Answer:
Concord Co.
Income Statement
For the Year Ended December 31, 2020
Revenues:
Sales revenue $555,600
Expenses:
Cost of goods sold ($320,200)
Salaries and wages expense ($120,100)
Other operating expenses ($11,210)
Income tax expense ($25,590)
Net income: $78,500
Earnings per share: $0.74
Increase in value of company reputation and unrealized gain on value of patents are not included in this income statement.
The Ethics of Care recognizes that human relationships are often asymmetrical and tries to incorporate this fact into the view by claiming that moral responsibility is partially determined by how vulnerable a person is in a relationship.
a. True
b. False
Answer:
True
Explanation:
Care means meeting the needs of ourselves and others. Ethics of care involves practising virtues as it maintain relationship and promote the well-being of those who give and receive care in social relations. It is hinged on the theory of what makes an action right or wrong.
Ideally, ethics of care is inspired to take care of the less privilege, the dependants and vulnerable. It place relevance on relationships, responsibility, concern over traditional rule. Ethics of care recognize that human relationships are not similar or do not perfectly match up hence incorporate this fact into the view and claiming that moral duty is partially determined by how vulnerable a person is in a relationship.
While ethics of care seems to place emphasis on social well being of vulnerable, yet it has being a foremost part of ethical issues among professionals such as medical practitioners.
sadik inch's bonds currently sell for $1,300 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call
Answer:
5.31%
Explanation:
For computing the yield to call we need to use the RATE formula i.e shown in the attachment below:
Given that,
Present value = $1,300
Future value or Face value = $1,100
PMT = 105
NPER = 5 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the yield to call is 5.31%
Peterson Company estimates that overhead costs for the next year will be $3,400,000 for indirect labor and $850,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 85,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? (Round your answer to two decimal places.)
Answer:
Predetermined manufacturing overhead rate= $50 per machine-hour
Explanation:
Giving the following information:
Estimated overhead costs= $3,400,000 for indirect labor
Estimated overhead costs= $850,000 for factory utilities.
85,000 machine hours are planned for this next year
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (3,400,000 + 850,000) / 85,000
Predetermined manufacturing overhead rate= $50 per machine-hour
Indicate whether each of the statements below about a perfectly competitive market is true or false. a. In general, the market demand curve in a perfectly competitive market is perfectly elastic. False True b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve. True False c. An individual firm in a perfectly competitive market can obtain a higher price for its product by reducing output. True False d. An individual firm in a perfectly competitive market must lower its price to sell more of its product. True False f. In a perfectly competitive market, average revenue is equal to the market price. False True e. In a perfectly competitive market, marginal revenue is equal to the market price. False True
Answer:
A. False
B. True
C. False
D. False
E. True
F. True
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
If a seller increases her price, her demand would fall to zero because customers woild patronize other suppliers. Also, there is no incentive to reduce price because the firm would be making a loss. This is the reason why the firm's demand curve is perfectly elastic, the firm can only sell at one price. This price is set by the market forces.
The market's demand curve is downward sloping
Price = average revenue = Marginal revenue
I hope my answer helps you
In general, the market demand curve in a perfectly competitive market is perfectly elastic.
A. FalseIn general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve.
B. TrueAn individual firm in a perfectly competitive market can obtain a higher price for its product by reducing output.
C. FalseAn individual firm in a perfectly competitive market must lower its price to sell more of its product
D. FalseIn a perfectly competitive market, marginal revenue is equal to the market price.
E. Tr ueIn a perfectly competitive market, average revenue is equal to the market price
F. TrueAccording to the principles of economics, we can see that in a perfectly competitive market, the marginal revenue is equal to the market price and the average revenue is equal to the market price.
A perfectly competitive market is a market where there is equal chances for competitors in an ideal scenario
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College education results in a positive externality for society. Explain whether the market failure that results from this externality is already being addressed with respect to college tuition in Texas.
Answer:
In simple words, positive externalilty refers to the phenomenon under which an etity or an individual takes advanatage of any sctions made bo some other entity. Education helps to make individual build a strong character which further results in overall development of the society.
Free university education in Texas would be good for society in terms of quality education becoming cost effective to everyone and thus everyone would be able to sign up for college degree. This would end up making university education accessible to all and improve their standard of living.
