Answer:
C
Explanation:
Product differentiation is a marketing strategy where a company strives to distinguish the products it offers to consumers from other products.
differentiation could be in terms of offering a broad range of products to consumers or offering products of superior quality to consumers or offering better services to customers
A project's incremental cash flow is the difference between the firm's cash flow if it accepts the project versus if it rejects the project. Thus, if a project has an initial cost of $1 million in Year 1 and no other costs or revenues, then the incremental cash flow in that year will be -$1 million. True or false?
Answer:
false
Explanation:
Incremental cash flow is the additional cash flow from a project after the initial investment.
if a project has an initial cost of $1 million in Year 1 and no other costs or revenues, then the incremental cash flow in that year will be 0
A firm has a stock price of $68.00 per share. The firm's earnings are $85 million, and the firm has 20 million shares outstanding. The firm has an ROE of 11% and a plowback of 70%. What is the firm's PEG ratio
Answer:
2.1
Explanation:
A firm has a stock price of $68.00 pet share
The firm's earning are $85,000,000
The firm has $20,000,000 outstanding
They have an ROE of 11% and a Plow back ratio of 70%
The first step is to calculate the EPS
EPS= $85,000,000/$20,000,000
= $4.25
P/E= $68.00/$4.25
= 16
g= 11×70
= 770/100
= 7.7%
Therefore the PEG ratio can be calculated as follows
PEG ratio= 16/7.7
= 2.1
Hence the firm PEG ratio is 2.1
The PEG ratio that is the Price to Earnings Growth ratio is the ratio analytical tool that measures the expected growth in the earnings with the change in the share prices. It determines the valuation of stock amongst various other stocks.
The firms' PEG ratio is 2.1.
Computation:
Given,
Stock price =$68 per share
Total earning =$85,000,000
Outstanding balance =$20,000,000
ROE =11%
Plowback ratio =70%
[tex]\rm{PEG ratio}=\dfrac{\text{P/E}}{\text{Annual Growth rate}}\\\\=\dfrac{\$16}{7.70\%}\\\\=2.1[/tex]
Working Note:
Computation of EPS:
[tex]\rm{EPS}=\dfrac{Total \;Earning}{Outstanding\;Amount}\\\\=\dfrac{\$85,000,000}{\$20,000,000}\\\\=\$4.25[/tex]
Computation of P/E:
[tex]\rm{P/E}=\dfrac{Stock\;Price}{EPS}\\\\=\dfrac{\$68}{\$4.25}\\\\=\$16[/tex]
Computation of annual growth rate:
[tex]\rm{Annual growth rate}=ROE\;\times\;plowback\;period\\\\=11\%\;\times\;70\%\\\\=7.70\%[/tex]
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The current risk-free rate of return ( rRF ) is 4.67% while the market risk premium is 6.63%. The Burris Company has a beta of 0.78. Using the capital asset pricing model (CAPM) approach, Burris’s cost of equity is
Answer:
9.84%
Explanation:
The current risk free rate of return is 4.67%
The market risk premium is 6.63%
Burris company has a beta of 0.78
Therefore, using the capital assets pricing model the cost of equity can be calculated as follows
Cost of equity= Risk free rate+ Beta×Market risk premium
= 4.67%+0.78×6.63%
= 4.67%+5.171
= 9.84%
Hence Burris's cost of equity is 9.84%
ABC issues $10 million in bonds on January 1, 2018. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 1/1/2018 $8,640,967 6/30/2018 $300,000 $345,639 $45,639 8,686,606 12/31/2018 300,000 347,464 47,464 8,734,070 6/30/2019 300,000 349,363 49,363 8,783,433 12/31/2019 300,000 351,337 51,337 8,834,770 What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six month rate. (round to nearest whole percentage, just put in the number with no %)
Answer:
6%
Explanation:
Calculation of the stated annual rate of interest on the bonds
Using this formula
Annual rate of interest = (Cash paid /Bonds Amount)× 2 payments per year
Where,
Cash paid=$300,000
Bonds amount =$10,000,000
Let plug in the formula
Annual rate of interest=($300,000/$10,000,000) × 2 payments per year
Annual rate of interest= 0.03×2 payments per year =6%
Note the 2 payment per year is June 30 and December 31
Therefore stated annual rate of interest on the bonds will be 6%
Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing parts is , which includes fixed costs of and variable costs of . The company can buy the part from an outside supplier for per unit, and avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $ profit. If Harvey Automobiles makes the part, what will its operating income be?
