Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem1: East Publishing Company is doing an analysis of a proposed new finance text book. Using the following information, answer A through D.

Fixed costs per edition:

Development $18,000

Copyediting     $ 5,000

Selling/Promo $ 7,000

Typesetting     $40,000

Total                $70,000 

Variable costs per copy

Printing/bind   $4.20

Admin costs     $1.60

Sales commission    $0.06   2% of selling price

Royalties         $3.60   12% of selling price

Discounts         $6.00   20% of selling price

Total                $16.00 

Projected selling price $30.00

Tax rate is 40%

find out the firm's breakeven volume for the book

In units

In dollar sales

Make a breakeven chart for the text book

Find the number of copies they must sell to earn an operating profit of $21,000 on this book

Assume East feels that $30 is too high a price to charge. It examined the market and determined that dollar 24 would be better. Find the break even volume at the new price?

problem2: Rodney Rogers, a business school grad, plans to open a wholesale dairy products company.  The business will be completely financed with equity. Rogers expects first year sales to total $5,500,000.  He desires to earn a target pretax profit of $1,000,000 during his first year of operation. Variable costs are 40% of sales.

[A] How large can his fixed operating costs be if he is to meet his profit target?

[B] What is his breakeven level of sales at the level of fixed operating costs determined in [A]?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920525

Have any Question? 


Related Questions in Basic Finance

Milgram conducted his experiments on obedience in the days

Milgram conducted his experiments on obedience in the days before all research was scrutinized by an Institutional Review Board. Imagine, however, that Milgram had submitted his research proposal to an IRB of which you w ...

1 graphically explain cost-push and demand pull inflation2

1. Graphically explain Cost-push and Demand pull inflation. 2. What is meant by Effective Exchange rate? Explain with examples how Nominal and Real Effective exchange rate are measured in an economy. 3. Define Purchasing ...

What is the accounting identity list at least three of the

What is the accounting identity? List at least three of the assumptions underlying financial statements? Identify at least three current asset accounts ? What is the operating cycle ? Identify three current liability acc ...

Business financewe develop the theory and application of

Business Finance We develop the theory and application of capital budget analysis. The theory was robust, the calculations mathematically and logically defined, and many of the real-world problems, likely to be encounter ...

Discuss the financial performance of the starbucks over the

Discuss the financial performance of the Starbucks over the past three years.

An article in the wall street journal discussing the fear

An article in the Wall Street Journal discussing the fear that some farmers had that regulation of derivatives would make it harder for them to hedge risk, described the situation of a feedlot owner who "uses derivatives ...

One bond in forest inc has 9 years to maturity and a coupon

One bond in Forest, Inc., has 9 years to maturity and a coupon of 4.2%. The coupon is paid semiannually. If the YTM is 6%, what is the value of the bond? Marcia Food Company has a bond with 15 years to maturity and a cou ...

1 what are the primary differences between operating leases

1. What are the primary differences between operating leases and financial leases? 2. How does a leveraged lease differ from a nonleveraged financial lease? What type of firm or organization is most likely to take advant ...

Part a answer each of the following questions in a

Part A: Answer each of the following questions in a composition of one to two paragraphs, or perform calculations as requested. 1. Define liquidity risk, default risk and taxability risk, and explain how these risks rela ...

Module- slpcash flow estimation and capital

Module- SLP CASH FLOW ESTIMATION AND CAPITAL BUDGETING Applying Various Capital Budgeting Methodologies The objective of a firm is to maximize shareholder wealth. The Net Present Value (NPV) method is one of the useful m ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen