Answer:
1. Stockholders invested $24,500 cash in the business in exchange for common stock.
Dr Cash 24,500
Cr Common stock 24,500
2. Purchased equipment for $4,500 cash.
Dr Equipment 4,500
Cr Cash 4,500
3. Paid $200 cash for May office rent.
Dr Rent expense 200
Cr Cash 200
4. Paid $600 cash for supplies.
Dr Supplies 600
Cr Cash 600
5. Incurred $350 of advertising costs in the Beacon News on account.
Dr Advertising expense 350
Cr Accounts payable 350
6. Received $4,900 in cash from customers for repair service.
Dr Cash 4,900
Cr Service revenue 4,900
7. Declared and paid a $1,000 cash dividend.
Dr Dividends 1,000
Cr Cash 1,000
RKI Instruments borrowed $4,100,000 from a private equity firm for expansion of its facility for manufacturing carbon monoxide monitors. The company repaid the loan after 1 year with a single payment of $5,325,000. What was the interest rate on the loan
Answer:
29.88%(30% when rounded to the nearest whole percentage)
Explanation:
The amount borrowed was the present value of the loan while the amount repaid was the future value of the loan, hence, considering the relationship between the present value and the future value, we can determine the interest rate on the loan as shown thus:
FV=PV*(1+r)^n
FV=future value=the repayment=$5,325,000
PV=present value=loan amount= $4,100,000
r=rate of interest=the unknown
n=the duration of the loan=1 year
$5,325,000= $4,100,000*(1+r)^1
$5,325,000/$4,100,000=1+r
r=($5,325,000/$4,100,000)-1
r=1.298780488 -1
r=29.88%
Rappaport Corp.'s sales last year were $385,000, and its net income after taxes was $23,000. What was its profit margin on sales
Answer:
5.97%
Explanation:
Profit margin is an example of profitability ratio
profitability ratio measures the ability of a firm to generate profit from its assets
Profit margin = net income / sales
= $23,000. / $385,000,
Presented below are incomplete manufacturing cost data. Determine the missing amounts for three different situations. Direct Materials Used Direct Labor Used Factory Overhead Total Manufacturing Costs (1) $42,300 $64,000 $52,300 $ (2) $ $77,800 $144,000 $297,000 (3) $58,300 $ $115,000 $314,000
Answer and Explanation:
The computation of the missing amount of the three different situations is shown below:
As we know that
Total manufacturing costs = Direct materials + Direct labor + Factory overhead
Now
Direct materials Direct labor Factory overhead Total manufacturing
costs
$42,300 $64,000 $52,300 $158,600
$75,200 $77,800 $144,000 $297,000
$58,300 $140,700 $115,000 $314,000
The demand for wooden pencils is very responsive to a change in price. That is, the demand for these pencils is highly elastic. Suppose that workers in this industry are successful in negotiating a higher wage from management. As a result:______
A. The price and quantity of pencils purchased will fall, and gross revenues will rise.
B. Price and quantity purchased will rise, and gross revenues will fall.
C. Price will fall, quantity purchased will rise, and gross revenues will rise.
D. Price will rise, quantity purchased will fall, and gross revenues will fall.
Answer:
D. Price will rise, quantity purchased will fall, and gross revenues will fall.
Explanation:
It will lead to a higher price of the good as the management has to take into consideration the amount to wages to be paid to the workers, thus increasing the price of the goods. This will result to a lower demand at a higher price because the price increases and competitions will take advantage of the situation and that will also reduce the revenue of the firm.
Brooklyn Cabinets is a manufacturer of kitchen cabinets. The two cabinetry styles manufactured by Brooklyn are contemporary and farmhouse. Contemporary style cabinets sell for $90 and farmhouse style cabinets sell for $85. Each cabinet produced must go through carpentry, painting, and fiishing processes. The following table summarizes how much time in each process must be devoted to each style of cabinet.
Hours per process
Style Carpentry Painting Finishing
Contemporary 2.0 1.5 1.3
Farmhouse 2.5 1.0 1.2
Carpentry costs $15 per hour, painting costs $12 per hour, and fiishing costs $18 per hour, and the weekly number of hours available in the processes is 3000 in carpentry, 1500 in painting, and 1500 in fiishing. Brooklyn also has a contract that requires the company to supply one of its customers with 500 contemporary cabinets and 650 farmhouse style cabinets each week.
