Answer:
P = $25,000
Explanation:
Cost price of truck = $50,000
Present value = $25,000
Operating costs = $9,000 per year
Salvage value = $4,000
Find remaining amount for old truck:
Amount remaining = $50,000 - $25,000 = $25,000
Total amount, since it has a salvage value of $5,000:
Total = $25,00 + $5,000 = $30,000
For new truck:
Cost price = $55,000
Operating costs = $28,000 per year
Salvage value = $10,000
To find the value that should be used as P for the presently owned vehicle in a replacement study:
P = Cost of new truck - Total amount remaining from old truck
P = $55,000 - $30,000
P = $25,000
Therefore, the value that should be used as P for the presently owned vehicle in a replacement study is $25,000
Randolph is a 30 percent partner in the RD Partnership. On January 1, RD distributes $24,500 cash and inventory with a fair value of $23,600 (inside basis of $11,800) to Randolph in complete liquidation of his interest. RD has no liabilities at the date of the distribution. Randolph's basis in his RD Partnership interest is $39,725. What is the amount and character of Randolph's gain or loss on the distribution
Answer:
3425 LOSS
Explanation:
Randolph gain or loss can be calculated as
Gain/loss = Cash distribution + Inventory distribution - Basis in RD
Gain/loss = $24,500 + $11,800 - $39,725
Gain/loss = (3425) LOSS
As You can see RD distributing cash and inventory and they are less than his basis in RD
All projects are unique:________.
Select one:
A. Therefore all project management circumstances are equally unique.
B. So knowledge should not be transferred to avoid bias in future projects.
C. So knowledge cannot be transferred.
D. But they may have several common points.
Answer:
D. But they may have several common points
Explanation:
Although all projects are unique, they still share similar similarities. So knowledge can be transferred.
Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $35,000.
What is its approximate internal rate of return?
Answer:
i think the answer218
Explanation:
if you add 176.000+35.000=211+7=218 you get the right answer
The approximate internal rate of return is 176.000+35.000=211+7=218. From calculating the cost and salvage value we get the internal rate of return.
What is internal rate of return?In financial analysis, the internal rate of return (IRR) is a statistic used to calculate the profitability of possible investments. IRR is a discount rate that, in a discounted cash flow analysis, reduces all cash flows' net present values (NPV) to zero. The same formula is used for NPV calculations and IRR calculations.
A useful tool for comparing investments is the internal rate of return (IRR), which is the interest rate at which the sum of all cash flows equals zero. If we substitute 13.92% for the 8% in the aforementioned case, NPV will be zero, and that represents your IRR. IRR is therefore defined as the discount rate at which a project's NPV equals zero.
IRR can be used to rank a variety of potential investments or projects on a pretty even basis because it is consistent for investments of all types. Generally speaking, the investment with the highest IRR would be regarded as the best when comparing options with other similar attributes.
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1. A company sells a plant asset that originally cost $375,000 for $125,000 on December 31, 2017. The accumulated depreciation account had a balance of $150,000 after the current year's depreciation of $37,500 had been recorded. The company should recognize a
Answer:
The company should recognize a loss on sale of plant asset of $100,00.
Explanation:
The cost = $375,000
Accumulated Depreciation = $150,000
Therefore, book value = $225,000
This book value is compared with the sales value of $125,000.
There is a difference of $100,000 ($225,000 - $125,000).
Since the book value is greater than the sales value, it means that the plant asset was sold at a loss.
The cost is the amount at which the plant asset was purchased. The accumulated depreciation represents the cost that has been expensed so far. The sales value is the amount at which the plant asset was sold.
Motorzone offers replacement parts for old Volkswagen Beetles. The company calculates shipping charges based on shipping parts from Boston, even though some parts actually ship from St. Louis. Motorzone most likely practices ________ pricing.
Answer:
basing-point
Explanation:
Basing point pricing is a system used to establish prices in which the business charges a fixed amount for the product and an additional charge for the shipping that is determined according to the customer's distance from a certain place that is called the basing point. According to this, the answer is that Motorzone most likely practices basing-point pricing because they establish the shipping charges based on a pre-determined location even though some products are not in this place.
