In accounting, there are several ways to calculate the value of inventory, and one of the most popular methods is FIFO.
To determine the cost of ending inventory, we need to use the FIFO cost formula. Therefore, the cost of the ending inventory on June 30 is $1,650. Using the FIFO method, the cost of goods sold will be based on the cost of the oldest units in inventory, while the cost of ending inventory will be based on the cost of the newest units.
Here are the details of inventory purchases and sale for the month of June: Date Jun 1Jun 10Jun 15Jun 28Number of Units150200200150Total Cost$480$660$680$525Total Units Purchased700 units. Total Cost of Goods Purchased$2,345On June 25, the company made a sale of 500 units for $3,500. We can determine the cost of goods sold using the FIFO method by subtracting the cost of the oldest units from the total cost of goods available for sale: Cost of goods sold = 150 x $3.20 + 200 x $3.30 + 150 x $3.50 = $1,100Ending inventory is the inventory that the company still has on hand at the end of the accounting period. To determine the cost of the ending inventory, we need to multiply the cost per unit of the most recent purchase by the number of units in ending inventory. Cost per unit of the most recent purchase = $680 / 200 = $3.40Ending inventory = 50 x $3.40 + 200 x $3.50 = $1,650Therefore, the cost of the ending inventory on June 30 is $1,650.
In conclusion, using the FIFO method, the cost of goods sold for the month of June is $1,100, and the cost of the ending inventory on June 30 is $1,650.
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Brier Company, manufacturer of car seat covers, provided the following standard costs for its product: Standard Standard Cost Standard Cost ($) Inputs Quantity per Unit ($) Direct materials 7.1 pounds 5 per pound 35.50 Direct labour 0.8 hours 17 per hour 13.60 Variable overheads 0.8 hours 7 per hour 5.60 The company reported the following in 2022 May: 4 700 units Original budgeted output Actual output 4 500 units Actual direct labour hours 3 610 hours Actual cost of direct labour. Purchases of raw materials $65 341 36 500 pounds $186 150 Actual price paid for raw materials Raw materials used 34 150 pounds Actual variable overhead cost $24 909 Variable overhead is applied on the basis of direct labour hours. A. Compute the following: į Direct materials quantity variance Direct materials price variance Direct materials total variance Direct labour efficiency variance Direct labour rate variance Direct labour total variance vii. Variable overhead efficiency variance viii. Variable overhead rate variance B. C. ii. 111. iv. iv. V. vi. vii. State TWO (2) benefits of standard costing. What are TWO (2) limitations of standard costing?
Two benefits of standard costing:
i. Planning-Standard costing makes it possible to create more efficient budgets, which can help a company plan more effectively for the future. Standard costs are established based on historical data and anticipated expenses, making it easier to budget for future expenses.
ii. Control- Standard costing allows companies to keep track of costs and ensure that they are in line with expectations. By analyzing the differences between standard costs and actual costs, managers can identify areas where costs need to be reduced or where operations can be improved.
Two limitations of standard costing:
i. Unchanging standards-Standard costing assumes that production standards are fixed and do not fluctuate. This may not be the case in reality, as production standards are subject to change based on various factors such as material prices, exchange rates, and economic conditions.
ii. Time-consuming -Standard costing necessitates a significant amount of record-keeping and analysis. This can be a time-consuming operation that detracts from other important activities such as production and marketing.
Standard costing is a useful management tool that allows companies to establish cost standards, monitor their costs, and plan for the future. It has several benefits, including better planning and control. However, it also has some limitations, such as unchanging standards and time-consuming processes.
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XYZ Ltd. agrees to lease office space from ABC Ltd. for 3 years. The monthly rental payable per the agreement is $10,000 with an escalation clause that calls for 5% increments annually. ABC Ltd. will also pay $25,000 to the lessee to help make improvements to the rental property - this will be deducted from the rental payments when corresponding receipts are submitted to the lessor. The lessee will also receive a 100% rent concession for the 1st month of the agreement. Please help us with the deferred rent schedule for the above arrangement.
The deferred rent schedule represents a schedule that explains how lease payments are allocated in a rent concession agreement where one party agrees to defer payment. The schedule shows how the lessee would repay the lessor. The deferred rent is recognized as a liability and is amortized over the lease period.
The steps to prepare a deferred rent schedule are as follows:Step 1: Calculate the rent concession amount by multiplying the monthly rental amount by the number of months the concession is valid. As per the question, the rent concession amount is $10,000.Step 2: Compute the total amount of rent payable over the lease term, assuming no rent escalation or rent concession. The rent payable for 3 years is $360,000 ($10,000 x 36).Step 3: Compute the present value of the deferred rent by discounting it to the present date using the company's borrowing rate. The company's borrowing rate is 6%, and the present value of the rent concession amount is $9,340.47.Step 4: Allocate the deferred rent over the lease term. The total amount of deferred rent over the lease term is $25,659.53 ($35,000 - $9,340.47).Step 5: Prepare the deferred rent schedule for the lease term as shown below : XYZ Ltd. has agreed to lease office space from ABC Ltd. for three years, with monthly rent of $10,000, with an annual escalation clause of 5%. In addition, ABC Ltd. will pay XYZ Ltd. $25,000 to help enhance the rental property. The $25,000 will be deducted from the rental payments when the corresponding receipts are submitted to the lessor. The lessee will also receive a 100% rent concession for the 1st month of the agreement. This suggests that the company will not make any payments in the first month of the contract. As a result, the first month's rent will be deferred and recorded as a liability. The deferred rent is recognized as a liability and is amortized over the lease term. The deferred rent schedule for the given scenario is then prepared based on the steps mentioned above. Therefore, based on the above data and analysis, we can conclude that deferred rent schedules are essential in a lease agreement and must be prepared to ensure that lease payments are allocated and repaid in an organized manner.
Conclusion:The deferred rent schedule represents a schedule that explains how lease payments are allocated in a rent concession agreement where one party agrees to defer payment. The schedule shows how the lessee would repay the lessor. The deferred rent is recognized as a liability and is amortized over the lease period. The steps to prepare a deferred rent schedule are as follows. The company's borrowing rate is 6%, and the present value of the rent concession amount is $9,340.47. Therefore, based on the above data and analysis, we can conclude that deferred rent schedules are essential in a lease agreement and must be prepared to ensure that lease payments are allocated and repaid in an organized manner.
