5BP Bronco Truck Parts expects to se... [FREE SOLUTION]

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Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 5BP (page 114)

Bronco Truck Parts expects to sell the following number of units at the prices indicated under three different scenarios in the economy. The probability of each outcome is indicated. What is the expected value of the total sales projection?
Outcome
Probability
Units
Price
A
0.40
350
$21
B
0.10
600
30
C
0.50
1,050
35

Short Answer

Expert verified

The total sales value projection of the company is $23,115.

Step by step solution

Expected sales value of A

$\begin{array}{rcl} Expected sales & = & Units sold 脳 Unit price 脳 Probability \\ = & 350 脳 $ 21 脳 0.40 \\ = & $ 2, 940 \end{array}$

Expected sales value of B

$\begin{array}{rcl} Expected sales & = & Units sold 脳 Unit price 脳 Probability \\ = & 600 脳 $ 300 脳 0.10 \\ = & $ 1, 800 \end{array}$

Expected sales value of C

$\begin{array}{rcl} Expected sales & = & Units sold 脳 Unit price 脳 Probability \\ = & 1, 050 脳 $ 35 脳 0.50 \\ = & $ 18, 375 \end{array}$

Expected total sales value projection of the Alliance Corp.

$\begin{array}{rcl} Expected total sales value & = & Expected sales of A + Expected sales of B + Expected sales of C \\ = & $ 2, 940 + $ 1, 800 + $ 18, 375 \\ = & $ 23, 115 \end{array}$

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	Capable corporation	Muli-media inc
Net income	\(31,200	\)140,000
Sales	317,000	2,700,000
Total assets	402,000	965,000
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Stockholder鈥檚 equity	239,000	423,000

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Balance sheet 20X1
Assets		Liabilities and Equity
Cash	\)60,000	Account payable	\(220,000
Account receivable	240,000	Accrued taxes	30,000
Inventory	350,000	Bonds payable (long term)	150,000
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Short Answer

Step by step solution

Expected sales value of A

Expected sales value of B

Expected sales value of C

Expected total sales value projection of the Alliance Corp.

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Outcome	Probability	Units	Price
A	0.40	350	$21
B	0.10	600	30
C	0.50	1,050	35