Heavy Duty Company, a manufacturer of power tools, decides to offer a rebate of $130 on its 16-inch mid-range chain saw, which currently has a retail price $490
Heavy Duty's marketers estimate that, as a result of the rebate, sales of this model will increase from 60,000 to 80,000 units next year. The profit margin for Heavy Duty before the rebate is $180. Based on the given information, is the decision to give the rebate a wise one?
A) No, since costs are $7,800,000 more than benefits.
B) No, since costs are $6,800,000 more than benefits.
C) Yes, since the benefits are $3,400,000 more than the costs.
D) Yes, since the benefits are $7,300,000 more than the costs.
Answer: B
You might also like to view...
If a company is using accrual basis? accounting, when should it record? revenue?
A) when cash is received, even though services may be performed at a later date B) when services are performed, even though cash may be received at a later date C) when services are performed and cash is received D) when cash is received, 30 days after the completion of the services
According to PRIZM, the ________ cluster is characterized as the nation's tech-savvy singles and couples, living in areas typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants, and all types of
bars-from juice to coffee to microbrew. A) beltway boomers B) old milltowns C) young digerati D) cosmopolitans E) winner's circle
A company issued rights to its existing shareholders to purchase for par unissued shares of common stock with a par value of $10 per share. When the market value of the common stock was $12 per share, the rights were exercised. Common Stock should be credited at $10 per share and
a. Paid-In Capital from Stock Rights credited at $2 per share. b. Additional Paid-In Capital credited at $2 per share. c. Retained Earnings credited at $2 per share. d. no credit made to Additional Paid-In Capital or Retained Earnings.
Where should the Federal Trade Commission (FTC) franchise notice appear?
A) in the licensing agreement between the franchisor and franchisee B) as a separate clause in the franchise agreement C) on the cover of a franchisor's required disclosure statement D) on the cover of a franchisee's required disclosure statement