However, on the other hand, free university education might make them take things for granted, and the seriousness of education would be significantly reduced. At the very same period, it will be very costly for the state to employ a professional faculty to provide education.
Given this project and the requirement that the number of resources working on a task cannot be less than the number assigned to the task, answer the following question. What is the least amount of time that the project can be completed and how many resources are required to complete the work?
a. 16 days, 7 workers
b. 7 days, 5 workers
c. 5 days, 7 workers
d. 8 days, 3 workers
Answer: c. 5 days, 7 workers
Explanation: With the project requirements provided, and with the least of number of resources working on the task not less than the number of those assigned to the task.
The least amount of time for the project to complete would be approximately 5 days, and the resources needed to complete the task would be approximately 7 workers.
If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in:_______
A) a Ricardian dilemma.
B) a direct expenditure offset.
C) an increase in real Gross Domestic Product (GDP).
D) a reduction of the government deficit.
Answer:
Option (B) is the correct answer to this question.
Explanation:
As the government spends more money, businesses within the private sector typically spend less.
Specific budget offsets refer to the private-sector expenditures through which compensation was generated as a result of expansionary budgetary policy decisions becoming implemented. The private sector activities in investment profits that counter government spending behavior by the state. Some income from federal spending in an environment competing with corporate companies must be offset by any government expenditure.
Other options are incorrect because they are not related to the given scenario.
The fair values of all of Sirius's assets and liabilities were equal to their book values except for inventory that had a fair value of $85,000, land that had a fair value of $60,000, and buildings and equipment that had a fair value of $250,000. Buildings and equipment have a remaining useful life of 10 years with zero salvage value. Paradox Company decided to employ push-down accounting for the acquisition. Subsequent to the combination, Sirius continued to operate as a separate company. Based on the preceding information, what amount will be present in the revaluation capital account, when consolidating entries are prepared?
Answer:
$0
Explanation:
The fair value is the value above the book value. The financial statements are prepared at historic cost and when the value of assets rises a revaluation account is created to present financial statements accurate. The fair values of Sirius's assets are equal to book value and all assets are presented at cost or book value. There will be no revaluation charged to the consolidated statement.
You come across different kinds businesses every day. The following sentences describes some businesses. Using the description of each business, classify it as a sole proprietorship, a partnership, a corporation, or a Limited liability company/limited liability partnership.
a. Anthony started a tutoring website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement. Anthony had to shut down his business and lost all his personal assets in the process.
b. Willie started a business, based in a different state, with his unde. Due to the business's underperformance, they had to dose the business. Willie, however, ended up losing his house due to a litigation claim.
c. James, the CEO of a beverage company, is required to certify the accuracy of information provided in the company's quarterly reports.
Answer:
The correct answers are:
A - Sole propietorship
B - Partnership
C - Corporation
Explanation:
A) The name of "Sole Propietorship" is refered to a type of enterprise whose main characteristics reside in the fact that the ownership belongs to one person only and that person receives all the profits and is also fully unlimited liable for the debts of the business. Therefore that in that case Anthony started a sole propietorship
B) The name of "Partnership" is refered to a type of enterprise that is characterized for the fact of being a business that is operated and managed by two or more parties that have made a formal arregenment in order to work together and both obtain profits equally and also share the responsibility of the debts and its liability together equally. Therefore that in that case Willie has started a partnership.
C) The name of "Corporation" is refered to a type of enterprise that basically is characterized by the fact of being a different legal person that itw owners and therefore that the ones that own the business do not take unlimited responsibility for the actions of the company and its debts. The most common in this type of companies is that the owners hire many employees, among them, CEOs.
The adjusted trial balance of Ryan Financial Planners appears below.
