Answer:
Investment Payback period(in years)
A 2.08
B 3.066
Explanation:
The payback period is the length of time in years it will take the net cash inflow of a project to recoup its initial cost
Payback period = Initial cost of investment /Annual net cash inflow
Investment A
Annual depreciation = (Cost - Salvage value)/Number of years
= (240,000 - 9,000)/5 =
Annul cash inflow = 69,230 + 46200 = 115,430
Payback period = Initial cost of investment /Annual net cash inflow
= 240,000/ 115,430 = 2.079
Investment B
Annual depreciation = (Cost - Salvage value)/Number of years
= (170,000 - 13,000)/9 = 17,444.444
Annul cash inflow= 38,000 + 17,444.44= 55,444.44
Payback period = 170,000 /55,444.44 =3.067
Investment Payback period(in years)
A 2.08
B 3.066
Which of the following is an example of a hidden variable? Quality of life is a hidden variable because it cannot be measured directly but must be inferred from measurable variables such as wealth, success, and environment.
Answer:
Quality of life is a hidden variable because it cannot be measured directly but must be inferred from measurable variables such as wealth, success, and environment.
Explanation:
Hidden variable: The term "hidden variable" is described as the proposition that specific "statistical models" of any physical systems, for example, Quantum mechanics are being incomplete inherently, and along with this the apparent randomness of a particular system is being dependent not on "collapsing functions" but instead it is due to any unmeasurable or unseen or hidden variables.
1. On January 1, 2020, Scottsdale Company issued its 12% bonds in the face amount of $3,000,000, which mature on January 1, 2032. The bonds were issued for $$3,408,818 to yield 10%. Scottsdale uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. The 12/31/23 Premium on Bond Payable balance is:
Answer:
Premium ob bonds payable = $320,090.44 (credit balance)
Explanation:
January 1, 2020
Dr Cash 3,408,818
Cr Bonds payable 3,000,000
Cr Premium on bonds payable 408,818
January 1, 2021
Dr Interest expense 340,881.80
Dr Premium on bonds payable 19,118.20
Cr Cash 360,000
($3,408,818 x 0.1) - $360,000 = -$19,118.20
January 1, 2022
Dr Interest expense 338,969.98
Dr Premium on bonds payable 21,030.02
Cr Cash 360,000
($3,389,699.80 x 0.1) - $360,000 = -$21,030.02
January 1, 2023
Dr Interest expense 336,866.98
Dr Premium on bonds payable 23,133.02
Cr Cash 360,000
($3,368,669.78 x 0.1) - $360,000 = -$23,133.02
December 31, 2023
Dr Interest expense 334,553.68
Dr Premium on bonds payable 25,446.32
Cr Interest payable 360,000
($3,345,536.76 x 0.1) - $360,000 = -$25,446.32
The Federal Reserve and the money supply
Suppose the money supply (as measured by checkable deposits) is currently $400 billion. The required reserve ratio is 20%. Banks hold $80 billion in reserves, so there are no excess reserves. The Federal Reserve ("the Fed") wants to decrease the money supply by $35 billion, to $365 billion. It could do this through open-market operations or by changing the required reserve ratio. Assume for this question that you can use the oversimplified money multiplier formula. If the Fed wants to decrease the money supply using open-market operations, it shouldsell $7 billion worth of U.S. government bonds. If the Fed wants to decrease the money supply by adjusting the required reserve ratio, it shouldincrease the required reserve ratio.
Answer:
1. Sell $7 billion worth of U.S. government bonds
2. Increase the required reserve ratio.
Explanation:
1. If the Fed wants to change the money supply in the economy, it can use the Money Multiplier to determine how much is it has to put in or take out of the economy to increase/decrease the Money supply to a certain level. The Money Multiplier is a figure that shows how much the money supply will increase/ decrease by as a result of an additional dollar put into or removed from the economy.
Formula is;
= 1/ Reserve Ratio
= 1 / 20%
= 5
Federal Reserve wants to decrease supply by $35 billion.
$35 billion = Amount of Bonds to sell * Multiplier
$35 billion = Amount of Bonds to sell * 5
Amount of Bonds to sell = 35/5
Amount of Bonds to sell = $7 billion worth of bonds
2. If the Fed wants instead to use the required reserve ratio to reduce money supply then it should increase the ratio. This way banks will have to keep more money in reserve instead of giving it out as loans. This reduced lending in the economy will lead to less money being created and hence a reduced money supply.
