Jim Busby calls his broker to inquire about purchasing a bond of Disk Storage Systems. His broker quotes a price of $1,160. Jim is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 10 percent interest, and it has 20 years remaining until maturity. The current yield to maturity on similar bonds is 8 percent. a. Calculate the present value of the bond. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)
Answers
Answer:
Bond Price or Present value = $1196.362948 rounded off to $1196.36
Explanation:
To calculate the quote/price of the bond today, which is the present value of the bond, we will use the formula for the price of the bond. As the bond is an annual bond, the annual coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 1000 * 0.1 = $100
Total periods (n) = 20
r or YTM = 0.08 or 8%
The formula to calculate the price of the bonds today is attached.
Bond Price = 100 * [( 1 - (1+0.08)^-20) / 0.08] + 1000 / (1+0.08)^20
Bond Price or Present value = $1196.362948 rounded off to $1196.36
Related Questions
Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8.6 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $11.4 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $22.6 million to build, and the site requires $1,010,000 worth of grading before it is suitable for construction.
Required:
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)
Answers
Answer:
$35,010,000
Explanation:
Calculation for the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project
Cash flow = $11.4 million + $22.6 million + $1,010,000
Cash flow = $35,010,000
Therefore the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,010,000
The four primary areas of U.S. legislation dealing with human resource management concern labor relations, compensation and benefits, health and safety, and equal employment opportunity.
a. True
b. False
Answers
Answer: True
Explanation:
The statement that the four primary areas of the U.S. legislation deals with the human resource management concern labor relations, the compensation and benefits, the health and safety, and also equal employment opportunity" is true.
Employees should be managed properly and given the necessary conditions for them to thrive and succeed. The health and safety of workers is vital and should be adequately taken care of. Also, their benefits and compensation should be regularly reviewed and looked into in order to motivate workers and maximize productivity.
Quantity of Flower A Total Utility Marginal Utility Quantity of Flower B Total Utility Marginal Utility 1 16 16 1 30 30 2 30 14 2 46 16 3 42 12 3 61 15 4 52 10 4 75 14 5 60 8 5 88 13 6 66 6 6 100 12 7 70 4 7 111 11 Your mother needs help deciding how many of two kinds of flowers to purchase for a bouquet she is making. She wants to purchase two kinds of flowers: Flower A and Flower B. If the price of Flower A is $2 and the price of Flower B is $3, how many of Flower A should your mother purchase for her bouquet to maximize her utility if she can spend at most $17 on flowers
Answers
Answer:
she should buy 4 As and 3 Bs
Explanation:
utility per dollar
flower A flower B total money spent
1 flower 8 10 $5
2 flowers 7.5 7.67 $10
3 flowers 7 6.78 $15
4 flowers 6.5 $17
total 29 24.45 $17
Communicating Negative News EffectivelyAt some point, everyone will have to deliver bad news. The bad feelings associated with this type of message can be alleviated if the receiver knows the reason for the bad news, feels the news is revealed sensitively, thinks the matter is treated seriously, and believes that the decision is fair. When applying these strategies, make sure to follow the writing process and determine whether to use a direct or an indirect pattern in your message. Read the following scenario:Your company started using shipping company two months ago. During your short relationship with a new the company, you notice that it regularly inflates its shipping rates, fails to meet scheduled deliveries, and loses packages. You decide to write a letter to them ending the business relationship. 1. What are your goals when responding to the previous scenario? A. To encourage follow-up correspondence from the receiver. B. To ensure that the company knows you are angry.C. To convey fairness.D. To avoid creating legal liability for your company.E. To make the receiver understand the bad news.2. Staying calm and using polite language while offering a clear explanation of why the negative message was necessary helps the sender to:___.A. Limit legal liability.B. Be firm in their decision.C. Project a professional image.D. Avoid apologizing.
Answers
Answer:
Communicating Negative News Effectively
1. The goals when responding to the previous scenario is:
E. To make the receiver understand the bad news.
2. Staying calm and using polite language while offering a clear explanation of why the negative message was necessary helps the sender to:___
D. Avoid apologizing.
Explanation:
To effectively communicate negative news to a recipient, the sender needs to clarify her goal. The goal is the purpose that she wants to achieve through the communication. There are many goals one can pursue when delivering negative news. They include avoiding further clarification, legal liability, or erroneous admission of guilt, maintaining relationships, reducing tensions, and achieving the intended outcome.
Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218,000, $224,000, and $238,000 over the next three years, respectively. After that time, they feel the business will be worthless. If the desired rate of return is 14.5 percent, what is the maximum Southern Tours should pay today to acquire Holiday Vacations?