If the interest rate in the United Kingdom is 8 percent, the interest rate in the United States is 10 percent, the spot exchange rate is $1.75/£1, and interest rate parity holds, what must be the one-year forward exchange rate?
Answer:
The answer is $1.78 / £1
Explanation:
Solution
Given that
Interest rate of United kingdom = 8%
Interest rate of United States =10%
Spot exchange rate =$1.75£1
The next step is to find the one year forward rate of exchange
Thus
Forward Rate = S₀ * [ ( 1 + Rus) / ( 1 + RE) ]
=$ 1.75 * ( ( 1 + 10%) / ( 1 + 8%) )
$1.78
Therefore, the forward exchange rate is $ 1.78 / £1
Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is pequals 160minus2 q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20 , which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $nothing . (Enter your response as a whole number.)
Answer:
Club membership fee of $60 would maximize profit.
If the club charges tow part pricing the maximum revenue can be $3500.
Explanation:
Joe has entered into a monopoly because he is owner of single golf course in the Northlands.
Demand function for Joe's golf course is:
P = 160 - 2q
P = $20 , q = 50
160 - 2 (50) = 60
Consumer surplus = 0.5 * equilibrium quantity
Consumer Surplus for Joe is ; 0.5 * 50 (160 - 20) = $3500
If MR = MC then demand function will become :
160 - 4q
If q = 25 then
160 - 4 * 25 = 60
Your uncle lends you $2,000 less $100 (interest at 5 percent), and you receive $1,900. Use the APR formula to find the true annual percentage rate. Assume you repay the entire loan in one year
Answer:
APR =5.263%
Explanation:
Computation of the true annual percentage rate
Using the APR formula to find the true annual percentage rate
APR=(2 × n × I) / [P × (N + 1)]
Hence;
APR= (2 × 1 × $100) / [$1,900 × (1 + 1)]
APR=$200/($1,900×2)
APR=$200/$3,800
APR= 0.05263 ×100
APR =5.263%
Therefore the true annual percentage rate using the APR formula will be 5.263%
Production estimates for July are as follows:
Estimated inventory (units), July 1 725
Desired inventory (units), July 31 1, 200
Expected sales volume (units), July 7,500
For each unit produced four hours of direct labor is required. The labor rate per hour is $15. The number of direct labor hours required for July production is:_________
Answer:
31,900
Explanation:
For the computation of the number of direct labor hours required for July production first we need to find out the production in units which is shown below:-
Production in units = Expected sales in Units + Ending Inventory - Beginning inventory
= 7,500 + 1,200 - 725
= 7,975
Total direct labor hours required = Production in units × Hours per unit
= 7,975 × 4
= 31,900
We simply applied the above formulas
Six years ago, James Corporation sold a $100 million bond issue to expand its facilities. Each debenture has a $1,000 par value, an original maturity of 20 years (there are now 14 years left to maturity), and an annual coupon rate of 11.5% with semiannual payments. If you require a 14% return, what price would you pay today for a James bond?
Answer:
Price of Bonds=$848.286
Explanation:
The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate
Value of Bond = PV of interest + PV of RV
The value of bond for James Corporation can be worked out as follows:
Step 1
PV of interest payments
PV = A × (1+r)^(-n)/r
A- semiannual interest payment, n-number of periods, r- semi annul yield
A-semi- annul interest payment:
=11.5%× 1,000× 1/2 = 75
r-semi-Annual yield = 14%/2 = 7%
n-Maturity period =1 4 × 2= 28
PV of interest payment:
=57.5 × (1- (1+0.07)^(-28)/0.07)
= 697.88
Step 2
PV of Redemption Value
= 1,000 × (1.07)^(-28) = 150.40
Step 3
Price of bond
=697.88 + 150.40
=$848.286
In 2019, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much FUTA tax is due from Willow Corporation for 2019, after the credit for state unemployment taxes
Answer:
FUTA tax due from the corporation is $108
Explanation:
The First and Second employee earned 7000 each
The Third employee earn earns 4000
Paid under State Unemployment Tax by the employer is = (7000+7000+4000) x 5.40% =$972
How much FUTA tax is due from Willow Corporation for 2019?