RYAN FINANCIAL PLANNERS
Adjusted Trial Balance
December 31, 2014
Debit Credit
Cash $2,660
Accounts Receivable 2,140
Supplies 1,850
Equipment 15,900
Accumulated Depreciation-Equipment $3,975
Accounts Payable 3,310
Unearned Service Revenue 3,205
Common Stock 10,000
Retained Earnings 4,510
Dividends 1,000
Service Revenue 4,300
Supplies Expense 410
Depreciation Expense 2,420
Rent Expense 2,920
$29,300 $29,300
Using the information from the adjusted trial balance, you are to prepare for the month ending December 31:
1. An income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
RYAN FINANCIAL PLANNERS
Income Statement
For the Month Ended December 31, 2014
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
2. A retained earnings statement.
RYAN FINANCIAL PLANNERS
Retained Earnings Statement
For the Month Ended December 31, 2014
3. A balance sheet. (List Assets in order of liquidity.)
RYAN FINANCIAL PLANNERS
Balance Sheet
December 31, 2014
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
less
Assets
Liabilities and Stockholders' Equity
Current AssetsLiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesShort-term InvestmentsTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Liabilities and Stockholders
Answer and Explanation:
The preparation is presented below:
1. For income statement
Particulars (in dollars)
Service Revenue 4,300
Less: Supplies Expense 410
Gross Income 3,890
Less: Depreciation Expense 2,420
Less: Rent Expense 2,920
Income Statement ($1,450) i.e net loss
It records expenses incurred and revenues earned
3. For retained earnings statement
Retained Earnings Statement $
Beginning Retained Earnings 4,510
Less: Dividend Paid (1,000)
Less: Net Loss for the year (1,450)
Ending Retained earning 2,060
It records the dividend paid and the net loss for the year
2. For Balance Sheet
Assets $
Non-Current Asset
Equipment (15,900 - 3,975) 11,925
Current Asset
Cash 2,660
Accounts Receivable 2,140
Supplies 1,850
Total current assets 6,650
Total Asset 18,575 (11,925 + 6,650)
Common Stock 10,000
Add: Retained Earnings 2,060
Liabilities
Current Liabilities
Unearned Service Revenue 3,205
Accounts Payable 3,310
Total current liabilities 6,515
Total Equity and Liability 18,575 ($10,000 + $2,060 + $6,515)
It shows the financial position, performance of the company
Star Corp. has a rate of return on assets of 10% and a debt/equity ratio of 2 to 1 before entering into an operating lease. Not including any indirect effects on earnings, when Star Corp. records the operating lease, the immediate impact on these ratios is a(an):
Answer:
The return on assets and debt/equity ratio does not change
Explanation:
An operating lease does not affect assets and liabilities. From the formula:
Equity = Assets - Liabilities, since both assets and liabilities are not affected (they remain unchanged) therefore the equity is also the same.
The debt/ equity ratio = total liabilities/total equity. Since liabilities and equity remain unchanged, therefore The debt/ equity ratio is the same.
Also the return of assets (earnings/assets) remain the same
Duff Inc. paid a 2.69 dollar dividend today. If the dividend is expected to grow at a constant 3 percent rate and the required rate of return is 5 percent, what would you expect Duff's stock price to be 4 years from now?
Answer:
$155.92
Explanation:
Div₀ = $2.69
Div₁ = $2.7707
Div₂ = $2.8538
Div₃ = $2.9394
Div₄ = $3.0276
Div₅ = $3.1184
we need to calculate the stocks terminal value in year 4, and to do that we will use Div₅ and the growing perpetuity formula:
stock price = $3.1184 / (5% - 3%) = $155.92
if we wanted to calculate the current stock price we would use Div₁ in the same formula.
Newport Printing paid a $2.50 dividend over the past year. During the coming year, the dividend is expected to rise by five percent, while the required return on stocks in this risk class is eleven percent. What is the value of Newport Printing
Answer: $43.75
Explanation:
The value of Newport Printing stock can be calculated using the Dividend Growth Model which uses dividends and a growth rate to calculate the value of stock.
Formula is,
P = D( 1 + g) / ( r - g)
P is the price of stock
D is the dividend
g is the growth rate
r is the required return.
P= 2.5( 1 + 0.05) / (0.11 - 0.05)
= 2.625/0.06
= $43.75
Which of the following factors could explain why Regal Industrial Fixtures had a negative net cash flow provided (used) by operations year, even though the cash on its balance sheet increased?
a. The company repurchased 20% of its common stock.
b. The company sold a new issue of bonds.
c. The company made a large investment in new plant and equipment.
d. The company paid a large dividend.e.The company had high amortization expenses.
Answer:
The answer is B.
Explanation:
Option B is correct. When a bond is issued, money comes in and this is under Financing section in the cash flow BUT when an already issued bond is sold, cash goes out from the business and this will be in the operating activities under cash flow.
