Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department
Total Hardware Linens
Sales $ 4,170,000 3,010,000 $ 1,180,000
Variable expenses 1,231,000 814,000 417,000
Contribution margin 2,959,000 2,196,000 763,000
Fixed expenses 2,180,000 1,340,000 840,000
Net operating
income (loss) $ 779,000 $ 856,000 $ (77,000 )
A study indicates that $375,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 11% decrease in the sales of the Hardware Department.
Required:
What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Yael decides that she no longer enjoys her job, and she quits to open a gluten-free, dairy-free kosher bakery. she pays a monthly rent for her store of $2,000. her labor costs for one month are $4,500, and she spends $6,000 a month on nut flours, sugar, and other supplies. yael was earning $2,500 a month working as a bank teller. these are her only costs. her monthly revenue is $14,000. which of the following statements about yael’s costs and profit are correct? correct answer(s) an accountant would say she is earning a monthly profit of $1,500. her implicit costs are $2,500 a month. an economist would tell her that she is experiencing a loss. her total costs are $12,500 a month. her explicit costs include the labor, rent, and supplies for her store. her economic profit is $1,500 a month.

Verizon communications, inc., provides the following footnote relating to its leasing activities in its 10-k report. the aggregate minimum rental commitments under noncancelable leases for the periods shown at december 31, 2010, are as follows: years (dollars in millions) capital leases operatingleases 2011 $97 $1,898 2012 74 1,720 2013 70 1,471 2014 54 1,255 2015 42 1,012 thereafter 81 5,277 total minimum 418 $ 12,633 rental commitments less interest and (86) executory costs present value of 332 minimum lease payments less current (75) installments long-term obligation $257 at december 31, 2010 (a) confirm that verizon capitalized its capital leases using a rate of 7.4 %. (b) compute the present value of verizon's operating leases, assuming an 7.4% discount rate and rounding the remaining lease term to 3 decimal places. (use a financial calculator or excel to compute. do not round until your final answers. round each answer to the nearest whole number.)

What’s the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%? $4,750 $5,000 $5,250 $5,513 $5,788what is the present value of the following cash flow stream at a rate of 8.0%, rounded to the nearest dollar? cash flows: today (t = 0) it is $750, after one year (t = 1) it is $2,450, at t = 2 it is $3,175, and at t=3 it is $4,400. draw a time line. $7,917 $8,333 $8,772 $9,233 $9,695