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Power Brokers, Inc. ( PBI ) , a discount brokerage firm, is contemplating opening a new regional office in Providence, Rhode Island. An accounting cost
Power Brokers, Inc. PBI a discount brokerage firm, is contemplating opening a new regional office in Providence, Rhode Island. An accounting cost analysis of monthly operating costs at a dozen of its regional outlets reveals average fixed costs of $ per month and average variable costs of AV C $ $Q where AV C is average variable costs in dollars and Q is output measured by number of stock and bond trades. A typical stock or bond trade results in $ gross commission income, with PBI paying of this amount to its sales representatives ie this payment leaves the office Do not use derivatives. Be sure to show your work. a Estimate the trade volume necessary for PBI to break even on a monthly basis at a typical office. b Estimate the trade volume necessary for PBI to reach a target return of $ per month for a typical office.
Power Brokers, Inc. PBI a discount brokerage firm, is contemplating opening a new regional office in Providence, Rhode Island. An accounting cost analysis of monthly operating costs at a dozen of its regional outlets reveals average fixed costs of $ per month and average variable costs of AV C $ $Q where AV C is average variable costs in dollars and Q is output measured by number of stock and bond trades. A typical stock or bond trade results in $ gross commission income, with PBI paying of this amount to its sales representatives ie this payment leaves the office Do not use derivatives. Be sure to show your work. a Estimate the trade volume necessary for PBI to break even on a monthly basis at a typical office. b Estimate the trade volume necessary for PBI to reach a target return of $ per month for a typical office.
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