Answer:
$26000 greater than if the company bought the part
Explanation:
The computation of the operating income in case of the making part is shown below:
In making 40,000 parts
The relevant cost is $60,000
In the case when the product is buyed from outsider
Purchase costs ($3 × 40,000) $120,000
Less - avoidable fixed cost ($70,000 × 30%) ($21,000
Less; profit from the sale of another product ($13,000 )
Relevant cost to buy $86,000
Now the difference of cost is
= $86,000 - $60,000
= $26,000
n the context of SWOT analysis, which of the following best exemplifies a firm's external opportunity? an increase in its brand equity an increase in its employee productivity an increase in its customers' disposable income an increase in its financial resources
The correct answer is C. An increase in its customers' disposable income
Explanation:
In businesses, the SWOT analysis helps a business grow and improve by considering its strengths which refer to advantages or qualities; weaknesses or areas to improve; opportunities or factors that can contribute positively; and threats or factors that might influence negatively.
In this context, external opportunities refer to factors beyond the control of the business that can make it grow. This includes an increase in the customers' disposable income, which refers to the money customers can spend as they wish because if customers have more money to spend the sales of the business can increase.
Arbot Co. manufactures appliances at three manufacturing facilities in the United States. Each location has a plant manager who oversees the manufacturing process for that location. Segmented income statements are prepared for each plant and for each product manufactured in the plant. The salary of each plant manager is a ______ for the individual product lines made in the plant.
The correct answer to this open question is the following.
Arbot Co. manufactures appliances at three manufacturing facilities in the United States. Each location has a plant manager who oversees the manufacturing process for that location. Segmented income statements are prepared for each plant and each product manufactured in the plant. The salary of each plant manager is a traceable fixed cost to the plant and a common fixed cost for the individual product lines made in the plant.
The traceable fixed cost for a corporation means that this cost has a relationship between cost and effect related to a particular area or region of the country, or related to a process just operated in a specific location. This traceable fixed cost is part of the equation because there is a peculiar business that includes it. Or there is a necessity to be covered.
Black Oil Company considered building a service station in a new location. The owners and their accountants decided that this was the profitable thing to do. However, soon after they made this decision, both the interest rate and the cost of building the station changed. In which case do these changes both make it less likely that they will now build the station?
A. Interest rates rise and the cost of building the station rises.
B. Interest rates rise and the cost of building the station fills.
C. Interest rates fall and the cost of building the station rises.
D. Interest rates fall and the cost of building the station falls.
Answer:
A. Interest rates rise and the cost of building the station rises.
Explanation:
An increase in interest rate means that the amount of money that will be paid back on a loan borrowed for a given period of time will increase. A risen interest rate discourages borrowing, and spending, as people do not want to pay a lot of money on loans collected. If interest rate increases, the company best postpone the project to a later time when interest rate falls. If the cost of building the new station increases, it means more capital than normal is now needed to build this service station, which will discourage investing in the project at that time period. So an increase in interest rate and cost of building the station, makes it less likely that the company builds the station in this time period.
. Why does Starbucks Coffee consider internal leadership such an important part of its core business process?
Answer:
Starbucks Coffee consider internal leadership an important aspect of its core business because it understands and appreciates the idea of planning for one's own succession.
