Working capital measures of an organizations financial well

Reference no: EM13388110

Project Accounting Break-even Point (in units) Price per unit Variable Cost per unit Fixed Costs Depreciation
A 6,240 $53 $103,000 $26,000
B 780 $1,020 $499,000 $102,000
C 1,960 $22 $14 $4,600
D 1,960 $22 $6 $12,000

Questions:

1. What is the price per unit of Project A? (round to the nearest cent)
2. Note that Projects C and D share the same accounting break-even. If sales are above the break- even point, which project would you prefer? Explain why.
3. Calculate the cash break even for the above projects. What do the differences in the accounting and cash break even tell you about the four projects?

Working capital measures of an organizations financial well being. A business figures this out by measuring the company’s current assets and current liabilities. A businesses working capital gives detail information to the company to gauge rather they can continue their business. It also measures the amount of cash flow needed to see if there is sufficient money to cover both debt and operational expenses. If a company’s liabilities are greater than the assets used to pay their debt they may have to borrow money to cover the debt. I would recommend using limited customer credit. Offering credit to customers creates risk. If you end up with more credit (monies owed) than assets to cover than you are digging yourself a whole much similar to borrowing money to get out of debt. Credit can be important to marketing needs, however financially extending credit in my opinion is risky.

Reference no: EM13388110

Questions Cloud

Course fin370 myfinance lab wk 2 problems partial already : course fin370 myfinance lab wk 2 problems partial already completed wk3 practice amp problems wk 4 practice amp

1floridas department of citrus and a coalition of consumer : 1. floridas department of citrus and a coalition of consumer groups have launched an attack on your company for

Evaluate the profit margin on sales ratio the return : digital relay has both preferred and common stock outstanding. the comshypany reported the following information for

Write the limits to us long-term economic growth is there : what are the limits to the u.s. long-term economic growth? is there anything that our government can do to address

Working capital measures of an organizations financial well : project accounting break-even point in units price per unit variable cost per unit fixed costs depreciationa 6240 53

Calculate the current and quick ratios for each of three : 1. edison stagg and thornton have the following financial information at the close of business on july

Considering genesisrsquos aggressive growth plan sensible : considering genesisrsquos aggressive growth plan sensible essentials suggested that its client should broaden the scope

Explain how should the government and producers balance : 1 how does vaccine distribution relate to key operations and supply chain management questions including quality

Consider a market of mp3 players write one or two events : consider a market of mp3 players. list one or two events related with this market which will cause the following

User Account

All Pages