Lucas wants to buy a new car. Before he makes a final purchase, he decides to do a full web-based information and near ones. This type of decision-making is an example of extended problem-solving.
Making decisions, gathering data, and considering possible solutions are steps in the decision-making process. By following a step-by-step decision-making process and organizing relevant information and outlining alternatives, you can make more thoughtful and intelligent decisions.
Strong decision-making problem resolution and put decision makers in leadership positions. Strong decisions must be unbiased and free from any emotional factors that can cause us to ignore flaws. Additionally, such decision-making ought to be rational and transparent.
Extended problem-solving refers to the situation where a prospective customer searches for the best product or service in a new, pricey, or infrequently purchased category, requiring a lot of research. In limited problem solving, consumers have the fundamental notion or the evaluation criteria set, whereas, in routine response behavior, consumers just require a small amount of extra information to make a decision.
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which of the following are possible effects on the accounting equation when recording a transaction that increases a liability by $100? (select all that apply.)
A shareholders' equity account decreases by $100.
An asset increases by $100.
What is accounting equation?
The accounting equation shows that the total assets of a company are financed by a combination of shareholder's equity and liabilities, in other words, total assets are the same as the sum of equity and liabilities
In this case, an increase in liability by $100, for instance by purchase on account, from the suppliers would increase liability and increase asset, inventory and can also decrease shareholder's equity if items are sold immediately, which requires an entry in costs of goods sold, which reduces stockholder's equity
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Full question:
which of the following are possible effects on the accounting equation when recording a transaction that increases a liability by $100? (select all that apply.)
Increase in equity
Increase liability
increase in assets
Increase in revenue
Given+a+4%+required+return,+what+is+a+$100+cash+flow+today,+a+$1,000+cash+flow+at+the+end+of+1+year,+and+a+$100,000+cash+flow+at+the+end+of+five+years,+worth+to+you+at+the+end+of+5+years?
The worth of $100 cash flow today, a cash flow of $1,000 at the end of 1 year, and a $100,000 cash flow at the end of 5 years will be $101,057.69
Given,
Required return = 4%
$100 cash flow today
Cash flow of $1,000 at the end of 1 year
$100,000 cash flow at the end of 5 years
Here, the future value of present cash flows will be calculated. This refers to the value of present cash flow in the future at a certain discounting rate.
The formula which is used to calculate future value is given below.
[tex]FV= \frac{PV}{(1 + r)^{n}}[/tex]
Here,
FV is the future value.
PV is the present value.
r is the rate of interest.
n is the number of years.
Thus, the FV of the cash flows will be:
[tex]FV = \frac{100}{(1+0.04)^{5}} + \frac{1000}{(1+0.04)^{4}} + 100,000[/tex]
[tex]= 96.1538 + 961.5384 + 100,000\\=$101,057.69[/tex]
Hence, a $100,000 cash flow at the end of five years will be $101,057.69
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an oil exploration company currently has two active projects, one in asia and the other in europe. let a be the event that the asian project is successful and b be the event that the european project is successful. suppose that a and b are independent events with p(a)
Exploration & production (E&P) is a specific sector within the oil exploration company and gas industry linked to the early stage of energy production, which generally involves searching for and extracting oil and gas. An E&P company finds and extracts the raw materials used in the energy business.
The problem deals with the concepts of the probability of events, such as the probability of complementary events, the probability of the union of events, the probability of the intersection of events, and the conditional probability of events.
Probability of Events
Compliment of Event and its probability:
For any event A, the complement of A is,
P(A)=1-P(A)
Union of events and its probability:
For andA2 be any two events, then
P(AUG)- P(4)+P(A)-P(ANA)
Here, ANĄ represents a set consisting of those elements which belong to both andA2, and AUA represents a set consisting of all those elements which belong to either orA2 or both.
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The real interest rate equals the nominal interest rate ________ the inflation rate.
The real interest rate equals the nominal interest rate minus the inflation rate.
An interest rate that has been prorated for inflation is referred to as a "real interest rate." The nominal interest rate is subtracted from the inflation rate to arrive at the real interest rate.
What is Nominal vs. Real Interest Rate?