Let
x = the number of contemporary style cabinets produced each week
y = the number of farmhouse style cabinets produced each week
a. Develop the objective function, assuming that Brooklyn Cabinets wants to maximize the total weekly profit.
b. Show the mathematical expression for each of the constraints on the three processes.
Hours available in carpentry: x1 + y1 ≤
Hours available in painting: x2 + y2 ≤
Hours available in fiishing: x3 + y3 ≤
c. Show the mathematical expression for each of Brooklyn Cabinets' contractual agreements.
Answer:
a) Objective Function:
P = $18.6x + $13.9y
b)
1. 2x + 2.5y [tex]\leq[/tex] 3000 For Carpentry
2. 1.5x +1.0 y [tex]\leq[/tex] 1500 For Painting
3. 1.3x + 1.2y [tex]\leq[/tex] 1500 For Finishing
c)
x [tex]\geq[/tex] 500
y [tex]\geq[/tex] 650
Explanation:
Data Given:
Contemporary Style Cabinets Sells For = $90
Farmhouse Style Cabinets Sell For = $85
Hours per process:
For Contemporary:
Time for Carpentry = 2.0
Time for Painting = 1.5
Time for Finishing = 1.3
Similarly,
for Farmhouse Cabinet style:
Time for Carpentry = 2.5
Time for Painting = 1.0
Time for Finishing = 1.2
Costing for Processes:
Carpentry = $15/hr
Painting = $12/hr
Finishing = $18/hr
Availability of hours in the week:
Carpentry = 3000 hours
Painting = 1500 hours
Finishing = 1500 hours
Orders for Cabinets in the week:
Contemporary Cabinets = 500 units/week
Farmhouse Style = 650 units/week
Suppose,
x = number of contemporary style cabinets
y = number of Farmhouse cabinets
Step 1:
We need to calculate the total cost of the cabinets first.
Cost of Contemporary Style:
(2 x $15) + (1.5 x $12) + (1.3 x $18) = $71.4/cabinet
Similarly,
Cost of Farmhouse Style:
(2.5 x $15) + (1 x $12) + (1.2 x $18) = $71.1/cabinet
We know that the selling price of Contemporary and Farmhouse cabinets is $90 and $85 respectively. So, we can calculate the profit of both the cabinets.
For Contemporary Style:
Profit = ($90-$71.4) =$18.6
For Farmhouse Style:
Profit = ($85-$71.1)= $13.9
a) Objective Function for the maximization of the profit:
We know that x represents contemporary style and y represents farmhouse style. So, the profit is the basically the objective function. So.,
Objective Function:
P = $18.6x + $13.9y
b) Mathematical Expression for the constraints, which are:
1. 2x + 2.5y [tex]\leq[/tex] 3000 For Carpentry
2. 1.5x +1.0 y [tex]\leq[/tex] 1500 For Painting
3. 1.3x + 1.2y [tex]\leq[/tex] 1500 For Finishing
c) Mathematical Expression for Contracts:
x [tex]\geq[/tex] 500
y [tex]\geq[/tex] 650
Let's examine the market for iPads. Assume iPads are a normal good, Microsoft Surfaces are a substitute, and Apple Pencils are a complement. If the price of silicon (a key component of iPads) increases, what would happen to Supply or Demand for iPads (all else held equal)?
Answer:
the supply curve for iPads would shift to the left, decreasing the quantity supplied at every price level. This shift would result in a price increase. Since the price of iPads increased, the demand will decrease, also decreasing the demand of Apple Pencils.
Since Microsoft Surface are substitutes, when the price of iPads increase, the demand for Surface tablets will increase.
What are the benefits of training?
How can a customer pay an emailed QuickBooks Online invoice via credit card?
