On December 28, 20Y3, Silverman Enterprises sold $18,500 of merchandise to Beasley Co. with terms 2/10, n/30. The cost of the go

Solution

1.Hotel’s cost structure          Indications in percentage(%)

Revenue                                     $ 2,000,000                          (100)

Less: Variable expenses            $ 1,300,000                            65

                                                    --------------------

Contribution margin                       $700,000                            

Less: Fixed expenses                   $560,000                            28

                                                    ---------------------

Net income                                       $140,000                            7

2.Revenue declines by 30 percent

Revenue                                     $ 1,400,000                    

Less: Variable expenses               $910,000                                                                                    

                                                   ---------------------

Contribution margin                       $490,000                  

Less: Fixed expenses                   $392,000                          

                                                    ---------------------

Net income                                       $98,000          

3.Operating leverage factor when revenue is $2,000,000    

       Operating leverage =    Contribution/ Net income

4.Operating leverage factor when increase in revenue by 25 percent  

increase in revenue by 25 percent=

increase in contribution by 25 percent=

increase in net income by 25 percent  =                                                  

       Operating leverage =    Contribution/ Net income

Response:

b. A reduction in the YTM.

Detail:

The valuation of the bond is derived from the present worth of expected cash flows. When determining these present values for cash inflows or the bond's price, the YTM is utilized for discounting. It is known that a higher interest rate results in a lower present value, whereas a lower interest rate yields a greater present value. Interest rates and present value have an inverse relationship. Thus, a decrease in YTM will enhance the bond's price.

Answer:

$21,370.1071

Explanation:

The calculation for the present value of this perpetuity is as follows:

= Present value five years later + present value at the time of purchase

where,

The present value after five years is

= ($1,000) ÷ (1.04)^5

=$821.9271

Additionally, the present value at the purchase time is

= $821.9271 ÷ 4%

=$20,548.18

Thus, the total present value of the perpetuity is

=$821.9271 + $20,548.18

= $21,370.1071

Response:

The property will go to the nearest direct heir, which is his sister. This is because property is typically divided among siblings. Therefore, since Smith's sister qualifies as one of the siblings, she is entitled to inherit the property.

Clarification: