Answer:
recorded as a debit to the Accounts Receivable account
Explanation:
Five hundred small almond growers operate in areas with plentiful rainfall. The marginal cost of producing almonds in these locations is given by MC = 0.02Q, where Q is the number of crates produced in a growing season. Three hundred almond growers operate in drier areas where costly irrigation is required. The marginal cost of growing almonds in these locations is given by MC = 0.04Q.A. What is the individual supply curve for each type of almond grower? (Hint: remember that supply is the relationship between the quantity supplied and price). b. Using the individual supply curves from part a), derive the market supply curve.c) If the market demand for almonds is Qd = 105,000 - 2,500P, what will the equilibrium price of almonds be? The equilibrium quantity?
d) How many almonds will each type of almond grower produce at that price?
e) Verify that the total production of all almond growers equals the equilibrium quantity you found in part (c).
Answer:
Explanation:
a. The almonds growers will supply the quantity at which price is equal to the marginal cost. For growers with plentiful rainfall, MC = 0.02Q.
P = 0.02Q
Q = 50P
For almond growers that operate in drier areas, MC = 0.04Q
P = 0.04Q
Q = 1/0.04 × P
Q = 25P
b. Market supply curve will be the number total supply multiplied by the growers.
Qs = 500(50p) + 300(25p)
= 25000p + 7500p
= 32500p
c. To find the equilibrium price, quantity demanded must equate the quantity supplied.
Qd = 105,000 - 2,500P
Qs = 32500p
Qd = Qs
105,000 - 2500p = 32500p
32500p + 2500p = 105000
35000p = 105000
p = 105000/35000
p= 3
Equilibrium Price = 3
Since Q = 32500p
Q = 32500 × 3
Equilibrium quantity = 97500
d. For growers with plentiful rainfall
Q = 25000p
= 25000 × 3
= 75000
For almond growers that operate in drier areas, they will produce:
Q = 7500p
= 7500 × 3
= 22500
e. To verify that the total production of all almond growers equals the equilibrium quantity you found in part (c) will be:
75000 + 22500 = 97500
97500 = 97500
It has been verified. It is correct.
Lord Greystroke uses his limited income to purchase fruits and nuts; he is currently buying 10 pounds of fruits at a price of $2 per pound and 5 pounds of nuts at a price of $6 per pound. The last pound of fruits added 10 units to Lord Greystroke's total utility, while the last pound of nuts added 30 units. Lord Greystroke:__________.
1. is making the utility-maximizing choice.
2. should buy more fruits and less nuts because the last pound of fruits cost less than the last pound of nuts.
3. should buy more fruits and less nuts because the last dollar spent on fruits added more to total utility than the last dollar spent on nuts.
4. should buy more nuts and less fruits because the last pound of nuts added more to total utility than the last pound of fruits.
5. should buy more nuts and less fruits because the last dollar spent on nuts added more to total utility than the last dollar spent on fruits.
Answer:
1. Is the answer
Explanation:
the utility-maximizing choice between consumption goods happens where the marginal utility per dollar is the same for both goods, and the consumer has finished his or her budget. By buying 10 pounds of fruits at a price of $2 per pound and 5 pounds of nuts at a price of $6 per pound. The last pound of fruits added 10 units to Lord Greystroke's total utility, while the last pound of nuts added 30 units. Lord Greystroke is utilizing this concept
1 as follows: February 3, year 1 April 15, year 1 May 28, year 1 July 5, year 1 September 30, year 1 Number of shares Purchased (sold) 1,100 2,500 (750) 1,400 (4,000) Price per share $11 9 13 12 15 Janson traded stock in Flax Co. held as trading securities during year No other transactions took place for Flax during the remainder of the year. At December 31, year 1, Flax is trading at $10 per share. Janson trades securities on a last in, first out basis. What amount is the net value of the investment in Flax at year end
Answer: The net value of the investment in Flax at year end = $2,500
Explanation: Given from the question
Year 1 Number of shares Purchased (sold) Price per share
February 3, 1,100 $11
April 15, 2,500 $9
May 28, (750) $13
July 5, 1,400 $12
September 30, (4,000) #15
From the given values above, we can see that
Total number of shares purchased for the year 1 = 1,100 + 2500 +1400= $5000
Total number of shares sold for the year 1 = 4000 + 750 = $4,750
Share Balance = $5000 - $4,750 = $ 250
but flax is trading at $10 per share
Therefore the amount of net value of investment = $250 x $10 = $2,500
A company is considering constructing a plant to manufacture a proposed new product. The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required. It is expected that the product will result in sales of $750,000 per year for 10 years, at which time the land can be sold for $400,000, the building for $350,000, and the equipment for $50,000. All of the working capital would be recovered at the EOY 10. The annual expenses for labor, materials, and all other items are estimated to total $475,000. If the company requires a MARR of 15% per year on projects of comparable risk, determine if it should invest in the new product line. Use the AW method. (Sullivan, 20180327, p. 234) Sullivan, W. G., Wicks, E. M., Koelling, C. P. (20180327). Engineering Economy, 17th Edition. [[VitalSource Bookshelf version]]. Retrieved from vbk://9780134838229 Always check citation for accuracy before use.