Credit of tax paid in State Unemployment Tax is availabe for FUTA tax of 6%, thus FUTA due will be:
=(6% of 18000) - $972
=1080-972
=$108
Tactical decisions define Group of answer choices the day-to-day activities of the organization. the goals and plans of the organization. the domain of operations managers, who are close to the customer. the steps taken to achieve the goals and objectives.
Answer:
E. the steps taken to achieve the goals and objectives.
Explanation:
Tactical decisions are the decisions made by the mid-level management in an organization, in a bid to implement the strategic plans of the director-general of the organization. These decisions are made and implemented within a short period of time. Some tactical decisions include;
1. Structuring of workforce
2. Purchase of items and resources
3. Marketing strategies
4. Allocation of jobs to employees.
When these decisions are made by the middle-level management, they are under obligation to answer to the directors of the organization as to how these decisions were implemented.
A company had beginning inventory... A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold
Answer:
COGS= $470
Explanation:
Giving the following information:
Beginning inventory= 10 units for $20 each
On March 2, it purchased 10 units at $22 each.
On March 6 it purchased 6 units at $25 each.
On March 8, it sold 22 units for $54 each.
We need to determine the cost of goods sold for the 22 units under the FIFO (first-in, first-out) method. Using this method, we need to use the cost of the firsts units incorporated into inventory.
COGS= 10*20 + 10*22 + 2*25= $470
To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises:
Dairy King
Advertise Doesn't Advertise
Creamland Advertise 10,10 18, 2
Doesn't Advertise 2,18 11,11
For example, the upper right cell shows that if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $18 million, and Dairy King will make a profit of $2 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms.
a. If Creamland decides to advertise, it will earn a profit of $ _______ million if Dairy King advertises and a profit of $_______ million if Dairy King not advertise.
b. If Creamland decides not to advertise, it will earn a profit of________ million if Dairy King advertises and a profit of______ $ million if Dairy King does not advertise.
Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing?
a. Creamland will choose not to advertise and Dairy King will choose to advertise.
b. Both firms will choose not to advertise.
c. Both firms will choose to advertise.
d. Creamland will choose to advertise and Dairy King will choose not to advertise.
Answer:
a. 10, 18
b. 2, 11
c. Both firms will choose to advertise.
Explanation:
Interpreting the payoff matrix for all possible cases:
Both Advertise:
Dairy King profit = 10
Creamland profit = 10
Neither Advertise:
Dairy King profit = 11
Creamland profit = 11
Only Dairy King advertises:
Dairy King profit = 18
Creamland profit = 2
Only Creamland advertises:
Dairy King profit = 2
Creamland profit = 18.
Filling in the blanks:
a. If Creamland decides to advertise, it will earn a profit of $10 million if Dairy King advertises and a profit of $18 million if Dairy King not advertise.
b. If Creamland decides not to advertise, it will earn a profit of $2 million if Dairy King advertises and a profit of $11 million if Dairy King does not advertise.
For both firms, if they choose not to advertise and the other firm advertises, they will have a much lower profit than their competitors. Therefore, the dominant strategy for either firm is to advertise since it will at least keep them even with their competitor (if both advertise).
The answer is c. Both firms will choose to advertise.
According to the Phillips curve, policymakers could reduce both the inflation rate and the unemployment rate by Group of answer choices increasing the money supply. raising taxes. increasing government expenditures None of the other answers is correct
Answer:
None of the other answers is correct.
Explanation:
Williams A. Phillips was a notable economist born in New Zealand. Phillips wrote a famous article titled "The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957" published in 1958 by Economica. In the article, he used data for the United Kingdom (U.K) to illustrate on a graph, a negative or inverse relationship between the rate of change of employee wages in the U.K and the unemployment rate in the United Kingdom (U.K).
Consequently, using the Phillips curve it is practically impossible for policymakers to reduce both the inflation rate and the unemployment rate because as the inflation rate decreases; the unemployment rate increases and vice-versa.
However, according to the Phillips curve, policymakers can reduce inflation and increase unemployment if aggregate demand is contracted.
