Apex Company Produces Artificial Christmas Trees

question 87

Multiple Choice

Apex Company produces artificial Christmas trees.A local shopping mall recently made a special order offer;the shopping mall would like to purchase 200 extra-large white trees.Apex Company is currently producing and selling 20,000 trees;the company has the excess capacity to handle this special order.The shopping mall has offered to pay $120 for each tree.An accountant at Apex Company provides an estimate of the unit product cost as follows:

This special order would require an investment of $10,000 for the molds required for the extra-large trees.These molds would have no other purpose and would have no salvage value.The special order trees would also have an additional variable cost of $5.00 per unit associated with having a white tree.This special order would not have any effect on the company's other sales.If the special order is accepted,the company's operating income would increase (decrease) by

• A)$2,300 decrease.
• B)$13,100 decrease.
• C)$2,100 increase.
• D)$13,100 increase.

Evaluate situations where organizations or government entities can be blamed for the outcomes of natural disasters and understand the implications.

Recognize the benefits of engaging in issues management for preventing or mitigating crises.

Compare and contrast different organizational responses to crises, understanding the stages of the issue life cycle.

Understand the variability and overlap in terms used to describe leadership behavior.

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Definitions:

Inflation Rate

A surge in the broad cost of goods and services, leading to a fall in the power to purchase.

Net Present Value

A calculation used to assess the profitability of an investment, factoring in the present values of all cash inflows and outflows.

Real Rate Of Return

The annual percentage gain or loss on an investment, adjusted for inflation, providing a more accurate measure of the purchasing power of the return.

Risk Premium

The risk premium is the additional return an investor requires for choosing a risky investment over a risk-free asset, compensating for the extra risk undertaken.