When represented as a percentage of the total amount of a loan or investment, interest rates represent the cost of borrowing or the return on saving.A nominal interest rate is the sum of the real interest rate and the anticipated inflation rate.The actual return on a loan (to the lender) and on a bond is provided by a real interest rate (to the investor).Subtract the actual or anticipated rate of inflation from the nominal interest rate to determine the real interest rate.The nominal interest rate is the rate that banks, debt issuers, and investment firms advertise for loans and various investments. Real interest rates represent the purchasing power of investors. Nominal interest rates can indicate current market and economic conditions. The interest rate that banks, debt issuers, and investment companies promote for loans and different types of investments is known as the nominal interest rate.To know more about Nominal vs. Real Interest Rate visit:
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A low ids level indicates that too much inventory is being held.
a. true
b. false
A low ids level indicates that too much inventory is being held. a. true
Inventory refers to all the items, goods, merchandise, and materials held by a business for selling in the market to earn a profit. Example: If a newspaper vendor uses a vehicle to deliver newspapers to the customers, only the newspaper will be considered inventory. The vehicle will be treated as an asset.
Inventory is an asset because a company invests money in it that it then converts into revenue when it sells the stock. Inventory that does not sell as quickly as expected may become a liability.
Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated.
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What are the effects on the accounting equation when an adjusting entry is made for goods or services provided during the accounting period related to an amount previously received in advance from a customer?.
Total liabilities will decrease and total stockholders' equity will increase are the the effects on the accounting equation when an adjusting entry is made for goods or services provided during the accounting period related to an amount previously received in advance from a customer
The accounting equation is crucial to the use of double entry bookkeeping, where every transaction has a dual impact on the financial accounts, and it depicts the relationship between the assets, liabilities, and capital of a corporation. The accounting equation can be simply answered as assets - Liabilities equal capital.
The remaining interest in a company's assets after all liabilities have been paid off is known as capital (ie what would be left if the business sold all of its assets and settled all of its liabilities). Capital would be referred to as "Equity" in the context of a limited liability business.
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If the price of cocoa rises by 10 nd the elasticity of supply is 0.5, then the quantity supplied?
If the price of cocoa rises by 10, then quantity supplied would rise by 5.
What is the change in quantity supplied?The price elasticity of supply measures how quantity supplied changes when there is a change in the price of the good. There is a positive relationship between price and the quantity supplied.
When supply is elastic, it means that when there is a change in price, the quantity supplied changes by more than the change in price. When supply is inelastic, it means that when there is a change in price, the quantity supplied changes by less the change in price.
The price elasticity of supply = percentage change in the quantity supplied / percentage change in price
Percentage change in quantity supplied = price elasticity x percentage change in price
0.5 x 10 = 5
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Discuss why should the estimator review the plumbing portions of the project whether it involves single or separate contract. how should project risk affect the profit on a job?
The estimator should review the plumbing component since plumbing requires various items such as taps, pipes, and so on. These things come in many different variations and price ranges, therefore it is the estimator's task to review the quality of plumbing materials used in construction work.
There are various risks in construction work, and an estimator reserves a budget for risk. If the risk in any project is considerable, the estimator should increase the budget for risk. and if the estimator reduces the risk, the project will be lucrative.A competent estimator provides unbiased, effective, and consistent estimations. I'll explain what these phrases represent in this post. An estimator is a formula that takes our sample values and estimates the statistic.As the risks are identified ahead of time, risk management helps to improve the company's functioning and performance. The company will be prepared to deal with the threat. Thus, higher operational efficiency leads to increased production, which leads to increased firm profitability.Thus this is the meaning of estimator's review.
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In "thinking like an economist," the section "the role of economic theory" states that many economists believe that useful insights into our behavior can be gained by assuming that we act as if governed by the rules of___________ decision making.
In "thinking like an economist," the section "the role of economic theory" states that many economists believe that useful insights into our behavior can be gained by assuming that we act as if governed by the rules of Rational decision making.
Rational Decision making may be defined as the process of decision making which involves the use of logic in every step of decision making. It is based on the utilization of objective knowledge. The process of rational decision-making involves identifying the problem to be solved and then gathering all possible facts and figures.
The next step is analyzing all the possible solutions and the outcomes related to the solutions. The next step involves a decision making which is done by considering all the possible solutions and choosing the best one based on logic.
Examples of Rational decision-making are:
A student chooses what to pursue in his higher education.
A business decision on what to purchase for the organization.
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during 2021, belen paid the following taxes: property taxes on residence (paid from escrow account) $ 1,550 property tax portion of car registration (based on value) 400 property taxes on land held for long-term appreciation 350 what amount can belen deduct as property taxes in calculating her itemized deductions for 2021?
