Reference no: EM133234922

Question 1.

Any one of these different product lines can be produced by Bubble Mills, Inc., with the present equipment in one of the divisions. The annual depreciation of the equipment is P6,400; and the annual cost to operate the equipment, regardless of product line manufactured, is P4,600.

Product A is expected to yield sales revenue of P71,000 a year with increased costs of production amounting to P42,000. Product B should yield sales revenue of P46,000 a year with increased costs of P15,000. Product C should yield sales revenue of P117,000 with increased costs of P96,000.

How much is the sunk costs of the company?

a  P19,600

b  P26,000

c  P11,000

d  P21,400

Question 2.

X Corp has P 24,000,000 in sales last year. The company's net income was P 400,000, its total assets turnover was 6 and the company's ROE was 15%. The company is financed entirely with debt and common equity. What is the company's debt ratio?

a  67%

b  33%

c  None of the above

d  50%