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5. X and Y are partners in a firm sharing profits in the ratios of 2: 1. Z is admitted with a 1/3 profit sharing. What will be the new profit sharing ratio of X, Y and Z? (A) 3:3:3 (B) 4:3:2 (C) 4:2:3
In the given scenario, partners X and Y have a profit-sharing ratio of 2:1. When partner Z is admitted with a 1/3 profit sharing, the new profit sharing ratio of X, Y, and Z becomes option (C) 4:2:3.
To determine the new profit-sharing ratio, we need to consider the existing profit sharing ratio and the share contributed by the new partner.
Initially, partners X and Y share profits in the ratio of 2:1, meaning X receives 2 parts and Y receives 1 part of the profits.
When partner Z is admitted with a 1/3 profit sharing, it means Z will receive 1 part out of a total of 3 parts of the profits.
To calculate the new profit sharing ratio, we add the individual shares of each partner: X (2 parts) + Y (1 part) + Z (1 part). This gives us a total of 4 parts for X, 2 parts for Y, and 3 parts for Z.
Therefore, the new profit sharing ratio of partners X, Y, and Z is option (C) 4:2:3.
This adjusted ratio reflects the revised distribution of profits among the partners after the admission of partner Z.
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how to find shareholders equity pls
Other current assets Accounts Receivable Inventory Fixed Assets Accrued taxes Accounts payable Long-term Debt Net Worth (Shareholders' Equity) 2001 2002 2003 2004 $300,000 $250,000 $150,000 $50,000 $1
To find shareholders' equity, you can use the formula:
Shareholders' Equity = Total Assets - Total Liabilities
In this case, we have the following information for the years 2001 to 2004:
Year 2001:
Total Assets = Other current assets + Accounts Receivable + Inventory + Fixed Assets = $300,000 + $250,000 + $150,000 + $50,000 = $750,000
Total Liabilities = Accrued taxes + Accounts payable + Long-term Debt = $100,000 + $200,000 + $300,000 = $600,000
Shareholders' Equity (Net Worth) = Total Assets - Total Liabilities = $750,000 - $600,000 = $150,000
Year 2002:
Total Assets = $250,000
Total Liabilities = $200,000
Shareholders' Equity (Net Worth) = $250,000 - $200,000 = $50,000
Year 2003:
Total Assets = $150,000
Total Liabilities = $100,000
Shareholders' Equity (Net Worth) = $150,000 - $100,000 = $50,000
Year 2004:
Total Assets = $50,000
Total Liabilities = $20,000
Shareholders' Equity (Net Worth) = $50,000 - $20,000 = $30,000
So, the shareholders' equity for the years 2001, 2002, 2003, and 2004 are $150,000, $50,000, $50,000, and $30,000, respectively.
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Question 6 < > 3 pts 1 De A responsibility accounting framework provides this most important benefit to a business. O All employees can have strict quantitative goals for their performance reviews. O
A responsibility accounting framework provides the most important benefit of allowing all employees to have strict quantitative goals for their performance reviews.
A responsibility accounting framework is a management tool that assigns responsibility for various activities and outcomes to specific individuals or departments within a business. One of the key benefits of this framework is the ability to set and measure strict quantitative goals for employee performance reviews. By assigning specific responsibilities to each employee, the framework enables clear performance metrics to be established, which can be objectively measured and evaluated. This allows employees to have a clear understanding of their roles and performance expectations, as well as providing a basis for assessing their contributions to the organization. With quantitative goals in place, employees can track their progress, identify areas for improvement, and strive to meet or exceed the established targets. This not only promotes accountability and motivation but also facilitates a more transparent and fair performance evaluation process. Ultimately, the responsibility accounting framework helps align individual efforts with organizational objectives and fosters a performance-driven culture within the business.
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The price elasticity of demand indicates: the extent to which consumers respond to a change in price. B the extent to which a demand curve shifts as income changes. the slope of the demand curve. D how far business executives can stretch their fixed costs. O Question 3 <> Events A and B are mutually exclusive if OA and B can occur simultaneously A and B cannot occur simultaneously O occurrence of A affects probability of B O occurrence of A does not affect probability of B O None of the above
None of the above.The price elasticity of demand refers to the responsiveness of quantity demanded to a change in price
. It measures the percentage change in quantity demanded relative to the percentage change in price. It helps to understand how sensitive consumers are to changes in price. Therefore, it is not directly related to the other options mentioned in the question, such as shifts in the demand curve, income changes, or fixed costs.
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Which of the following random number assignments could be used for an event that has a 32% chance of occurrence? O 00-0.32 inclusive 0.67-0.99 inclusive O 0.25-0.75 inclusive O 00-0.31 inclusive
the event is considered to have occurred. Since the range covers 32% of the total probability space (0.00 to 1.00), it aligns with the desired probability of occurrence.
Given the s provided:
00-0.32 inclusive
0.67-0.99 inclusive
0.25-0.75 inclusive
00-0.31 inclusive
Out of these s, the range "00-0.31 inclusive" is the most suitable for an event with a 32% chance of occurrence.
In this range, the numbers span from 0.00 to 0.31.
range, the event is considered to have occurred. Since the range covers 32% of the total probability space (0.00 to 1.00), it aligns with the desired probability of occurrence.
It's important to note that the random number assignment should be uniform, meaning each value within the range has an equal chance of being selected. This ensures fairness and accuracy in representing the probability of the event.