$ 2,300 Itemized Deduction For 2017
All of the above are included in Itemised Deduction.
Taxes on residency + Tax portion of registration +Property tax on land for long-term appreciation
$1,550+$400 +$350 = $2,300
Property tax is a tax paid on property owned by an individual or other legal entity, such as a corporation. Most commonly, property tax is a real estate ad-valorem tax, which can be considered a regressive tax. It is calculated by a local government where the property is located and paid for by the owner of the property.
Texas has no state property tax. All property is appraised at full market value, and taxes are assessed by local county assessors on 100% of appraised value.
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the trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred. what will the accountant do to confirm this suspicion?
The trial balance does not seem to be in harmony, and the accountant has a sneaking suspicion that a slide or transposition mistake may be to blame.
Find out how much of a mistake there was, then divide that number by nine. If the result is split down the middle in a fair manner, then there is a good chance that this sort of mistake occurred.
This is further explained below.
What is a financial accountant?A general definition of an accountant is someone who works in the field of accounting or accountancy.
Accountants who have successfully passed the certification tests administered by their respective professional organizations are authorized to use designations such as
Chartered Accountant, Chartered Certified Accountant, Certified Public AccountantIn conclusion, Determine how many times there was a mistake, then take that amount and divide it by nine.
If the outcome is evenly divided down the middle in an equitable way, then there is a strong possibility that a mistake of this kind had a place.
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regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected
the fundamental subject material of the interconnected Economy does not change.
What is macroeconomics?
Macroeconomics is a branch of economics that focuses on how an economy as a whole functions, is set up, acts, and makes decisions. Controlling the growth and stability of an economy, for instance, by the use of interest rates, taxes, and government spending. This covers the regional, governmental, and global economy. According to economists Emi Nakamura and Jón Steinsson in a 2018 study, the economic "data addressing the repercussions of alternative macroeconomic strategies is still relatively imperfect and susceptible to serious criticism." Macroeconomists study topics such as the Gross Domestic Product (GDP), unemployment (including unemployment rates), national income, price indices, output, consumption, inflation, saving, investment, energy, international trade, and international finance.
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A ________ helps you to complete projects, keep within your budget, stay on schedule, and work with others.
A Project management program helps you to complete projects, keep within your budget, stay on schedule, and work with others. A program is a collection of connected projects handled in concert to achieve benefits not possible while managing them separately.
Program management in modern enterprisesMany individuals confuse the terms "project management" with "program management," possibly under the impression that they have essentially the same meanings. Although the two terms are connected, they are treated very differently depending on who is using them.
Often, program management for results that are in line with attaining company objectives is led by the enterprise program management office (EPMO). The coordination and interdependencies of the cross-enterprise projects that make up the program and collectively fulfill strategic goals are one of its main responsibilities.
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If net fixed assets increased by $28,000 during the year, what was the addition to nwc?
Net capital is the net of total current assets of an entity with its total current liabilities. once we want to assess the liquidity problems in the company, networking capital is one among the most important items to be included.
Sometimes we use this ratio to assess how efficiently the corporate uses its current assets. Two main important items involved networking capital calculation are current liabilities and current assets.
If current assets are above current liabilities, that mean the corporate may have enough fund to support its liabilities and operation costs.
And if, current assets are smaller than current liabilities, then entity might face liquidity problems soon.
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Which type of growth would follow the reopening of idled manufacturing plants to produce additional product?
The type of growth would follow the reopening of idled manufacturing plants to produce additional product is short run growth.
The economy would move from below the production possibilities border to above it. When production shifts from a point beneath the PPF to a point to the right of (but still beneath) or on the PPF, short-run growth occurs.This simply signifies a gain in GDP over a specific time period. Short-run growth is feasible without increasing productive capacity if the economy is functioning below capacity (within the production potential frontier); it is simply a matter of using unused resources.Short-run economic growth occurs when the economy employs excess capacity to boost real production. The short run is often described as the time frame over which wages and prices of other production inputs are "sticky," or inflexible, and the long run is defined as the length of time over which these input prices have opportunity to adapt.Thus this is the meaning of short run growth.
