Tarco Toys is considering a new product, a gumball bank. Tarco’s market research firm is recommending that they sell the bank for $45 and predicts at that price they will sell 65,000 units per year. Variable cost per unit is $25 and annual fixed costs are $200,000. The up front investment in equipment for the five year project is $750,000. Tarco’s tax rate is 21%. You can direct the market research firm to either do further research to improve the accuracy of their pricing recommendation or the unit forecast. You therefore want to understand which variable will have more effect on your operating cash flow forecast.
a. Calculate annual operating cash flow (OCF) assuming the recommended variables
b. Calculate the sensitivity of OCF to a 10% increase in selling price and then, instead, to a 10% higher unit forecast. Based on those calculations, which variable is a more important driver of operating cash flow, in other words, is OCF more sensitive to price or units sold?
Answers
Based on the data provided, (a) the annual operating cash flow (OCF) = $835,800 ; (b) the sensitivity of OCF to a 10% increase in selling price = 21.12% and sensitivity of OCF to a 10% increase in unit forecast = 22.45%. OCF is more sensitive to a 10% increase in units sold than a 10% increase in the selling price. Hence, the unit forecast variable is more important for driving the operating cash flow than the price variable.
a. Calculation of annual operating cash flow (OCF) with the recommended variables
Annual sales revenue= $45*65000= $2925000
Variable costs= 65,000*25= $1,625,000
Contribution margin= $2925000 - $1625000= $1,300,000
Annual operating cash flow (OCF) = contribution margin - fixed costs - taxes
= $1,300,000 - $200,000 - 0.21($1,300,000-$200,000) = $835,800
b. Calculation of sensitivity of OCF with a 10% increase in selling price
New annual sales revenue = $45*(1+10%)*65000 = $319,9500
New contribution margin = $3,199,500-$1,625,000 = $1,574,500
New annual operating cash flow (OCF) = $1,574,500-$200,000-0.21($1,574,500-$200,000 )= $1,013,850
Sensitivity of OCF to a 10% increase in selling price = ($1,013,850-$835,800) / $835,800 = 0.2112 = 21.12%.
Calculation of sensitivity of OCF with a 10% increase in unit forecastNew annual sales revenue = $45*71500 = $3,217,500
New contribution margin = $3,217,500-$1,625,000 = $1,592,500
New annual operating cash flow (OCF) = $1,592,500-$200,000-0.21($1,592,500-$200,000) = $1,025,250
Sensitivity of OCF to a 10% increase in unit forecast = ($1,025,250-$835,800) / $835,800= 0.2245 = 22.45%.
From the calculation, we can infer that OCF is more sensitive to a 10% increase in units sold than a 10% increase in the selling price. Hence, the unit forecast variable is more important for driving the operating cash flow than the price variable.
Thus, based on the data provided, (a) the annual operating cash flow (OCF) = $835,800 ; (b) the sensitivity of OCF to a 10% increase in selling price = 21.12% and sensitivity of OCF to a 10% increase in unit forecast = 22.45%. OCF is more sensitive to a 10% increase in units sold than a 10% increase in the selling price. Hence, the unit forecast variable is more important for driving the operating cash flow than the price variable.
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Related Questions
the following table contains financial statement information for walmart inc. $ millions total assets net income sales equity 2018 $285,084 $8,271 $561,362 $94,245 2017 265,879 12,229 545,337 101,230 2016 258,473 16,917 529,449 101,137 a. compute return on equity (roe) for the two recent years. b. compute return on assets (roa) for the two recent years. c. compute profit margin (pm) for the two recent years. d. compute asset turnover (at) for the two recent years. round roe, roa and pm to one decimal place (example: 0.2345
Answers
The answer to the give question is as follows: a. Return on Equity (ROE): 2018: ROE = Net Income/Equity = 8,271/94,245 = 0.087
2017: ROE = 12,229/101,230 = 0.121
b. Return on Assets (ROA):
2018: ROA = Net Income/Total Assets = 8,271/285,084 = 0.029
2017: ROA = 12,229/265,879 = 0.046
c. Profit Margin (PM):
2018: PM = Net Income/Sales = 8,271/561,362 = 0.015
2017: PM = 12,229/545,337 = 0.022
d. Asset Turnover (AT):
2018: AT = Sales/Total Assets = 561,362/285,084 = 1.97
2017: AT = 545,337/265,879 = 2.05
To sum up, stocks are referred to as equities because they signify ownership in businesses. They give investors the opportunity to profit from growth while also taking on risk when the economy falters.
