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Author Question: Flowers.com is earning a total revenue of 100,000 per year. Its annual total fixed costs are 25,000 ... (Read 152 times)

j.rubin

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on: Jun 29, 2018
Flowers.com is earning a total revenue of 100,000 per year. Its annual total fixed costs are 25,000 and its annual total variable costs are 75,000 . What is the operating profit for Flowers.com? What is economic profit?
 
  What will be an ideal response?

Question 2

If you own a bond with a six percent coupon rate and new bonds are paying six percent, what will happen to your bond's market price?
 
  What will be an ideal response?


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katkat_flores

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Operating profit is revenue minus variable costs (100k - 75k) equals operating profit of 25k. Economic profit is revenue minus total costs (100k - 100k) equals 0 .

Answer to Question 2

It will not change.


j.rubin

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

covalentbond

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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