Explanation:
Internal Leadership can be defined as an ability to oneself. Many times it is a neglected aspect of leadership, but a leader who knows how to lead himself have thriving possibility to lead others as well.
Starbucks Coffee is considered one of the companies in which people like to work. It is because Starbucks Coffee has given much importance to the aspect of internal leadership development. This aspect is usually overlooked in many companies but is accepted and adopted by Starbucks Coffee. The company understands that everyone has right to plan for one's own succession and thus keeps itself prepare for top-level-successors. The company provides an environment growth and becoming a successful leader to the educated employees that come for work in the company.
A market demand curve shows Group of answer choices the sum of all prices that the individual buyers are willing and able to pay for each possible quantity of the good. the relationship between price and the number of buyers in a market.
Answer:
the sum of all prices that the individual buyers are willing and able to pay for each possible quantity of the good.
Explanation:
Market demand refers to the sum of the individual demand for a commodity from all buyers in a given market.
A market demand curve is therefore a graph that shows the the sum of the individual demand for a commodity from all buyers in the market.
Therefore, the correction option is "the sum of all prices that the individual buyers are willing and able to pay for each possible quantity of the good".
Note that the market demand curve is a downward sloping curve due to the fact that there is a negative relationship between price and quantity demanded. That is, as price increases, the quantity demanded decreases. On the other hand, as price decreases, the quantity demanded increases.
Also note that an example of a market demand curve is given in the attached graph. From the graph, it can be seen that when price is [tex]p_{0}[/tex], quantity demanded is [tex]q_{0}[/tex]. But when price falls to [tex]p_{1}[/tex], quantity demanded increased to [tex]q_{1}[/tex]. This shows the negative relationship between price and quantity demanded as explained above.
Nash's Trading Post, LLC had an increase in inventory of $88800. The cost of goods sold was $414400. There was a $22200 decrease in accounts payable from the prior period. Using the direct method of reporting cash flows from operating activities, what were Nash's's cash payments to suppliers?
Answer: $525,400
Explanation:
From the question, we are informed that Nash's Trading Post, LLC had an increase in inventory of $88800, the cost of goods sold was $414400 and that there was a $22200 decrease in accounts payable from the prior period.
Using the direct method of reporting cash flows from operating activities, Nash's's cash payments to the suppliers will be:
= $88,800 + $414400 + $22200
= $525,400
Q 10.29: The current market interest rate for $1,000, 10-year bonds of large corporations in the food industry is 6.3 percent. If a large corporation in the food industry wants to sell $1,000, 10-year bonds with a 4.9% annual interest rate, what type of bond should they consider issuing
Answer:
Convertible bond
Explanation:
Convertible bond refers to the bond in which the investor has an option to convert its bond into another form
By converting the bonds you get the lower interest rate as compared to before.
Therefore as per the given situation, if the one bond contains 6.3% and other contains 4.9% so this represents the convertible bond
5) In a building construction project, 7,500feet of insulated ductwork is required. The ductwork is made from 14-gauge steel costing $8.50 per pound. The 24-inch-diameter duct weighs 15 pounds per foot. Insulation for the ductwork costs $10 per foot. Engineering design will cost $16,000, and labor to install the ductwork will amount to $180,000. What is the total cost of the installed ductwork for this project?
Answer:
$1,227,250
Explanation:
Calculation for the total cost of the installed ductwork for this project
First step is to calculate the costs that have to be estimated based on unit technique for both material and insulation
Material: 7,500ft*15 lb/ft*$8.5/lb=$956,250
Insulation: 7,500ft *$10/ft=$75,000
The next step is to calculate for the Total cost
Engineering design cost $16,000,
Labor $180,000
Material $956,250
Insulation $75,000
Total cost $1,227,250
Therefore the Total cost of the installed ductwork for this project will be $1,227,250
Items that regularly appear on the financial statements of Maple Park Theatres Corp. The amounts shown for balance sheet items are balances as of September 30,2016
Answer:
Financial Statements are the reports of a company which provide detailed information about company financial position. The Income statement reports the company revenues and expense for the period whereas Balance sheet reports the company assets and liabilities position.