8 points eBook HintPrintReferences Check my work Check My Work button is now enabledItem 4Item 4 8 points The following information is from Amos Company for the year ended December 31, 2019. Retained earnings at December 31, 2018 (before discovery of error), $852,000. Cash dividends declared and paid during the year, $13,000. Two years ago, it forgot to record depreciation expense of $44,600 (net of tax benefit). The company earned $219,000 in net income this year. Prepare a statement of retained earnings for Amos Company. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Amos Company
Statement of Retained Earnings for the year ended December 31, 2019:
December 31, 2018 balance $852,000
adjustment of error:
Depreciation expense for 2017 -44,600
Adjusted Retained Earnings $807,400
Income for the year 219,000
less Dividends -13,000
Retained Earnings, Dec. 31, 2019 $1,013,400
Explanation:
The depreciation expense of $44,600 would be recorded by deducting it from the beginning retained earnings. This adjusts the balance to reflect the previous year's errors. Then the year's earnings are added before the payment of dividends. The resultant figure is the retained earnings to be carried to the next accounting period.
Retained earnings a.cannot have a debit balance b.is equal to cash on hand c.is the same as contributed capital d.changes are summarized in the retained earnings statement
Answer:
d. Changes are summarized in the retained earnings statement
Explanation:
Retained earnings also known as accumulated earnings, can be defined as the total amount of net income held by a corporation for its future use after paying out dividends to its shareholders.
The retained earnings statement refers to a financial statement that enumerate changes in retained earnings for an organization over a specific period of time. The retained earnings statement is the statement of owner's equity that outlines details of changes in the amount of retained earnings (profits) over a specified period in an organization.
Hence, retained earnings changes are summarized in the retained earnings statement.
The main purpose of preparing a retained earnings statement is to boost investor's confidence and improve market value.
The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:
September October November
Sales $250,000 $300,000 $315,000
Manufacturing costs 150,000 180,000 185,000
Selling and administrative expenses 42,000 48,000 51,000
Capital expenditures _ _ 200,000
The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.
Current assets as of September 1 include cash of $40,000, marketable securities of $75,000, and accounts receivable of $300,000 ($60,000 from July sales and $240,000 from August sales). Sales on account for July and August were $200,000 and $240,000, respectively. Current liabilities as of September 1 include $40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $55,000 will be made in October. Bridgeport’s regular quarterly dividend of $25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $50,000.
Required:
1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Enter all amounts as positive values except for overall cash decrease and deficiency which should be indicated with a minus sign.
Bridgeport Housewares Inc.
Cash Budget
For the Three Months Ending November 30
September October November
Estimated cash receipts from:
Cash sales $ $ $
Total cash receipts $ $ $
Less estimated cash payments for:
Manufacturing costs $ $ $
Selling and administrative expenses
Capital expenditures
Other purposes:
Income tax
Dividends
Total cash payments $ $ $
$ $ $
Less cash balance at beginning of month
Cash balance at end of month $ $ $
Plus minimum cash balance
Excess or (deficiency) $ $ $
2. The budget indicates that the minimum cash balance (will or will not) be maintained in November. This situation can be corrected by (inevesting or borrwing) and/or by the (purchase or sale) of the marketable securities, if they are held for such purposes. At the end of September and October, the cash balance will (exceed or be sort of) the minimum desired balance.
Answer:
Bridgeport Housewares Inc.