Option A. is incorrect because this will be under Financing activities in cash flow.
Option C. is incorrect because this will be under investing activities in cash flow.
Option A. is incorrect because this will be under investing activities in cash flow.
Option D is incorrect, this is under the operating activities in cash flow but instead of reducing, it will be added back to the net income.
Cotton On Ltd. currently has the following capital structure: Debt: $3,500,000 par value of outstanding bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 12%. The bond issue has face value of $1,000 and will mature in 20 years.
Answer and Explanation:
This question is incomplete. Kindly find the incomplete question here
Ordinary shares: $5,500,000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm plan just paid a $8.50 dividend per share. The firm is maintaining 4% annual growth rate in dividends, which is expected to continue indefinitely.
Preferred shares: 45,000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 12%
The firm's marginal tax rate is 30%.
Required:
a) Calculate the current price of the corporate bond?
b)Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?
c) Calculate the current price of the preferred share if the average return of the shares in the same industry is 10%
The computation is shown below:
a. For the current price of the corporate bond
Before that first we have to determine the after tax yield to maturity i.e
After tax YTM = Before tax YTM × (1 - tax rate)
= 12% × ( 1 - 30%)
= 12% × (1 - 0.3)
= 12% × (0.7)
= 8.4%
Now
Price of bond = Interest × PVIFA(YTM%,n) + Redemption value × PVIF(YTM%,n)
Interest = 1000 × 10% = $100
YTM% = 8.4%
n = 20
PVIFA(YTM%,n) = [1 - (1 ÷ (1 + r)^n ÷ r ]
PVIFA(8.4%,20) = [1 - (1 ÷ (1 + 8.4%)^20 ÷ 8.4%]
= [1 - (1 ÷ (1 + 0.084)^20 ÷ 0.084]
= [1-(1 ÷ (1.084)^20 ÷ 0.084]
= [1 - 0.1993 ÷ 0.084]
= 0.8007 ÷ 0.084
= 9.5327
PVIF(8.4%,20) = 1 ÷ (1 + 8.4%)^20
= 1 ÷ (1.084)^20
= 0.19926
So, the price of bond is
= $100 × 9.5327 + $1000 × 0.19926
= $953.27 + $199.26
= $1,152.52
b)Price of stock = Dividend of next year ÷ (Required rate of return - growth rate )
where,
Growth rate = 4%
Required rate of return = 9%
The Dividend of next year = Dividend paid × (1 + growth rate)
= 8.50 × (1 + 4%)
= 8.50 × (1 + 0.04)
= 8.50 × (1.04)
= $8.84
Thus the price of the stock is
= $8.84 ÷ (9% - 4%)
= $8.84 ÷ 5%
= $176.80
c) Price of preference shares is
= Dividend ÷ Required rate of return
where,
Dividend = 100 × 12% = $12
And, the Required rate of return = 10%
So, the price of preference shares is
= 12 ÷ 10%
= $120
Hall Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work in process inventory:
Units in beginning work in process inventory 1,000
Materials costs $7,100
Conversion costs $6,400
Percent complete with respect to materials 65%
Percent complete with respect to conversion 30%
Units started into production during the month 13,600
Units transferred to the next department during the month 12,300
Materials costs added during the month $137,224
Conversion costs added during the month $215,050
Ending work in process inventory:
Units in ending work in process inventory 2,300
Percent complete with respect to materials 60%
Percent complete with respect to conversion 25%
The total cost transferred from the first processing department to the next processing department during the month is closest to:______
a. $356,256
b. $380,435
c. $341,325
d. $349,856
Answer:
c. $341,325
Explanation:
First determine the Equivalent Units of Production
Materials
Units completed and transferred (12,300 × 100%) = 12,300
Units in Ending Work In Process Inventory ( 2,300 ×60%) = 1,380
Equivalent Units of Production = 13,680
Conversion
Units completed and transferred (12,300 × 100%) = 12,300
Units in Ending Work In Process Inventory ( 2,300 ×25%) = 575
Equivalent Units of Production = 12,875
Next Determine the Total Cost Incurred during the period
Materials
Cost in Units of Opening Work In Process = $7,100
Incurred during the period = $137,224
Total Cost = $144,324
Conversion
Cost in Units of Opening Work In Process = $6,400
Incurred during the period = $215,050
Total Cost = $221,450
Then Determine the Total Cost per Equivalent unit of Production
Cost per Equivalent unit = Total Cost / Total Equivalent Units
Materials = $144,324 / 13,680
= $10.54
Conversion = $221,450 / 12,875
= $17.20
Total = $10.54 + $17.20 = $27.74
Finally calculate total cost transferred from the first processing department to the next processing department
total cost transferred = Units transferred × Total cost per equivalent unit of production.
