Violet sales corp, reports the yearminus−end information from 2018 as follows:

sales (35,625 units)

$285,000

cost of goods sold

116,000

gross margin

169,000

operating expenses

154,000

operating income

$15,000

violet is developing the 2019 budget. in 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. all other operating expenses are expected to remain constant.

assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.

should violet increase the selling price in 2019?

a. yes, because sales revenue increases for 2019.

b. yes, because gross margin increases for 2019.

c. no, because sales volume decreases for 2019.

d. no, because operating income decreases for 2019.

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

Which of the following will not cause the consumption schedule to shift? a) a sharp increase in the amount of wealth held by households b) a change in consumer incomes c) the expectation of a recession d) a growing expectation that consumer durables will be in short supply

The wall street journal reported that over a recent five-month period, a downturn in the economy has caused endowments to decline 23%. what is the estimate of the dollar amount of the decline in the total endowments held by these 10 universities (to the nearest billion)?