The president believes that a $6,300 increase in the monthly advertising budget, combined with an intensified effort by thesales staff, will increase unit sales and the total sales by $84,000 per month. If the president is right, what will be theincrease (decrease) in the company's monthly net operating income?Note: Do not round intermediate calculations.IncreasesbyShow less A

Monthly expenses=$6300Monthly sales=$84000

Answered: The president believes that a $6,300…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Bb.39.
2. The president believes that a $6,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $84,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?
[The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year. Dept. 0 $70,000 Dept. M Dept. N Dept. P Dept. T Total $77,000 $ 39,000 $56,000 $ 38,000 $ 280,000 Sales Expenses 14,800 55,800 70,600 42,400 18,600 19,000 43, 200 46,800 16,800 Avoidable 21,600 5, 200 26,800 $43, 200 144,600 139,600 Unavoidable Total expenses 61,000 $(22,000) 62,200 63,600 284, 200 Net income (loss) $ 6,400 $(6, 200) $(25,600) $ (4, 200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPEC TED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)
Acme Company recently introduced a new bonus plan for its corporate executives. The company believes that current profitability and customer satisfaction levels are equally important to the company’s long-term success. As a result, the new plan awards a bonus equal to 0.5% of salary for each 1% increase in business unit net income or 1% increase in the business unit’s customer satisfaction index. For example, increasing net income from $1 million to $1.1 million (or 10% from its initial value) leads to a bonus of 5% of salary, while increasing the business unit’s customer satisfaction index from 50 to 60 (or 20% from its initial value) leads to a bonus of 10% of salary. There is no bonus penalty when net income or customer satisfaction declines. In 2016 and 2017, Acme’s three business units reported the following performance results: Q.Compute the bonus as a percent of salary earned by each business unit executive in 2017
Acme Company recently introduced a new bonus plan for its corporate executives. The company believes that current profitability and customer satisfaction levels are equally important to the company’s long-term success. As a result, the new plan awards a bonus equal to 0.5% of salary for each 1% increase in business unit net income or 1% increase in the business unit’s customer satisfaction index. For example, increasing net income from $1 million to $1.1 million (or 10% from its initial value) leads to a bonus of 5% of salary, while increasing the business unit’s customer satisfaction index from 50 to 60 (or 20% from its initial value) leads to a bonus of 10% of salary. There is no bonus penalty when net income or customer satisfaction declines. In 2016 and 2017, Acme’s three business units reported the following performance results: Q. Acme’s board of directors is concerned that the 2017 bonus awards may not accurately reflect the executives’ overall performance. In particular, the…
Suppose your firm receives a $4.34 million order on the last day of the year. You fill the order with $1.82 million worth of inventory. The customer picks up the entire order the same day and pays $1.17 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $3.17 million within 40 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following: d. Inventory e. Cash a. Revenues b. Earnings c. Receivables a. Revenues Revenues will increase by $ million. (Select from the drop-down menu and round to two decimal places.) b. Earnings Earnings will increase by $ million. (Select from the drop-down menu and round to two decimal places.) c. Receivables Receivables will increase by $ million. (Select from the drop-down menu and round to two decimal places.) d. Inventory Inventory will decrease by $ million. (Select from the drop-down menu and round to two decimal places.) е. Cash…
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A chain of convenience stores has one manager per store who is paid a monthly salary. Relative to the number of stores, is the manager’s salary fixed or variable? Why?
In some business models, like restaurants, revenue determines expenses. For example, a restaurant owner may find that labor and food costs should each be 30% of total revenue for the business model to work. As you run your business over time, you'll see certain patterns and limitations (e.g. cafes only have a certain number of seats) -- patterns in revenue to determine expenses. Please review and analyze the Financial Statement Model and explain each component in Dark Blue Such as % Growth per month, Revenue, Expenses, Operating Cash Flow, etc.
please solve all parts within 30 minutes.
Your company received a $7 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $2 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $5 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes). Based on this information, complete the table below: Account Account Increase/Decrease/ No effect Value of effect ($) Revenues Earnings Receivables Inventory Cash

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