Answer: - Send A Message Via The Message Feature With Their Credit Card Number Select Review And Pay
- Apply For Account
- Pay Print Off A Form And Then Enter And Send Their Credit Card Details And Authorization Select Review And Pay
- Enter Payment Details
- Pay
Explanation:
A customer can pay an emailed QuickBooks Online invoice via credit card by doing the following;
- Send A Message Via The Message Feature With Their Credit Card Number Select Review And Pay
- Apply For Account
- Pay Print Off A Form And Then Enter And Send Their Credit Card Details And Authorization Select Review And Pay
- Enter Payment Details
- Pay
Assume the following capital structure: Preferred stock, 5%, $50 par value, 1,200 shares issued and outstanding with dividends in arrears for the three prior years. Common stock, $100 par value, 2,200 shares issued and outstanding. Total dividends declared and paid in current year were $52,000. How much of the current dividend will be paid to the preferred stockholders assuming the preferred stock is cumulative
Answer:
$12,000
Explanation:
The computation of the preferred dividend in the case when the preferred stock is cumulative is given below:
= Dividend percentage × par value of each share × number of shares issued × number of years
= 5% × $50 × 1,200 shares × 4 years
= $12,000
Hence, the preferred dividend in the case when the preferred stock is cumulative is $12,000
State if each of the following statements is true or false. Justify your answer. Decision trees can help identify and describe real options. The option to expand increases PV. High abandonment value decreases PV.
Answer and Explanation:
a. The first statement is true as the technique of the decision tree would be represented as a tree-shaped for the possible outcomes also it would help to understand the risk attached with the projects plus it would also provide the options
b. The second statement is true as the present value is the value of the today it would be discounted with the cash flows in order to calculate the present value. If the company has more capital so it would increase in the cash flows so that the investment would be covered up
c. The third statement is false as the abandonment value is the sales value that would be sold immediately. It is not related with the present value also if there is high abandonment value so it would not decrease the present value
What is the future value (FV) of $82,797 in thirty years, assuming the interest rate is 16% per year
Answer:the Future Value of $82,797 in 30 years with 16% interest rate =$7,108,112.26
Explanation:
F V = PV x (1 + R)^n
Where
FV=Future Value
PV= Present Value
R =Interest rate
n= Number of years
F V = PV x (1 + R)^n
Future Value =$82,797 x ( 1+ 0.16) ^30
=$82,797 x ( 1.16) ^30
$82,797 x 85.849
=$7,108,112.26
Therefore, the Future Value of $82,797 in 30 years with 16% interest rate =$7,108,112.26
You have always thought that learning to scuba dive would be fun. However, this activity would cost money and require time away from other activities. This situation best exemplifies
Answer:
Trade-off
Explanation:
Trade-off means the decision depend upon the situation in order to maintain the substainable sequence that lies between the two desirable.
Since in the question it is mentioned that as the person wants to learn scuba dive that required time and the money so this represent the trade-off example
Indicate the section operating activities,investing activities,financing activities,or none in which each of the following would be reported on the statement of cash flows prepared by the indirect method: a gain on sale of fixed assets b net income c retirement of long-term debt d sale of capital stock e distribution of stock dividends f payment of cash dividends g purchase of fixed assets h sale of fixed assets i receipt of interest revenue j Payment of interest expense
Answer and Explanation:
The indication of the following transactions for the cash flow statement is given below:
a. Operating activities
b. Operating activities
c. Financing activities
d. Financing activities
e. None
f. Financing activities
g. Investing activities
h. Investing activities
i. Operating activities
j. OPerating activities
Milden Company is a merchandiser that plans to sell 27,000 units during the next quarter at a selling price of $53 per unit. The company also gathered the following cost estimates for the next quarter: CostCost Formula Cost of good sold$23 per unit sold Advertising expense$173,000 per quarter Sales commissions6% of sales Shipping expense$68,000 per quarter $5.00 per unit sold Administrative salaries$83,000 per quarter Insurance expense$9,300 per quarter Depreciation expense$53,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.
Answer:
Part 1.
Contribution format income statement for the next quarter.
Sales $1,431,000
Less Variable Costs
Cost of Sales $621,000
Sales commissions $85,860
Shipping expense : Variable $135,000 ($832,860)
Contribution $598,140
Less Fixed Costs
Advertising expense $173,000
Shipping expense : Fixed $68,000
Administrative salaries $83,000
Insurance expense $9,300
Depreciation expense $53,000 ($386,300)
Net Income $211,840
Part 2.
