on breakeven. Then look at the following five pricing options/scenarios: 1. Lower the selling price by 10% to increase sales volume by 5%. 2. Advertise on radio and social media for a combined cost of $1,000 to increase volume by 10%. 3. Use a more affordable paper on which to print the posters (available for $ 0.60 per unit), in combination with a less - expensive film to coat the surface of the poster (available for $ 0.40 per unit).
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- Lorenzo, the owner of a local poster shop, comes to you for help. While his shop has been breaking even for the past two years, it has not been able to generate a profit. For him to keep the shop open, he needs to earn at least $12,000 in operating income next year. Review the contribution margin income statements for Lorenzo's shop and find the following: 1)Explain the benefits and advantages to the company for each scenario. 2)Explain the disadvantages to the company for each scenario.Mr. Salim runs a carpentering business in his village. Mr. Salim’s business has expanded, with revenue now reaching 40,000 per year. Mr. Salim is considering moving his business into town centre premises, and employing another carpenter, who would cost 6,000 per year. He has found premises that could be leased for 3,500 per year payable in advance. Mr. Salim currently advertises his business in the local newspapers and business directories, at a cost of 1,000 per year payable in advance. Mr. Salim will carry on with this advertising, but he will also need extensive ‘one off’ advertising to promote the move to the new premises. This ‘one off’ advertising in the local newspapers will cost 2,000, which will be paid immediately. In addition to advertising the move in the local newspapers, Mr. Salim could advertise the move on the local radio. The cost of this would be 5,000, also payable immediately. Mr. Salim believes that having a town centre presence and the associated publicity in the…Ernie Bilko has a business idea. He wants to rent an abandoned gas station for just the months of November and December. He will convert the gas station into a drive-through Christmas wrapping station. Customers will drive in, drop off their gifts, return the next day, and pick up their wrapped gifts. He needs $331,700 to rent the gas station, purchase wrapping paper, hire workers, and advertise. If he borrows this amount at 6.5 interest for those two months, what size lump sum payment will he have to make to pay off the loan? (Round your answer to the nearest cent.) $ _______
- After two years in business selling donuts in a local office building, Lisa wants to move on. Zeke wants to buy out the last two years of Lisa's four-year contract. He estimates he can make $6,400 in the first year and $7,200 in the second year. If the discount rate is 6%, the most Zeke should be willing to pay is Click here to access the TVM Factor Table Calculator O $12,707.07 O $12,756.85 O $12,445.71 O $12,201.68Barry wants to re-model the store that he has for his business. His cousin Diego agrees to give him $100,000, but asks for 10 percent of the profits in return. Joseph's father William is reluctant to put his own money into the business, but finally agrees to lend $100,000 to him at an interest rate of 5 percent per year, with interest to be paid every month. The agreement is put in writing. What most accurately describes these arrangements?Fiona has a four-year contract to sell coffee in a local office building. After two years in business, she wants to move on. Kurt wants to buy out the last two years of Fiona’s contract. He estimates he can make $7,500 in the first year and $7,800 in the second year. If the discount rate is 8%, what is the maximum amount Kurt should be willing to pay?
- Mr.Salim runs a carpentering business in his village. Mr.Salim’s business has expanded, with revenue now reaching OMR 40,000 per year. Mr. Salim is considering moving hisbusiness into town centre premises, and employing another carpenter, who would cost OMR 6,000 per year.He has found premises that could be leased for OMR 3,500 per year payable in advance. Mr. Salim currently advertises his business in the local newspapers and business directories, at a cost of OMR 1,000 per year payable in advance. Mr. Salim will carry on with this advertising, but he will also need extensive ‘one off’ advertising to promote the move to the new premises. This ‘one off’ advertising in the local newspapers will cost OMR 2,000, which will be paid immediately. In addition to advertising the move in the local newspapers, Mr. Salimcould advertise the move on the local radio. The cost of this would be OMR 5,000, also payable immediately. Mr. Salimbelieves that having a town centre presence and the associated…To travel to his new job, Hassan is shopping for a new vehicle, and has noticed that many vehicle manufacturers are offering special deals to sell off the current year's vehicles before the models arrive. Hassan's local Ford dealership is advertising 3.9% financing for a full 48 months (i.e., 3.9% compounded monthly) or up to $4000 cash back on selected vehicles. The vehicle that Hassan wants to purchase costs $24,600 including taxes, delivery, licence, and dealer preparation. This vehicle qualifies for $1800 cash back if Hassan pays cash for the vehicle. Hassan has a good credit rating and knows that he could arrange a vehicle loan at his bank for the full price of any vehicle he chooses. His other option is to take the dealer financing offered at 3.9% for 48 months. Hassan wants to know which option requires the lower monthly payment. 4. Suppose Hassan buys the vehicle on July 1. What monthly payment must Hassan make if he chooses the dealer's 3.9% financing option and pays off the…Camila Torres wants to buy a new high-end audio system for her car. The system is being sold by two dealers in town, both of whom sell the equipment for the same price of $2,000. Camila can buy the equipment from Dealer A, with no money down, by making payments of $173.98 a month for 12 months; she can buy the same equipment from Dealer B by making 36 monthly payments of $66.43 (again, with no money down). Camila is considering purchasing the system from Dealer B because of the lower payment. Find the APR for Dealer A. Round the answer to 2 decimal places. % Find the APR for Dealer B. Round the answer to 2 decimal places. % What do you recommend?
- Mr. Salim runs a carpentering business in his village. Mr. Salim’s business has expanded, with revenue now reaching OMR 40,000 per year. Mr. Salim is considering moving his business into town centre premises, and employing another carpenter, who would cost OMR 6,000 per year. He has found premises that could be leased for OMR 3,500 per year payable in advance. Mr. Salim currently advertises his business in the local newspapers and business directories, at a cost of OMR 1,000 per year payable in advance. Mr. Salim will carry on with this advertising, but he will also need extensive ‘one off’ advertising to promote the move to the new premises. This ‘one off’ advertising in the local newspapers will cost OMR 2,000, which will be paid immediately. In addition to advertising the move in the local newspapers, Mr. Salim could advertise the move on the local radio. The cost of this would be OMR 5,000, also payable immediately. Mr. Salim believes that having a town centre presence and the…Would Qualifying an Indorsement Be Ethical? Suppose you have taken a promissory note for $3,500 payable in 12 months with interest at 10 percent as payment for some carpentry work you did for a friend. You have some reason to believe the maker of the note is in financial difficulty and may not be able to pay the note when it is due. You discuss with an elderly neighbor the possibility of her buying the note from you as an investment, and she agrees to buy it from you for $3,000. Would it be ethical for you to indorse the note with a qualified indorsement ("without recourse")?Meg O’Byte wants to buy a new computer for her business for Internetaccess on a cable modem. The computer system cost is $5,100. The cablecompany charges $200 (including the cable modem) for installation and hasa $50 a month usage fee for businesses, paid at the end of the month. Megexpects to buy the system with a $100 down payment, financing the balanceat 8 percent over the next 4 years. She will sell the computer for $1,000when she upgrades. She expects a $500 a month increase in cash flow and isin the 25 percent tax bracket.a. The start-up costs are __________________.b. The PVC is __________________.c. The PVB is __________________.d. The monthly payment for the computer is __________________.