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A major goal of environmentally-friendly business is
O A. sustainability
B. globalization
O C. discrimination
O D. diversity
Answers
Answer:
A major goal of environmentally - friendly business is sustainability i. e. Option A.
Answer:
A. Sustainability
Explanation:
Apex
Question 2 of 25
Compared to CDs, basic savings accounts are
interest rates.
liquid and have
A. less; higher
B. less; lower
C. more, lower
D. more; higher
Answers
Answer:
C:
Explanation:
CD's are less liquid and tie up your $$ for a certain period of time, however, extend to you a higher interest rate.
Answer: A: Less and higher
Explanation:
You want to ask three different people—your uncle, your teacher, and the director of your summer internship—for letters of recommendation. What mode and channel of communication would you use for each of these people and why?
Answers
To ask for letters of recommendation from three different people, being your uncle, your teacher and the director of your summer internship, some modes and channels of communication could be more useful and aligned with the type of relationship you have with each person.
The means of communication used with your uncle could be a telephone call with informal communication. With a teacher, you could make the request through face-to-face communication in a formal tone, as you have more access to your teacher during class.
With the director of your summer internship, the appropriate channel of communication could be email, using a formal tone, as this is an entirely professional relationship.
How to choose the ideal communication channel?There are different communication channels, such as email, telephone and meetings, and the most effective will be the one aligned with the purpose of your communication and the recipient of the message.
Therefore, the use of the ideal communication channel will have relevance in the transmission of your message, which must be delivered objectively and without communication noise.
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a manager with strong emotional intelligence needs to overcome his ability to empathize when dealing with others.
o True
o False
Answers
The given statement "a manager with strong emotional intelligence needs to overcome his ability to empathize when dealing with others." is false.
Emotional intelligence is a set of skills that allow individuals to identify and manage their emotions and the emotions of others effectively. Emotional intelligence is essential for building positive relationships, managing conflicts, and making decisions that are both empathetic and effective.
However, some people believe that having too much empathy can hinder a manager's ability to make tough decisions and take actions that may be difficult but necessary for the organization's success.
Empathy is a key component of emotional intelligence, and it is crucial for building strong relationships with team members, clients, and stakeholders. Empathy is the ability to understand and share the feelings of others and is an essential quality for effective communication.
A manager with strong emotional intelligence should be able to empathize with team members and stakeholders while also managing their emotions effectively. This means that they should not let their emotions override their decision-making process, but they should use their emotions to inform their decisions.
A manager with strong emotional intelligence should be able to balance empathy and logic to make decisions that are both empathetic and effective.
In some cases, making tough decisions may require a manager to set aside their emotions temporarily, but this does not mean that they need to overcome their ability to empathize with others. Instead, they need to manage their emotions effectively and make decisions that are both empathetic and in the best interest of the organization.
In conclusion, a manager with strong emotional intelligence should not overcome their ability to empathize when dealing with others. A manager with strong emotional intelligence should be able to balance empathy and logic to make decisions that are both empathetic and in the best interest of the organization.
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assume sophie and chad can both make candles and cookies and the only limited resource is their time, all other resources they have access to are plentiful. sophie can produce 10 candles or 5 cookies in an hour. chad can produce 10 candles or 25 cookies in an hour. who has the absolute advantage in making cookies? chad neither sophie who has the absolute advantage in making candles? neither sophie chad who has the comparative advantage in making cookies? neither sophie chad who has the comparative advantage in making candles? sophie neither chad
Answers
Chad has a comparative advantage in making cookies.
What is comparative advantage?