Traditional format income statement for the next quarter.
Sales $1,431,000
Less Cost of Sales ($621,000)
Gross Profit $810,000
Less Operating Expenses
Sales commissions $85,860
Shipping expense : Variable $135,000
Advertising expense $173,000
Shipping expense : Fixed $68,000
Administrative salaries $83,000
Insurance expense $9,300
Depreciation expense $53,000 ($598,160)
Net Income $211,840
Explanation:
Contribution format income statement
Here the Company calculates Contribution. Contribution is the amount remaining after All Variable Costs are deducted from Sales Revenue. All the Fixed Costs are expensed in the year they are incurred.
Traditional format income statement
Here the Company calculates Gross Profit. Gross Profit is the amount remaining after All Cost of Sales are deducted from Sales Revenue. All the other costs incurred are expensed in the year they are incurred as operating expenses.
Ben Collins plans to buy a house for $166,000. If the real estate in his area is expected to increase in value by 2 percent each year, what will its approximate value be five years from now?
Answer:
$183,264
Explanation:
The computation of the expected value for the five years from now is as followS:
As we know that
Future value = Present value × FV Value Factor
= $166,000 × 1.104
= $183,264
We simply multiplied the present value with the factor of the future value to determine the future value
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.1%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 11 % 33 % Bond fund (B) 8 % 25 % The correlation between the fund returns is .1560. Suppose now that your portfolio must yield an expected return of 9% and be efficient, that is, on the best feasible CAL. a. What is the standard deviation of your portfolio
Answer:
standard deviation of your portfolio = 21.35%
Explanation:
Without mincing words, let's dive straight into the solution to this particular question. The following parameters are given in the question and they are:
The expected Return Standard Deviation Stock fund (S) = 11 % with standard deviation of 33%[=0.33] and the expected Return Standard Deviation Stock fund is 8% with standard deviation of 25 %[=0.25]. Also, it is given that the correlation between the fund returns = .1560.
STEP ONE: Determine the proportion of stock in minimum risky portfolio.
Therefore, the proportion of stock in minimum risky portfolio = [( 0.25)² - ( 0.33 × 0.25 ×.1560)] ÷ [ (0.33²) + (0.25²) - ( 2 × 0.33 × 0.25 × 0.156)] = 34.07%[=0.3407].
STEP TWO: Determine the proportion of bond fund in minimum risky portfolio.
The proportion of bond fund in minimum risky portfolio = 1 - 0.3407 = 0.6593 = 65.93.
STEP THREE: Determine the expected return of minimum risky portfolio.
The expected return of minimum risky portfolio = 0.3407 × 0.11 + 0.6593 × 0.08 = 0.0902= 9.02%.
STEP FOUR: Determine the standard deviation of your portfolio.
The standard deviation of your portfolio = [(0.6593²) × (0.25²) × (0.3407²) × (0.33²) + ( 2 × 0.6593 × 0.340 × 0.33 × 0.25 × 0.156)]^0.5 = 0.2135 = 21.35%
The ability to market your skills and persuade internal customers to use your services is an example of:
Answer:
HELPPPPPPPPP
Explanation:
an example of:
Three years ago, Charles purchased a health policy from the QRS Company; he has purchased two additional contracts from the same insurer since. Each contract contains the Other Insurance With This Insurer Provision. What happens if Charles has a claim
Answer: a. Only one policy will pay, the premiums for the other contracts will be returned.
Explanation:
When there are multiple insurance contracts from the same insurer and these contracts have a ''Other Insurance With This Insurer'' provision, it means that in cases where the insured wants to claim, they can choose whichever of the policies they want and that one will pay out but they cannot pick them all.
The premiums paid on the other contracts/s will be returned to the insured because it represents excess coverage.
If Java and Kaffe have a long-standing business relationship that they would like to continue, a preferred method of settling their dispute may be mediation because:________
a. the process is not adversarial.
b. the dispute will eventually go to trial.
c. the case will be heard by a mini-jury.
d. the resolution of the dispute will be decided an expert.