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A project has an initial cost of $26,000, a discount rate of 11.7 percent, a life of 5 years, and an npv of $11,216. given this, you know that the project is expected to earn a return:_________
A challenge has an initial cost of $26,000, a discount price of eleven.7 percent, the existence of 5 years, and an NPV of $11,216. given this, you already know that the task is expected to earn a go back: $ 10247.46
Consider NPV = $11216
PV of cash inflow = NPV of cash outflow = 26000$
11216$ = $37216
Cash flow = Cash inflow PV / PVAF(r%, n) = $37,216/PVAF (11.7%, 5) = $37216/3.6317 = $10247.46
internet present value (NPV) is used to calculate the current cost of a future flow of bills from an employer, task, or funding. To calculate NPV, you want to estimate the timing and quantity of destiny cash flows and select a discount fee equal to the minimum applicable charge of going back.
The internet present value or net gift well-worth applies to a chain of coin flows occurring in one-of-a-kind instances. the prevailing value of a cash glide relies upon the c program language period of time between now and the cash float. It additionally depends on the cut price price. NPV accounts for the time cost of money.
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Based on research evidence, top-down management and rules-based management styles suggest that:______.
Top-down management and rules-based management styles suggest that due process and committee cycles govern change.
Top-down management occurs when your company's senior leaders decide on goals, projects, and tasks independently of their teams. These objectives, projects, and tasks are then shared with the rest of the organization.
The top-down management is preferred by many teams because it eliminates confusion, reduces risk, and keeps initiatives organized across larger teams. Top-down management, on the other hand, is not for everyone. It can stifle creativity and slow problem-solving, so it might not be the best choice for teams that need more flexibility and responsiveness.
The concept of rule-based management is the control of the security of communications and IT events via rule- or filter-driven systems. Firewalls, proxies, routers, IDS, IPS, antivirus, and other rule-based security management systems are examples. Each of these systems is governed by a set of rules. Each rule expressly allows or denies. If no rule matches an event or packet, it should be denied by default.
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project managers and others who bring people together from various parts of the organization to perform a task are in this layer of management.
project managers and others who bring together people from various parts of the organization to accomplish a task are middle managers.
What is middle management?Corresponds to the set of managers responsible for managing teams, that is, they are responsible for effectively supervising the teams of a project, thus fulfilling the goals and objectives stipulated by the executive managers.
Therefore, middle managers are essential for a project to be effective in terms of quality, meeting schedule, utilization of resources, and team integration.
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if you pay $1,000 for a vacation package this year and the inflation rate is 2%, the same package will likely cost $1,020 next year. if you invest $1,000 today at 5%, you will have $1,050 next year from your investment. what is the real rate of return on your investment? 2% 3% 5% 20% 30%
If you if you pay $1,000 for a vacation package this year and the inflation rate is 2% and you invest $1,000 today at 5% and have $1,050 next year from your investment. The real rate of return on your investment is 3%.
Real rate of return on your investmentFirst step is to calculate the additional purchasing power
Additional purchasing power=$1,050-$1,020
Additional purchasing power=$30
Second step is to calculate the Real rate of return on your investment
Real rate of return on your investment=$30/$1,000
Real rate of return on your investment= 3%
Therefore If you if you pay $1,000 for a vacation package this year and the inflation rate is 2% and you invest $1,000 today at 5% and have $1,050 next year from your investment. The real rate of return on your investment is 3%.
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A marketing mix that is ________ to provide a good, service, or idea to prospective buyers is known as a marketing program. multiple choice question. a. deconstructed b. compressed c. segmentedd. integrated
The marketing process of discovering, developing, and providing value to satisfy a target market's needs in terms of products and services, sometimes involving the choice of a target audience; Operation of advertising campaigns; selection of specific qualities or topics to emphasize in advertising.
A marketing program is an integrated marketing mix that offers a product, service, or concept to potential customers. When you combine two diverse answers to a problem to get one better one, that is an example of integrating.
When you combine many educational techniques to develop a coherent educational plan, that is an example of integrating. shape, coordinate, or combine into a working or cohesive whole: unify. to include a bigger structure. B: to combine with another object. marketing and integrating school systems is a step.
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A bond is issued with a coupon of 4% paid annually, a maturity of 30 years, and a yield to maturity of 7%. What rate of return will be earned by an investor who purchases the bond for $627. 73 and holds it for 1 year if the bond’s yield to maturity at the end of the year is 8%?.
-11% is the rate of return will be earned by an investor who purchases the bond for $627. 73 and holds it for 1 year if the bond’s yield to maturity at the end of the year is 8%.