1. Monthly Cash Budget with supporting schedules for September, October, and November:
a. Cash Budget for September, October, and November:
September October November
Beginning balance $40,000 $111,0000 $137,500
Cash receipts 253,000 259,500 288,000
Total cash available $293,000 $370,500 $425,500
Cash Payments:
Payment for manufacturing costs 140,000 130,000 135,000
Income tax 55,000
Dividend 25,000
Selling & administrative expenses 42,000 48,000 51,000
Capital expenditures _ _ 200,000
Total cash payment $182,000 $233,000 $411,000
Balance $111,000 $137,500 $14,500
Minimum Cash Balance 50,000 50,000 50,000
Cash to invest or borrow $61,000 $87,500 -$35,500
b. Supporting Schedules:
i) Cash Collections:
September October November
10% Cash Sales, month of sales $25,000 $30,000 $31,500
Sales on account: 90%
70% following month of sales 157,500 189,000
30% 2nd month following sale 67,500
30% of July Sales 60,000
70% of August 168,000
30% of August 72,000
Total cash receipts $253,000 $259,500 $288,000
2. The budget indicates that the minimum cash balance (will or will not) be maintained in November. This situation can be corrected by (investing or borrowing) and/or by the (purchase or sale) of the marketable securities, if they are held for such purposes. At the end of September and October, the cash balance will (exceed or be sort of) the minimum desired balance.
Explanation:
a) Data and Calculations:
1. Budget Information:
September October November
Sales $250,000 $300,000 $315,000
Manufacturing costs 150,000 180,000 185,000
Selling and administrative expenses 42,000 48,000 51,000
Capital expenditures _ _ 200,000
2. Cash Collections:
September October November
10% Cash Sales, month of sales $25,000 $30,000 $31,500
Sales on account: 90%
70% following month of sales 157,500 189,000
30% 2nd month following sale 67,500
30% of July Sales 60,000
70% of August 168,000
30% of August 72,000
Total cash receipts $253,000 $259,500 $288,000
3. Manufacturing Costs:
Manufacturing costs 150,000 180,000 185,000
less Depreciation, insurance, &
property tax expenses 50,000 50,000 50,000
Remainder 100,000 130,000 135,000
4. Remainder of Manufacturing costs:
80% paid in the month incurred 80,000 104,000 108,000
Remainder 20%, month following 20,000 26,000 27,000
August manufacturing cost: 40,000
Payment for manufacturing costs $140,000 $130,000 $135,000
5. Cash Payments:
Payment for manufacturing costs 140,000 130,000 135,000
Income tax 55,000
Dividend 25,000
Selling & administrative expenses 42,000 48,000 51,000
Capital expenditures _ _ 200,000
Total cash payment $182,000 $233,000 $411,000
Other relevant information:
Current assets as of September 1:
Cash of $40,000
Marketable securities of $75,000
Accounts receivable of $300,000 ($60,000 from July sales and $240,000 from August sales). Sales on account for July and August were $200,000 and $240,000, respectively
Current Liabilities:
September 1 Accounts payable = $40,000 incurred in August for manufacturing costs.
Selling and administrative expenses are paid in cash in the period they are incurred.
Income tax = $55,000 October
Quarterly Dividend of $25,000 in November
Minimum cash balance of $50,000 monthly
b) When Bridgeport Housewares Inc prepares budgeted monthly cash budgets, important highlights are indicated. For instance, it becomes easier for the management of Bridgeport to know when to borrow cash to meet the minimum cash balance or in the alternative sell off some marketable securities. It is also easier for Bridgeport to understand that it can be having excess cash which should not be allowed to sit idle, but can be invested in marketable securities. The cash budgets and their preparation also help Bridgeport to be better prepared to exert the required efforts to generate sales revenue in order not to jeopardize its liquidity position. It can also help Bridgeport to understand that the capital expenditure could have been paid for instalmentally starting from September or so instead of lumping the sum in November. There are many other insights garnered from the cash budgets and their preparation.
"Value proposition in simple terms is the consideration of the value the product delivers against the ______________ necessary to obtain and use it. "
Answer:
Price
Explanation:
The value proposition refers to the promise made to the customers about what they wil get when they buy the product. This value proposition is determined by analizing the benefits the customers get and the costs they have to be able to get the product. So, according to that, the answer is that "Value proposition in simple terms is the consideration of the value the product delivers against the price necessary to obtain and use it" because the price would be the cost the customer has to pay to purchase the product.
What must be the first cost of Alternative B to make the two alternatives equally attractive economically at an interest rate of 8% per year
Answer:
The answer is "21,622.98".
Explanation:
In the given question some information is missing, which can be defined in the given attachment.
To calculate the first cost we first subtract B cost is to X.