Explanation:
The Maple Park Theaters Corp. has reported the net of $133,562 in its income statement. The company has planned for reinvesting the 80% of net income into the extension of park. The reinvestment decision is taken by the company management for the purpose of increase revenue. The decision seems to be correct as extension of park and its services will attract more people to the park and ultimately revenue will increase and so profit too.
Cliff Company traded in an old truck for a new one. The old truck had a cost of $75,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $125,000. Huffington was given a $12,000 trade-in allowance on the old truck, which meant they paid $113,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck
Answer: $125,000
Explanation:
If the above transaction in the question has commercial substance, the recorded value of the new truck will be the trade in allowance of $12,000 on the old truck in addition to the $113,000 that was paid to get the new truck.
Mathematically expressed, this will be:
= $113,000 + $12,000
= $125,000
A Nash equilibrium occurs when: each player receives the same final payoff. each player believes it is doing the best it can given the behavior of rivals. there is no dominant strategy for any player. payoffs are independent of the actions taken by rivals.
Answer:
Option B, “Each player believes it is doing the best it can given the behavior of rivals” , is the right answer.
Explanation:
Option B is correct because Nash equilibrium is the situation where each player is earning the highest payoff and there is no intention to change their optimum strategy. However, if any player changes their strategy then they will get the lower payoff. Therefore, in the Nash equilibrium, each player knows his best moves and also knows the behavior of their competitor.
Scott Company sells merchandise with a one-year warranty. Sales consisted of 2,500 units in Year 1 and 2,000 units in Year 2. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and 70% in Year 2 for the Year 1 sales. Similarly, 30% of repairs will be made in Year 2 and 70% in Year 3 for the Year 2 sales. In the Year 3 income statement, how much of the warranty expense shown will be due to Year 1 sales?
Answer:
$0
Explanation:
Scott Company must record the warranty expense and liability regarding the products sold during the years that they occur. For example, the following journal entry must be made to record the warranty expense for year 1:
Dr Warranty expense 25,000
Cr Warranty liability 25,000
During year 2, they will record the warranty expense for that year:
Dr Warranty expense 20,000
Cr Warranty liability 20,000
That means that during year 3, the only warranty expense recorded will be the one related to the goods sold during that year.
Carlton Company uses the percent of sales method to estimate its bad debt expense. Based on past experience, the company estimates 2 percent of credit sales to be uncollectible. At the end of the current year, the company's unadjusted trial balance shows Accounts Receivable of $245,000 and Credit Sales of $900,000. Prepare the necessary December 31 adjusting entry by selecting the account names and dollar amounts from the drop-down menus.
Answer and Explanation:
The Journal entry is shown below:-
Bad debts expense Dr, $18,000 ($900,000 × 2%)
To Allowance for doubtful accounts $18,000
(Being bad debt expense for the year is recorded)
Here we debited the bad debt expenses as it increased the expenses and we credited the allowance for doubtful accounts as it decrease the value of the assets
"XYZZ ADR represents 10% of the value of an XYZZ ordinary share. The ordinary shares trade on the London Stock Exchange, where the current price is 400 British Pounds (BP). The current exchange rate for the British Pound against the U.S. Dollar is $1.40. The ordinary share pays an annualized dividend of 12 BP, with payment made semi-annually. The XYZZ ADR is listed on the NYSE. If a customer places an order to buy $560,000 of the ADR on the NYSE, how much will the customer receive in each dividend payment?"