Answer:
$327,909.14
Explanation:
Calculation to determine if it should invest in the new product line.
First step
The Investment cost will be:
Land costs $300,000
Building costs $600,000
Equipment costs $250,000
Additional working capital $100,000
=$1,250,000
Annual revenue $750,000
Annual expenses$475,000
Market value:
$400,000 +$350,000 + $50,000 = $80,0000
N: 10 year
MARR: 15% per year
Using PW method
-$1250000 + ($750,000 – $475,000) (P/A, 15%, 10) +$ 80000(P/F, 15%, 10)
-$1250000-$275,000((1+15)^¹⁰−1/15(1+15)^¹⁰+$3000
Hence,
=-$1,250,000 – $275,000(5.0188) + $3000(0.2472)
= $327,909.14
E-Eyes has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. The required return on the stock is 7.75 percent.
Required:
On this stock, how much should you pay today?
Answer:
$63.27
Explanation:
Calculation of how much should you pay on the stock today
First step
The Price of stock 19 years from now will be:.
20/0.075
= 266.67
Second step
The Price of stock today will be :
The price of stock from 19 years from now which is:
250 / (1.075)^19
=250/3.951489
=$63.27
Therefore how much should you pay on the stock today will be $63.27
Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 39,000 for January, 59,000 for February, and 49,000 for March. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows. Commissions 11 % of sales dollars Rent $ 20,000 per month Advertising 12 % of sales dollars Office salaries $ 74,000 per month Depreciation $ 49,000 per month Interest 11 % annually on a $270,000 note payable Tax rate 40 % Prepare a budgeted income statement for this first quarter. (Round your final answers to the nearest whole dollar.)
Answer:
Budgeted Income Statement For Quarter Ended March 31
Sales $3,675,000
Cost of goods sold $1,764,000
Gross profit $1,911,000
Operating expenses
Commissions expense $404,250
Rent expense $60,000
Advertising expense $441,000
Office salaries expense $222,000
Depreciation expense $147,000
Interest expense $ 7,425
Total operating expenses $1,281,675
Income before taxes $629,325
Income tax expense $251,730
Net income $ 377,595
Explanation:
Commissions 11 % of sales dollars
Rent $ 20,000 per month
Advertising 12 % of sales dollars
Office salaries $ 74,000 per month
Depreciation $ 49,000 per month
Interest 11 % annually on a $270,000 note payable
Tax rate 40%
Sales = Number of units for first quarter × price per unit
= (39,000 + 59,000 + 49,000) × $25
= $3,675,000
Cost of goods = (39,000 + 59,000 + 49,000) × $12
= $1,764,000
Commissions expense = 11 % of sales = 11% × $3,675,000 = $404,250
Advertising expense = 12 % of sales = 12% × $3,675,000 = $441,000
Interest expense = 11 % annually on a $270,000
= 11% × 270,000 × 3/12
= $ 7,425
Income = Gross profit - total operating expenses
= $1,911,000 - $1,281,675
= $629,325
Income tax expenses = 40% × $629,325 = $251,730
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $4,600 on each September 30, beginning on September 30, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2018, assuming that an interest rate of 11% properly reflects the time value of money in this situation. Amount recorded
Answer:
Dr purchases $ 15,794.56
Cr notes payable $ 15,794.56
Explanation:
The present value of the annual payments of $4,600, starting in three years' time is computed as shown below:
PV of annual payments=$4600/(1+11%)^3+$4600/(1+11%)^4+$4600/(1+11%)^5+$4600/(1+11%)^6+$4600/(1+11%)^7+$4600/(1+11%)^8=$ 15,794.56
The amount of purchases and notes payable is $ 15,794.56
Rennie Norquist is a recent law school graduate. She is employed at Dillard Dobbs Dooley & Duncan, LLP, a 200 lawyer firm. Rennie is well paid at $98,000 per year. However, she thinks she should be paid overtime for all the hours she works because she spends over 70 hours a week researching the law and writing legal memoranda. Which of the following is a correct statement?