Answer:
d. the resolution of the dispute will be decided an expert
Explanation:
Mediation is the process by which conflicts are resolved through a third party that provides expert and impartial negotiation on issues that occurs between different parties.
To make the process effective the parties are required to fully participate in the mediation.
All sides air their views and the expert tries to find a middle ground that the warring parties can agree to.
Java and Kaffe who have a long-standing business relationship need an expert to act as mediator in resolving their issues.
ZeroSun Pictures is a Denver-based video production start-up agency. Imagine the founders are currently trying to decide between two cost structures, one that has a greater proportion of fixed costs (e.g., proprietary equipment), the other that is more heavily weighted to variable costs (e.g., leased equipment). Estimated revenue and cost data for each alternative is as follows:
Alternative #1 Alternative #2
Selling price per unit $100 $100
Variable cost per unit $85 $80
Fixed cost per year $40,000 $45,000
a. Under Alternative #1, what is the amount of revenues that would allow the company to breakeven?
b. What sales volume, in units, is needed for the total costs in each structure alternative to be the same?
Answer:
Results are below.
Explanation:
Giving the following information:
Alternative #1 Alternative #2
Selling price per unit $100 $100
Variable cost per unit $85 $80
Fixed cost per year $40,000 $45,000
To calculate the break-even point in sales, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 40,000 / [(100 - 85) / 100]
Break-even point (dollars)= $266,666.67
Now, we can determine the sales volume for the two options:
Alternative 1:
Total cost= 40,000 + 85x
Alternative 2:
Total cost= 45,000 + 80x
x= number of units
40,000 + 85x = 45,000 + 80x
5x = 5,000
x= 1,000 units
The indifference point is 1,000 units.
Prove:
Total cost= 40,000 + 85*1,000= $125,000
Total cost= 45,000 + 80*1,000= $125,000
A manufacturer of tiling grout has supplied the following data: Kilograms produced and sold 480,000 Sales revenue $ 1,830,000 Variable manufacturing expense $ 942,000 Fixed manufacturing expense $ 230,000 Variable selling and administrative expense $ 358,000 Fixed selling and administrative expense $ 196,000 Net operating income $ 104,000 The company's contribution margin ratio is closest to:
Answer:
$28.96%
Explanation:
Given the above information, we would calculate first the total variable cost
Total variable cost = Variable manufacturing selling expense + Variable selling and administrative expense
= $942,000 + $358,000
= $1,300,000
The next is to compute the contribution margin
Contribution margin = Sales - Total variable cost
= $1,830,000 - $1,300,000
= $530,000
Therefore,
Contribution margin ratio = (Contribution margin / Sales) × 100
= ($530,000 / $1,830,000) × 100
= 28.96%
A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move A. raises GDP. B. decreases GDP. C. doesn't change GDP because gambling is never included in GDP. D. doesn't change GDP because in either case his income is included.
Answer:
The answer is C.
Explanation:
In calculating GDP of a country, illegal activities like gambling, betting, proceeds of crime, buying and selling of drugs are nor counted in the computation of GDP.
GDP can be calculated as follows:
C + G + I + (X-M)
Where:
C is Consumers' consumption/spending
G is Government's consumption/spending
I is business investment
X is the country's exports
M is the country's imports.
Differences in customer rage behaviors of customers from japan & usa (1200 words )
Answer:
There is difference in the behavior of people who belong to different nations. The people in USA will make different decisions based on their preferences than the decisions made by the people of Japan.
Explanation:
Customer rage is the response of customer to the faulty good. If the customer is not satisfied he may get angry and show some emotions. The behavior in this situation is different for every person. The people in USA might respond less angry than the people in Japan. Their anger and emotions is driven by many factor. The job security in the country, Climatic conditions, political situations, literacy rate, basic necessity problems and many others. The people living in a poor country may show anger in small things while the people in developed country are less angry and more understanding.
The statement of cash flows: Multiple Choice Presents the financial position of a company at a point in time. Indicates if a company is profitable. Shows the net change in cash over a period of time. Reports the difference between revenues and expenses.
Answer:
???????