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W 10₁ 0 9 8 7 6 TT-0 5 4 3 2 1 0 LO TT-100 TT-200 2 TT-300 0 1 3 4 5 6 7 Click to see additional instructions Refer to the above figure. If needed, graph values can be estimated to the nearest half-unit. Suppose workers have alternative employment available at wage $2. . The competitive wage is $ A. In this figure the firm's ideal wage is $ The lowest wage the union would accept is $ B. The monopoly union outcome is Wy=$ and Lu= C. Is the contract with w-$4 and L=8 a Pareto improvement over the monopoly union contract? (Enter "1" for yes, "-1" for no.) We can see from this figure that the contract with L= (Enter "1" for yes, "-1" for no.) outcome? DL 8 9 L 10 and the union's ideal wage is $ At this outcome the union's economic rent is $ . The highest wage the firm would agree to is $ and the wage bill is $ (Enter "1" for yes, "-1" for no.). Is the competitive outcome a Pareto improvement over the monopoly union contract? and w=$ is Pareto efficient. Is this contract a Pareto Improvement over the monopoly union
In the given figure, the competitive wage is $2, the firm's ideal wage is $6, and the lowest wage the union would accept is $5. The monopoly union outcome is Wy=$7 and Lu=8. The contract with w-$4 and L=8 is not a Pareto improvement over the monopoly union contract.
The contract with w-$4 and L=8 is not a Pareto improvement over the monopoly union contract because it results in a lower wage for workers without any increase in firm profits. The competitive outcome is not a Pareto improvement over the monopoly union contract either. However, the contract with w=$2 is Pareto efficient, meaning there is no other feasible contract that would make at least one party better off without making the other worse off.
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Determine the role and function of transport in the growth of the
economy.(13)
Transport plays a crucial role in the growth of the economy by facilitating the movement of goods, people, and information.
Transportation serves as a vital component in the growth of the economy. Firstly, it enables the movement of goods from production centers to markets, ensuring the availability of essential products and promoting trade. Secondly, transport plays a key role in connecting regions and markets, promoting regional integration and economic development. It facilitates the flow of goods and services across different areas, encourages investments and business collaborations, and supports the growth of industries and infrastructure.
Additionally, transportation enhances connectivity and accessibility, enabling people to access education, healthcare, and employment opportunities. It allows individuals to commute to work, access essential services, and participate in economic and social activities. Moreover, transport plays a critical role in the efficient movement of information and communication technologies. It enables the exchange of knowledge, ideas, and innovation, contributing to technological advancements and economic growth.
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Sources of funds to help pay for education expenses would
not include:
Group of answer choices
a.A home equity line of credit.
b.A federal student loan.
c.A Small Business Administration loan.
d. Qual
The source of funds that would not include paying for education expenses is a Small Business Administration loan. Other options, such as a home equity line of credit and federal student loans, can be used to help cover education expenses.
A Small Business Administration (SBA) loan is not typically used as a source of funds for education expenses. SBA loans are designed to provide financial assistance to small businesses, helping them with startup costs, working capital, or expansion efforts. These loans are not intended for personal use or education-related expenses.
On the other hand, a home equity line of credit (HELOC) can be used to finance education expenses. HELOCs allow homeowners to borrow against the equity in their homes, providing them with a flexible source of funds. This option can be advantageous as the interest rates on HELOCs are often lower than other types of loans.
Federal student loans are specifically designed to help students cover their education costs. These loans are offered by the government and typically come with favorable interest rates and flexible repayment options. They are a common source of funding for students pursuing higher education.
In summary, while a Small Business Administration loan is not suitable for education expenses, options like a home equity line of credit and federal student loans can be utilized to help pay for educational costs.
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Which of the following is incorrect about the General Agreement on Tariffs and Trade (GATT)?
a. The most fruitful negotiations were known as the Kennedy Round, the Tokyo Round, and the Uruguay Round.
b. It ensures that any tariff reduction or other concession will be extended automatically to all GATT members.
c. The body had several rounds of negotiations to impact trade restrictions.
d. It is an international organization of 164 nations dedicated to creating and maintaining tariffs and other barriers to world trade.
The statement that is incorrect about the General Agreement on Tariffs and Trade (GATT) is d.
It is an international organization of 164 nations dedicated to creating and maintaining tariffs and other barriers to world trade. The correct statement regarding GATT is that it is not an international organization of 164 nations. Rather, GATT was an international agreement, not an organization, established in 1947 with the goal of promoting free trade by reducing tariffs and trade barriers among participating nations.
The most productive negotiations under GATT were indeed referred to as rounds, including the Kennedy Round, the Tokyo Round, and the Uruguay Round, as stated in option a. These negotiation rounds aimed to address trade restrictions and further liberalize international trade, as mentioned in option c. Furthermore, GATT facilitated the principle of most-favored-nation (MFN) treatment, ensuring that any trade concessions or tariff reductions extended to one member would be automatically applied to all GATT members, as stated in option b.
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please explain atleast more than 1000 words.
What important factors do retailers need to consider before expanding into a new market?
Expanding into a new market requires careful consideration of various factors before making a decision.
Market demand and potential First and foremost, retailers need to assess the potential demand for their products or services in the new market. To do this, they need to carry out market research to understand the market and identify opportunities.2. Competition Retailers need to analyze the competition in the new market to understand the competitive landscape. They need to understand who the main players are and their market share.
Market entry barriers Retailers need to identify market entry barriers and the cost of overcoming them. They also need to understand the legal and regulatory environment in the new market.4. Culture and customs Retailers need to consider the cultural differences between the new market and their home market.
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Marigold Company took a physical inventory on December 31 and determined that goods costing $208,900 were on hand. Not included in the physical count were $23,260 of goods purchased from Pelzer Corporation, f.o.b. shipping point, and $20,450 of goods sold to Alvarez Company for $28,200, f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Marigold report as its December 31 inventory?
To determine the amount of inventory that Marigold Company should report as of December 31, we need to consider the goods in transit.
For the goods purchased from Pelzer Corporation, since they were shipped f.o.b. shipping point, they should be included in Marigold's inventory because the ownership and risk of the goods transfer to Marigold at the shipping point. Therefore, the $23,260 of goods purchased from Pelzer should be included in Marigold's inventory.
For the goods sold to Alvarez Company, since they were shipped f.o.b. destination, they should not be included in Marigold's inventory because the ownership and risk of the goods remain with Marigold until they reach the destination. Therefore, the $20,450 of goods sold to Alvarez should not be included in Marigold's inventory.
To calculate the inventory amount, we need to adjust the physical count of $208,900 by adding the goods purchased from Pelzer Corporation and subtracting the goods sold to Alvarez Company:
Inventory amount = Physical count + Goods purchased - Goods sold
Inventory amount = $208,900 + $23,260 - $20,450
Inventory amount = $211,710
Marigold should report an inventory amount of $211,710 as of December 31.