In a profitable model, agents have a relative advantage over others in producing a particular good if they can produce that good at a lower relative occasion cost or autarky price, i.e. at a lower relative borderline cost previous to trade. relative advantage is a frugality's capability to produce a particular good or service at a lower occasion cost than its trading mates. relative advantage is used to explain why companies, countries, or individuals can profit from the trade. For illustration, if a country is professed at making both cheese and chocolate, they may determine how important labor goes into producing each good. However, also this country has a relative advantage in making chocolate If it takes one hour of labor to produce 10 units of cheese and one of labor to produce 20 units of chocolate.
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True or False: After calculating how much money you have left after paying for all of your monthly expenses, you can
olan on spending up to 50% of that amount on car expenses
Answers
Based on microeconomic theory, it is true that after calculating how much money you have left after paying for all of your monthly expenses, you can
plan on spending up to 50% of that amount on car expenses.
Note that after making a payment on living expenses, such as rent, mortgage, utilities, loans, car payments, and food, the money that remains is discretionary income.
This discretionary income can be used as savings, investment, or spending on your discretionary expenses such as vacations and travel expenses, car expenses.
This is because discretionary expenses are categorized under wants instead of needs.
Thus, given that planning for car expenses is a want, then the statement in the question is True.
Hence, in this case, it is concluded that the correct answer is "True."
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If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?
Answers
The equilibrium price will be $20. This is because the equilibrium price must be the same between supply and demand.
An equilibrium price, generally can be defined as a market-clearing price, is the consumer cost assigned to service or some product such that demand, and supply are equal, or close to equal. The equilibrium price can be described as supply of goods matches demand. Or known as that the forces of supply and demand are relatively same, and the market is in a state of equilibrium. Supply, which is generally can be defined as how much of something you have, and demand, which is generally can be defined as how much of something people want.
The question is incomplete, the complete question is:
A country club usually allows members to purchase tickets for its celebrity golf tournament, but is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows: If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?
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Creating an anonymous complaint or grievance process is something
employers can implement to prevent which of the following?
O A. Layoffs
B. Harassment
C. Taxed income
D. Arguments
Answers
hope I could help goodluck
What is nation’s plan for answering the key economic questions?
Answers
Explanation:
economic decision-making
process of choosing which wants among several options will be satisfied
producers
individuals and organizations that determine what products and services will be available for sale
economic system
a nation's plan for answering the three economic questions
economic resources
means through which goods and services are produced
needs
things that are required in order to live
scarcity
not having enough resources to satisfy every need
supply
quantity of a good or service that businesses are willing and able to provide
consumer
person who buys and uses goods and services
command economy
system in which resources are owned and controlled by the government
goods
things that you can see and touch
capitalism
private ownership of resources by individuals rather than by the government
traditional economy
system in which goods and services are produced the way they have always been done
mixed economy
system that combines elements of the command and market economies
demand
quantity of a good or service that consumers are willing and able to buy
market price
point where supply and demand are equal
wants
things that add comfort and pleasure to your life
services
activities that are consumed at the same time they are produced (things that others do for you)
trade-off
giving up on something to have something else
opportunity cost
value of the alternative you did not choose
market economy
system in which the resources are owned and controlled by the people of the country
economic choices
you can't have everything so you must choose
what are the 6 tips in the economic decision making?
1. define the problem
2. identify your choices
3. evaluate your choices
4. choose one
5. act on your decision
6. review your decision
(DieCar)
unlimited wants
wants that are never-ending and build off each other
what are the three economic resources or also known as factors of production?
a. natural resources
b. human resources
c. capital resources
natural resources
resources that come from the earth, water, or air (oil, ,gold, copper, etc.)
human resources
people who work to produce your goods and services (people in labor)
capital resources
tools, building, equipment that are used to produce them
what is the basic economic problem for businesses and families?
scarcity
competition
a contest among sells to get consumers to buy their product (you)
freedom of choice
buy what you want and where you want
your grandmother tells you a dollar doesn't go as far as it use to. she says the "purchasing power" of a dollar is much less than it used to be. explain what she means. try to use and explain terms like inflation and deflation in your answer
Answers
Back then. A dollar was worth WAYYYYY more than it is now. back then you could buy a lollipop for a like a penny. However as time went on we went through deflation and prices went down
sunland company accepted a visa card in payment of a $425 lunch bill. the bank charges a 4% fee. what entry should sunland mak
Answers
Sunland company should mark an entry of a total sum of $442.