Answer:
$8,400
Explanation:
XYZZ ADR = 10% XYZZ ordinary share
Current price of ordinary shares trade = 400 British pounds
Pounds rate against the dollar = $1.40
Annualized Dividend pay = 12 pounds paid semianually
Dividend to be received on the purchase of $560,000 worth of ADR
Therefore ;
To calculate worth of XYZZ ADR
Dollar value of £400
400 * 1.4 = $560
10% of $560 = 10* 560 = $56 per ADR
Therefore, semiannual Dividend payed :
£12 / 2 = £6 every 6 months ; which is equivalent to (£6 * 10%) = £0.6 per ADR
Equivalent dollar value :
0.6 * $1.4 = $0.84 per ADR
AMOUNT OF ORDER TO BE PLACED / price per ADR
$560,000 / $56 = 10,000 shares
Dollar value of Dividend payed per share = $0.84
Dividend customer will receive :
10,000 * $0.84 = $8,400
When a security is being registered under coordination, all of the following are required EXCEPT A) filing with the Administrator of a statement of the maximum and minimum proposed offering price and maximum underwriting discounts or commissions concurrently with the filing of the registration statement with the SEC B) payment of the appropriate fee C) a description of the proposed use of the proceeds of the underwriting D) prompt filing with the Administrator of any amendments filed with the SEC
Answer:
C) a description of the proposed use of the proceeds of the underwriting
Explanation:
When registering security by coordination, it is required that the applicant pays the appropriate fees required by law before the process begins. He is also expected to make proper documentation and filing with the Administrator at the Securities Exchange Commission. Any amendments made in former agreements are to be filed. An undertaking is to be signed by the applicant to document any future amendments.
The applicant is also expected to provide a statement of the maximum and minimum price offering, underwriting discounts, or commissions. Price Amendments are to be filed with the Administrator too. He is not expected to provide a description of the proposed use of the proceeds of the underwriting.
After a couple orally agrees to purchase an appliance at a special price, the salesman tells them he misquoted the price, indicating it was only available for an out-of-stock model with fewer options. The couple then agrees to purchase the appliance at a higher price. It appears that the salesman has effectively used the _____ technique.
Answer:
low-ball technique
Explanation:
Low-ball technique is a method used to persuade buyers make a purchase by offering a product at low price to get the customer to commit. The price is then increased.
This is a method commonly used by sales people.
In the given scenario this was used by the salesman when a couple orally agrees to purchase an appliance at a special price, he tells them he misquoted the price, indicating it was only available for an out-of-stock model with fewer options.
Since the couple had made a commitment to buy the particular appliance, they still buy at the higher price.
Elinor is asked to invest $5100 in a friend's business with the promise that the friend will repay $5610 in one year. Eleanor finds her best alternative to this investment, with similar risk, is one that will pay her $5508 in one year. U.S. securities of similar term offer a rate of return of 7%. What is the opportunity cost of capital in this case
Answer:
the opportunity cost of capital in this case is 8%
Explanation:
From the information given :
Elinor is asked to invest $5100 in a friend's business with the promise that the friend will repay $5610 in one year.
Eleanor finds her best alternative to this investment, with similar risk, is one that will pay her $5508 in one year.
U.S. securities of similar term offer a rate of return of 7%.
The opportunity cost of capital can be determined by using the expression:
[tex]A = P ( \dfrac{1+r}{100})^n[/tex]
where;
A = amount = $5508
P = Principal = $5100
r = opportunity cost of capital = ???
n = number of years = 1 year
[tex]5508= 5100 ( {1+ \dfrac{r}{100})^1[/tex]
[tex]\dfrac{5508}{5100}= ( {1+ \dfrac{r}{100})^1[/tex]
[tex]1.08 = ( {1+ \dfrac{r}{100})[/tex]
[tex]1.08 = \dfrac{100 + r}{100}[/tex]
1.08 × 100 = 100 + r
108 = 100 + r
r = 108 - 100
r = 8%
Therefore; the opportunity cost of capital in this case is 8%
Investments are different from savings accounts in that they A. Offer high profit potential B. Are FDIC-insured C. Guarantee to never lose money D. Can only be accessed online
Answer:
Option A, Offer high-profit potential, is the right answer.