Yosko Company expects to sell 2 comma 000 units of finished product in January and 2 comma 150 units in February. The company has 260 units on hand on January 1 and desires to have an ending inventory equal to 40% of the next month's sales. March sales are expected to be 2 comma 270 units. Prepare Yosko's production budget for January and February.
Answer:
Production budget
January 2,600 units
February 2,198 units
Explanation:
The sales budget is adjusted for the projected opening and closing inventories unit to arrive at the production budget:
The production budget can be determined using the formula below
Production budget = Sales budget + closing inventory- opening inventory
January production budget
Sales budget = 2,000 units
Closing inventory = 40% × February sales = 40% × 2,150
Opening inventory = 260 units
Production budget for January = 2000 + (40% × 2,150) - 260= 2,600 units
February production budget
Sales budget = 2,150
Opening inventory = January closing inventory = 860 units
Closing inventory = 40% × March sales= 40% × 2,270
Production budget fro February = 2,150 + (40% × 2,270) - 860= 2,198 units
Production budget
January 2,600 units
February 2,198 units
Zappos' product selection includes performance athletic shoes, outdoor coats, contemporary shirts, couture accessories, and more. This selection best illustrates the firm's:
Answer:
Product mix breadth
Explanation:
Product mix breadth refers to varieties of products offer for sale by a store. In a product mix breadth, all products being produced by a brand or company are sold.
Although, product mix breadth comprises varieties of product line, yet it is made up of all products produced and distributed by a company. For example, a store will little space or limited finance may opt to sell fewer product lines but would also make more choices available from the product lines being sold.
Ski West, Inc., operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adulit customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its season pass holders to use their passes equally throughout the season. The company's fiscal year ends on December 31. On November 6, 2018, Jake Lawson purchased a season pass for $450.1. What will be included in the Ski West 2018 Income statement and balance sheet related to the sale of the season pass to Jake Lawson? Complete this question by entering your answers in the tabs below. 2. When should Ski West recognize revenue from the sale of its season passes?3. Prepare the appropriate ournal enteries that Sky West would record on November 6 and December 31.
Answer:
Ski West, Inc.
1. What Ski West 2018 should include in its Income statement and balance sheet related to the sale of the season pass to Jake Lawson?
a) Income Statement:
Season Passes Revenue = $90 ($450/5). This represents December season pass by Jake Lawson.
b) Balance Sheet:
Unearned Season Passes Revenue $360 as a current liability.
2. When Ski West should recognize revenue from the sale of its season passes:
Revenue should be recognized on December 31.
3. Journal Entries on November 6 and December 31:
November 6:
Debit Cash Account $450
Credit Unearned Season Passes Revenue $450
To record the receipt from Jake Lawson.
If this sale was on account, then the Accounts Receivable is debited instead.
December 31:
Debit Unearned Season Passes Revenue $90
Credit Season Passes Revenue $90
To record the earned revenue from Jake Lawson's.
Explanation:
Unearned revenue is not recognized in the income statement. It is taken to the Balance Sheet as a current liability. It is not recognized because it does not belong to the current period, as specified by the accrual concept and matching principle.
please discuss the similarities and differences between transformational and charismatic leadership. Choose an individual that qualifies as a charismatic or transformational leader and explain why. Also, in your analysis, what are some of the unique characteristics of this individuals followers that might identify him/her as charismatic or transformational
Answer:
The transformational leaders are bureaucratic and charismatic are people oriented in nature.
Explanation:
The charismatic leaders are also called as the transformational leaders and shares various things. Charismatic leaders make their status better and transformational leaders focus on the transformation of the organization's vision. The main difference is the focus and the audience. The charismatic leaders are committed and have engaging personalities like martin Luther king as his speeches were often more tangible than other leaders and used to have a huge influence on the people he met. The charismatic leaders are more emotionally attached to their audience. They work towards an emphasis on the greater good. More people-oriented.