a. Rennie is eligible for overtime under the new FLSA regulations because she makes less than $100,000 per year.
b. Rennie is not eligible for overtime under the new FLSA regulations because, as a professional worker, she is exempt from overtime regulations.
c. Rennie is entitled to overtime because, as a recent graduate, she is in training.
d. None of the above choices is correct.
Answer:
b. Rennie is not eligible for overtime under the new FLSA regulations because, as a professional worker, she is exempt from overtime regulations.
Explanation:
According to the Fair Labor Standards Act (FLSA) certain employees are exempt from overtime regulations:
executives (top management and board of directors)professionals: Rennie falls under this category because she already graduated from law school. administrativecomputerexternal salesAnyone that falls under any of these categories, is exempt from overtime pay and other FLSA regulations.
You are cautiously bullish on the common stock of EXTREME INC over the next several months. The current price of the stock is $59 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: EXTREME INC Underlying Stock price: $59.00 Expiration Strike Call Put June 54.00 9.40 2.45 June59.00 4.95 3.90 June64.00 2.45 8.40 Suppose you establish a bullish money spread with the puts. In June the stock's price turns out to be $62. Ignoring commissions, the net profit on your position is
Answer: $395
Explanation:
A bull put spread is a strategy that is utilized by investors when a moderate rise is being expected in the price of an asset. Investors will purchase put at a lower price and then sells the put option at a strike price that is higher.
In this scenario, the $54 put option will have to be bought and the $64 put option will then be sold.
Profit = Premium received – Premium Paid + Settlement gain/Loss
Since we have been given that the stock's price turns out to be $62 in June, $64 put will be exercised which will lead to ($64 - $62) = $2 loss per option.
The net profit will now be:
= (8.40 - 2.45 - 2) × 100
= 3.95 × 100
= $395
Therefore, the net profit is $395
The accounting department prepares a bank reconciliation at the end of each month. The following Table Dashboard is provided to assist in our reconciliation for the month of November.
Bank Balance is $15000 at 31th Oct.. Bank Balance is $9700 at 15th November. Bank Balance is $16028 at 30th November.
Book Balance is $15000 at 31th Oct. Book Balance is $9100 at 15th November. Book Balance is $16127 at 30th November.
Cash interest received on Bank Balance: Augugst $31, September $24, October $22 November $37.
Total Deposits in Transit November 30: $250
Outstanding Checks at Nov.30: Check#1203 : $100 Check#1278 : $78.
November Bank Fees: Check Printing Fees: $35, Service Fees: $15, Wire Transfer Fees: $14.
1. Determine the company's (a) bank balance and (b) book balance on November 30 before the bank reconciliation.
2. What is the amount of cash interest received in the month of November?
3. Which of the bank fees is the largest of those charged to the company in November?
Answer: Please see explanation for answer
Explanation:
Bank Reconciliation statement for the month of November
Balance from bank statement $16,028
Deposit in transit +250
Outstanding checks
check1203 -100
check 1278 -78
Total outstanding checks - 178
Adjusted cash balance $16,100
Balance from Company account $16,127
Interest earned $37
Bank fees
Check Printing Fees $35,
Service Fees: $15,
Wire Transfer Fees $14
Total Bank fees -64
Adjusted cash balance $16,100
1.The company's
(a) bank balance on November 30 before the bank reconciliation= $16,028
(b) book balance on November 30 before the bank reconciliation =$16,127
2. Amount of cash interest received in the month of November = $37.
3. Bank fees charged in November is given as
Check Printing Fees: $35, Service Fees: $15, Wire Transfer Fees: $14.
