Judy Blue,CEO of the Clothing Store All Blue,is Planning to Open

question 69

Multiple Choice

Judy Blue,CEO of the clothing store All Blue,is planning to open a new store in Manhattan.She plans to purchase a small storefront for $5,250,000 which has a remaining useful life of 15 years.She plans to hire 2 part-time sales clerks and will pay each of them $34,000 per year in wages and other benefits.Judy expects that revenues will average $86,000 per month and other monthly operating costs will run $13,200.What is the accounting rate of return for the Manhattan store?

• A) 15.3%
• B) 8.7%
• C) 10%
• D) 1.1%

Identify and calculate variances between actual and budgeted performances including favorable and unfavorable outcomes.

Use budget formulas to prepare budgets based on activity measures such as customer served and patient-visits.

Understand and apply cost formulas in budget preparations.

Analyze spending variances in different expense categories and understand their implications on financial performance.

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Definitions:

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed.

Foreign Investors

Individuals or companies from one country investing in assets or businesses in another country, influencing the host country's economy.

Vital Life Functions

The essential bodily processes necessary for maintaining life, including respiration, circulation, and digestion.

Irreversible Cessation

A permanent halt in function or activity, often used in the context of the cessation of biological life functions or processes.