What is entry?A transaction is formally recorded in an accounting entry. Most of the time, an accounting entry is made using the double-entry bookkeeping method, which necessitates the formation of both a debit and credit entry and ultimately results in the production of a full set of financial statements.A journal entry is an act of recording any transaction, whether it is economic or not.So, the entry will be:
425/100 × 4$17Total sum:
425 + 17$442Entry of a total of $442.
Therefore, Sunland company should mark an entry of a total sum of $442.
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Which of the following is NOT a fixed expense?
Answers
Answer:
?????????????????
Explanation:
Fixed expenses are costs that do not change from month to month and do not change according to the needs. So, Groceries are not a fixed expense. Option D. is correct.
Groceries are a variable expense, as the amount spent on groceries can vary depending on dietary needs, shopping habits, and other factors. So, groceries can vary according to needs because Variable expense is a cost that varies depending on usage.
While the other options Car payment, Insurance premiums, and Gym membership are included in fixed expenses.
Therefore, the correct option is D.
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This is an incomplete question, probably the complete question is:
Which of the following is NOT a fixed expense?
A. Car payment
B. Insurance premiums
C. Gym membership
D. Groceries.
help me please please
Answers
Answer:
A). compound interest
Explanation:
Hope that helped you :)
Answer:
Simple interest
Explanation:
I believe it's simple interest
Sue Holloway was an accountant in 1944 and earned $12,000 that year. Her son, Josh Holloway, is an accountant today and he earned $210,000 in 2017. Suppose the price index was 17.6 in 1944 and 218.4 in the current year. Refer to Scenario 24-1. Sue Holloway's 1944 income in current year dollars is -$23,033 -$136.909 -$148.909 -$240,960
Answers
As per the given question, the scenario says that Sue Holloway was an accountant in 1944 and earned $12,000 that year. Her son, Josh Holloway, is an accountant today and he earned $210,000 in 2017. Sue Holloway's 1944 income in current year dollars is -$136.909.
Out of these two methods, we will use the price index method for the calculation of Sue Holloway's 1944 income in current year dollars.The price index number represents the average price of all goods and services in a particular year compared to the average price
By using the price index number, we can convert the past year's income to present year's income.Therefore, the formula for the price index method is:Current Year Income = Base Year Income × (Current Year Price Index ÷ Base Year Price Index)
Base Year Price Index = 17.6 Current Year Price Index = 218.4. Therefore, putting the values in the formula, we get:Current Year Income = $12,000 × (218.4 ÷ 17.6) Current Year Income = $148,909.09. Therefore, Sue Holloway's 1944 income in current year dollars is -$136.909.
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Purchased goods on credit Rs. 2,000 from hari at 10% trade discount
Answers
Answer:
SHE / HE HAS PURCHASED GOOD = 2000
CREDIT CARD
DISCOUNT = 10 %
\( \frac{10}{100} \times 2000 \: = \frac{10 \times 20}{1} = 200\)
DISCOUNT YOU GOT IS 200
What are at least two things you should check for accuracy on your credit report?
Answers
It is important to check your credit report for accuracy on a regular basis. When checking your credit report, there are two main things you should look for: personal information and account information.
Your name, Social Security number, address, contact details, and date of birth are all considered to be personal information.
Creditor names, account numbers, balances, payment history, and any other public data are all included in account information.
As inaccuracies might result in inaccurate credit scores and other issues, it is crucial to make sure that all of this information is exact and current.
A smart technique to make sure your credit information is correct and current is to check your credit report for accuracy.
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Which of the following is not an example of professional behavior
?
Answers
If your gross pay is $1500 each pay period, and you are paid semimonthly, what is your yearly gross pay?
