Finance rocks had decided to reduce its fixed costs by seller some of its manufacturing facilities and assigning the production of certain parts to a group of predecessors suppliers, by doing so the company is trying to adjusts its operating leverage, financial leverage or tax burden?
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- Is this statement true or false? and the explanation to why? An investment in machinery for an assemble-to-order production strategy is best financed by an investment from equity. Can you also explain when a company uses the investment from the equity in comparison to a loan for example or the use of the company's own assets? like how do they decide which method of investment is appropriate to use for something?1. What is the relevant cost to make the part? State answer in total dollars NOT per unit and as a positive number. 2. Should Ran Corporation make the part? 3. What should Ran ignore? Why? 4. What would be the impact on total Net Income if Ran corporation accepted the supplier's offer? Show a negative for a loss, positive for a gain.A company accepts incremental business at a special price that exceeds the variable cost. What other issues must the company consider in deciding whether to accept the business?
- What are some examples of fixed costs and variable costs for sony corporation? Some examples include the cost of sales, interest expenses, foreign exchange loss, and more.Explain intuitively how a manager could tweak the salvage value of machinery to benefit from an expected reduction in the corporate tax rate taking place towards the end of an investment.If a firm is structured so that it has a more favorable tax status than that of its competitors, this can give the firm an overall cost advantage over its competitors. The question is, how would this give them a cost advantage over its competitors?
- Which of the following is true of accounting for research and development cost? Responses Accounting for research and development costs is same under U.S. GAAP and IFRS. Accounting for research and development costs is same under U.S. GAAP and IFRS. The current accounting for research and development costs under U.S. GAAP avoids the probability of companies to manipulate their earnings. The current accounting for research and development costs under U.S. GAAP avoids the probability of companies to manipulate their earnings. U.S.GAAP adheres to the matching principle by expensing research and development costs. U.S.GAAP adheres to the matching principle by expensing research and development costs. Under U.S. GAAP accounting for research and development costs violates the conservative principle. Under U.S. GAAP accounting for research and development costs violates the conservative principle.Why would a company choose to factor itsreceivables, given that it will get less money than thereceivables are worth?Companies have found that offering discounts to customers in return for early payment can be counterproductive in terms of the resulting adverse effect on profitability. This is when the reduction in profitability outweighs any marginal improvements gained from the benefit of a reduction in the working capital requirement. Required: Given the above critically discuss the alternative measures to offering discounts to customers that could prove more effective in reducing the working capital requirement for a company with only minimal potential reductions in profitability.
- Business Unit A, the supplying business unit, is selling to an outside market. It has excess capacity and can use it to transfer product to the receiving business unit, Business Unit B. Business Unit A does not incur incremental fixed costs in the production of the units supplied to Business Unit B. The formula to calculate the transfer price in this scenario is?Which of the following statements is CORRECT? Group of answer choices Since debt capital can cause a company to go bankrupt but equity capital cannot, debt is riskier than equity, and thus the after-tax cost of debt is always greater than the cost of equity. The tax-adjusted cost of debt is always greater than the interest rate on debt, provided the company does in fact pay taxes. If a company assigns the same cost of capital to all of its projects regardless of each project’s risk, then the company is likely to reject some safe projects that it actually should accept and to accept some risky projects that it should reject. Because no flotation costs are required to obtain capital as retained earnings, the cost of retained earnings is generally lower than the after-tax cost of debt. Higher flotation costs tend to reduce the cost of equity capital.Which of the following statements is most accurate? A. Financial leverage is directly related to operating leverage. B. Increasing the corporate tax rate will not affect capital structure decisions. C. A firm with low operating leverage has a small proportion of its total costs in fixed costs. D. Total costs can be calculated as net income minus total revenue.