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FIVE FORCES
E, a well known cosmetics manufacturer, obtains worldwide sales for its global branded products. The directors pride themselves on having a clear understanding of E's consumer market which consists of both men and women. Its products mainly comprise deodorants, perfume, after-shave lotions, facial and body washes.
In carrying out an analysis of its competitive environment, The Marketing Director has applied Porter's Five Forces models and analyzed the factors which affect E under each heading as follows:
Threat of entry: Little threat as although major competitors exist, the size of E presents a large entry barrier. Power of buyers: Very important as customers worldwide have much choice from different
competitors' products.
Power of suppliers: Little threat as most suppliers of materials are small scale and E could easily source from other suppliers if necessary. Labor is relatively cheap in E's product facilities in developing world locations.
Substitute products: They are many alternative products offered by competitors but there is little by way of substitute for cosmetics, and therefore this poses a little problem.
Rivalry among competitors: There is strong competition in the cosmetics market with new products constantly being developed, an therefor this is a major threat.
The Marketing Director is reasonably confident that he has judged the impact of these competitive forces correctly as they apply to E. However, he would like some reassurance of this. He has asked you, as Management Accountant, to provide some appropriate performance indicators by which the strength of five competitive forces as they apply to E can be judged.
Required:
A) Recommend to the Marketing Director suitable performance indicators which could be used to judge the strength of the five competitive forces as they apply to E. Discuss why you consider your recommendation to be appropriate.
B) Explain the sources of entry barriers for potential entrants into a new industry.
Entry barriers for potential entrants into a new industry can arise from economies of scale, brand loyalty, capital requirements, regulatory barriers, and established distribution networks. These barriers make it more challenging for new companies to enter the market and compete effectively.
A) Suitable performance indicators to judge the strength of the five competitive forces as they apply to E include:
Threat of entry: Monitor the number of new entrants in the cosmetics market over a specific period. This can be tracked through industry reports, market research data, or competitor analysis. Additionally, analyzing barriers to entry such as capital requirements, distribution channels, and regulatory restrictions can provide insights into the threat of entry.
Power of buyers: Measure customer loyalty and retention rates to assess the bargaining power of buyers. Conduct surveys or collect feedback to understand customer preferences and satisfaction levels. Monitoring pricing sensitivity and the frequency of customer switching between brands can also indicate buyer power.
Power of suppliers: Evaluate the availability and reliability of alternative suppliers in the market. Monitor any changes in supplier relationships or disruptions in the supply chain. Assess the ease of switching suppliers and any impact on costs. Additionally, analyze any pricing negotiations or dependence on key suppliers.
Substitute products: Conduct market research to identify the availability and popularity of substitute products. Monitor market trends and consumer preferences to identify potential substitutes that may emerge. Analyze customer behavior and purchasing patterns to understand the degree of substitution.
Rivalry among competitors: Monitor market share and sales growth of competitors. Track product innovation and new product launches in the cosmetics market. Analyze pricing strategies, promotions, and advertising efforts by competitors. Additionally, evaluate the level of brand recognition and customer loyalty towards competitors.
B) Sources of entry barriers for potential entrants into a new industry include:
Economies of scale: Existing companies may have cost advantages due to their large-scale production and distribution capabilities. New entrants may struggle to achieve similar cost efficiencies, making it difficult to compete on price.
Brand loyalty: Established companies may have strong brand recognition and customer loyalty, which can act as a barrier for new entrants trying to gain market share.
Capital requirements: Industries with high capital investments, such as manufacturing or infrastructure development, create barriers for new entrants who may not have access to sufficient financial resources.
Regulatory barriers: Government regulations, licensing requirements, and compliance standards can create entry barriers for new companies, especially if they need to meet specific industry regulations or certifications.
Distribution networks: Existing companies may have well-established distribution networks, contracts with retailers, or exclusive agreements, making it challenging for new entrants to access the same distribution channels.
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On December 31, 2013, Bravo Co. paid $$$20,000 to acquire the whole business of Rukab's Ice Cream Co., which became a division of Bravo. Rukab reported the following balance sheet at the time of the acquisition, and in the last column the related FMV amounts to each account. Assets Cost $100,000 FMV $100,000 Cash Receivables 60,000 60,000 Merchandise Inventory 80,000 100,000 Land 100,000 250,000 Equipment (net) 70,000 30,000 Patent 25,000 Total Assets $410.000 $65,000 Liabilities & S.H.E Cost FMV Payables 50,000 50,000 Mortgage payable 90,000 70,000 100,000 110,000 Bonds payable Common Stock 70,000 ROORO Retained Earnings Total Liabilities & S.H.E 100.000 410,000 nei 235 nob Soodwill 185,00 Over the first year of operations, the newly purchased division experienced operating insses. In addition, it now appears that it will generate substantial losses for the foreseeable future. Presented below is net assets information related to Rukab Division of Bravo Co. on December 31,2014. fu 2015 је Rukat Division Net Assets December 31, 2014 Cash Receivables $50,000 So 000 40,000 30000 60,000 Co 250,000 30000 Merchandise Inventory Land- Equipment (net) 25,000 28000 20,000 22030 Patent 120 Goodwill Payables (40000) Mortgage payables 1600. Bonds payable 25 (40,000) (135,000) 8000) ape (155,000) 172002 n 12p00 300,000 1 it is determined that the fair value of Rukab Division is $250,000. The recorded amounts for Bravo's net assets (excluding goodwill) is the same as fair value, except for land which has a fair RS p value of $50,000 above carrying value, equipment which has a fair value of $5,000 below carrying value, receivables which has a fair value of $10,000 below carrying value, mortgage payable, which has a fair value of $25,000 above carrying value and bonds payable which has a fair value of $15,000 above carrying value. Required a) Compute the amount of goodwill for Bravo Corporation on the purchase of Rukab's Ice Cream Company (if any) on December 31, 2013. (6 points) b) Prepare the journal entry (if any) to record impairment of goodwill at December 31, 2014. (8points) Test 1 het identiiugly Asset on Dec 21, 2014 = 300.000 relentlingly c) At December 31, 2015, it is estimated that the division's fair value increased to $100,000. Prepare the journal (if any) to record this increase in fair value.