Rachelle transfers property with a tax basis of $800 and a fair market value of $960 to a corporation in exchange for stock with a fair market value of $765 and $42 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $153 on the property transferred. What is the corporation's tax basis in the property received in the exchange
Answer:
$842
Explanation:
The computation of corporation's tax basis in the property received in the exchange is shown below:-
corporation's tax basis = Fair market value + Transaction
= $800 + $42
= $842
Therefore, The corporation's tax basis should be equivalent to the shareholder's tax basis as the property is transferred for $800 (a substituted basis) and add gain recognized of $42. And If the corporation sells the property for $960, the recognized gain would be $52.
Ship Co. produces storage crates that require 34.0 meters of material at $0.20 per meter and 0.30 direct labor hours at $19.00 per hour. Overhead is applied at the rate of $16 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
Answer:
Total standard cost = $103.7
Explanation:
Standard cost is the sum of the standard material cost , standard labour cost and standard overhead
Overhead = OAR × direct labour hour
= $16 × (0.30×$19.00)= 91.2
Standard cost = (34.0×$0.20) + (0.30×$19.00) + 91.2 = $103.7
Standard cost = $103.7
Collins Company borrowed $1,250,000 from BankTwo on January 1, 2016 in order to expand its mining capabilities. The five-year note required annual payments of $325,545 and carried an annual interest rate of 9.5%. What is the amount of expense Collins must recognize on its 2017 income statement
Answer:
Collins Company must recognize $118,750 (which is annual interest paid on the capital) in its 2017 income statement as an expense item if the method of computing the interest is the flat rate method.
If it is reducing balance rate, then the amount deducted will equal $ 87,823
Explanation:
According to the principles of Financial Accounting, the interest portion of any loan must be entered as an expense item. The portion of the principal being paid back is recorded as part of the liability of the company in the period under consideration. It often goes by the term Loan Payable or Notes Payable.
Hence to arrive at the answers given above, you must note that the year in question is 2017 and that the loan took effect from January 2016.
When computing for interest payable, two methods may be used:
Flat rate method: which requires that the interest rate applicable is computed on the capital and multiplied by the number of years the loan will run.That is, $1,250,000 x 9.5% x 5 = Total Interest Rate Applicable.
= $593,750 so going by this method, the interest rate to be entered is
= $593, 750/5
= $118,750
2. Reducing balance rate method: This requires the rate of interest to be applied each year succesievely having taken into account the capital which way paid in the previous year.
That is, [Initial Capital-Annual Payments] *9.5%
For year 2016, annual payment will be Zero. Given that the loan started in that year. In 2017 however, the annual payment will apply as shown below:
= [$1,250,000-$325,545] *9.5%
= $924, 455 * 9.5%
= $87,823 (approximately)
Cheers!
8. Problems and Applications Q8 The city government is considering two tax proposals: • A lump-sum tax of $300 on each producer of hamburgers. • A tax of $1 per burger, paid by producers of hamburgers. Which of the following statements is true as a result of the lump-sum tax? Check all that apply. Average fixed cost will increase. Average variable cost will remain unchanged. Average total cost will increase. Marginal cost will increase. Which of the following statements is true as a result of the per-burger tax? Check all that apply. Average fixed cost will remain unchanged. Average total cost will increase. Average variable cost will increase. Marginal cost will remain unchanged.
Answer:
Which of the following statements is true as a result of the lump-sum tax?
Average fixed cost will increase.
Average total cost will increase.
The lump-sum tax of $300 is a one time payment that does not depend on the amount of output, for this reason, it is a fixed cost that is spread over the total quantity of burgers that are produced, and that also affect average total cost.
Which of the following statements is true as a result of the per-burger tax?
Average fixed cost will remain unchanged.
Average total cost will increase.
Average variable cost will increase.
The per-burger tax depends on the quanityt of burgers produced, therefore, it is another variable cost. It affects average total cost, and average variable cost, while average fixed cost remains unchaged precisely because it is not a fixed cost.
The average cost of production is computed by dividing the number cost (TC) by the output produced (TO) (Q). When we say "per unit cost of production," we mean that all fixed and variable costs are taken into account when calculating the average cost.
As a result, it's also known as Per Unit Total Cost.
The answers to the above questions are:
1) The $300 lump-sum tax is a one-time contribution that is not based on the amount of output; as a result, it is a fixed cost that is distributed across the total quantity of burgers produced, affecting the average total cost.