Answers
Answer:
$519,799.59
Explanation:
Discount rate = R = 14.50%
Year Cash flows Discount factor PV of cash flows
1 218,000.00 0.873362 190,393.0131
2 224,000.00 0.762762 170,858.6793
3 238,000.00 0.666168 158,547.9011
Total of PV = NPV = $519,799.59
Note:
Df = 1/(1+R)^Year
PV of cash flows = Cash flows x Df
labor force
200 million
Adults in the military
1 million
Population below 16
50 million
Employed adults
180 million
Institutionalized adults
3 million
Not in labor force
40 million
1. What is the total population? 1 pt. (Show your work)
2. How many people are unemployed, and what is the unemployment rate? 2 pts.
3. What is the labor force participation rate? 1 pt.
Answers
Answer:
not entirely sure if that's how you are suppose to do it. but that's how I would've done it.
The manager of the main laboratory facility at Center is interested in being able to predict the overhead costs each month for the lab. The manager believes that total overhead varies with the number of lab tests performed but that some costs remain the same each month regardless of the number of lab tests performed. The lab manager collected the following data for the first seven months of the year. Number of Lab Total Laboratory Tests Performed Overhead CostsMonth January 2,700 $22,900February 2,500 $23,500March 3,500 $29,800 April 4,000 $32,500May 4,600 $31,100 June 2,250 $22,000 July 2,000 $19,100 1. Use the high-low method to determine the laboratory's cost equation for total laboratory overhead. Use your results to predict total laboratory overhead if 3,200 lab tests are performed next month.2. Use the high-low method to determine UrbanFit's operating cost equation.
Answers
Answer:
Total cost= 9,871 + 4.615*x
x=number of lab tests
Explanation:
To calculate the variable and fixed costs using the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (31,100 - 19,100) / (4,600 - 2,000)
Variable cost per unit= $4.615
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 31,100 - (4.62*4,600)
Fixed costs= $9,871
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 19,100 - (4.615*2,000)
Fixed costs= $9,870
Total cost= 9,871 + 4.615*x
x=number of lab tests
Answer:
you need to use exel to find the awnser
Explanation:
The journal entry to record the transfer of partially completed work in process to the next process in process costing is a(n): Multiple choice question. increase in assets and an increase in liabilities decrease in assets and a decrease in liabilities decrease in one asset and an increase in another asset increase in assets and an increase in equity
Answers
Answer:
decrease in one asset and an increase in another asset increase.
Explanation:
Work-in-process inventories can be defined as a number of partially completed goods which are still in the process of being transformed into finish products that meets the needs of consumers.
Generally, the work-in-process inventories include the following raw materials cost, direct labor cost and factory overhead cost.
These category of products are only partially completed and as such are waiting for further processing, still undergoing fabrication or kept in a buffer storage.
A journal entry involves the process of keeping the records of business transactions made by an organization.
The journal entry is used by bookkeepers and accountants. Ideally, it is important that a journal has all of following informations; date, reference number, debit balance, credit balance and transaction description.
Hence, the journal entry to record the transfer of partially completed work in process to the next process in process costing is a decrease in one asset and an increase in another asset increase.
Ivanhoe Company reports the following operating results for the month of August: sales $392,000 (units 4,900), variable costs $247,000, and fixed costs $96,000. Management is considering the following independent courses of action to increase net income.
1. Increase selling price by 10% with no change in total variable costs or units sold.
2. Reduce variable costs to 57% of sales.
3. Reduce fixed costs by $22,000.
Which course of action wiIl produce the highest net?
Answers
Answer:
The best course of action is to increase the selling price by 10%.
Explanation:
Giving the following information:
sales $392,000 (units 4,900)
variable costs (247,000)
fixed costs (96,000)
Current net income= 49,000
First, we need to calculate the unitary selling price and variable cost:
Selling price= 392,000 / 4,900= $80
Unitary variable cost= 247,000 / 4,900= $50.41
Now, we will calculate the impact on net income of each variation:
Increasing selling price by 10%:
Selling price= 80*1.1= $88
Effect on income= 8*4,900= $39,200 increase
Reduce variable costs to 57% of sales.
Unitary variable cost= 80*0.57= $45.6
Effect on income= (50.41 - 45.6)*4,900= $23,569 increase
Reduce fixed costs by $22,000.