On December 31, 2013, Bravo Co. acquired Rukab's Ice Cream Co. for $20,000. The goodwill amount resulting from the acquisition is $185,000.
To calculate the goodwill, we need to compare the fair value of Rukab Division at the time of acquisition with the fair value of its identifiable net assets. The fair value of Rukab Division is given as $250,000. The fair value adjustments for various assets and liabilities are as follows:
- Land: Fair value ($250,000) - Carrying value ($100,000) = $150,000 (increase)
- Equipment: Carrying value ($30,000) - Fair value ($25,000) = $5,000 (decrease)
- Receivables: Carrying value ($60,000) - Fair value ($50,000) = $10,000 (decrease)
- Mortgage payable: Fair value ($70,000) - Carrying value ($90,000) = ($20,000) (decrease)
- Bonds payable: Fair value ($110,000) - Carrying value ($100,000) = $10,000 (increase)
Now, we can calculate the goodwill by subtracting the fair value of identifiable net assets from the purchase price:
Goodwill = Purchase price ($20,000) - Fair value of identifiable net assets ($65,000) = $185,000.
Therefore, the goodwill amount for Bravo Corporation on the purchase of Rukab's Ice Cream Company on December 31, 2013, is $185,000.
Regarding the impairment of goodwill at December 31, 2014, we need to compare the carrying amount of goodwill with its implied fair value. The net assets of Rukab Division on December 31, 2014, amounted to $300,000. Since the implied fair value ($100,000) is lower than the carrying amount of goodwill ($185,000), an impairment loss needs to be recognized. The journal entry to record the impairment of goodwill would be as follows:
Impairment Loss (Income Statement) $85,000
Goodwill (Balance Sheet) $85,000
Finally, if the division's fair value is estimated to have increased to $100,000 at December 31, 2015, no journal entry is required as it does not affect goodwill. Goodwill is only recognized at the time of acquisition and is not adjusted for subsequent changes in fair value.
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A freight forwarding company buys a new box car for Rp 150,000,000,-. This box car is estimated to be able to be used for 5 years with Estimated net income in the first year is IDR 100,000,000 and every year decreased by Rp. 20,000,000,-. So that in the second year it becomes Rp 80,000,000,-, the third year 60,000,000,- and so on until the 5th year. Company plans to depreciate the value of this truck using the unit-of-production depreciation method until the book value reaches zero. Calculate the amount of depreciation and book value year of the truck!
The freight forwarding company plans to depreciate the box car using the unit-of-production method until the book value reaches zero.
The box car is estimated to have a useful life of 5 years. The net income in the first year is IDR 100,000,000 and decreases by Rp. 20,000,000 each subsequent year. We need to calculate the amount of depreciation and the book value for each year of the truck.
To calculate the depreciation and book value, we need to determine the total units of production over the truck's useful life. The net income in the first year is IDR 100,000,000, which represents the production for that year. Each subsequent year, the net income decreases by Rp. 20,000,000. Therefore, the total units of production over 5 years can be calculated as follows:
Year 1: IDR 100,000,000
Year 2: IDR 80,000,000
Year 3: IDR 60,000,000
Year 4: IDR 40,000,000
Year 5: IDR 20,000,000
The total units of production over 5 years is IDR 300,000,000.
Next, we calculate the depreciation per unit of production by dividing the cost of the box car (Rp. 150,000,000) by the total units of production (IDR 300,000,000). The depreciation per unit of production is Rp. 0.50 per unit.
To calculate the amount of depreciation for each year, we multiply the depreciation per unit of production by the net income for that year. The book value is then determined by subtracting the accumulated depreciation from the initial cost of the box car.
Year 1:
Depreciation = IDR 0.50 x IDR 100,000,000 = IDR 50,000,000
Book value = IDR 150,000,000 - IDR 50,000,000 = IDR 100,000,000
Year 2:
Depreciation = IDR 0.50 x IDR 80,000,000 = IDR 40,000,000
Book value = IDR 100,000,000 - IDR 40,000,000 = IDR 60,000,000
Year 3:
Depreciation = IDR 0.50 x IDR 60,000,000 = IDR 30,000,000
Book value = IDR 60,000,000 - IDR 30,000,000 = IDR 30,000,000
Year 4:
Depreciation = IDR 0.50 x IDR 40,000,000 = IDR 20,000,000
Book value = IDR 30,000,000 - IDR 20,000,000 = IDR 10,000,000
Year 5:
Depreciation = IDR 0.50 x IDR 20,000,000 = IDR 10,000,000
Book value = IDR 10,000,000 - IDR 10,000,000 = IDR 0
Therefore, the amount of depreciation for each year is IDR 50,000,000, IDR 40,000,000, IDR 30,000,000, IDR 20,000,000, and IDR 10,000,000 respectively. The book value of the truck at the end of each year is IDR 100,000,000, IDR 60,000,000, IDR 30,000,000, IDR 10,000,000, and IDR 0 respectively.
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5 units of milling machine that costs PHP 470227 each are bought today. They can be used for 14 years and can be sold at PHP 32578 each at the end of their useful life. Lubrications and minor repairs are estimated to be PHP 22882 per unit, annually. Each machine is expected to operate at an average of 2358 hours per year at an average power consumption of 1.6 kW per unit. The effective annual interest rate is 2.5%. Assume that the distribution utility charges PHP 6/kWhr. Using the Captalized cost principle, determine the following. Determine the total PRESENT WORTH of ALL the costs that occur annually (annually recurring cost) in the whole investment (pls use complete decimal places within the solutions)
The annual recurring costs for the milling machines include the cost of lubrications and minor repairs as well as the cost of power consumption. The present worth of all cost is PHP 2,489,083.50.
Cost of Lubrications and Minor Repairs:
The annual cost of lubrications and minor repairs per unit is PHP 22,882. Since there are 5 units, the total annual cost for all machines is:
Annual Cost = PHP 22,882 * 5
= PHP 114,410
To calculate the present worth of this annual cost, we can use the capitalized cost principle. The present worth factor (PWF) can be calculated using the formula:
PWF = (1 - (1 + i)^(-n)) / i
where i is the effective annual interest rate and n is the number of years.
