When comparing the cost of purchasing a data center outright versus leasing it on a monthly basis over three years, it is slightly more cost effective, factoring in the present value of money, for the firm to lease the data center. The total present value cost of leasing is approximately $119,199.09, while purchasing would be $120,000.
The subject matter of this question involves determining the least expensive option for accessing a data center over a span of three years, given two possibilities: purchasing the center outright (Plan A), or leasing it on a monthly basis (Plan B). It's a form of capital budgeting, specifically a cost comparison method.
For Plan A, the upfront cost is $120,000. This cost is incurred immediately and there are no further costs associated with it for the three-year period.
Plan B needs to be evaluated using the time value of money because the monthly lease payments are made over time. Given the borrowing cost/APR of 5% and the semiannual compounding, it means the interest is compounded twice a year. The monthly cost of leasing the data center is $3,500. Over three years (36 months), this would amount to $3,500 x 36 = $126,000.
However, since we need to factor in the cost of borrowing, we need to calculate the present value (PV) of the lease payments. Because the interest is compounded semiannually, the effective monthly interest rate is (1+0.05/2)^(2/12)-1
= 0.00407412378303.
Using this to calculate the present value of an ordinary annuity formula:
P V = $3,500 x (1-(1+0.00407412378303)^-36)/0.00407412378303.
P V under Plan B is approximately $119,199.09.
Comparing the two plans, it's evident that Plan B (leasing) is the cheaper option by just under $1,000. Therefore, it would be more cost-effective for the firm to lease the data center rather than purchasing it outright.
#SPJ3
Trading securities 11,500
Accumulated depreciation on equipment and furniture 29,000
Cash 33,000
Inventory 58,500
Equipment 45,000
Patent 9,000
Prepaid expenses 3,700
Land held for future business site 36,500
In Sheridan’s December 31, 2017 balance sheet, the current assets total is:
a. $212500.
b. $234300.
c. $146500.
d. $218300.
Answer:
$143,700
Explanation:
Current assets in Sheridan Company's trial balance are;
Accounts receivable (net) = $37,000
Trading securities = $11,500
Cash = $33,000
Inventory = $58,500
Prepaid expenses = $3,700
Total current assets = $37,000 + $11,500 + $33,000 + $58,500 + $3,700
= $143,700
The right answer is not given as an option.
B. Chatter groups
C. Similar opportunities
D. Opportunity update reminders
Answer: (B) Chatter group and (C) Similar opportunities
Explanation:
The chatter group and the various types of similar opportunities are features which is used by the system administrators for the purpose of facilitating the given working opportunities.
The chatter group is one of the type of collaboration tool in which the various types users can easily interact and also communicating socially.
According to the given question, the universal containers effectively understand that the peers are managing various types of opportunities by using the comparable products and the services with the competitors in the market.
Therefore, Option (B) and (C) are correct answer.
Answer:
The correct answer is $100,000.
Explanation:
According to the scenario, the given data are as follows:
Contribution margin = $2,500 per hour
Extra time = 40 hours
Selling price = $100 per unit
So, we can calculate the increase in contribution margin by using following formula:
Increase in contribution margin = Contribution margin × Extra time
By putting the value in the formula, we get
= $2,500 × 40
= $100,000
Answer:
If the price level in China is rising faster than the price level in the US, this means that the Chinese inflation rate is higher.
two different things will happen here:
1) higher inflation means that Chinese products will be more expensive which will increase the demand for American products. An increase in the demand for American products will appreciate the US dollar, but...
2) Inflation all by itself generally would not alter the exchange rate, but high inflation generally leads to high interest rates. Central banks usually increase interest rates to decrease inflation.
Higher interest rates will usually increase the demand of a currency which result in an appreciation of the local currency against foreign currencies. In this case, the Chinese yuan should appreciate against the US dollar.
Generally the appreciation of a currency due to high interest rates will offset the depreciation due to a negative trade balance.
2. %
Answer:
Margin of safety in dollars is $91,000
Margin of safety as percentage of sales is 26%
Explanation:
Margin of safety can be defined as the amount of output or sales that a business can make before it reaches its breakeven point.
To calculate margin of safety in dollars
Margin of safety= Sales - Breakeven sales
Margin of safety= 350,000- 259,000
Margin of safety= $91,000
To calculate margin of safety as a percentage of sales, we use the following formula.
Margin of safety = (Sales- Breakeven point) ÷ Sales
Margin of safety = (350,000- 259,000)÷ 350,000
Margin of safety= 0.26= 26%
Answer:
1. Margin of Safety(MOS) expressed in dollars =91,000
2. Margin of Safety(MOS) expressed as percentage = 26% (to the nearest whole number)
Explanation:
The MARGIN OF SAFETY is applied as a measure of the difference between the actual sales and break-even sales.
In other words, to find Margin of Safety, you subtract break-even sales from the actual sales.
MOS is used to determine at which level sales can drop before a business incurs losses. It is a tool by which actual or budgeted sales may be decreased without resulting in any loss.
1. Formula for Margin of Safety(in dollars):
Margin of Safety(in dollars) = Actual/Budgeted Sales ➖ Break-even Sales
Where:
Actual Sales = $350,000
Break-even Sales = $259,000
➡ Margin of Safety(in dollars) = $350,000 ➖ $259,000 = 91,000(ans)
2. Formula for Margin of Safety (expressed as a percentage) = [(Actual/Budgeted Sales ➖ Break-even Sales) ➗ Actual/Budgeted Sales] ✖ 100%
Where:
Actual Sales = $350,000
Break-even Sales = $259,000
➡ Margin of Safety (in percentage) = [($350,000 ➖ $259,000) ➗ $350,000] ✖ 100%
= ($91,000 ➗ $350,000) ✖ 100%
= 0.26 ✖ 100% = 26%(ans).