Available options are:
A. by using internal capital markets as a source of value creation
B. by adding more unrelated businesses into its corporate portfolio
C. by increasing its coordination and influence costs
D. by investing in businesses under the question mark quadrant of the BCG matrix
Answer:
Option A. By using internal capital markets as a source of value creation
Explanation:
The internal capital market is a mechanism of allocation of funds of an organization to its various projects that meets its desired return criteria and is in-accordance with their mission statement.
Option A is correct because the The reason is that if the organization is investing in the projects that will generate greater value by using its funds then it will increase the corporate performance.
Option B is incorrect because investing in unrelated business decreases the risk level associated with the corporate operations and is serious trouble for the company if it doesn't have any prior experience of the unrelated business.
Option C is incorrect because cordination might not bring value to corporations as there are many examples of mismanagement and collapse of corporations in the past.
Option D is also incorrect because almost one third of new businesses collapse every year. The investment in question mark is thus a very risky option and can effect the company by significant losses.
Identify which of the following lists of accounts would belong on the statement of retained earnings.
A. Dividends and Account Payable
B. Retained earnings and Dividends
C. Retained earnings and Cash
D. Service Revenue and Wages Expense
Answer:
B. Retained earnings and Dividends
Explanation:
Retained earnings can be defined as the amount of a business’s profits or net income which isn't distributed to shareholders as dividends but are rather reserved so that it can be reinvested subsequently into the business.
Simply stated, retained earnings of an organization is the profit or net income remaining after paying the shareholders their dividends, which can then be reinvested into the business again. These earnings can be used for fixed or capital expenditures such as buying a new equipment, servicing debt profile, researching and development of the company's products.
A statement of retained earnings is a financial document which is usually prepared by an organization for use by the public such as investors, lenders and creditors. Hence, the statement of retained earnings are typically recorded under the shareholder's equity in order to represent the relationship between the balance sheet and income statement. Also, it is important and required that the statement of retained earnings is prepared in accordance with the Generally Accepted Accounting Principles (GAAP).
The following lists of accounts would belong on the statement of retained earnings;
1. Retained earnings: an amount of money left as profits or accumulated net income.
2. Dividends: an amount of money being paid to shareholders from an organization's net income or profit.
The correct option is : B Retained earnings and Dividends
What is retained earnings?Retained earnings refers to the amount of net income left over for the business after it has paid out dividends to its shareholders. ·
It also refers to the portion of a company's profit that is held or retained from net income at the end of a reporting period and saved for future use.
These earnings can be used for fixed or capital expenditures such as buying a new equipment, servicing debt profile, researching and development of the company's products.
Therefore, Retained earnings and Dividends will belong on the statement of retained earnings.
Learn more about retained earnings here : https://brainly.com/question/25998979
Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create (in the entire mult-banking system), a maximum of:
Answer:
The maximum money created is $50000
Explanation:
The given reserve requirement ratio is = 20 percent
The injection of cash = $10000
So, first, we have to find the money multiplier and then multiply with the injected amount.
Since the reserve requirement is 20 percent so the money multiplier = 1/ 20 = 0.5 or 5.
The Fed can create the maximum money = 10,000 x 5 = 50,000
Assume for a perfectly competitive firm, the market price of one box of tissues is $2. What is the marginal revenue when sales increase from 100 boxes to 200 boxes?
Answer:
The marginal revenue = $2
Explanation:
Firstly we calculate the value in dollars for the number of boxes sold
For 100 boxes, we have 100 * 2 = $200
For 200 boxes, we have 200 * 2 = $400
Mathematically, the marginal revenue = (cost of 200 boxes- cost of 100 boxes)/difference in quantity
= (400-200)/(200-100) = 200/100 = $2
Thus affirms the fact that for a perfectly competitive firm, marginal revenue MR = P (price)
The interest rate on loan would be an effective 5% per semiannual, compounded monthly. What is the APY(annual percentage yield)
Answer:
The APY is 10.43%.
Explanation:
The annual percentage yield (APY) can be described as the real rate of return that is earned on investment or a saving deposit considering the impact of compounding interest. It is different from a simple interest rate that does take into account the effect of compounding interest.