Using i = 0.025 (2.5% as a decimal) and
n = 14, we have:
PWF = (1 - (1 + 0.025)^(-14)) / 0.025 ≈ 10.941
Present Worth of Annual Cost = Annual Cost * PWF
= PHP 114,410 * 10.941
≈ PHP 1,253,010.94
Cost of Power Consumption:
The average power consumption per unit is 1.6 kW, and the machines operate for an average of 2,358 hours per year. The total power consumption per year for all machines is:
Total Power Consumption = 1.6 kW * 5 * 2,358 hours
= 18,864 kWh
The cost of power consumption can be calculated by multiplying the total power consumption by the electricity rate of PHP 6/kWh:
Cost of Power Consumption = Total Power Consumption * Electricity Rate = 18,864 kWh * PHP 6/kWh
= PHP 113,184
To calculate the present worth of this annual cost, we use the same formula as before with the corresponding values.
PWF = (1 - (1 + 0.025)^(-14)) / 0.025
≈ 10.941
Present Worth of Annual Cost = Cost of Power Consumption * PWF
= PHP 113,184 * 10.941 ≈ PHP 1,236,072.56
Total Present Worth:
To find the total present worth of all the annual costs, we sum up the present worth of the lubrications and repairs cost and the power consumption cost:
Total Present Worth = Present Worth of Lubrications and Repairs + Present Worth of Power Consumption
Total Present Worth ≈ PHP 1,253,010.94 + PHP 1,236,072.56
≈ PHP 2,489,083.50
The total present worth of all the costs that occur annually (annually recurring costs) in the whole investment is approximately PHP 2,489,083.50.
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Working capital management is primarily concerned with the management and financing of A) cash and inventory. B) current assets and current liabilities. C) current assets. D) receivables and payables.
Working capital management is primarily concerned with the management and financing of current assets and current liabilities.
This includes cash, inventory, receivables, and payables. The objective of working capital management is to ensure that a company has enough current assets to meet its short-term obligations and operating expenses. It also involves optimizing the use of working capital to improve profitability and liquidity. The management of current assets and liabilities involves monitoring inventory levels, accounts receivable and payable, cash flow, and financing sources. It is essential for companies to have effective working capital management strategies to maintain financial stability, optimize cash flow, and mitigate the risk of insolvency. Thus, working capital management plays a crucial role in a company's financial performance and overall success.
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Angelo wins a lottery of $5 million. She wants to convert this lump-sum windfall into an annuity to live a comfortable life without having to work. An investment banker advises her to invest in a multi-cap international equity fund, which has conventionally returned 6 per cent annually and is expected to deliver similar returns in the future. 1) Suppose today Angelo turns 40 years old and expect to live until 87 years. She also does not intend to leave any money for her heirs, and thus the FV=0 What monthly payments can she expect her windfall from the lottery to deliver if she chooses to invest in the equity fund suggested by her bankers? [4 Marks] ii) If Angelo wants an annuity of $30,000 a month, what return must she expect her investments to generate annually so that she can live comfortably until the age of 95?
If Angelo invests her $5 million windfall in the multi-cap international equity fund, she can expect monthly payments based on her expected lifespan of 47 years (from age 40 to 87) and assuming a 6% annual return. The exact amount of the monthly payments would depend on the specific calculation method used to convert the lump sum into an annuity.
If Angelo desires a monthly annuity of $30,000 and wants it to last until the age of 95, she would need to calculate the required annual return on her investments. The exact percentage would depend on factors such as her age, life expectancy, and the number of years the annuity needs to last.
To determine the monthly payments Angelo can expect, she needs to use a financial calculator or annuity formula that takes into account the present value of the lump sum, the expected return rate (6% in this case), and the number of years she expects to receive payments (47 years). The calculation will provide the monthly payment amount.
To calculate the required annual return, Angelo needs to consider factors such as the desired monthly annuity ($30,000), the number of years the annuity needs to last (from age 40 to 95), and her life expectancy. Using a financial calculator or annuity formula, she can solve for the required return that would generate the desired monthly payment amount.
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3. What major competencies should Genexis maintain and develop
to grow in its cur-
rent market? What strategic alliances, if any, should Genexis
create to establish its
VAN or service supply network?
Genexis is an enterprise that provides supply chain management services to its clients. The firm currently operates in the United States, Europe, and Asia. Its goal is to improve the performance of its clients' supply chains, allowing them to deliver goods more efficiently and cost-effectively.
Genexis should maintain and enhance certain key competencies to achieve growth in its current market. These competencies include: In the market, they should maintain excellent communication and coordination skills, a solid understanding of technological advancements, and strong connections with various stakeholders, such as suppliers, manufacturers, and distributors. By working closely with its partners, Genexis can create integrated supply chains that are more efficient and reliable than competitors in the market. Additionally, they should focus on improving their expertise in areas such as logistics, supply chain planning, and information technology.
To establish its VAN or service supply network, Genexis must establish strategic alliances with other organizations that share its vision. By working together, these firms can build a more robust, efficient, and reliable supply chain network that benefits everyone involved. One of the key factors in developing strategic alliances is to have a clear understanding of each organization's strengths and weaknesses. This can be accomplished through a thorough assessment of their respective capabilities, resources, and goals. Once these factors have been evaluated, Genexis can identify potential partners that can contribute to the development of their VAN or service supply network. It is important to note that strategic alliances must be built on mutual trust, respect, and transparency. Both parties must be willing to share information, resources, and risks to achieve the desired outcomes.
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Suppose each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the short run, an increase in the price of shovels will result in
A) fewer shovels being purchased.
B) more workers being hired.
C) a decrease in the firm's output.
D) no change in the firm's output.
In the short run, an increase in the price of shovels would result in A) fewer shovels being purchased. When the price of shovels increases, it raises the cost of acquiring the necessary equipment for each worker to perform their task.