NPV = Cash Flow of the sum of PV amount
[tex]PV = \frac{Flow of cash} {(1+i)^n} \\\\ \ Calculating \ the \ NPV \ of \ option \ A: \\\\[/tex]
[tex]= \frac{-16600}{(1 + 0.08)^0}-\frac{2400}{(1 + 0.08)^1}-\frac{2400}{(1 + 0.08)^2} -\frac{2400}{(1 + 0.08)^3}-\frac{2400}{(1 + 0.08)^4}[/tex]
[tex]= \frac{-16600}{1}-\frac{2400}{1.08}-\frac{2400}{1.16}-\frac{2400}{1.25}-\frac{2400}{1.36}[/tex]
[tex]=-16600-2222.22-2068.96-1920-1764.70\\\\=-24,575.88[/tex]
The value of Option A or NPV = -24,575.88
The value of Option B or NPV:
[tex]=-\frac{X}{(1 + 0.80)^0}-\frac{1000}{(1 + 0.08)^1} -\frac{1000}{(1 + 0.08)^2}-\frac{1000}{(1 + 0.08)^3}-\frac{1000}{(1 + 0.08)^4} \\\\ =-\frac{X}{(1.80)^0}-\frac{1000}{(1.08)^1} -\frac{1000}{(1.08)^2}-\frac{1000}{(1.08)^3}-\frac{1000}{(1.08)^4}[/tex]
[tex]= -\frac{X}{1}-\frac{1000}{1.08}-\frac{1000}{1.16}-\frac{1000}{1.25}-\frac{1000}{1.36}\\\\= -X -555.55-862.06-800-735.29\\\\=-X -2952.9[/tex]
The value of Option B or NPV = -X -2952.9
As demanded
In Option B the value of NPV = In Option A the value of NPV
[tex]-X -2952.9= -24,575.88\\\\-X= -21,622.98\\\\X=21,622.98\\[/tex]
Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $99,000; May, $129,000; and June, $139,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $41,000. Prepare a schedule of budgeted cash payments for April, May, and June.
Answer and Explanation:
The preparation of a schedule of budgeted cash payment for the three months i.e April, may and June is presented below:
Particulars April May June
Purchase $99,000 $129,000 $139,000
Payment made in
Latest Month (70%) $69,300 $90,300 $97,300
Payment made in
Next Month (30%) $29,700 $38,700 $41,700
Cash Disbursements
Particulars April May June
Payment made in
Current Month (70%) $69,300 $90,300 $97,300
Add:
Last Month
Purchases (30%) $41,000 $29,700 $38,700
Budgeted
Cash Payments $110,300 $120,000 $136,000
The _____ was established by Congress to encourage American firms to focus on quality improvement in order to improve their global competitiveness.
Answer:
The correct answer is: Baldridge Performance Excellence Program.
Explanation:
To begin with, the "Baldridge Performance Excellence Program" is the name given to the program that was established by the United States of America in order to encourage the companies of the country to improve their performance regarding the economy and the globalization that was happening at the time the program was created. It receives its name from the ex secretary of commerce Malcom Baldridge and the award gives to the company selected the recognition of having performance excellence in the its field
The following present value factors are provided for use in this problem. 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Cliff Co. wants to purchase a machine for $40,000, but needs to earn an 8% return. The expected year-end net cash flows are $12,000 in each of the first three years, and $16,000 in the fourth year. What is the machine's net present value?
Answer:
$2,685.64
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-40,000
Cash flow each year from year 1 to 3 = $12,000
Cash flow in year 4 = $16,000
I = 8%
NPV = $2,685.64
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Give one example of how you think the Law of One Price may hold.
Answer:
The answer is below
Explanation:
The law of one price may hold, when there is eliminatination of price differences through arbitrage opportunities between markets.
For example, considering the value of two currencies e.g Dollar and Pound is equal when a basket of identical goods is priced the same in both countries. This ensures that buyers have the same purchasing power across global markets.
A security held in a well-diversified portfolio that has a beta of zero in a one-factor model will have an expected return of:
Answer:
The answer is risk free rate.
Explanation:
Beta is a risk arising from systematic risk or market risk.
A portfolio with a beta of zero would have the same expected return as the risk-free rate. Such a portfolio would have zero correlation with market movements.
Market risk cannot be diversified. Examples of zero beta assets are cash and US treasury bill.