APY can be calculated using the following formula:
APY = [(1 + r)^n] - 1 ............................... (1)
Where, for this question;
r = monthly interest rate = 5% / 6 = 0.83%, or 0.0083
n = Number of compounding periods per year = 2 semiannual in a year * 6 months = 12
Substituting values into equation (1), we have:
APY = [(1 + 0.0083)^12] - 1
APY = 1.1043 - 1
APY = 0.1043, or 10.43%
Therefore, the APY is 10.43%.
Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees?
A. A liquidated debt is involved, and there is an accord and satisfaction.
B. A liquidated debt is involved, and there is an accord but no satisfaction.
C. A liquidated debt is involved, and there is not a satisfaction or an accord.
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
E. An un-liquidated debt is involved, and there is an accord but not satisfaction.
Answer:
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
Explanation:
The impact when debtor offers to pay the different type of payment like goods instead of money, non dispute debt arises when the unliquidated debt is involved that means the amount is owed as mentioned in the contract or it is under dispute
Plus it also accord and satisfaction
Therefore the correct option is d.
The American chocolate wafer and cream cookie most of us know (and love?) is made by Nabisco and sold under the name
Oreo. But an earlier brand of chocolate wafer cream-filled cookie called HydroxTM was sold from 1908 until around 1999.
In 2008 a company called Leaf Brands that specializes in reviving disappeared food items decided to try to bring Hydrox
cookies back. The trademark by that time was owned by the cereal maker Kellogg. Someone from Leaf contacted Kellogg's
consumer affairs office and explained that he was a big fan of Hydrox cookies. He asked if the company had any plans to
bring it back. Kellogg's consumer affairs representative said "Sorry- no plans to ever revive the Hydrox brand." Does this
mean that Leaf Brands is free to use the Hydrox name? Please explain whether trademark law protects (or doesn't) a
trademark that is owned but no longer being used by a company.
Answer:
Leaf Brands is free to use the Hydrox name.
Explanation:
Trademark law protects the trademark that is registered and in use. However, it is not enough to use the trademark, it must be renewed every 10 years if it is in use. Whereas the trademark law allows the trademark to last in perpetuity, unlike copyrights and patents, Kellogg can only enjoy the protection of its trademark if it is renewed every 10 years as long as it continues to be in use.
By practice and in utterance, Kellogg had abandoned its Hydrox trademark. As such Leaf Brands is free to take it up and re-register and use it.
A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for the next four years and 3 percent per year thereafter. The discount rate is 11 percent. Which one of these is correct regarding the two-stage growth formula?
Answer:
12.78
Explanation:
Two stage dividend growth model enables us to identify dividend value by incorporating the effect of multiple growth rates. This model assumes that dividend will pass out through 2 stages of growth. In first stage the dividend grows at a constant rate to a specified time then dividend grows at a further rate.
= Do (1 + g) + D1 (1 +g) + D2 (1 +g) + D3 (1 +g) + D3 * (1 +g2) / (r - g2)
0.4 * 1.2 + 0.48 * 1.2 + 0.6 * 1.2 + 0.7 *1.2 + 0.83 * 1.03 / 11 - 3
= 12.78.
Your company is trying to decide which of the two following devices should be selected.
Device A: costs $1,000 but can save $300 annually
Device B: costs $1,350 but can save $300 the first year, but savings is increased $50 annually thereafter.
Both devices have 5-year useful life and no salvage value
a) Draw cash flow diagram for each option
b) If interest rate is 7%, which device should your company purchase?
Answer:
a) Find the attached jpeg file for the cash flow diagram
b) The company should purchase Device B.
Explanation:
a) Draw cash flow diagram for each option
A project cash flow diagram is a tool that is used to present a visual representation of the cost of a project and cash it is expected to generate over a specified period of time. On the diagram, x-axis represents the year, and y-axis represents cash out flows and/or inflows.
Note: See the attached jpeg for the cash flow diagram.
b) If interest rate is 7%, which device should your company purchase?
To determine this, we compare the Net Present Value (NPV) of the 2 devices.
Note: See the attached excel file for the calculation of the NPVs of the two devices.
From the attached excel file, we have:
NPV of Device A = $230
NPV of Device B = $262
Decision: Since $262 NPV of Device B is greater than the $230 NPV of Device A, the company should purchase Device B.