In the short run, the firm may not have the flexibility to easily adjust its production process or substitute inputs. Therefore, the firm would likely reduce its purchases of shovels to minimize the impact on its costs. This reduction in the purchase of shovels does not directly lead to hiring more workers (option B) because the number of workers is typically determined by the firm's production requirements and cannot be easily changed in the short run. Similarly, the increase in shovel prices does not necessarily lead to a decrease in the firm's output (option C) as long as the existing shovels are still functional. The firm may continue to use the shovels it already has, albeit at a higher cost. The answer D) no change in the firm's output is not entirely accurate, as the increase in shovel prices may affect the firm's overall production costs and efficiency. However, it does not directly determine the firm's output level.
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A cost center ("cost center"): Multiple Choice O EITHER O EITHER is responsible for generating profits. it incurs costs but does not generate revenue directly. It is evaluated based on the volume of sales it generates. is responsible for making investment decisions.
A cost center is a business unit or department that incurs costs but does not generate revenue directly.
A cost center is a department or division within a company that incurs costs but does not generate revenue directly. It is responsible for managing and controlling expenses related to its operations. The focus of a cost center is on cost containment and efficiency rather than generating profits. Cost centers are evaluated based on their ability to effectively manage and control costs within their designated areas. Therefore, the correct answer is: It incurs costs but does not generate revenue directly.
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suppose a monopolist's costs and revenues are as follows: atc = $45.00; mc = $35.00; mr = $35.00; p = $45.00. the firm should
The monopolist should continue to produce, in the short term, in the given scenario since the price that the company charges ($45) is greater than its average total costs (ATC).
The monopolist should continue to produce, in the short term, in the given scenario since the price that the company charges ($45) is greater than its average total costs (ATC). The ATC is $45 and the price is $45. The monopolist, on the other hand, would experience economic profit if it generated less output in the short run since this would result in less than ATC costs per unit and higher than market price. In the case of pure monopoly, short-run economic profit is not sustainable; as soon as other companies notice this, they will enter the market to earn some economic profits. A monopolist’s costs and revenues are some of the primary factors that determine its production and profit-making decisions. Monopolists are unique because they are the only players in the market, so they have the power to influence the price at which goods or services are sold. In this scenario, the monopolist has an ATC of $45.00, MC of $35.00, MR of $35.00, and the price of $45.00. The company should continue to produce in the short term since the price that the company charges ($45) is greater than its ATC. In the short run, the company would experience economic profit if it generated less output since this would result in less than ATC costs per unit and higher than market price. However, in pure monopoly, short-run economic profit is not sustainable. As soon as other companies notice this, they will enter the market to earn some economic profits.
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Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): Period 2 Cash Flows $19.98 $19.98 $19.98 $19.98+$1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? a. uyuyo The maturity is years. (Round to the nearest integer.) b. What is the coupon rate (as a percentage)? The coupon rate is%. (Round to two decimal places.) c. What is the face value? The face value is $- (Round to the nearest dollar.) Time Remaining: 01:2
a. The maturity of the bond is 1 year.
b. The coupon rate cannot be determined with the given information.
c. The face value of the bond cannot be determined with the given information.
The maturity of the bond can be calculated by multiplying the number of cash flows by the length of each period. In this case, there are four cash flows, each occurring every six months. Therefore, the maturity of the bond is 2 years.
The coupon rate can be calculated by dividing the annual coupon payment (which is the sum of all the cash flows) by the face value of the bond. In this case, the annual coupon payment is $19.98 * 4 + $1,000 = $1,079.92. To convert it to a percentage, we divide it by the face value and multiply by 100. However, the face value is not provided in the question, so we cannot calculate the coupon rate.
The face value of the bond is not provided in the question, so it cannot be determined without additional information.
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A waiting line meeting the M/M/1 assumptions has an arrival rate of 4 per hour and a service rate of 12 per hour. Find:
a. What is the probability that the waiting line is empty?
b. What is the probability that the waiting line is busy?
c. What is the average time a unit spends in the system (in hours)?
d. What is the average time a unit spends waiting (in hours)?
e. How many customers are likely to be in the system at any one time?
f. How many customers are waiting in the que?
Please answer all questions using M/M/1 Model (Waiting Line Model A)
The number of customers likely to be in the system at any one time (L): The average number.
The probability that the waiting line is empty (P0):
To find the probability that the waiting line is empty, we need to use the formula for the steady-state distribution of the M/M/1 queue. In this case, since the service rate is greater than the arrival rate, the system is stable and the probability of an empty waiting line can be calculated as follows:
P0 = 1 - (λ/μ)
where λ is the arrival rate and μ is the service rate.
In this case, the arrival rate (λ) is 4 per hour and the service rate (μ) is 12 per hour. Plugging these values into the formula:
P0 = 1 - (4/12)
= 1 - 1/3
= 2/3 or 0.667
The probability that the waiting line is empty is 2/3 or 0.667.
The probability that the waiting line is busy (Pb):
The probability that the waiting line is busy can be calculated using the complement of the probability that the waiting line is empty. Therefore:
Pb = 1 - P0
In this case, we already calculated P0 to be 2/3 or 0.667. Plugging this value into the formula:
Pb = 1 - 2/3
= 1/3 or 0.333
The probability that the waiting line is busy is 1/3 or 0.333.
The average time a unit spends in the system (W):
The average time a unit spends in the system can be calculated using Little's Law, which states that the average time spent in the system is equal to the average number of units in the system divided by the arrival rate. Therefore:
W = L / λ
where L is the average number of units in the system and λ is the arrival rate.
In the M/M/1 model, the average number of units in the system (L) can be calculated using the formula:
L = λ / (μ - λ)
Plugging in the values of λ = 4 per hour
and μ = 12 per hour:
L = 4 / (12 - 4)
= 4 / 8
= 0.5
Now, we can calculate the average time a unit spends in the system:
W = L / λ
= 0.5 / 4
= 0.125 hours or 7.5 minutes
The average time a unit spends in the system is 0.125 hours or 7.5 minutes.
The average time a unit spends waiting (Wq):
The average time a unit spends waiting can be calculated by subtracting the average service time from the average time spent in the system. Therefore:
Wq = W - (1 / μ)
where W is the average time spent in the system and μ is the service rate.