Explanation:
Option A, “Offer high-profit potential” is the current answer because the savings account provides a fixed interest rate and this interest rate is sometimes unable to match the inflation. However, the investments give high profits. Moreover, there is zero risks associated with the savings accounts but there may be the risk involved in the investments. For example, investment in mutual funds given high profit but also involves the market risk.
If the Administrator were examining the actions of a particular agent to determine whether the agent engaged in churning a client's account, focus would be placed upon A) the number of complaints received relating to that agent B) the amount of profits generated in the client's account C) the client's objectives, financial resources, and the character of the account D) the length of time the account had been opened
Answer:
C) the client's objectives, financial resources, and the character of the account
Explanation:
While at the time of examining the actions of a specific agent by the administrator with respect to the commission earned would be depended upon the objective of the client, his financial resources,and the character of the account.
The character of the account represents the type of account in which the client is interest as different accounts have different commissions
So these three above objectives should be required
Hence, the option c is correct
Bill Kroganski is the owner of a moderately successful industrial services firm. His reaction to the introduction of a new process technology that could be a direct competitor to the process his firm utilizes is fear. He spends his time considering ways to isolate his firm from this new technology. Bill has characteristics consistent with the entrepreneurial mind-set.
a) true
b) false
Answer:
False
Explanation:
I've come across this question before.
Assume that a hypothetical economy with an MPC of 0.8 is experiencing severe recession. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion
Answer:
$5 billion
Explanation:
Calculation of how much would government spending have to rise
The MPC will be :0.8
First step
Using multiplier =1/1-0.8
=1/0.2
=5
Second step is to calculate the amount of the rise in government spending
=25/5
=$5 billion
Therefore the amount that the government spending would have to rise to shift the aggregate demand curve rightward by $25 billion will be $5 billion
____ is the efforts to systematically find, organize, and make available a company's intellectual capital and to foster a culture of continuous learning and knowledge sharing so that organizational activities build on what is already known.
Answer: knowledge management
Explanation:
Knowledge management has to do
with the efficient handling of the resources and the information that is within an organization. Organizational objectives and goals can be easily achievable when there is an efficient use of the available knowledge.
Therefore, knowledge management is the efforts to systematically find, organize, and make available a company's intellectual capital and to foster a culture of continuous learning and knowledge sharing so that organizational activities build on what is already known.
Motonous Corporation has completed its fiscal year and reported the following information. The company had current assets of $153,413, net fixed assets of $ 412,331, and other assets of $7,822. The firm also has current liabilities worth $65,314, long-term debt of $178,334, and common stock of $162,000. How much retained earnings does the firm have?
Answer:
The retained earning is $167918.
Explanation:
The current assets of the company = $153413
The net fixed assets = $412331
Other assets of the company = $7822
Current liabilities of the company = $65314
Long term debt = $178334
Common stock = $162000
Retained earnings = total assets - (total liabilities + common stock)
Retained earnings = 153413 + 412331 + 7822 - ( 65314+ 178334+162000)
Retained earnings = $167 ,918
How does price war affect businesses?
Price wars can come at a high cost since it decreases a company's profit margins in the short-term. However, price wars can help companies gain a sizable increase in market share and lead to more profitability in the long-term.
"A 65-year old retired teacher living on a pension has $200,000 invested in 2 year certificates of deposit that are yielding 4%. $20,000 of the CDs are maturing and the customer wants to diversify into an investment that gives a higher return and a moderate level of risk. The BEST recommendation would be:"
Answer:
Equity REIT's
Explanation:
In this scenario, it can be said that the best recommendation would be Equity REIT's. These are Real Estate Investment Trusts. REIT's tend to pay a higher dividend yield than most other types of stocks since they have been structured to generate net rental income. While maintaining the risk level moderate due to the underlying diversification of the trust itself. Therefore since the yield is higher and the risk level moderate this is the best next investment for the teacher to get into.