PracticeQ13StudentCopy_2

PracticeQ13StudentCopy_2 - Planning and Budgeting: Practice...

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1 Planning and Budgeting: Practice Quiz 13 44. The Sledge Hammer Company manufactures a line of high quality tools. The company sold 1,000,000 hammers at a price of $4 per unit last year. The company estimates that this volume represents a 20% share of the current hammers market. The market is expected to increase by 5%. Marketing specialists have determined that, as a result of a new advertising campaign and packaging, the company will increase its share of this larger market to 24%. Due to changes in prices, the new price for the hammer will be $4.30 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates. What are the estimated sales revenues in the coming year? A. $5,040,000. B. $5,160,000. C. $5,418,000. D. $5,689,000.
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2 45. TRS is a large securities dealer. Last year, the company made 120,000 trades with an average commission of $120. Because of the general economic climate, TRS expects trade volume to decline by 20%. Fortunately, the average commission per trade is likely to increase by 10% because trades are expected to be large in the coming year. What are the estimated commission's revenues for TRS in the coming year? A. $11,520,000 B. $12,672,000 C. $15,552,000 D. $15,840,000
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3 46. TLC Credit, Inc. has $35.0 million in consumer loans with an average interest rate of 12.0%. The bank also has $30.0 million in home equity loans with an average interest rate of 8.0%. Finally, the bank owns $5.0 million in corporate securities with an average interest rate of 6%. Next year, consumer loans will increase to $40.0 million because of a rate decrease to 10.0%, while home equity loans will increase to $32.0 million at an average interest rate of 6.5%. Unfortunately, the investment in corporate securities will decrease by 20% and the average interest rate will be only 9.0%. What is TLC's estimated change in revenues next year? A. $460,000 decrease B. $460,000 increase C. $700,000 increase D. $700,000 decrease
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4 Hawle Manufacturing Company is in the process of preparing its 2010 budget and is anticipating the following changes: 30% increase in the number of units sold 20% increase in the direct material unit cost 15% increase in the direct labor cost per unit
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This note was uploaded on 11/14/2011 for the course ECONOMICS 121 taught by Professor Aktiwari during the Spring '10 term at Amity University.

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PracticeQ13StudentCopy_2 - Planning and Budgeting: Practice...

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