The largest here is the Check Printing Fees at $35
Your company is upgrading the breakroom and kitchen. It is going to include an expresso machine, a fridge with compartments for each employee, a sink, microwave, toaster oven, tables chairs, a rock wall, snacks for everyone, and maybe some other bells and whistles. Your managers think that by updating this area employees will not take as long of lunches. They understand this purchase will be at a cost. You are tasked with considering two different options and presenting them to management. Use a 5% interest rate. Walmart Kit Target First Cost $40,000 $65,000Annual Maintenance Cost $10,000 $12,000Salvage Value $12,000 $25,000Life Years 3 6 a. Using NPW (Net Present Worth Analysis) analysis determine which kitchen kit you should chooseb. Using EUAW (Equivalent Uniform Annual Worth) analysis determine which kitchen kit you should choose. C. You really want the Target kit because it looks nicer and has more bells and whistles. You are willing to keep these products around for longer and therefore extend the lives of these products. Perform the analysis to show that the Target option is the better choice. d. Now from your analysis in part b think about how ethical presenting this information to management would be. Write 2-3 sentences about how you would present this information in a way that showed your bias. You will be graded on your ability to consider two options in an ethical comparison and how you perceive your bias.
Answer:
1. In a Year 20,367 20,017
2. In a Year 21,333 21,917
3. In the case of NPW analysis Selected Target is best option because it is the better and cheaper investment while EUAM analysis states Walmart kit is better option,
4.Target is the best option because the cost difference is only around $600 which will last for 6 Years while in walmart case we will need to replace all the furniture in 3 Years .
Explanation:
1. Using NPW Analysis
Walmart Kit Target
Intial Cost 40000 65000
AMC 10000 12000
Salvage Value 12000 25000
Life Years 3 6
Total Cost
Intial Cost 40000 65000
Less Salvage 12000 25000
Balance 28000 40000
5% Interest 6000 19500
AMC PV 2.71 5.05
Amc 27100 60600
Total Cost 61100 120100
In a Year 20,367 20,017
2. Using EUAW Analysis
Walmart Kit
Target
Intial Cost 40000 65000
AMC 10000 12000
Salvage Value 12000 25000
Life Years 3 6
Total Cost
Intial Cost 40000 65000
Less Salvage 12000 25000
Balance 28000 40000
5% Interest 6000 19500
AMC 30000 72000
Total 64000 131500
In a Year 21,333 21,917
In the case of NPW analysis Selected Target is best option because it is the better and cheaper investment while EUAM analysis states Walmart kit is better option,
Target is the best option because the cost difference is only around $600 which will last for 6 Years while in walmart case we will need to replace all the furniture in 3 Years .
Hence Target product will be the best option we would advice the management to go for.
Large private organizational buyers and government agencies make large- volume or large-value purchases through also known as *.reverse auctions viral marketing O online direct marketing O name-your-own-price models O electronic tendering systems
Answer: Electronic tendering system
Explanation:
Electronic tendering system is an internet based method whereby the tendering process is completed. This is typically used.by large organizations or government agencies when they want to make large purchases.
The tendering process from the advertisement to the receiving and submitting of every information that are relating to the tender will be done online.
This method helps in efficiency because it reduces or completely eliminates paper-based transactions which therefore brings about a faster exchange of information.
Definition of economic costs Raphael lives in San Diego and runs a business that sells guitars. In an average year, he receives $722,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. He owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Raphael does not operate this guitar business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Felix’s costs as either an implicit cost or an explicit cost of selling guitars.
a. The wholesale cost for the guitars that Felix pays the manufacturer
b. The rental income Felix could receive if he chose to rent out his showroom
c. The salary Felix could earn if he worked as a paralegal
d. The wages and utility bills that Felix pays
Complete the following table by determining Felix’s accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
Answer:
a. The wholesale cost for the guitars that Felix pays the manufacturer
explicit cost (or accounting cost)b. The rental income Felix could receive if he chose to rent out his showroom
implicit cost (or opportunity cost)c. The salary Felix could earn if he worked as a paralegal
implicit cost (or opportunity cost)d. The wages and utility bills that Felix pays
explicit cost (or accounting cost)Felix's accounting profit = $722,000 - $422,000 - $268,000 = $32,000
Felix's economic profit = accounting profit - implicit costs = $32,000 - ($21,000 + $2,000) = $32,000 - $23,000 = $9,000
Opportunity costs are the extra costs or benefits lost from choosing one activity or investment over another alternative.