Answers
Answer:
$39,000
Explanation:
Ideally, we'd know if every pay period is 2 weeks, but that's pretty standard. They say semimonthly because if you look at a calendar over a year, there are a couple of months where you will have 3 paychecks.
So. 52 weeks/year, divided into 2-week pay periods = 26 pay periods/year.
26 x 1,500 = 39,000
Please let me know if you have any questions about this.
Louvers, Incorporated, accepted a $15,000, 180-day, 10 percent note from a customer on May 31. On June 30, Louvers prepared a period-end adjusting entry to accrue the $125 of interest owed on the note. The note is honored on November 27.
Prepare the necessary November 27 entry for Louvers by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. If there are multiple debits or multiple credits, please enter the account titles in alphabetical order. View transaction list Journal entry worksheet < 1 Louvers, Inc., accepted a $15,000, 180-day, 10 percent note from a customer on May 31. On June 30, Louvers prepared a period-end adjusting entry to accrue the $125 of interest owed on the note. The note is honored on November 27. Note: Enter debits before credits. Debit Credit Date Nov. 27 General Journal Cash Interest revenue Interest receivable Notes receivable Record entry Clear entry View general journal
Answers
Answer:
November 27 Debit Credit
Bank $15,750
(15,000+15,000*10%*180/360)
Accrued interest income $125
Interest income $625
Note receivable from customer $15,000
Which of these is not affected by a person's credit score?
A. Apartment rentals
B. Credit card rates
C. Ability to get a cell phone contract
D. Federal income tax
Answers
If Martha set a goal for employees to sell $60,000 of merchandise during the month of December and give them a directive to re-organize the back room under the same deadline then employees my question which of the five essential go accomplishment factors
1. time bound
2.specificity
3.relevancy
4. measurability
5. all of the above
Answers
The employees might question this element of the five essential goal-accomplishment factors: 3. relevancy.
What is a SMART goal?A SMART goal can be defined as a well-established tool that can be used by an individual, a project manager or business organization to plan (create), track, and achieve (accomplish) both short-term and long-term goals.
Generally speaking, SMART is a mnemonic acronym and it comprises the following elements:
SpecificityMeasurableAchievable or Attainable.Relevancy (realistic).Time bound (timely)In conclusion, we can reasonably infer and logically deduce that these employees would question the relevancy of this goal-accomplishment because it does not conform with a SMART goal.
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Complete Question:
Martha set a goal for employees to sell $60,000 of merchandise during the month of December and gave them a directive to reorganize the break-room under the same deadline, then employees might question which of the five essential goal-accomplishment factors?
1. time bound
2.specificity
3.relevancy
4. measurability
5. all of the above
anyone know how to do these economic credit score problems??
Answers
Answer:
please share the question nicely fristy
Explanation:
James is the human resource manager at a large bottle manufacturing company. Ten years ago, when the business moved to its current location, the company structured operations around the different functions performed throughout the company. To enhance the speed and effectiveness of decision-making, James is now restructuring company activities around its three major product lines. James is undertaking the process of grouping jobs known as
Answers
Answer:
departmentalization
Explanation:
Departmentalization is defined as the process of grouping various activities according to departments.
Each department tends to specialise in the assigned activity. This method promotes division of labour where a group of people specialise in one activity.
In the given scenario James is restructuring operations around three product lines to increase speed and effectiveness of decision making.
This is departmentalization with a view of increasing process efficiency
Clients tend to report satisfaction and self-improvement to the degree that there is:
A. a session frequency of at least two times per week.
B. limited financial hardship experienced as a result of sessions.
C. a trusting relationship with the coach.
D. a repetition to the content of the sessions.
Answers
Among the options provided, a trusting relationship with the coach is the most significant factor in clients reporting satisfaction and self-improvement.
A strong and trusting relationship between the client and the coach forms the foundation for effective coaching outcomes.
While factors such as session frequency, limited financial hardship, and repetition of session content can contribute to the overall coaching experience, they are not as directly linked to client satisfaction and self-improvement as the establishment of trust.