The key to answer this question is to remember that valuation of a bond depends basically of calculating the rate of return present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginning (principal), so applying math we have the bond value given by:
so in this particular case that one year later there are 29 years to maturity so we have:
[tex]price= \frac{Principle*coupon}{(1+i)^{1} } +\frac{Principle*coupon}{(1+i)^{2} }+.......+\frac{Principle*coupon}{(1+i)^{n} }[/tex]
[tex]price= \frac{1000*0.04}{1+0.08} + \frac{1000*0.04}{(1+0.08)^{2} } +..........................\frac{1000*0.04)}{(1+0.08)^{30} }[/tex]
[tex]price=553.6638[/tex]
so as we have a higher rate of return the investment has the next return:
[tex]rate=\frac{553.68}{627.73} -1[/tex]
[tex]rate= -11.8[/tex]
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which statement is not correct about the business-society interdependence? multiple choice business is a part of society. business is separated from the rest of society by clear boundaries. business activities impact other activities in society. actions by governments rarely affect business.
The actions by governments rarely affect the business is not correct about the business-society interdependence.
What is business-society interdependence?
The business-society interdependence means that the business and the society both are related to each other.
In this question, we have to identify the wrong statement about the business-society interdependence. There are four statements are given from which we have to choose the wrong statement. The statement fourth is not correct about the business-society interdependence because both the business and the government related to each other. Each decision of the government directly affects the company. Hence, fourth statement is correct.
Statement 1 is not correct because it is true about business-society interdependence.
Statement 2 is not correct because it is true about business-society interdependence.
Statement 3 is not correct because it is true about business-society interdependence.
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The principle that irrelevant detail should not be included in a model is known as.
The principle that irrelevant detail should not be included in a model is known as: Ockham's razor.
Ockham's razorOckham's razor theory is the theory that stated that only relevant details or important details that will be of benefit should be included in a model.
This in turn means that irrelevant information or details should be excluded in a model or theory.
Therefore the principle that irrelevant detail should not be included in a model is known as: Ockham's razor.
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a city uses a water tower to store water for times of high demand. when demand is light, water is pumped into the tower. when demand is heavy, water can flow from the tower without overwhelming the pumps.
A metropolis makes use of a water tower to keep water for times of excessive demand. whilst the call for is light, water is pumped into the tower. whilst the call for is heavy, water can waft from the tower without overwhelming the pumps: gauge strain = P - Pa = rho gh
height h= (P - Pa )/rho g = 350000/(one thousand*9.8) = 35.7 meters
Demand can be defined as the quantity of a commodity that a consumer is in a position and inclined to buy, at every feasible price, over a given time period. crucial elements of the call for are amount, capability, willingness, expenses, and period of time.
In economics, demand is the amount of amazing that customers are willing and able to purchase at diverse prices all through a given time. the relationship between rate and quantity called for is likewise called the demand curve. For example, if a purchaser is hungry and buys a slice of pizza, the primary slice will have the best advantage or software. With every extra slice, the client turns into greater glad, and software declines. In concept, the first slice would possibly fetch a better rate from the consumer.
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On october 1, 20x1, snorkel company issues $4 million, 8% interest bonds at face amount. interest is payable on march 30 and sept. 30. on march 30, 20x2, snorkel should:____
Snorkel Company should
Debit Interest Expense = $80,000
Debit Interest Payable = $80,000
So, the credit cash will be $160,000.
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oday’s managers are moving from a controller role to an enabler role. their goal is to provide support and learning opportunities, coach, and guide their employees. andy and scott discuss their approach at barcelona as one that is empowering. "this is your restaurant," andy tells new managers. scott says, "i think you’re limiting your ability to get better," when you tell managers what to do.
Remove an item from an unhappy customer's bill,Change menu prices on seafood dishes due to increased market prices,Seek approval from Scott to run an advertisement in a local newspaper announcing new, extended hours for your location,Hire an additional bartender to meet the demand of increased "happy hour" business
Since ancient times, the phrases "happy hour" and "hour" have been used to describe enjoyable periods. Shakespeare's King Henry V quotes him as saying, "Therefore, my lords, omit no cheerful hour/That may assist our adventure" in act I, scene 2. However, it is more modern to use the term "happy hour" to describe a set time for amusement.The United States Navy is one potential source for the term "happy hour," which refers to a set time for amusement. On board the USS Arkansas, "semi-weekly smokes" were organized by a group of housewives known as the "Happy Hour Social" in the beginning of 1913. The term "happy hours," "happy hour club," or "happy hour social club,"
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for large interest rate increases, duration the fall in security prices, and for large interest rate decreases, duration the rise in security prices.