On December 1, Novak Corp. has three DVD players left in stock. All are identical, all are priced to sell at $181. One of the three DVD players left in stock, with serial#1012, was purchased on June 1 at a cost of $40. Another, with serial #1045, was purchased on November 1 for $34. The last player, serial #1056, was purchased on November 30 for $33.
(a) Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players were sold by the end of December, Discount Electronics' year-end.
(b) If Discount Electronics used the specific identification method instead of the FIFO method, what would Bargain's cost of goods sold be if the company wished to minimize earnings?
Answer:
Novak Corp.a) Calculation of the cost of goods sold using FIFO:serial#1012 June 1 $40
serial #1045 November 1 $34
Total cost of goods sold $74
b) Calculation of the cost of goods sold under Specific Identification to minimize earnings:serial#1012 June 1 $40
serial #1045 November 1 $34
Total cost of goods sold $74
Explanation:
a) Inventory Summary:
Serial No. Purchase Date Unit Cost
serial#1012 June 1 $40
serial #1045 November 1 $34
serial #1056 November 30 $33
b) For specification identification and in order to minimize earnings, the company would choose report on products with higher costs.
A corporation can earn 7.5% if it invests in municipal bonds. The corporation can also earn 8.30% (before-tax) by investing in preferred stock. Assume that the two investments have equal risk. What is the break-even corporate tax rate that makes the corporation indifferent between the two investments? Assume a 70% dividend exclusion for tax on dividends. (Do not round your intermediate answer and round your final answer to two decimal places.)
Answer:
32.13%
Explanation:
The computation of the break-even corporate tax is shown below:
As we know that
Municipal bond return = preferred stock return before tax × [1 - (1 - dividend exclusion) × Break even corporate tax]
7.5 = 8.30 × [1 - ( 1 - 0.70) × Break even corporate tax ]
7.5 ÷ 8.30 = 1 - 0.30 × Break even corporate tax
0.9036 = 1 - 0.30 × Break even corporate tax
0.30 × Break even corporate tax = 1 - 0.9036
So, Break even corporate tax is
= 0.0964 ÷ 0.30
= 32.13%
Basically we applied the above formula
To calculate the market demand curve from individual demand curves, we: Group of answer choices vertically sum the individual demand curves. horizontally sum the individual demand curves. exponentiate the individual demand curves. add up the prices of the individual demand curves, holding the quantities constant.
Answer:
horizontally sum the individual demand curves.
Explanation:
A company began its operations on April 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for April, May, and June. The company expects to sell 50% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month of the sale, 40% in the month following the sale. The budgeted cash collections in May are:
Answer:
Total cash collection May= $306,000
Explanation:
Giving the following information:
Sales:
April= $250,000
May= $320,000
June= $410,0000
The company expects to sell 50% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month of the sale, 40% in the month following the sale.
Cash collection May:
Sales on cash May= 320,000*0.5= 160,000
Sales on Account May= (160,000*0.6)= 96,000
Sales on Account April= (250,000*0.5)*0.4= 50,000
Total cash collection May= $306,000
Hulston Appliances Co. wants to introduce a new digital display, laser driven iron to the market. The estimated unit sales price is $44.00. The required investment is $88,000. Unit sales are expected to be 8,800 and the minimum required rate of return on all investments is 10.00%. Compute the target cost per iron.