Trust allows clients to feel comfortable and open in sharing their thoughts, feelings, and goals with their coach. It enables the coach to provide personalized guidance, support, and feedback tailored to the client's specific needs. Through trust, clients are more likely to engage actively in the coaching process, implement recommended strategies, and make meaningful progress toward their goals.
It is important to note that individual preferences and circumstances may vary, and different clients may place different emphasis on various factors in their coaching experience. However, overall, a trusting relationship with the coach plays a crucial role in clients' reported satisfaction and self-improvement.
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A two-word phrase in each box. The value of the X (____) Q is equal to the x (_____) K, when equilibrium is reached
Answers
The value of the X (quantity demanded) Q is equal to the x (quantity supplied) K when equilibrium is reached
The phrase that fits in each box is "quantity demanded" and "quantity supplied". In economics, the quantity demanded refers to the amount of a particular good or service that consumers are willing and able to purchase at a given price. On the other hand, the quantity supplied refers to the amount of the same good or service that suppliers are willing and able to produce and offer for sale at a given price.
The law of supply and demand states that in a competitive market, the price of a good or service will adjust to bring the quantity supplied and quantity demanded into balance. The point at which this balance is achieved is known as the market equilibrium.
At this point, the quantity demanded (as indicated by Q) is equal to the quantity supplied (as indicated by K), which is why the value of the X (quantity demanded) Q is equal to the x (quantity supplied) K when equilibrium is reached. This equilibrium is a crucial concept in understanding how markets work and how prices are determined.
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Pam's business earns 33,000 per month. Pam's non-employee expenses are $13,500 per month. If Pam wants $4,500 in profit per month, how many employees can she employ if each employee costs $3,000 per month?
Answers
The number of employee that she can employ if each employee costs $3,000 per month is 5 employees.
Using this formula
Number of employee=Business amount earn per month-Non -employee expenses per month-Profit per month/Employee cost
Let plug in the formula
Number of employee=$33,000-$13,500-$4,500/3,000
Number of employee=$15,000/3,000
Number of employee=5 employees
Inconclusion the number of employee that she can employ if each employee costs $3,000 per month is 5 employees.
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Accroding to lapena what is the importance of the oral tradition?
to what extent do you agree with his opinions why?
Answers
Answer:
Oral tradition is a form of human communication that transmits knowledge, ideas, culture, thoughts, beliefs and other issues of social or ideological nature through verbal communication. Therefore, this was the main means of knowledge transmission in pre-literate societies, where older generations transmitted their knowledge to younger people, and also an important aspect in literate societies in parallel with written literature.
Therefore, since it is the first means of transmitting knowledge, and is still applied today in smaller social groups such as the family, oral tradition is a fundamental part in the construction of knowledge and people's identity.
Economists typically assume producers and consumers a. are rarely rational, but sometimes are purposeful in their behavior.
b. are rational, and systematically work to achieve their goals. c. only pursue rational outcomes, and these outcomes would be agreed upon by all to be the most positive outcomes. d. can be rational, but are not systematically so.
Answers
The correct answer is b) Economists typically assume that producers and consumers are rational and systematically work to achieve their goals.
This assumption is based on the idea that individuals are motivated by self-interest and seek to maximize their utility (in the case of consumers) or profits (in the case of producers) given the constraints they face. Rational behavior means that individuals use all available information to make informed decisions and weigh the costs and benefits of different choices.
While it is true that individuals may not always behave in a perfectly rational way, economists assume that rationality is the norm and that deviations from rational behavior are the exception rather than the rule. This assumption allows economists to develop models and theories that help explain and predict economic behavior.
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_____ allows industries, organizations, and companies to approach business decisions from different perspectives. Arbitration Ergonomics Tolerance Workforce diversity
Answers
Answer:
Workforce diversity
Explanation:
Workforce diversity refers to similarities and differences between employers and employees in terms of their race, religion, gender, perspectives and opinions.
Diversity is important for every industry, organization, and company since people have different perspective and views, they approach business problems differently, leading to different solutions. Diversity leads to increase profits, creativity, wide range of skills e.t.c.