= 12,300 × $27.74
= $341,202
Conclusion :
The total cost transferred from the first processing department to the next processing department during the month is closest to $341,325
Kansas Company acquired a building valued at $151,000 for property tax purposes in exchange for 12,000 shares of its $3 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Kansas Company
Answer:
The building would be recorded by Kansas Company for an amount of $216,000
Explanation:
In order to calculate the amount should the building be recorded by Kansas Company we would have to calculate the value of the building with the following formula:
value of the building= shares exchanged*Market value per share
shares exchanged=12,000 shares
Market value per share=$18
Therefore, value of the building=12,000*$18
value of the building=$216,000
The building would be recorded by Kansas Company for an amount of $216,000
Zoe, who is risk averse, purchased flight cancellation insurance which will cover the cost of her non-refundable $500 airline ticket if she is unable to travel due to illness. Zoe faces a 10 percent probability of becoming ill and then using the insurance.a) The fair insurance premium (i.e., selling price) for this insurance is $450.b) Zoe’s maximum willingness to pay for the insurance is $50.c) Zoe’s personal risk premium must exceed the actuarially fair price.d) None of the above.
Answer: Zoe’s maximum willingness to pay for the insurance is $50
Explanation:
From the question, we are informed that Zoe, who is risk averse, bought flight cancellation insurance which will cover the cost of her non-refundable $500 airline ticket if she is unable to travel due to illness wnd also that Zoe faces a 10 percent probability of becoming ill and then using the insurance.
The expected value of the insurance will be the cost of the airline ticket multiplied by the probability of her becoming ill. This will be:
= $500 × 10%
= $500 × 0.1
= $50
Based on the calculation, it can be concluded that Zoe’s maximum willingness to pay for the insurance is $50.
COO, Scott Lawton, discusses Barcelona’s philosophy on allowing restaurant managers to make their own decisions. They hire and train managers that they believe have the "creativity and brain power" to be successful. Scott is performing a(n) informational role.
Answer: Interpersonal Role
Explanation:
In this scenario, Scott Lawton is not performing an Informational role but rather an Interpersonal one.
There are three (3) roles of a manager that involve Interpersonal skills. This includes, Figurehead, Liaison and Leader.
The role of Leader is the relevant role here. Under this role for instance, Managers are supposed to exercise leadership and one way to do that is to hire and train staff to the best of their ability. By hiring Managers and training them, Scott plays the Interpersonal role of Leader to the managers who they then hope will be successful.
Cole Corporation was organized on January 1, Year 1. The company was authorized to issue 100,000 shares of $1 par value common stock. During the year, the company had the following transactions relating to stockholders’ equity: Issued 40,000 shares of common stock at $8 per share. Reported a net income of $60,000. Paid dividends of $30,000. Purchased 5,000 shares of treasury stock at $10 per share. What is total stockholders’ equity at the end of Year 1? Multiple Choice a) $300,000 b) $350,000 c) $400,000 d) $460,000
Answer: a)$300,000
Explanation:
Stockholders Equity shows just how much of the company is being financed by the shareholders. It is calculated by,
Total Stockholders Equity for the Year = Issued and Outstanding Shares + Retained Earnings - Treasury Stock
Retained Earnings = Opening Retained Earnings + Net Income - Dividends
First year of operation so no Opening Retained Earnings.