Answer:
Target cost per unit = $43 per unit
Explanation:
Target cost is the cost at which a product must be produced and sold to achieve a desired profit margin
Target cost =(Sales revenue - (ROI × capital) )/ No of units
Target cost =( (44 × 8,800) - (10%× $88,000 ) )/ 8,800 guns
Target cost per unit = (387200 - 8800 ) / 8,800 units= $43 per unit
Target cost per unit = $43 per unit
Check the right boxes in the table below:
Statement Approximate Detailed
Estimates Estimates
A. Requires completed design documents
B. Used for bidding
C. Used for feasibility studies
D. Requires high effort
E. Used for comparing alternative projects or designs
F. Used for project control
G. Quick and has high margin of error
H. Used for making initial financial arrangements
I. Its concept depends on comparing the unit cost to
similar previous projects
J. Its concept depends on actual quantities and estimated
prices for the estimated project
Answer and Explanation:
The approximate estimates refer to the prediction of the nearest value while on the other hand, the detailed estimates refer to the estimation of the project or product that required a detailed analysis
based on the above explanation, the classification is as follows
A. Detailed estimates. As it required completed documents with respect to the design that needs comprehensive analysis
B. Approximate estimates. As the bidding is used so it required only approximation estimates
C. Approximate estimates. As the feasibility studies are used so it required only approximation estimates
D. Detailed estimates. If the project required high effort so detailed analysis should be there.
E. Approximate estimates. For comparing the alternative projects we needed detailed estimates
F. Detailed estimates. For project control, we required nearest value estimates
G. Approximate estimates. Since there is a high margin of error which required only prediction values to the nearest value
H. Detailed estimates. For making initial financial arrangements we need detailed analysis
I.Approximate estimates. For comparing the unit cost with respect to the same last projects we need prediction estimates
J. Detailed estimates. Since the concept based on actual quantities and there is a prediction price for estimating the project so in this we required detailed estimates.
Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 26, it paid the full amount due. The amount of the cash paid on August 26 equals:
Answer:
The journal entries to record the purchase and payment of the merchandise should be:
August 7, merchandise purchased, terms 1/10, n/30
Dr Merchandise inventory 9,750
Cr Accounts payable 9,750
August 11, $1,500 worth of merchandise is returned
Dr Accounts payable 1,500
Cr Merchandise inventory 1,500
August 26, invoice is paid at full amount since discount period expired
Dr Accounts payable 8,250
Cr Cash 8,250
If a firm’s business activities do not result in profit maximization, whilst alternatives exist, then such activities amount to irresponsible actions. Discuss any five sets of economic responsibilities firms must embrace to ensure the protection and enhancement of the business.
Answer:
The five steps of economic responsibilities firms should embrace includes the following: (1) By using resources efficiently (2) Organizational structure (3) Outsource (4) Continuous Improvement (5) Bench-Marking
Explanation:
Solution
The 5 sets of economic responsibilities firms should embrace include the following:
1)Use resources efficiently: Existing resources such as funds, infrastructure, man power,transport must be effective by the companies. Companies must have genuine policies and companies must guarantee that people are following the laid down standards and policies in making sure that operational costs are as low as feasible.
2)Organizational structure: Must guarantee that organizational structure and payoffs are right.
Organizational structure is necessary so as the manpower is not changed and all departments have the needed manpower only. Also, the payment gaps between different must be sufficient instead of excessive. There must not exist a large gap increase rate of average salaries of top executives and average salaries of lower level employees.
3)Outsource: Companies must outsource processes if the cost of outsourcing operations is lower than the cost of internal operations. for this it save a lots of costs.
4)Continuous Improvement: The welcoming of continuous improvement projects in the organizations to minimize the costs of operations shows that costs are saved.
5)Bench marking: Benchmark all the costs against industry leaders and aspire to become the most low cost operator to earn more profits.
Spontaneously generated funds are generally defined as follows: a. Funds that a firm must raise externally through borrowing or by selling new common or preferred stock. b. Assets required per dollar of sales. c. A forecasting approach in which the forecasted percentage of sales for each item is held constant. d. The amount of cash raised in a given year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firm's growth. e. Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include spontaneous increases in accounts payable and accruals.
Answer: e. Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include spontaneous increases in accounts payable and accruals.
Explanation:
Spontaneously Generated Funds are a result of an increase in sales. This then in turn leads to an increase in Accounts Payables, wages to employees and taxes to the Government. For example, if sales rise then the company will buy more from.its suppliers leading to a higher Payables balance.
It is used in the calculation of Additional Funds Needed where it along with an increase in Retained earnings is subtracted from the required increase in sales.
