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Acutron is a large securities dealer. Last year, the company made 240,000 trades with an average commission of $240. Because of the general economic climate, Acutron expects trade volume to decline by 20%. Fortunately, the average commission per trade is likely to increase by 10% because trades are expected to be large in the coming year. What are the estimated commission's revenues for Acutron in the coming year

Respuesta :

Answer:

The estimated commission's revenues for Acutron in the coming year will be $ 50,688,000.

Explanation:

In order to calculate the estimated commission's revenues for Acutron in the coming year we have to proceed first to following steps:

Step 1: We have to calculate the estimated trade

estimated trade= 240,000× 80%=192,000 Trade

Step 2: We have to calculate the estimated commission per trade

estimated commission per trade= 240×110%=264

Finally we can calculate the estimated commission's revenues

estimated commission's revenues=192,000×264= $ 50,688,000.

Answer:

Estimated commission revenues is$50,688,000.00  

Explanation:

The estimated commission revenue for Acutron in the coming year  reflects last year's volume of trade less 20% decline multiplied by the average commission for last year adjusted for 10% increase

volume of trade=240,000*(1-20%)

                          =240,000*0.80

                          = 192,000 trades

average commission  per trade=$240*(1+10%)

                                                    =$240*1.1

                                                    =$264

Estimated commission revenue=quantity*price

                                                     =192,000*$264

                                                      =$50,688,000.00  

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