Financial Math Answers

1.    The following worksheet contains cost and revenue data for koyel Shoe Company:

Total 15,000 Pairs of Shoes

Per pair of                Shoes

Sales Revenue

Tk. 600,000

Tk. 40

Variable expenses:

     Invoice cost

202,500

Tk. 13.5

     Sales commission

67,500

      4.5

Total variable expenses

Tk. 270,000

Tk.18

Contribution margin

Tk. 330,000

Tk. 22

Fixed expenses:

     Advertising

Tk. 30,000

     Rent

20,000

     Salaries

100,000

Total fixed expenses

Tk. 150,000

Net Income

Tk. 180,000

Required:

(a)  Compute the company’s degree of operating leverage at the present level of sales.

(b)  Assume that through a more intense effort by the sales staff, the company’s sales increase

by 8% next year. By what percentage would you expect net operating income to increase? Use the degree of operating leverage to obtain your answer.

(c)  Verify your answer to (b) by preparing a new contribution format income statement showing an 8% increase in sales.

Verify if the ISBN 978-0-760-73261-6 is valid?

Discuss whether it is possible that any devices if the production cost is R0,00

1. Eddie borrows R12000 from Janet at the beginning of 2005, at a rate of 10% p.a. compound interest. At the end of each year, he pays back R500. How much must he still pay at the end of 2008? How much does he have to pay back altogether?

Eddie borrows R12000 from Janet at the beginning of 2005, at a rate of 10% p.a. compound interest. At the end of each year, he pays back R500. How much must he still pay at the end of 2008? How much does he have to pay back altogether?

5. Lover Hardware Store had net credit sales of P 6,500,000 and cost of goods sold of P 5,500,000

for the year. The Accounts Receivable balances at the beginning and end of the year were P

600,000 and P 700,000, respectively. The Receivable turnover was:

a. 7.7 times

b. 10.8 times

c. 9.3 times

d. 10.0 times

Round off to the nearest 100

287 392

Thandi deposits 800 into a bank .The bank will pay simpl interest rate 8% per year.How much will thandi get when she withdraws all her money after 5 years

3 years ago Lily borrowed 10 000 from faith on condition that she should pay her back two years from now. she also owes faith 6 000 payable five years from now. the applicable interest rate for both transactions is 13.75% per year compounded every six months .after considering her pay back schedule,Lily ask faith if she can buy her 9 000 now and the rest in four years time .she agrees on condition that the new agreement will run from now and that an interest rate of 16.28% per year,compounded monthly, will be applicable from now The amount that Lily will have to pay faith four years from now is