A customer wishes to place a buy order for a security that has not been registered with the SEC. The security may be purchased if the security:
Complete Question:
A customer wishes to place a buy order for a security that has not been registered with the SEC. The purchase order can be filled if the security:
A. is exempt from SEC registration
B. is traded by at least 2 market makers
C. has been trading in the market for at least 1 year
D. is sold to professional investors
Answer:
Is exempt from SEC registration
Explanation:
The Securities and Exchange Commission (SEC) is a regulatory agency that is saddled with the responsibility of regulating the capital market and ensuring investors are well protected by making sure standard rules are followed.
If a customer wishes to place a buy order for a security that has not been registered with the Securities and Exchange Commission (SEC). The security may be purchased if the security is exempt from SEC registration.
By standard, the SEC states and implore investors to purchase only securities that are registered with the securities and exchange commission (SEC) or only when an exemption is made available. If securities have been trading for about a year or is being traded by a minimum of two companies, no exemption would be given by the SEC.
Also, there isn't any exemption for securities that is sold only to professional investors.
However, investors can purchase municipal and government securities even without it being registered with the securities and exchange commission.
In a nutshell, the customer can only purchase a security that has not been registered only if it is exempted from SEC registration.
On September 1, a company established a petty cash fund of $230. On September 10, the petty cash fund was replenished when there was $81 remaining and there were petty cash receipts for supplies, $53, and postage, $80. On September 15, the petty cash fund was increased to $320.
Required:
Prepare the journal entries, if any, required on September 1, September 10, and September 15. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
September 1, petty cash fund is established
Dr Petty cash fund 230
Cr Cash 230
September 10, petty cash expenses
Dr Supplies expense 53
Dr Postage expense 80
Dr Cash short and over 16
Cr Petty cash fund 149
September 10, petty cash is replenished
Dr Petty cash fund 149
Cr Cash 149
September 15, petty cash fund in increased
Dr Petty cash fund 90
Cr Cash 90
A structural engineering consulting company is examining its cash flow requirements for the next 6 years. The company expects to spend $18,000 two years from now, $22,000 three years from now, and $8,000 five years from now. What is the present worth of the planned expenditures at an interest rate of 10% per year, compounded semiannually
Answer:
The total present value of the expenditures= $36,136.7
Explanation:
Giving the following information:
Cash flows:
Cf2= $18,000
Cf3= $22,000
Cf5= $8,000
We need to calculate the present value of the planned expenditures at an interest rate of 10% per year, compounded semiannually.
i= 0.10/2= 0.05
We will use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf2= 18,000/(1.05^4)= $14,808.65
Cf3= 22,000/(1.05^6)= $16,416.74
Cf5= 8,000/(1.05^10)= $4,911.31
The total present value of the expenditures= $36,136.7
When advertising a test product, should test locations in particular markets be isolated from media with a far reach, such as television?
Answer:
Yes
Explanation:
In a test scenario such as this one, the test locations should be isolated from media with a far reach, such as television. This is mainly due to the fact that if media advertising reaches areas outside the market being tested, it will eventually attract customers from outside the test population which will in term contaminate the data. This can lead to false results, such as a product selling more than it really will.
Country Kitchen's cost of equity is 19.8 percent and its pretax cost of debt is 8.9 percent. What is the firm's weighted average cost of capital if its debt-equity ratio is 0.66 and the tax rate is 46 percent
Answer:
33.17%
Explanation:
WACC = (D/E) rd (1 - tax rate) + (E/D) re
(D/E) = Debt to equity ratio
rd = pretax cost of debt
(E/D) = equity to debt ratio
re = cost of equity
0.66 x 8.9 x 0.54 + 19.8 x 1.52 = 3.17 + 30 = 33.17%
A store has 5 years remaining on its lease in a mall. Rent is $1,900 per month, 60 payments remain, and the next payment is due in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,600 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month).
A. Should the new lease be accepted? (Hint: Be sure to use 1% per month.)
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
Answer:
A. Should the new lease be accepted?
No, since the PV of the new deal is much higher than the PV of the current deal.
