Chap 1 Knowledge Check Answer Key

Knowledge Check 1.1

1. a. $9,000        b.         $66,000
2. Sounders: $\frac{$936,400}{$184,000}$, Elecktronicks: $\frac{$1,245,900}{$209,400}$ (Elecktronicks is better)

Knowledge Check 1.2

1. a. Net Profit = 14% of $$29,000 = 0.14\times $29,000 = $ 4,060$.

b. $Sales \times 0.14 =$5,000$, so $Sales = \frac{$5,000}{0.14} =$35,714.29$

2 a. $9.80  b. $22.40  c. $39.20

Knowledge Check 1.3

1.a. COGS = 0.65 × $ 90,000 =   $58,500

2. $\text{Percent gross margin} =\frac{$31,500}{$90,000} = 0.35 = 35%$

Knowledge Check 1.4

Knowledge Check 1.5

1. a.

$\begin{align*} &200 € &=& 200 € \times \frac{$1.532}{1 € }&=&$306.40\\ &200 \text{ HKD} &=& 200 \text{ HKD} \times \frac{$0.1678}{1\text{ HKD} }&=&$33.56\\ &200¥ &=& 200 \: \yen \times \frac{$0.011648}{1¥}&=&$2.33 \end{align*}$

b.

$\begin{align*} $500 &=& $500 \times \frac{1€}{$1.532}&=&326.37€\\ $500 &=& $500 \times \frac{1\;HKD}{$0.1678}&=&2,979.74\;HKD\\ $500 &=& $500 \times \frac{1\yen}{$0.011648}&=&42,925.82\yen \end{align*}$

Knowledge Check 1.6

1. $700(1-0.3)(1-0.25) =$ 367.50$
2. Discount = $349-$ 244.30 =$ 104.70$

$\text{Discount Rate} =\frac{$104.70}{$349}=0.30=30%$

Knowledge Check 1.7

Before Discount: $6\times $ 749 (1-0.3)(1-0.05) = $ 2,988.51$

After Discount: $2,988.51(1-0.03)=$2,898.85$

Knowledge Check 1.8

1. The last day you can pay off both debts is the day the fridge invoice is due:  May 4.  On this day, the fridge will not get a discount, but the range will be eligible for a 5% discount
2. The first payment of $760 is worth a credit of:

$Credit = \frac{$760}{(1-0.05)}=$800$

so the we owe $$2,500-$800=$1,700$ on the fridge, and $$3,250(1-0.05)=$ 3,087.50$ on the range, so our final payment will be:

$Payment =$1,700+$3,087.50 = $4,787.50$