So, Option A and C are correct.
2) The per-burger tax is a variable expense that is determined by the number of burgers consumed. It has an effect on average total cost and average variable cost, but it has no effect on average fixed cost because it is not a fixed cost.
So, Option A, B, and C are correct.
Thus these Options are correct for the following question.
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A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. This firm is earning $5.50 on every $50 invested by its founders.
a. What is its percentage rate of return? 11 percent.
b. Is the firm earning an economic profit? Yes If so, how large? 6 percent.
c. Will this industry see entry or exit? Entry
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
Answer: The answers are given below
Explanation:
a. What is its percentage rate of return?
From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:
= $5.50/$50 × 100%
= 0.11 × 100%
= 11%
b. Is the firm earning an economic profit? If so, how large?
The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:
= 11% - 5%
= 6%
The firm is earning economic profit of 6%.
c. Will this industry see entry or exit?
There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.
A firm is considering a replacement project which requires the initial outlay of $300,000 which includes both an after-tax salvage from the old asset of $12,000 and an additional working capital investment of $8,000. The 12-year project is expected to generate annual incremental cash flows of $54,000 and have an expected terminal value at the end of the project of $20,000. The cost of capital is 15 percent, and the firm's marginal tax rate is 40 percent. Calculate the net present value of this project.
Answer:
-3,548.43
Explanation:
DF = Discount factor
Year Cash flow DF(15%) Present Value
0 (300,000) 1 -300,000
1 54,000 0.870 46,956.52
2 54000 0.756 40,831.76
3 54000 0.658 35,505.88
4 54,000 0.572 30,874.68
5 54000 0.497 26,847.54
6 54000 0.432 23,345.69
7 54000 0.376 20,300.06
8 54000 0.327 17,652.70
9 54000 0.284 15,350.17
10 54000 0.247 13,347.97
11 54000 0.215 11,606.93
12 74000 0. 187 13,831.13
Year 12 calculation = 54000 +20000 x 0.6 + 8000
= 74000
NPV = -300,000 + 46,956.52 + 40,831.76 + 35,505.88 + 30,874.68 + 26,847.54 + 23,345.69 + 20,300.06 + 17,652.70 + 15,350.17 + 13,347.97 + 11,606.93 + 13,831.13
NPV = -3,548.43
The due diligence process of analyzing and evaluating an existing business ________. Group of answer choices may be just as time consuming as the development of a comprehensive business plan for a start-up helps to determine if the company will generate sufficient cash to pay for itself and leave you with a suitable rate of return on your investment helps to determine what the company's potential for success is All of these
Answer:
All of these.
Explanation:
The due diligence process of analyzing and evaluating an existing business, is the process responsible for revealing the positive and negative aspects of a business.
This process aims to satisfy the buyer and seller by examining the main details of a transaction and ensuring its legality and evaluating most of the facts of the deal.
The agreement must then satisfy the due diligence aspects, so that the two parties involved can price and finalize the transaction effectively.
Therefore, all answer options are correct.
Corrector guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 5 % of sales. Assume that the Sierra dealer in Colorado Springs made sales totaling $ 800,000 during 2016. The company received cash for 30% of the sales and notes receivable for the remainder. Warranty payments totaled $12,000 during 2016.
Required:
a. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold.
b. Post to the Estimated Warranty Payable T-account. At the end of 2014, how much in Estimated Warranty Payable does the company owe? Assume the Estimated Warranty Payable is SO on January 1, 2014.
Answer:
A.CORRECTOR JOURNAL ENTRIES
1.2016
Dr Cash 240,000
Dr Note receivable 560,000
Cr Sales Revenue 800,000
2. Record of the warranty expense.
2016
Dr Warranty Expense 40,000
Cr Estimated Warranty Payable 40,000
3.To Record the warranty payments for the company.
2016
Dr Estimated Warranty Payable 12,000
Cr Cash12,000
B . T-ACCOUNT
DEBIT SIDE
The Estimated Warranty Payable will be:
Dr Payments12,000
CREDIT SIDE
Beginning balance 0
Accrual 40,000
Ending balance 28,000
Explanation:
A. Preparation of the Record of the sales, warranty expense, and warranty payments for the company while Ignore cost of goods sold.