= $0 + 60,000 - $30,000
= $30,000
Total Stockholders Equity for the Year = (40,000* $8) + $30,000 - (5,000 * 10)
= 320,000 + 30,000 - 50,000
= $300,000
Gladstone Co. has expected sales of $364,000 for the upcoming month and its monthly break even sales are $347,500. What is the margin of safety as a percent of sales, round your percentage answer to two decimal places
Answer:
4.53%
Explanation:
Expected Sales $364,000
Less: Break even sales $347,500
Margin of safety $16,500
Margin of safety in % = Margin of safety / Sales * 100
Margin of safety in % = $ 16,500 / $ 364,000 * 100 = 4.53%
The margin of safety is the financial ratio that measures the amount of sales that exceed the break-even point
Which Sunshine Apartment rental policy is considered legal under the 1968 federal fair housing laws? A) The lease of any tenant who regularly entertains guests of a race different from that of the tenant is canceled. B) Owners can refuse to rent to prospects who have long hair and ride motorcycles. C) Higher deposits are required from single males than from single females who are prospective tenants. D) Advertise exclusively by encouraging the existing tenants, predominately white, to solicit prospects from among friends and associates.
Answer: B) Owners can refuse to rent to prospects who have long hair and ride motorcycles.
Explanation:
The 1968 Federal Fair Housing Laws established that it is illegal to discriminate or refuse housing to a person based on race or color; religion; national origin; familial status or age—includes families with children under the age of 18 and pregnant women; disability or handicap, or sex.
Option A would be considered as a violation of the no discrimination based on race stipulation of the law.
Option C would be a violation of the no discrimination based on sex stipulation of the law.
And Option D would be a subtle violation but nonetheless a violation of the no discrimination based on race stipulation.
Option B is the only option that doesn't seem to break any of the stipulations of the 1968 act.
Suppose that Boeing and Rolls-Royce Holdings are the sole producers of a particular turbo engine. The two firms currently charge the same price for their products. If neither firm reduces the price of its turbo engine, each firm earns $50 million in profit. If both firms reduce their prices, then each firm will earn $10 million in profit. If one firm reduces its price and the other does not, then the firm that reduces price will earn a profit of $70 million while the other firm will earn a profit of $5 million. If the firms can operate as a cartel, what will they do
Answer:
The two firms will manipulate the market in unison, to maintain the same price, which guarantees the optimum benefit for both firms, as opposed to if one or both of them reduces its price.
Explanation:
A cartel is a group of independent market participants that collude with each other in order to improve their profits and dominate the market. Cartels are usually in the same line of business, and they form a type of alliance as competitors. Cartel use price fixing, bid rigging, and reductions in output, to dominate the market and to maximize their profit. They are usually frowned upon in a free market system.
In this case, if the the two firms Boeing and Rolls-Royce operates as a cartel, they will bend the market rules by fixing their prices, instead of letting market drivers like demand and supply to determine their selling price, they might also reduce their output so that they both have the same level of output, or do any other form of manipulation in unison to maintain the same price. This is because both companies will benefit equally if they maintain the same price, as opposed to if one or both of them reduces price.
Which of the following is not descriptive of external environmental scanning? used as a tool for corporations to avoid strategic surprise used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy used to identify major stockholders used to determine a firm's competitive advantage used as a tool to ensure a corporation's long-term health
Answer:
used to identify major stockholders
Explanation:
Environmental scanning is a management strategy that focuses on systematically acquiring informations about occasions, trends, events or patterns through surveys and analysis of these information in an organisation's external and internal environment. The informations acquired through environmental scanning is then used by the executive management in strategically planning the organisation's future and exploitation of available opportunities for the success of the organization.
The internal environmental scanning offers an organization strength and weakness while the external environmental scanning provides information about opportunities and threats.
Generally, the external environmental scanning gives an overview of the opportunities in the market as well as potential threats to an organization.
Hence, the following are descriptive of an external environmental scanning;
1. Used as a tool for corporations to avoid strategic surprise.
2. Used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy.
3. Used to determine a firm's competitive advantage.
4. Used as a tool to ensure a corporation's long-term health.
Consider a firm with an annual net income of $30 million, revenue of $70 million and cost of goods sold of $35 million. If the balance sheet amounts show $3.5 million of inventory and $800,000 of property, plant & equipment, what is the inventory turnover?
