Financial Analysis for Managers I Coursework Example | Topics and Well Written Essays - 750 words

Financial Analysis for Managers I - Coursework Example The rent of a warehouse where these pencils are stored is $100; hence it is a fixed cost. $100 would still need to be paid whether 10 pencils are stored there or 1000 pencils. Thus with a change in production, the fixed costs remain unmoved. Cost-Volume-Profit (CVP) analysis is a managerial accounting tool that helps to identify a relationship between the cost, profit and sales volume. It is used to 1) determine the level of output required to achieve any target profit level or 2) to find the impact changes in costs to the profitability. (Mowen & Hansen, 2005) In CVP analysis, 'break even' means to produce goods at such a quantity where there is no-profit and no-loss. It is a position where the company incurs exactly the same amount that it generates from the sales. (Mowen & Hansen, 2005) A direct cost is that cost that can be directly attributable to a specific unit of product or with a specific operation relating to production. On the other hand, an indirect cost is a fixed or overhead cost that does not relate to the production of a particular item and is incurred even when there is no output. (PHB, 2005) The core activity of an accounting teaching class is to educate the students. Therefore all those items that directly relate to the educational process of accounting would be direct costs and those that do not relate to the educational process of accounting would be treated as indirect costs. The salary paid to the accounting teacher and the costs of accounting books will be direct costs since they directly relate to the teaching of the accounting course. The costs of lighting, electricity, janitorial services, etc. would be indirect costs since they just aid in the teaching process but are not directly related to teaching the course. 5. How can out-of-pocket costs and opportunity costs be applied to your personal financial decisions Out of pocket costs and opportunity costs can be applied to an individual's personal financial decisions by comparing both of these costs. If the benefit of playing an hour of football is more that the benefit of studying for an hour, then the individual should use that hour to play football. If one hour is being spent each day at a tuition center which costs $50/hour for a 4 day week, it would cost $800 for a month using up 16 hours. If these 16 hours are used for other work like taking a horse riding lesson which is $400/month, then financially taking horse riding lesso

What are the The Possible Contributors to the Great Recession in Essay

What are the The Possible Contributors to the Great Recession in relation with Mortgage - Essay Example Starting as a liquidity crisis which can be in a layman term defined as, â€Å"A state in which there is a short supply of cash to lend to businesses and consumers and interest rates are high.† (Caouette, 25) This gravely caused an imbalance that resonated great economic crisis all around the world. This global crisis also gave a room to policy makers to intervene, as it was being quite difficult for the economic experts to handle this situation. However, the after effects of the Great Recession are still perpetuating in the global economy and have also limited the economic growth in 2012-2013 and have not completely recovered from the Great Recession. How Great Recession was stimulated? The major causes of the Great Recession date back to the start of 2007, however, the world wasn’t fully aware of the crisis until mid-2008, which could also be the main reason why it couldn’t recover from the crisis because it took a lot of time to look into what caused this cris isand rectify it. The root cause can be highlighted as the decline in the US consumers’ demand because of the gradual decrease in the Federal Reserve’s interest which was predicted to reach nearly zero and it was believed to occur by the year 2008, therefore they could not provide debts for people who called for refinancing. What triggered the economic crisis on a level of instability was the breakdown of mortgage-backed security. Moving on, another cause that resulted in this crisis can be pointed as the massive debt levels, which has long been acknowledged as an agent and a contributive factor for recessions that further led to the domino effect and perturbed the entire economic situation. Other causes were believed to be Government deregulation, over-leveraging, credit default swaps, collateralizing debt obligations, increase in the oil prices, and overproduction of goods as resulted by the Globalization. These were the main factors due to which the process of the e conomic crisis was accelerated. What Great Recession resulted in? The three regions globally affected by the Great Recession were Household, Income and Labor Dynamics in economy of Australia being an adequate example. The rate of employment was gravely affected which could also be noticed in the survey conducted in late 2009, which showed a high rate of job dismissals from 3.5% in 2008 to 5.4% in 2009. The types of workers that were affected due to this as usually suspected to be are the low-skilled workers and labors working in the informal sector, instead it was the working who were the full-time employers relating to skilled occupations. Globally, the Trade & Industrial production went through a complete manufacturing crisis. Environment was adversely affected and the rate of pollution increased as the industrial emissions gradually sped up. Unemployment increased in the US as the employment rate then was 4.9%. Tourism, insurance, small-business lending and political instability stimulated throughout the globe because of the economic and financial crisis. Mortgage Lending Practices – How they were affected? Mortgage loan can be defined as, â€Å"A loan on real estate that is usually secured by a mortgage.† (Jacobus& Thomas, 567). This could also be used as a generic term for loan. Demand is absent in recessionary periods so the interest rates are brought down to trigger it, lower interest rates entice people to get new mortgages and previous ones refinanced at a lower rate. Real estate lending crisis was triggered by the subprime lending mechanism, i.e. below normal rates. Financial institutions offered real estate at