current deal's PV = $1,900 x annuity factor (1%, 60 periods) = $1,900 x 44.40459 = $84,368.72
new deal's PV:
$2,600 x annuity factor (1%, 51 periods) = $2,600 x 39.79814 = $104,475.16
$104,475.16 / 1.01⁹ = $95,525.80
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
To determine which lease value would make the store owner indifferent between the two options, we have to determine the future value of the first 9 payments that are not paid. Then that value should be equal to the present value of the increase in rent for the next 51 months:
step 1, calculate future value of 9 payments:
F V = payment x [(1 + r)ⁿ - 1] / r
payment = $1,900 r = 1% n = 9F V = $1,900 x [(1 + 0.01)⁹ - 1] / 0.01 = $17,800
step 2, calculate the present value of the increase in rent:
PV = payment / {1 - [1 / (1 + r)ⁿ] / r}
payment = $17,800r = 1% n = 51PV = $19,674 / ({1 - [1 / (1 + 0.01)⁵¹]} / 0.01) = $17,800 / 39.8 = $447.24
the new lease payment for which the store owner would be indifferent = $1,900 + $447.24 = $2,347.24
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
in order to determine at what WACC would the store owner be indifferent between both alternatives, I used an excel spreadsheet to determine the IRR of the differential amount between both lease amounts:
periods 1 - 9 = -$1,900
periods 10 - 50 = $700
this results in a monthly IRR = 2.74%
WACC = 2.74% x 12 = 32.88%
Assume the total cost of a college education will be $395,000 when your child enters college in 18 years. You presently have $65,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?
Answer:
8.87%
Explanation:
Calculation for the annual rate of interest you must earn on your investment to cover the cost of your child’s college education
Using this formula
FV = PV(1 + r)t
Based on the information we were told to calculate for annual rate of return, this means we would be Solving for r
r = (FV / PV)1 / t– 1
Where,
FV =$300,000
PV=$65,000
=1 / t =1/18 years
Let plug in the formula
r = ($300,000 / $65,000)1/18– 1
r=(4.6153846)^0.055555 -1
r=1.08867-1
r= 0.0887 *100
r=8.87%
Therefore the annual rate of interest you must earn on your investment to cover the cost of your child’s college education will be 8.87%
Which value rolls up the hierarchy to the manager for both customizable and collaborative forecasts?
A. Expected revenue
B. Product quantity
C. Opportunity amount
D. Quota amount
Answer:
A. Expected revenue
Explanation:
The expected revenue determines the production quantity. Thus, making the expected revenue the most important figure for making forecasts. This is why the production budget is not prepared until the sales forecast had been obtained. It is the sales forecast that will determine how much to produce or purchase. It also allies with that customer service mantra that "customer is king." Without sales, an organization cannot survive. Sales bring in the needed funds for improving financial performance and position. Even though, a company incurs costs first before making the sales, but in the order of hierarchy, sales determines everything, including every cost. All costs should be tied to sales.
" When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want
When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want? Nobody asks about them or uses them." David and his bookstore are likely suffering from a:
A. knowledge gap.
B. standards gap.
C. retail policy gap.
D. delivery gap.
E. communications gap.
Answer:
A. knowledge gap.
Explanation:
Knowledge gap is term in business or marketing which describes the difference between the customers' expectations of the service and the company's perception of those expectations.
Hence, knowledge gap arises when a management fails to understand exactly the expectations of customers.
Knowledge gap could occur due to various reasons, some of which are:
1. Lack or inadequate market research.
2. Lack of management and customer interaction.
3. Inability to heed customer complaints.
Hence, in this case, David and his bookstore are likely suffering from a KNOWLEDGE GAP.
A corporation has operating income of $75,000. What is its taxable income if it receives a $20,000 dividend from another corporation in which it has the following ownership?
a. 10% is:
b. 65% is:
c. 90% is:
Answer:
Taxable income is $ 85000, $82000, and $75000
Explanation:
Given operating income = $75000
The dividend received from other corporations = $20000
Dividend received is taxable as, if the percentage of ownership is less than 20 percent then the deduction is 50 percent. If between 20 percent to 80 percent then 65 percent deduction. If more than 80 percent then 100 percent deduction.
a.10 percent ownership.
Taxable income = 75000 + 20000(1 – 50%) = 85000
b.65 percent ownership.
Taxable income = 75000 + 20000(1 – 65%) = 82000
c.90 percent ownership.