The amount of time a project manager estimates it will take to complete the activity under ideal conditions is known as:
Answer:
pessimistic time
Explanation:
The term that is being described in the question is known as pessimistic time. Like mentioned, this is a concept used in the program evaluation and review technique known as PERT and widely used in project planning in order to estimate the longest period of time it will take for a task/project to be fully completed and/or delivered to the client. Known as a pessimistic time since it is the worst possible outcome of time spent on a project.
suppose a German company issues a bond with a par value of €1,000, 23 years to maturity, and a coupon rate of 3.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Price of bond = €875.09
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).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 3.8% × 1,000 = 38
PV of interest payment = A ×(1- (1+r)^(-n))/r
r- annual yield = 4.7%
n- 23
PV of interest payment= 38 × (1-(1.047^(-23)/0.047 = €527.37
Step 2
PV of redemption Value
PV = RV × (1+r)^(-n)
PV = 1,000 × (1.047)^(-23) = €347.717
Step 3
Price of bond
= 527.37+ 347.717 = €875.09
Price of bond = €875.09
Loredo Company's net income for 2017 is $50,000. The only potentially dilutive securities outstanding were 1,000 options, each exercisable for one share at $6. None have been exercised, and 10,000 shares of common were outstanding during 2017. The average market price of Loredo's stock during 2017 was $10. The 1,000 options were issued on October 1, 2017. DEPS for 2017 is:__________.
a. $4.8
b. $4.55
c. $4.72
d. $4.95
e. $4.87
Answer:
DEPS for 2017 is: e. $4.87.
Explanation:
Diluted Earnings per Share = Earnings Attributable to Holders of Common Stock ÷ Average Number of Common Stocks Outstanding
Earnings Attributable to Holders of Common Stock = $50,000
Average Number of Common Stocks Outstanding :
Common Stocks Outstanding 10,000
Add Potential Common Stock ; Options (1,000 × 3/12) 250
Average Number of Common Stocks Outstanding 10,250
Thus,Diluted Earnings per Share = $50,000 ÷ 10,250
= $4.87
Required Information
[The following information applies to the questions displayed below]
Park co is considering an investment that requires immediate payment of $26120 and provides expected cash inflows of 8600 annually for four years. Assume park co. requires a 10% return on investments.
What is the net present value of this investment? (PV Of $1. FV of $1, P A of $1, and FVA of $1. Round your present value factor to 4 declmals.)
Answer:
$1140.28
Explanation:
The computation of the net present value of this investment is shown below:-
= Annual Cash flows × Present Value of Annuity Factor (r , n) - Initial Investment
as
Annual cash flows = $8600
Present Value of Annuity Factor (r , n)
r = 10% and n = 4 years
So, the Present Value of Annuity Factor will be the sum of the present value of 4 years at 10%
For Year 1 = 0.9091
For Year 2 = 0.8264
For Year 3 = 0.7513
For Year 4 = 0.6830
Total = 3.1698
Therefore,
Net Present Value = (Cash inflow × Total) -
Initial Investment
= ($8600 × 3.1698) - $26,120
= $27,260.28 - $26,120
= $1140.28
A small town is served by many competing supermarkets, which all have the same constant marginal cost. Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus.
Answer and Explanation:
From the diagram in the picture (please find attached) we see that the competitive price and quantity lies at the marginal cost( which the producer cannot go below). The consumer surplus lies just below the demand curve(the downward sloping curve with) and the producer surplus is above the marginal cost. Note the producer surplus is the difference between what the supplier is willing to sell and how much he actually sells, the marginal cost is the lowest the supplier would want to sell. This applies to the consumer surplus too
The producer surplus region was indicated with vertical strokes in the diagram attached
Brendan is a manager in a chocolate factory. His team works on an assembly line; workers fill boxes that come at a fixed rate of speed. The workers can easily see whether the boxes are filled correctly. Brendan schedules a team meeting to celebrate packing the millionth box.
Brendan’s_______leadership behavior is likely to be______, because_______, ______this leadership behavior.
Answer: people oriented; effective; automatic feedback; has no effect on.
Explanation:
For a people-oriented leader, success is achieved by building a lasting relationships with ones workers. For this leader, even though the tasks are vital, he or she believes that the work culture is more vital.