For large interest rate increases, duration overpredicts the fall in the security's price, and for large interest rate decreases, duration underpredicts the rise in the security's prices.
What does duration do?The purpose of a bond duration calculation, is to find out how much the price of a bond is going to change when there is a change in interest rates. In other words, the duration shows the interest rate risk on a bond's price.
When interest rates that are larger increase, the duration acts in such a way that it overpredicts the fall in the price of the security. When larger interest rates decrease instead, the duration will tend to underpredicts the rise in the price of the security.
Options for this question include:
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a common stock will pay a cash dividend of $5 next year. after that, the dividends are expected to increase indefinitely at 1% per year. if the discount rate is 12%, what is the pv of the stream of dividend payments?
A common stock will distribute a $5 cash dividend next year. Following that, an endless 1% annual growth in dividends is anticipated. The present value of the stream of dividend payments, at a discount rate of 12%, is $71.43.
Cash dividend minus present value (Discount rate - Growth rate)
The present value is $5. (0.11 - 0.04)
present value = $71.43
Common stock is a type of security that denotes ownership in a company. The board of directors and corporate discount rate policies are chosen by common stockholders. Long term, this type of stock ownership often produces higher rates of return. But in the event of liquidation, common shareholders are only entitled to the assets of the company once bondholders, preferred shareholders, and other debt holders have been fully compensated.
Common stock serves as a residual claim to current and future profits of a corporation. Shareholders are therefore referred to as a company's partial owners. This does not imply that stockholders can enter a company's offices and assert ownership of some of the chairs, desks, or computers. These items are the property of the corporation, a legitimate entity, which is wholly owned discount rate by it. This residual claim, however, is owned by the stockholders. On exchanges, common stock is exchanged, and investors and dealers can buy and sell it. Dividends could be available to common stock holders.
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suppose that a commercial bank wants to buy treasury bills. these instruments pay $5 comma 000 in one year and are currently selling for $5 comma 01
Commercial banks purchasing treasury bills at 5,000 and selling at 5,001 per bill. The interest rate of those bills is calculated using Present Value formula which is Present Value = Future Value / (1+i)^n through which we get rate of interest as 2%
Calculation of the required bonds percentage
5000 = 5001/(1+i)
1+i = 5001/5000 = 1.0002
i = 1.0002-1 = 0.0002
i = r/100 = 0.0002
r = 0.002 or 2%
No it is not a typical situation. In normal times banks will not choose to pay more than the face value of a discount bond, since that implies negative yields to maturity
Treasury bonds/bills (sometimes known as T-bonds) are fixed-rate debt instruments issued by the government, with maturities ranging from 10 to 30 years.
T-bonds offer semi-annual interest payments up until maturity, when the owner is given the bond's face value.
Treasury bills are one of four practically risk-free government-issued securities, along with Treasury bonds, Treasury notes, and Treasury Inflation-Protected Securities (TIPS).
Your question is incomplete. Kindly find the full content below:
The yield to maturity of these bonds is nothing%. (Round your response to two decimal places.)
Is this a typical situation?
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you own a small manufacturing business that produces widgets. you have spent $150,000 acquiring the fixed assets you need to produce widgets. each widget costs you $2 to make and they sell for $15 each, so your variable cost is 13.3% of the overall revenue.
To break even at the current operating leverage, 11,539 widgets must be sold.
Thus, 11,539 is correct.
What do you mean by operating leverage?Operational leverage, a cost-accounting technique, evaluates how much a business or project may increase operating profitability by increasing revenue. Businesses with high operating leverage generate revenues with low variable costs and large gross margins.
In order to find the appropriate price at which to turn a profit and cover your expenses, you must complete the operational leverage calculation. Additionally, it can help you understand how effectively your business can generate profits by utilizing fixed-cost assets like equipment or warehouses.
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The complete Question is:
You own a small manufacturing business that produces widgets. You have spent $150,000 acquiring the fixed assets you need to produce widgets. Each widget costs you $2 to make and they sell for $15 each, so your variable cost is 13.3% of the overall revenue.
At your current level of operating leverage, how many widgets must you sell to break even?