Taxable income = 75000 + 20000(1 – 100%) = 75000
Assume that the U.S. one-year interest rate is 3 percent and the one-year interest rate on Australian dollars is 6 percent. The U.S. expected annual inflation is 5 percent, while the Australian inflation is expected to be 7 percent. You have $100,000 to invest for one year and you believe that PPP holds. The spot exchange rate of an Australian dollar is $0.689. What will be the yield on your investment if you invest in the Australian market
Answer:
4%
Explanation:
you invest $100,000 today and purchase A$145,137.88
in one year, you will have A$152,394.78
since the PPP stands, the spot rate in one year should be:
0.703 US$ per A$ (since Australia's inflation rate is 2% higher than the US inflation rate, the Australian dollar will depreciate by 2%)
with your A$152,394.78, you can purchase $107,133.53
if you invested in the US instead, you would have $103,000
this means that your Australian investment yielded ($107,133.53 / $103,000) - 1 = 0.04 or 4%
What are the portfolio weights for a portfolio that has 148 shares of Stock A that sell for $35 per share and 110 shares of Stock B that sell for $24 per share
Answer:
Weight A= 0.6624
Weight B= 0.3376
Explanation:
From the question above,
Stock A has 148 shares at $35
Stock B has 110 shares at $24
The first step is to calculate the total amount of value
= 148($35)+110($24)
= $5,180+$2,640
= $7,820
Therefore the weight of each stock can be calculated as follows
Weight A= 148($35)/$7,820
= $5,180/$7,820
= 0.6624
Weight B= 110($24)/$7,820
= $2,640/$7,820
= 0.3376
Hence the portfolio weights are 0.6624 and 0.3376 respectively.
Schwiesow Corporation has provided the following information:_________. Cost per Unit Cost per PeriodDirect materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:A. $72,000B. $61,000C. $11,000D. $77,000
Answer:
Total product cost= $72,000
Explanation:
Giving the following information:
Direct materials $7.05
Direct labor $3.50
Variable manufacturing overhead $1.65
Total unitary variable cost= $12.2
Fixed manufacturing overhead $11,000
The product costs are the sum of direct material, direct labor, and total manufacturing overhead:
Total product cost= 5,000*12.2 + 11,000
Total product cost= $72,000
It is based on perceived characteristics such as style, fashion or peer acceptance.
Answer:
Consumer buying behavior
Explanation:
Due to various factors that affect consumer's purchase decision, crucial among them is emotional factors.Thus, many consumer marketing put more efforts in creating a stimulating discretionary buying behavior through catchy and enticing advertisement to create and increase demand.
Hence, considering that often times consumer goods are discretionary products people may want but don’t necessarily need, such as entertainment services and vacation travel, it can be concluded that CONSUMER BUYING BEHAVIOR is based on perceived characteristics such as style, fashion or peer acceptance.
Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:
Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)
Answer:
Assets Liabilities Stockholder's Equity
1. Authorizing and issuing Not affect Not affect Not affect
stock certificates in a
stock split
2. Declaring a stock Not affect Not affect Not affect
dividend
3. Issuing stock certificates Not affect Not affect Not affect
for the stock dividend
declared in (2)
4. Declaring a cash dividend Not affect Increase Decrease
5. Paying the cash dividend Decrease Decrease Not affect
declared in (4)
What do economists call the period when prices are rising even through the
quantity of goods and services remains constant?
A. Stagnation
B. Contraction
C. Disinflation
D. Inflation
Answer:
D. Inflation
Explanation:
Inflation-a general increase in prices and fall in the purchasing value of money
The situation when prices are rising even through the quantity of goods and services remains constant, is known as inflation. Thus, the correct option is D). Inflation.
What does the term inflation mean?In economics, the term inflation generally refers to the general increase in the prices of goods and services in an economy. It is the rate of increase in prices over a given period of time.
When the general price level rise in an economy, then the particular and each unit of currency buys fewer goods and services that directly means the inflation corresponds to a reduction in the purchasing power of money.
Thus, it can be said the period when prices are rising even through the quantity of goods and services remains constant, the economists call that period inflation.
Learn more about inflation here:-
https://brainly.com/question/28136474
#SPJ2
26) A tenant wants to lease a building for $50,000 per year. She signs a five-year rental agreement that states that she will pay $25,000 every six months for the next five years. Draw the timeline for her rental payments, assuming she makes the first payment immediately?
Answer:
Please check the attached image for time line
Explanation:
A time orders series of event in a chronological order.
Because the tenant is paying money, it is cash outflow and thus would have a negative sign in front of it.
I hope my answer helps you
The Molding Department of Sheffield Company has the following production data: beginning work in process 25100 units (70% complete), started into production 475500 units, completed and transferred out 449400 units, and ending work in process 51200 units (30% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:
Answer:
Equivalent units= 464,760
Explanation:
Giving the following information:
beginning work in process 25100 units (70% complete)
completed and transferred out 449400 units
ending work in process 51200 units (30% complete).