Comparing the expenditure and resource cost-income approachesfor calculating GDP The expenditure and resource cost-income approaches to calculating GDP arrive at the same final number, but they calculate that number in different ways. To illustrate, consider the possible effects of the following transactions on GDP:
1. Alex pays Awesome Foods Market $1,000 to cater his daughter's engagement party. He's attracted by Awesome Foods Market's guarantee that he'll be happy with the catering, or he'll get his money back.
2. Awesome Foods Market pays JoAnn's Catering $900 to cater the party. 3. JoAnn's Catering buys plasticware worth $150 from Kostko.
3. Al's Lawn Care buys grass seed worth $200 from Green Center Nursery.
Compute contributions to GDP, using the expenditure approach. Assume that Green Center Nursery receives the grass seed at no charge and that other costs are zero.
Hint: Add the amount of money spent by buyers of final goods and services.
Which of the following would be included in the expenditure method of calculating GDP? Check all that apply.
a. The Home Station spends $850.
b. Ralph spends $1,200.
c. Al's Lawn Care spends $200.
The total contribution to GDP, measured by the expenditure method, is $______
Now use the following table to compute contributions to GDP, employing the resource cost-income approach. In particular, indicate the costs of intermediate goods and the value added at each stage of production.
Stage of Production Sale Value Cost of Intermediate Goods Resource Cost-Income
Green Center Nursery $200 __________ ______________
Al's Lawn Care $850 __________ __________
The Home Station $1,200 __________ __________
The contribution to GDP that you found using the expenditure approach corresponds to the sum of the___________ at each stage of production.
Answer:
Comparing the expenditure and resource cost-income approaches for calculating GDP
1. Computation of contributions to GDP, using the expenditure approach
1. Alex spends for catering his daughter's party $1,000
3. Al's Lawn Care buys grass seed $200
Total GDP = $1,200
2. Expenditure included in calculating GDP:
b. Ralph spends $1,200.
3. The total contribution to GDP, measure by the expenditure method, is $1,200.
4. Computation of Contributions to GDP, using the resource cost-income approach:
Stage of Sales Value Cost of Resource Cost-Income
Production Intermediate Goods
Primary $200 $0 $200
Intermediate $850 $200 $650
Final $1,200 $850 $350
The contribution to GDP that you found using the expenditure approach corresponds to the sum of the___$1,200________ at each stage of production.
Explanation:
Three different methods can be used to measure a country's GDP (Expenditure, Income and Production), which produce the same amount.
The expenditure method is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.To compute GDP under this method, all of the expenditures made on final goods and services are added up. It is widely used to estimate GDP.
The income approach calculates GDP by adding income from various production factors, including such income components as interest on capital, rent, wages, profit and salaries.
The production approach (output approach), measures GDP as the difference between value of output less the value of goods and services used in producing these outputs during an accounting period.
Section 16 of the 1934 Act prohibits short-swing trading on the part of officers, directors, and controlling shareholders who a. trade their shares in order to invest in another company. b. own more than 10% of the company. c. are also on the board of directors of the company. d. own more than 25% of the company.
Answer:
Option B
Explanation:
In simple word, Section 16 refers to th provision in the Stock Exchange Act of 1934 (SEA) that sets out the report published obligations under which directors, officers and key shareholders are legally obliged under adhere.
As per Section 16, anybody who is a sole beneficiary of even more of some 10 percent of a corporation, explicitly or implicitly, or any chairman or manager of the lender of such a safety, is required to submit the declarations based on section 16.
The 1934 Securities and Exchange act is a federal law governing secondary securities trading across the Us. The wide-ranging law was developed in 1934 as part of an attempt to ensure greater transparency in the financial transactions and less corruption.
Assume you are selling a product in which at a price of $10, you can sell 90 units. When the price increases to $11, you can only sell 63 units. Given this change in price and sales, answer the following:________.
A. What is the price elasticity of demand for your product?
B. Is demand elastic, unit-elastic or inelastic?
C. What is the change in revenue for this product from the price increase?
An investor has examined Home Depot stock and makes the following predictions for the future: YEAR 1 2 3 4 DIVIDEND $1.31 $1.58 $1.54 $1.56 The investor believes the selling price in four years will be $76.25. If the investor wants a 18.00% return to hold the stock, what intrinsic value does the investor put on Home Depot today
Answer: $43.32
Explanation:
The Intrinsic value of Home Depot Stock will be the present value of all the future cashflows from the stock.
