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Opal Inc. sold 30,000 units of its product last year with the following results: Sales revenue $900,000 Variable Costs 630,000 Contribution Margin 270,000 Fixed Costs
Opal Inc. sold 30,000 units of its product last year with the following results: Sales revenue $900,000 Variable Costs 630,000 Contribution Margin 270,000 Fixed Costs 90,000 Operating Profit _$180,000 The company expects variable costs to increase by $3 per unit this year. Given the expected change in variable costs, how many units will have to be sold this year to earn the same operating profit as last year? Select one: O a. 45,000 units O b. 30,000 units O c. 31,667 units O d. 21,111 units Which of the following reasons could explain why a company would choose not to invest in a project with NPV>0? i) The project requires large resources which is beyond the company's capacity. ii) The project could result in low motivation and morale among workers. iii) The project will increase the wealth of the company's shareholders. iv) The project could cause environmental pollution and compromise the company's image. Select one: O a. ii and iv O b. i, ii and iv O c. i, ii, iii and iv O d. i and ii One of the purposes of budgeting is to promote forward thinking and identification of short-term problems. Which of the following statements is consistent with this purpose? Select one: O a. management is incapable to predict future promotion opportunities O b. management can react to problem areas as they occur. O c. management would be able to explore ways of overcoming potential problem areas O d. management can take actions when the actual results deviate from the targets To receive $1000 now is always preferred rather than $1000 in one year. Which of the following factors is not a reason for this preference? Select one: O a. Opportunity to earn some return on the amount of money O b. The increase in price level in the future O c. Risk of not receiving the amount of money as promised O d. One year is a long period to wait
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