CORRECTOR JOURNAL ENTRIES
2016
Dr Cash 240,000
(30%× Sales amount $800,000)
Dr Notes Receivable 560,000
(800,000-240,000)
Cr Sales Revenue 800,000
(560,000+240,000)
To record sales for 2016
Record of the warranty expense.
2016
Dr Warranty Expense 40,000
(5%×800,000)
Cr Estimated Warranty Payable 40,000
To record the accrue warranty payable.
To Record the warranty payments for the company.
2016
Dr Estimated Warranty Payable12,000
Cr Cash12,000
To record Warranty payments.
B . T-ACCOUNT
DEBIT SIDE
The Estimated Warranty Payable will be:
Dr Payments12,000
CREDIT SIDE
Beginning balance 0
Accrual 40,000
Ending balance 28,000
(40,000-12,000)
Photo Framing's cost formula for its supplies cost is $1,200 per month plus $20 per frame. For the month of November, the company planned for activity of 618 frames, but the actual level of activity was 610 frames. The actual supplies cost for the month was $13,850. The spending variance for supplies cost in November would be closest to:
Answer:
Direct material spending variance= $451.4 unfavorable
Explanation:
Giving the following information:
Photo Framing's cost formula for its supplies cost is $1,200 per month plus $20 per frame.
Actual level of activity was 610 frames. The actual supplies cost for the month was $13,850.
To calculate the spending variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= (13,850 - 1,200)/610= $20.74
Direct material price variance= (20 - 20.74)*610
Direct material price variance= $451.4 unfavorable
Riviera Township reported the following data for its governmental activities for the year ended June 30, 20X9: Item Amount Cash and cash equivalents $1,000,000 Receivables 300,000 Capital assets 8,500,000 Accumulated depreciation 1,200,000 Accounts payable 400,000 Long-term liabilities 4,000,000 Additional information available is as follows: All of the long-term debt was used to acquire capital assets. Cash of $475,000 is restricted for debt service. 1) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for total net assets?A) $2,425,000B) $4,200,000C) $2,900,000D) $3,625,0002) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets invested in capital assets, net of related debt?A) $4,200,000B) $2,900,000C) $2,825,000D) $3,300,0003) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets, unrestricted?A) $425,000B) $900,000C) $525,000D) $825,000
Answer:
1. B) $4,200,000
2. D) $3,300,000
3. B) $900,000
Explanation:
1. Total net assets = Total assets - Total Liabilities
=(1,000,000+300,000+8,500,000) - (1,200,000 + 400,000 + 4,000,000)
=9,800,000 - 5,600,000
=$4,200,000
2. The amount that should be reported for net assets invested in capital assets, net of related debt is
=(Capital assets- Accumulated Dep) - Long term debt
=(8,500,000 - 1,200,000) - 4,000,000
=7,300,000 - 4,000,000
=$3,300,000
3. The amount that should be reported for net assets, unrestricted is
=Total Net assets - Net of related debt
=4,200,000 - 3,300,000
=$900,000
Increased Efficiency, Inc. is looking for ways to shorten its cash conversion cycle. It has annual sales of $36,500,000, or $100,000 a day on a 365-day basis. The firm's cost of goods sold is 65% of sales. On average, the company has $9,000,000 in inventory and $8,000,000 in accounts receivable. Its CFO has proposed new policies that would result in a 20% reduction in both average inventories and accounts receivable. She also anticipates that these policies would reduce sales by 10%, while the payables deferral period would remain unchanged at 40 days. What effect would these policies have on the company's cash conversion cycle
Answer and Explanation:
The cash conversion cycle refers to the cycle which includes the days inventory outstanding and days sales outstanding and deduct the days payable outstanding
The cash cycle = Days inventory outstanding + days sale outstanding - days payable outstanding
The computation is shown in the attachment below:
As we can see in the attachment the new proposed policy i.e 234.19 days would decrease the cash conversion cycle by 24.27 days as compared with the current proposal policy i.e 258.46 days