Based on the analysis in the question,
Brendan’s people oriented leadership behavior is likely to be effective because automatic feedback will have no impact on this leadership behavior.
Ask Socrates, Inc., employees are allowed to dress informally. This is an example of a __________ through which organizational culture is transmitted.
The question is incomplete:
Ask Socrates, Inc., employees are allowed to dress informally. This is an example of a __________ through which organizational culture is transmitted.
A) primary procedure
B) ritual
C) material symbol
D) symbolic act
E) fundamental mechanism
Answer:
C) material symbol
Explanation:
-Primary procedure is a document that indicates employees how to perform a core activity in the business process.
-Ritual refers to a group of acctivities that are performed in a specific way according to an established order.
-Material symbol is a type of non-verbal communication that goes from the employer to the employees that shows the culture of the company.
-Symbolic act is an act that represents an idea without using words.
-Fundamental mechanism refers to a key process that helps people to perform their jobs.
According to this, the answer is that this is an example of a material symbol through which organizational culture is transmitted because a material symbol is a non-verbal form of communication from the employer to the employees and in this case, the company allows employees to dress informally and the organization's culture is communicated through this.
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Net foreign lending would be equal to
Answer:
Net foreign lending would be equal to $4 billion.
Explanation:
This can be computed using the formula for computing the total output of an open economy as follows:
Y = C + G + I + NX .................................. (1)
Where;
Y = Total Output = $35 billion
C = Desired consumption = $15 billion
G = Government purchases = $10 billion
I = Desired investment = $6 billion
NX = Net foreign lending = ?
Substituting the values into equation (1) and solve for NX, we have:
$35 = $15 + $10 + $6 + NX
$35 - $15 - $10 - $6 = NX
NX = $4 billion
Therefore, net foreign lending would be equal to $4 billion.
Maben Company was started on January 1, 2018, and experienced the following events during its first year of operation:
1. Acquired $30,000 cash from the issue of common stock.
2. Borrowed $40,000 cash from National Bank.
3. Earned cash revenues of $48,000 for performing services.
4. Paid cash expenses of $25,000.
5. Paid a $1,000 cash dividend to the stockholders.
6. Acquired an additional $20,000 cash from the issue of common stock.
7. Paid $10,000 cash to reduce the principal balance of the bank note.
8. Paid $53,000 cash to purchase land.
9. Determined that the market value of the land is $75,000.
a. Record the preceding transactions in the horizontal statements model. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first event is shown as an example.
Answer:
sine there is not enough space available, I used an excel spreadsheet.
Explanation:
The last event (9) does not need to be recorded since fixed assets must be reported using their historical value, not their fair market value.
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. The demand curve would
Answer:
D
Explanation:
here is the full question :
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. The demand curve would _________ and the supply curve would__________
a
a. Shift to the right, shift to the left
b. shift to the left, shift to the right
c. shift to the left, shift to the left
d. shift to the right, shift to the right
as a result of the medical study, the demand for bikes would increase. this would shift the demand curve outwards or to the right.
the fall in price of parts needed to make bikes would reduce the cost of making bikes. this would lead to an increase in the supply of bikes. the supply curve would shift outward as a result.
Robin Masters wants to establish an account that will supplement his retirement income beginning 30 years from now. Find the lump sum he must deposit today at 5%, compounded daily, so that $500,000 will be available when he retires. Round your answer to the nearest penny. Show your work using the fx tool.
Answer:
lump sum = $111,576.54
Explanation:
we can use the future value formula:
future value = principal x (1 + i)ⁿ
future value = $500,000i = 5% / 365 = 0.000136986n = 30 x 365 = 10,950principal = future value / (1 + i)ⁿ
principal = $500,000 / (1 + 0.000136986)¹⁰⁹⁵⁰ = $500,000 / 4.481228688 = $111,576.54
Sosa Company reported net income of $190,000 for 2017. Sosa Company also reported depreciation expense of $35,000 and a loss of $5,000 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 increase in prepaid expenses.
Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.