Explanation:
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Payroll Entries Urban Window Company had gross wages of $252,000 during the week ended July 15. The amount of wages subject to social security tax was $226,800, while the amount of wages subject to federal and state unemployment taxes was $32,000. Tax rates are as follows: Social security 6.0% Medicare 1.5% State unemployment 5.4% Federal unemployment 0.6% The total amount withheld from employee wages for federal taxes was $50,400. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Journalize the entry to record the payroll for the week of July 15.
Answer and Explanation:
The journal entry is given below
Wages expense Dr $252,000
To Social security tax payable ($252,000 × 6%) $15,120
To Medicare tax payable ($252,000 × 1.5%) $3,780
To employee federal income tax payable $50,400
To wages payable $182,700
(Being the payroll is recorded)
Here the wages payable is debited as it increased the expense and the payable is credited as it also increased the liabilities
Match the following product types to the appropriate product development description. A. Entail unusually large uncertainties about the technology or market. The development process takes steps to address those uncertainties. B. A firm with a new proprietary technology seeks out a market where that technology can be applied. C. Uses a repeated prototyping cycle. Results from one cycle are used to modify priorities in the ensuing cycle. D. The production process has an impact on the product properties. Therefore, product design and process design cannot be separated. E. Products are designed and built around a pre-existing technological subsystem.
Answer:
1. High-risk products.
2. Technology-push products.
3. Quick-build products.
4. Process-intensive products.
5. Platform products.
Explanation:
A. High-risk product: Entail unusually large uncertainties about the technology or market. The development process takes steps to address those uncertainties.
B. Technology-push product: A firm with a new proprietary technology seeks out a market where that technology can be applied.
C. Quick-build products: Uses a repeated prototyping cycle. Results from one cycle are used to modify priorities in the ensuing cycle.
D. Process-intensive product: The production process has an impact on the product properties. Therefore, product design and process design cannot be separated.
E. Platform products: Products are designed and built around a pre-existing technological subsystem.
A marketing plan is _______.
Answer:
A marketing plan is a part of an overall business plan
Suppose the price of movie tickets changes. The price change leads to a 10 percent decrease in the quantity demanded of movie tickets. This causes the total revenue from movie tickets to increase by 5 percent. Is the demand for movie tickets elastic, inelastic, or unit-elastic
Answer:
inelastic
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Demand is inelastic because the change in total revenue is less than the change in price.
elasticity of demand = 5/10 = 0.5
Elasticity of demand is less than 1
Land was acquired in 2021 for a future building site at a cost of $40,800. The assessed valuation for tax purposes is $27,900, a qualified appraiser placed its value at $48,900, and a recent firm offer for the land was for a cash payment of $44,200. The land should be reported in the financial statements at:
Answer:
The land should be reported in the financial statement at $40,800
Explanation:
At the time the fixed asset is being recorded, it should be recorded at the purchase cost or historical price.
Since the land was purchased at $40,800 according to the question, also it is assessed for tax purpose at $27,900 and was valued at $48,900 by other appraisers including an offer of cash payment of $44,200.
But at the time of recording, the balance sheet would show at the price of $40,800
Assume that you open a 100 share short position in Jiffy Inc. common stock at the bid-ask price of $32.00 - $32.50. When you close your position the bid-ask prices are $32.50 - $33.00. If you pay a commission rate of 0.5%, calculate your profit or loss on the investment position
Answer:
There is a net loss of $132.50
Explanation:
First, we need to determine the cash flows at the time of open the position and close the position.
Cash outflow
Cash flow from opening the position = Value of position + Commission
Where
Value of position = Numbers of shares - opening value per stock = 100 x 33 = $3,300
Commision = 100 x 33 x 0.5% = $16.50
Placing values in the formula
Cash flow from opening the position = $3,300 + $16.50 = $3,316.50
Cash inflow
Cash flow from Closing the position = Value of position - Commission
Where
Value of position = Numbers of shares - opening value per stock = 100 x 32 = $3,200
Commision = 100 x 32 x 0.5% = $16
Placing values in the formula
Cash flow from opening the position = $3,200 - $16 = $3,184
Now calculate the profit or loss on the position
Net profit / loss = Cashinflow - Cash outflow = $3,184 - $3,316.50
Net Loss = $132.50