We already calculated the average time spent in the system (W) to be 0.125 hours. Plugging in the value of μ = 12 per hour:
Wq = 0.125 - (1 / 12)
= 0.125 - 0.0833
= 0.0417 hours or 2.5 minutes
The average time a unit spends waiting is 0.0417 hours or 2.5 minutes.
The number of customers likely to be in the system at any one time (L): The average number.
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Additional paid-in capital is not affected by the issuance
of:
no-par stock.
no par with a stated value stock.
par value stock.
preferred stock.
The issuance of no-par stock, no par with a stated value stock, par value stock, and the preferred stock does not affect additional paid-in capital.
Additional paid-in capital is a component of shareholders' equity that represents the amount received from investors in excess of the par or stated value of the stock. It is generated when a company issues its stock at a price higher than its par or stated value.
When it comes to the issuance of different types of stock, such as no-par stock, no par with a stated value stock, par value stock, and preferred stock, none of these types directly impact additional paid-in capital.
No-par stock does not have a predetermined par value assigned to it. Instead, the entire amount received from investors is recorded as common stock or capital stock. Since there is no par value, there is no distinction between the amount received and the par value, and thus additional paid-in capital is not affected.
Similarly, with no par stock with a stated value, although it has a stated value, it is not directly linked to additional paid-in capital. The stated value represents the minimum amount at which the stock can be sold, but any amount received above the stated value is still considered common stock and does not impact additional paid-in capital.
Par value stock has a predetermined par value assigned to each share. However, the issuance of par value stock does not affect additional paid-in capital. The difference between the issuance price and the par value is recorded as common stock, while the par value itself does not contribute to additional paid-in capital.
Lastly, preferred stock represents a different class of stock with specific rights and preferences. The issuance of preferred stock does not impact additional paid-in capital because it is accounted for separately from common stock.
In conclusion, the issuance of no-par stock, no par with a stated value stock, par value stock, and the preferred stock does not affect additional paid-in capital. Additional paid-in capital is primarily influenced by the issuance of common stock at a price exceeding its par or stated value.
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You have been hired as an expert witness in a federal antitrust case. You are planning your strategy for determining whether or not your client (the defendant in the case) has engaged in predatory pricing. How will you get started? In general what is your strategy? What must you do to successfully defend your client?
To determine whether or not my client has engaged in predatory pricing in the federal antitrust case, I will employ the following strategy:
Gather relevant data: I will start by collecting detailed financial records, pricing information, and cost data of my client. This will allow me to understand their pricing practices and compare them to industry standards.
Analyze market conditions: I will examine the market structure and competitive dynamics to assess if my client possesses sufficient market power to engage in predatory pricing. This will involve studying market share, entry barriers, and the behavior of competitors.
Assess pricing behavior: I will evaluate the pricing history of my client and competitors over a significant period. This analysis will involve identifying periods of low pricing, calculating costs, and determining if prices were set below cost with a specific intent to drive competitors out of the market.
Demonstrate business justifications: To successfully defend my client, I will gather evidence to support their legitimate business justifications for any aggressive pricing practices. This may involve showing that pricing decisions were based on cost efficiencies, economies of scale, or other non-predatory factors.
Expert testimony and economic analysis: I will utilize economic experts to provide an in-depth analysis of the market, pricing behavior, and the economic impact of my client's pricing strategies. This will strengthen the defense by presenting a comprehensive and objective assessment of the situation.
In conclusion, my strategy for defending my client in the predatory pricing antitrust case involves gathering and analyzing relevant data, assessing market conditions, evaluating pricing behavior, demonstrating legitimate business justifications, and utilizing expert testimony. By following this approach, I aim to build a strong defense and effectively counter any allegations of predatory pricing against my client
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Which of the following describes a benefit enjoyed by investors in mutual funds?
a. Investors buy an ownership interest in many different companies
b. Guaranteed dividend payments are received annually.
c. Investment risk is eliminated
d. Investors exercise managerial authority in many different companies.
The correct answer is:
a. Investors buy an ownership interest in many different companies
Investors in mutual funds enjoy the benefit of buying an ownership interest in many different companies. Mutual funds pool money from multiple investors to invest in a diversified portfolio of securities, which can include stocks, bonds, or other assets. By investing in a mutual fund, individuals gain exposure to a wide range of companies and industries, providing them with diversification and spreading the investment risk. This allows investors to benefit from the potential returns and performance of multiple companies, rather than relying on the performance of a single investment.
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Only one of three different machines is to be purchased for a certain production process. An engineer performed the following analyses to select the best machine. All machines are assumed to have a 10-year life. Which machine, if any, should the company select if its MARR is 20% per year?
The company should select the machine that yields the highest present worth or net present value (NPV) at a 20% minimum attractive rate of return (MARR) over the 10-year life span.
Which machine, if any, has the highest net present value (NPV) at a 20% MARR?To determine the best machine, the engineer needs to calculate the NPV for each machine and compare them.
The NPV is the sum of the present values of the cash inflows and outflows associated with each machine, discounted at the MARR of 20%. The machine with the highest NPV should be selected.
The NPV formula can be expressed as:
[tex]NPV = Cash\ Inflow1 / (1 + MARR)^1 + Cash\ Inflow2 / (1 + MARR)^2 + ... + Cash\ InflowN / (1 + MARR)^N - Initial\ Investment[/tex]
By calculating the NPV for each machine and comparing the results, the company can identify the machine that generates the highest NPV.
The machine with the highest NPV would be the most financially favorable choice for the company.
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Find an example of a Bertrand Game from the mainstream press.
Clearly identify the players, their strategies, and payoffs. Your
choice may cite an example of a Bertrand Game that was avoided or
one th
One example of a Bertrand game from the mainstream press is the airline industry's pricing competition.
In this game, the players are two or more airlines competing for passengers. The strategies of the airlines involve setting ticket prices for their flights. The payoffs are the profits earned by each airline based on the number of passengers they attract and the prices they charge.
In a Bertrand game, the players simultaneously set their prices, assuming that customers will choose the airline with the lowest price. This creates a competitive environment where airlines aim to undercut each other to attract more passengers. As a result, prices tend to be driven down to the marginal cost of providing the service.
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