Answer:
$228,000
Explanation:
Preparation of the operating activities section of the statement of cash flows for 2017 for Sosa Company
Sosa Company operating activities section of the statement of cash flows for 2017
Net income $190,000
Add:Depreciation expenses $35,000
Loss on disposal of plant assets $5,000
Increase in accounts payable $17,000
Less: Increase in accounts receivable($15,000)
Increase in prepaid expenses ($4,000)
Net cash flow of the operating activities $228,000
Therefore the operating activities section of the statement of cash flows for 2017 for Sosa Company will be $228,000
A bond has a standard deviation of 10.7 percent and an average rate of return of 6.4 percent. What is the coefficient of variation (CoV)
Answer:
CoV = 1.671875 rounded off to 1.67
Explanation:
The coefficient of variation (CoV) is a measure of volatility of an investment. It tells the volatility in comparison with the expected return from the investment. We can say that the CoV tells us the risk per unit of return as CoV is calculated by dividing standard deviation, which is a measure of risk, by the expected return of the investment.
CoV = SD / r
Where,
SD is the standard deviationr is the expected returnCoV = 0.107 / 0.064
CoV = 1.671875 rounded off to 1.67
1. Name several business etiquette guidelines that promote positive workplace conversations, in the office and at work-related social functions.
2. How can you ensure that your telephone calls on the job are productive? Name at least six suggestions.
3. List at least three guidelines that courteous cell phone users follow to avoid offending others.
Answer:
Please see explanations below
Explanation:
1.
• Ignore or avoid negative remarks when interacting with people either at work or anywhere.
• Give sincere and specific praise to people when they surpass your expectation.
• Always use correct names and titles when addressing people.
• Always choose appropriate topics when sending mails or when communicating.
• Recognize people for good work
• listen to learn in order to be better
2.
• Be smart, cheerful and accurate at all times
• One has to be professional and courteous at all times
• Avoid small or irrelevant talk that can waste too many time hence causes delay in hitting the point of making the call
• Always end the call with a tactful cue without the receiver being offended
• Summarize the points of the call in order to be sure everyone is satisfied with the discussion.
• Plan an agenda to handle calls in-order to know what one has to discuss
3.
• When in a face to face conversation, be sure you pay utmost attention or avoid having divided attention
• One should learn how to lower his or her voice when making calls openly
• Receiving calls when you are already engaged in a face to face conversation is disrespectful hence should not be imbibed.
Labor Input Physical output 10 500 11 600 12 690 13 760 14 800 Refer to the above table, answer the following questions: A. If the price of the good produced is $7, what is the marginal revenue product (MRPL=11) of the 11th worker? B. Suppose the price of the good sold is $10 and the marginal factor cost of labor(MFC) is $700, how many units of labor will the firm hire?
Answer:
Explanation:
Labor Input Physical output
10 500
11 600
12 690
13 760
14 800
marginal output of 11 th labor = 600 - 500 = 100
price of each product = 7
marginal revenue product of 11 th labor 7 x 100 = 700
B )
price of each of the goods sold = 10
marginal factor cost of labour = 700
minimum no of goods to be sold to cover the labour cost
= 700 / 10 = 70
no of goods added due to addition of 11 the labour = 100
no of goods added due to addition of 12 the labour = 90
no of goods added due to addition of 13 the labour = 70
so no of units of labor upto which the firm will continue to hire
= 13 .
King enterprises has an Total Asset Turnover ratio of 5.0, Profit margin of 3%, and a ROE equals to 18%. What is the firm's equity mulitplier (Total Asset/Equity)? Use DuPont Analysis.
Answer: 1.2
Explanation:
The DuPont Analysis is a method of calculating the Return on Equity by using various other ratios. It shows the relatiosnhips between variables in a firm and can help the firm know which areas to target to improve ROE.
Using the DuPont Analysis, the Return on Equity is;
ROE = Profit Margin * Asset Turnover * Equity Multiplier
18% = 3% * 5 * Equity Multiplier
18% = 0.15 * Equity Multiplier
Equity Multiplier = 18%/0.15
Equity Multiplier = 1.2
The company is considering the purchase of machinery and equipment to set up a line to produce a combination washer-dryer. They have given you the following information to analyze the project on a 5-year timeline:
Initial cash outlay is $150,000, no residual value.
Sales price is expected to be $2,250 per unit, with $595 per unit in labor expense and $795 per unit in materials.
Direct fixed costs are estimated to run $20,750 per month.