To calculate the equivalent units for conversion costs, we need to use the following structure:
Beginning work in process = beginning inventory* %incompleted
Units started and completed = units completed - beginning WIP
Ending work in process completed= Ending WIP* %completed
=Number of equivalent units
Beginning work in process = 25,100*0.3= 7,530
Units started and completed = 449,400 - 7,530= 441,870
Ending work in process completed= 51,200*0.3= 15,360
= 464,760
At the date of the business combination, the book values of Spice’s assets and liabilities approximated fair value except for inventory, which had a fair value of, and land, which had a fair value of
Answer:
$830,000.
Explanation:
Step one: determine or Calculate the total number of assets.
Total number of assets = Retained Earnings + inventory(spice) + cash + land fair value + inventory (pumpkin)
Total number of assets = 180,000 + 25,000 + 15,000 + 95,000 + 30,000 = $345,000.
Step two : Calculate or determine the total liabilities.
Total liabilities = retained earnings + bonds payable + Account payable (pumpkin) +
Total liabilities = 180,000 + 40,000 + 10,000 = $230,000.
Step three: determine the value for the total amount of goodwill.
Total amount of Goodwill = A - B
Where A = paid consideration + non controlling interest fair value.= $(210000 + 90000) = $300, 000.
B= acquired Assets - assumed liabilities. = $(345,000 - 230,000) = $115,000.
Total amounts of Goodwill = A - B = $185,000.
Step four: determine the consolidated sheet;
185,000 + 95,000 + 65,000 + 360,000 + 30,000 + 95,000 = $830,000.
Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables.
Person Max Actual
bob 13 8
barly 12 8
bill 11 8
bart 10 8
brent 9 8
betty 8 8
Person Minimum Actual
carlos 3 8
courtney 4 8
chunk 5 8
cindy 6 8
craig 7 8
chad 8 8
Required:
a. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?
c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price?
Answer and Explanation:
a. The equilibrium quantity for the given two tables is
As if the equilibrium price is $8 so the six consumers i.e bob, barly,bill,bart, brent, betty) are paying more than the equilibrium price and on the other hand six producers (carlos, courtney, chunk, cindy, craig, chad) are accepted the price as the equilibrium price is more than the accepted price
Hence, the equilibrium quantity is 6
b. Now if all the buyers are free to ride so the quantity supplied by private sellers is 0 as the minimum accepted price is more than the willingness price as producers is not able to produced
c. At imposing $2 per bag tax on sellers, the new equilibrium price is $9 as the price rise to $9
If P represents the price of goods and services measured in money, then 1/P is the value of money measured in terms of goods and services True False
Answer:
The answer is True
Explanation:
There is an inverse relationship between the price level and value of money (also known as purchasing power). An increase in the price level is the same as an decrease in the value of money.
As the price level decreases money is able to buy more goods and services and as the price level increases, money is able to buy less goods and services. inflation decrease the value of money or consumers' purchasing power.
ZNet co. is a web based retail company. The company reports the following for the past year. The company's CEO believes that sales for next year will increase by 10% and both profit margin and the level of average invested assets will be the same as for the past year
1. Compute return on investment for 20172. Compute profit margin for 20173. If the CEO's forecast is correct, what will return on investment equal for 2018?4. If the CEO's forecast is correct, what will investment turnover equal for 2018?
Answer:
1. 17%
2. 42.5%
3. $2,748,900
4. 44%
Explanation:
1. Return on Investment for 2017
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,499,000}{14,700,000}[/tex]
= 17%
2. Profit Margin 2017
= [tex]\frac{Operating Income}{Sales}[/tex]
= [tex]\frac{2,499,000}{5,880,000}[/tex]
= 42.50%
3. Should the sales increase by 10% in 2018 then the new sales figure will be;
= $5,880,000 + ($5,880,000 *10%)
= $6,468,000
Profit = Sales * Profit Margin
= 6,468,000 * 42.5%
= $2,748,900
Return on Investment for 2018
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,748,900}{14,700,000}[/tex]
= 18.7%
4. Investment turnover equal for 2018
= [tex]\frac{ Sales}{Average Invested Assets}[/tex]
= [tex]\frac{6,468,000}{14,700,000}[/tex]
= 44%