Discounting with a rate of 18%, the intrinsic value is;
= 1.31/ ( 1 + 18%) + 1.58 / ( 1 + 18%)² + 1.54/ ( 1 + 18%)³ + 1.56 ( 1 + 18%) ⁴ + 76.25 / ( 1 + 18%) ⁴
= 1.11 + 1.1347 + 0.937 + 0.8046 + 39.3289
= 43.3152
= $43.32
Suppose we hold a forward contract on a stock with expiration 66 months from now. We entered into this contract 66 months ago so that when we entered into the contract, the expiration was T = 1T=1 year. The stock price$ 66 months ago was S_0 = 100S 0 =100, the current stock price is 125125 and the current interest rate is r = 10\%r=10% compounded semi-annually. (This is the same rate that prevailed 66 months ago.) What is the current value of our forward contract? Please submit your answer in dollars rounded to one decimal place so if your answer is 42.67842.678 then you should submit an answer of 42.742.7.
Answer:
The current value of our forward contract is $105.1
Explanation:
According to the given data we have the following:
Spot - 6 months ago=$ 100
Spot - Current=125
Interest rate= 10%
Time=12 months
Therefore, to calculate the current value of our forward contract we would have to make the following calculation:
Forward Price=Spot price*e^(rt)
=$100*e^(0.1*0.5)
Forward Price=$105.1
The current value of our forward contract is $105.1
An agency coupled with an interest means: Select one: a. either party may terminate the agency at any time. b. the agency may not be able to recover the debt in the event of the principal's death. c. the agency is irrevocable without the consent of the agent. d. each party has the power to terminate without breach of contract if done so within 18 months.
Answer:
c. the agency is irrevocable without the consent of the agent.
Explanation:
An agency is a fiduciary relationship in which an individual is appointed as the agent to act for a specific purpose or reason on behalf of another, who is the principal. Basically, in agency the agent is typically acting under the influence or control of his or her principal and as such can be a notable representative of the principal in any capacity deemed fit legally.
Also, the principal could be a corporation, an organization or a limited liability company (LLC) and not necessarily a single individual.
An agency coupled with an interest means the agency is irrevocable without the consent of the agent because the relationship that exists between them is a contractual one.
Hence, the agency is irrevocable before its expiration or without the consent of the agent.
Additionally, death, bankruptcy, and mismanagement by the principal cannot end or terminate an agency coupled with an interest until the agent is able to realize his or her legal interest.
Peanuts are an input in the production of peanut butter. If a decrease in the supply of peanuts increases the price of peanuts, what will happen to the equilibrium price and quantity in the peanut butter market?
Answer:
Equilibrium price would rise
Equilibrium quantity would fall
Explanation:
If the supply of peanuts falls, it would lead to a rise in the price of peanuts because the demand for peanuts woild exceed its supply.
The rise in price would increase the cost of production of peanut butter because peanut is an input in the production of peanut butter. This rise in cost would discourage suppliers and supply of peanut butter would fall. As a result equilibrium quantity would fall. As a result of a fall in supply of peanut butter, demand would exceed supply and equilibrium price would rise.
I hope my answer helps you
Answer:
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Explanation:
Assume that households consume only hot dogs and soda; the average household consumes 12 hotdogs and 20 bottles of soda. In 1995, a hot dog was $0.90 each and soda $0.50 each. In 2003, hotdog price went up to $1.25, and soda price went up to $1.00. If 2003 is the base year, then the price index in 1995 would be:
Answer:
The price index in 1995 would be $59.4
Explanation:
In order to calculate the price index in 1995 we would have to calculate the following formula:
price index in 1995=(Market basket at current year prices/ Market basket at base year prices)*100
Market basket at current year prices=12 hotdogs*price each hotdog+20 bottles of soda*price each bottes of soda
Market basket at current year prices=12 hotdogs*0.9+20 bottles of soda*0.5
Market basket at current year prices=$20.8
Market basket at base year prices =12*1.25+20*1
Market basket at base year prices=$35
Therefore, price index in 1995=($20.8/$35)*100
price index in 1995=$59.4
The price index in 1995 would be $59.4