Cost of capital is 8%, and the required rate of return is 10%.
They will incur all operational costs in Year 1, though sales are expected to be 55% of break-even.
Break-even (considering only direct fixed costs) is expected to occur in Year 2.
Variable costs will increase 2% each year, starting in Year 3.
Sales are estimated to grow by 10%, 15%, and 20% for years 3 - 5.
Then to calculate:
The product’s contribution margin
Break-even quantity
NPV
IRR
Finally:
Explain how the project analyses do or do not support this decision.
In either case, what are the factors that should have been considered in management’s decision?
Answer:
Break-even quantity = 290 units
NPV = -$150,038.78
IRR = -12.07%
This project should be rejected because it has a negative NPV and IRR. You would not be able to even recover your own investment, the sales output is too small.
Explanation:
initial outlay -$150,000
selling price per unit $2,250
production costs:
labor $595materials $795total fixed costs $20,750
contribution margin per unit = $2,250 - ($595 + $795) = $860
contribution margin year 3 = $2,250 - $1,417.80 = $832.20
contribution margin year 4 = $2,250 - $1,446.16 = $803.84
contribution margin year 4 = $2,250 - $1,475.08 = $774.92
in order to calculate the break even point in units we must determine the total fixed costs per year = $20,750 x 12 = $249,000
break even point in units = $249,000 / $860 = 289.5 ≈ 290 units
sales during first year = 290 x 55% = 159.5 ≈ 160 units
sales during second year = 290 units
sales during third year = 290 x 1.1 = 319 units
sales during fourth year = 319 x 1.15 = 366.85 ≈ 367 units
sales during fifth year = 367 x 1.2 = 440.4 ≈ 440 units
net cash flow year 1 = $137,600 - $249,000 = -$111,400
net cash flow year 2 = $249,400 - $249,000 = $400
net cash flow year 3 = $265,471.80 - $249,000 = $16,471.80
net cash flow year 4 = $295,009.28 - $249,000 = $46,009.28
net cash flow year 5 = $340,964.80 - $249,000 = $91,964.80
using a financial calculator and a 10% discount rate, NPV = -$150,038.78 and IRR = -12.07%
In this exercise we have to use finance knowledge to calculate the quantity and taxes calculated on the product, so we have to:
1) [tex]Break-even \ quantity = 290 units\\NPV = -$150,038.78 \\IRR = -12.07%[/tex]
2) This project should be rejected because it has a negative NPV and IRR. You would not be able to even recover your own investment, the sales output is too small.
Given the values in the text of:
Initial outlay [tex]\$150,000[/tex] Selling price per unit [tex]\$2,250[/tex] Labor [tex]\$595[/tex] Materials [tex]\$795[/tex] Total fixed costs [tex]\$20,750[/tex]
Now calculating the margin for each unit we find that:
Contribution margin per unit: [tex]\$2,250 - (\$595 + \$795) = \$860[/tex] Contribution margin year 3: [tex]\$2,250 - \$1,417.80 = \$832.20[/tex] Contribution margin year 4: [tex]\$2,250 - \$1,446.16 = \$803.84[/tex] Contribution margin year 5: [tex]\$2,250 - \$1,475.08 = \$774.92[/tex]Knowing that break even point in units it is worth it 290, we have to:
Sales during year 1: [tex]290 * 55\% = 159.5 = 160 \ units[/tex] Sales during year 2: [tex]290 \ units[/tex]Sales during year 3: [tex]290 * 1.1 = 319 \ units[/tex] Sales during year 4: [tex]319 * 1.15 = 366.85 = 367 \ units[/tex] Sales during year 5: [tex]367* 1.2 = 440.4= 440\ units[/tex]
So to calculate the net cash we found that:
Net cash flow year 1: [tex]\$137,600 - \$249,000 = -\$111,400[/tex] Net cash flow year 2: [tex]\$249,400 - \$249,000 = \$400[/tex] Net cash flow year 3: [tex]\$265,471.80 - \$249,000 = \$16,471.80[/tex] Net cash flow year 4: [tex]\$295,009.28 - \$249,000 = \$46,009.28[/tex] Net cash flow year 5: [tex]\$340,964.80 - \$249,000 = \$91,964.80[/tex]
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