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Question
Spencer Tools would like to offer a special product to its best customers. However, the firm wants to limit its maximum potential loss on this product to the firm's initial investment. The fixed costs are estimated at $27,400, the depreciation expense is $1,700, and the contribution margin per unit is $6.75. What is the minimum number of units the firm should pre-sell to ensure its potential loss does not exceed the desired level?
A) 3,220 units
B) 4,059 units
C) 2,815 units
D) 4,233 units
E) 4,658 units
Answer
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Related questions
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Jensen Enterprises paid $700 in dividends and $320 in interest this past year. Common stock remained constant at $6,800 and retained earnings decreased by $180. What is the net income for the year?
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B) Decrease in accounts payable
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Q:
Depreciation for a tax-paying firm:
A) increases expenses and lowers taxes.
B) increases the net fixed assets as shown on the balance sheet.
C) reduces both the net fixed assets and the costs of a firm.
D) is a noncash expense that increases the net income.
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Q:
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Q:
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B) current liabilities minus shareholders' equity.
C) fixed assets minus long-term liabilities.
D) total assets minus total liabilities.
E) current assets minus current liabilities.
Q:
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B) The replacement of old inventory items with more desirable products
C) Improvements to the surrounding area by other store owners
D) Construction of a new restricted access highway located between the store and the surrounding residential areas
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Q:
Which one of the following statements is correct concerning the NYSE?
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B) The NYSE is the largest dealer market for listed securities in the United States.
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D) Any corporation desiring to be listed on the NYSE can do so for a fee.
E) The NYSE is an OTC market functioning as both a primary and a secondary market.
Q:
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B) Promotion
C) Sarbanes-Oxley Act
D) Agency play
E) Proxy fight
Q:
Agency problems are most associated with:
A) sole proprietorships.
B) general partnerships.
C) limited partnerships.
D) corporations.
E) limited liability companies.
Q:
The Sarbanes-Oxley Act of 2002 holds a public company's ________ responsible for the accuracy of the company's financial statements.
A) managers
B) internal auditors
C) external legal counsel
D) internal legal counsel
E) Securities and Exchange Commission agent
Q:
Decisions made by financial managers should primarily focus on increasing the:
A) size of the firm.
B) growth rate of the firm.
C) gross profit per unit produced.
D) market value per share of outstanding stock.
E) total sales.
Q:
A partnership with four general partners:
A) distributes profits based on percentage of ownership.
B) has an unlimited partnership life.
C) limits the active involvement in the firm to a single partner.
D) limits each partner's personal liability to 25 percent of the partnership's total debt.
E) must distribute 25 percent of the profits to each partner.
Q:
The primary advantage of being a limited partner is:
A) the receipt of tax-free income.
B) the partner's active participation in the firm's activities.
C) the lack of any potential financial loss.
D) the daily control over the business affairs of the partnership.
E) the partner's maximum loss is limited to their capital investment.
Q:
Which one of the following statements concerning a sole proprietorship is correct?
A) A sole proprietorship is designed to protect the personal assets of the owner.
B) The profits of a sole proprietorship are subject to double taxation.
C) The owner of a sole proprietorship is personally responsible for all of the company's debts.
D) There are very few sole proprietorships remaining in the U.S. today.
E) A sole proprietorship is structured the same as a limited liability company.
Q:
Which one of the following questions is least likely to be addressed by financial managers?
A) How should a product be marketed?
B) Should customers be given 30 or 45 days to pay for their credit purchases?
C) Should the firm borrow more money?
D) Should the firm acquire new equipment?
E) How much cash should the firm keep on hand?
Q:
An example of a capital budgeting decision is deciding:
A) how many shares of stock to issue.
B) whether or not to purchase a new machine for the production line.
C) how to refinance a debt issue that is maturing.
D) how much inventory to keep on hand.
E) how much money should be kept in the checking account.
Q:
The date on which a shareholder is officially listed as the recipient of stock rights is called the:
A) issue date.
B) offer date.
C) declaration date.
D) holder-of-record date.
E) ex-rights date.