a. 12.50
b. 4.44
c. 17.50
d. 5.00
e. 10.00
Answer:
The answer is 5.2 million
Explanation:
Solution
Given that:
The cost of good sold is =$35 million
Inventory = $3.5 million
Thus we compute for the Inventory turnover which is given below:
Inventory turn over ratio (ITR)
=Cost of goods sold/Inventory
=35$million/$3.5 million
=$10 million
So,
The weekly supply = The number of week in a year /ITR
= 52 Weeks/$10 million
=5.2
Therefore the turnover of inventory is 5.2 million which is close to option (d) 5.00
The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 Inventory $ 360,000 Jan. 1 to Dec. 31 Purchases (net) 2,870,000 Sales 4,470,000 Estimated gross profit rate 30% A. Estimate the cost of the inventory destroyed. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. B. In which situations would the gross profit method be useful
Answer:
A. Estimate the cost of the inventory destroyed is $101,000
B. Gross profit method would be useful in estimating the cost of merchandise destroyed by the fire.
Explanation:
Particulars Debit ($) Credit ($)
Beginning merchandise inventory 360,000
Add: Net purchase 2,870,000
Merchandise available for sale 3,230,000
Less: Net sales 4,470,000
Estimated gross profit (30%) (1,341,000)
Estimated cost of merchandise sold 3,129,000
Estimate the cost of the inventory destroyed 101,000
Conroy Copper Mines has $940 million in total liabilities and $620 million in shareholder's equity. It discloses operating lease commitments over the next five years with a present value of $120 million. If the lease commitments are treated as debt, the debt-to-total-capital ratio is closest to:
Answer:
0.63
Explanation:
Total debt = 940 + 120 =1060
Total sharesholder's equity = $620 million
We can find the debt to total capital ratio by dividing debt by total capital
Debt-to-total-capital ratio = Debt / Total capital = 1060 / (1060+620)
Debt-to-total-capital ratio = 0.63
In a safety stock problem where both demand and lead time are variable, demand averages 200 units per day with a daily standard deviation of 25, and lead time averages 5 days with a standard deviation of 2 days. How much safety stock is required for a 90% service level?
Answer:
517 safety stock is required for a 90% service level
Explanation:
In this question, we are tasked with calculating the amount of safety stock required for a 90% service level.
From the question, we can identify the following;
Demand d = 200 units per day
Daily standard deviation = 25
Lead time average = 5 days
Standard deviation of lead time = 2 days
Amount of safety stock = 90%
The z-score for 90%(0.9) confidence interval = 1.28
Mathematically;
Safety stock SS = z × [tex]\sqrt{} \s[/tex](Daily standard deviation)^2(Lead Time) + (standard deviation of lead time)^2(demand)^2
Plugging the values into the equation above, we have;
Safety stock SS = √(25)^2(5) + (2)^2(200)^2
Safety stock SS = 1.28 × √3125 + 160,000
SS = 1.28 × √163,125 = 1.28 × 403.89 = 516.98 which is approximately 517
Finance in an organization
Corporate finance is concerned with the different aspects of a business's financial management. The chief financial officer (CFO) is the top financial position in the organization and oversees several tasks.
The CFO is not responsible for which of the following departments? Check all that apply.
A. Human resources
B. Marketing
C. Production
D. Security analyst relations
E. Accounting
The US Securities and Change Commission (SEC), a US federal agency, is considered to be an investor's advocate. Its purpose is to protect investors, maintain market integrity, and facilitate capital formation. Under the Sarbanes-Oxley Act of 2002, the SEC requires CFOs to certify that the firm's:
A. Growth plans are on track
B. O Shareholders are protected
C. Financial statements are audited
D. Earnings numbers are accurate
Answer and Explanation:
a. In the first case as we know that the Chief Financial Officer ( CFO) is the company's high financial position and supervises several tasks.
But CFO would not be responsible for human resource, marketing and the production as these have the different departments and their manager would deal with it
So first three are not relevant for the CFO
b. According to the Sarbanes-Oxley Act of 2002, The SEC requires CFOs to certify the accuracy of the firm's earnings or we can say it would be correct. Hence, the last option is correct
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.3 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 8% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2021, to record the issuance of the note
Answer:
The journal entry to record the issuance of the promissory note:
October 1, 2021, loan obtained from Midwest Bank
Dr Cash 40,300,000
Cr Notes payable 40,300,000
By December 31, 2021, interests will have accrued. Assuming a 365 day year, accrued interest for 3 months = $40,300,000 x 8% x 82/365 = $724,295.89
December 31, 2021, accrued interest on bank loan
Dr Interest expense 724,295.89
Cr Interest payable 724,295.89