Effect on income= $22,000 increase
Chino Company manufactures fabric and clothing. Managers can either sell the unfinished fabric to other clothing manufacturers or incur additional conversion costs to create a finished garment. The costs incurred to produce the unfinished fabric are $400,000, which are allocated to the products based on the sales value of the unfinished fabric. Following is information concerning the clothing that can be produced from the fabric:
Product # of units Selling price of Unfinished Fabric Selling price after processing further Addtional Processing cost
Pants 6,000 $20.00 $30.00 $28,450
Shirts 12,000 $23.20 $32.40 $64,400
Coats 4,000 $38.80 $43.20 $18,300
Required:
a. Calculate the increase or decrease in profit if the products are processed further.
b. Assume that the $400,000 in costs is allocated based on the number of units of output. Which products should be sold as unfinished fabric and which should be further processed?
Answers
Answer:
a. we have:
Increase in profit of Pants if processed further = $31,550
Increase in profit of Shirts if processed further = $46,000
Decrease in profit of Coats if processed further = -$700
b. We have:
1. Both Pants and Shirts should be processed further.
2. Coats should should be sold as unfinished fabric.
Explanation:
a. Calculate the increase or decrease in profit if the products are processed further.
Note: See the part (a) of the attached excel file for calculation of the increase or decrease in profit if the products are processed further.
In the attached excel file, we have:
Increase in profit of Pants if processed further = $31,550
Increase in profit of Shirts if processed further = $46,000
Decrease in profit of Coats if processed further = -$700
b. Assume that the $400,000 in costs is allocated based on the number of units of output. Which products should be sold as unfinished fabric and which should be further processed?
Note: See the part (b) of the attached excel file for calculation of the increase or decrease in profit if the products are processed further.
In the attached excel file, we have:
Increase in profit of Pants if processed further = $31,550
Increase in profit of Shirts if processed further = $46,000
Decrease in profit of Coats if processed further = -$700
Since both there are increases in the profits of both Pants and Shirts if they are processed further, this implies that both Pants and Shirts should be processed further.
Since there is a decrease in the profits of Coats if it is processed further, this implies that Coats should should be sold as unfinished fabric.
Part U16 is used by Mcvean Corporation to make one of its products. A total of 16,500 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 3.60 Direct labor $ 8.20 Variable manufacturing overhead $ 8.70 Supervisor's salary $ 4.10 Depreciation of special equipment $ 2.50 Allocated general overhead $ 7.70 An outside supplier has offered to make the part and sell it to the company for $27.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part U16 could be used to make more of one of the company's other products, generating an additional segment margin of $28,500 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part U16 from the outside supplier should be:
Answers
Answer:
Financial disadvantage = 45,750
Explanation:
First of all, we need to sort out the data given in this question.
Data Given:
Per Unit Direct materials = $ 3.60
Direct labor = $ 8.20
Variable manufacturing overhead = $ 8.70
Supervisor's salary = $ 4.10
Depreciation of special equipment = $ 2.50
Allocated general overhead = $ 7.70
Offer by outside supplier = $27.50
So,
Cost of making = [(3.60+8.20+8.70+2.50)*16,500]+28,500 (Opportunity cost)
Cost of Making = (23*16,500)+28,500
Cost of Making = 408,000
Cost of buying = 16,500*27.50
Cost of buying = 453,750
Financial disadvantage = Cost of making - Cost of buying
Financial disadvantage = 453,750 - 408,000
Hence,
Financial disadvantage = 45,750
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, "This is a golden opportunity." The mine will cost $3,400,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $575,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $123,000 at the end of year 11.
Required:
What is the IRR for the gold mine? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
IRR
%
Answers
Answer:
19.07%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-3,400,000
Cash flow in year 1 = $575,000
Cash flow in year 2 = $575,000 x 1.08
Cash flow in year 3 = $575,000 x 1.08^2
Cash flow in year 4 = $575,000 x 1.08^3
Cash flow in year 5 = $575,000 x 1.08^4
Cash flow in year 6 = $575,000 x 1.08^5
Cash flow in year 7 = $575,000 x 1.08^6
Cash flow in year 8 = $575,000 x 1.08^7
Cash flow in year 9 = $575,000 x 1.08^8
Cash flow in year 10 = $575,000 x 1.08^9
Cash flow in year 11 = ($575,000 x 1.08^10) - $123,000
IRR = 19.07%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
B. Federal Reserve Chair Jerome Powell has hinted that a long run inflation rate target of 2% is the guide he uses for monetary policy in the long run Appealing to the Quantity Theory of Money, Rep. Doro Green advises Chair Powell to therefore set a money growth rate target of 2% to achieve this long run inflation goal. i.) If the Chair takes the Representative's advice, he_________achieve his long run inflation goal because__________ A. Will not; economic growth is positive in the long run. B. Will not; velocity growth is positive in the long run. C. will real economic growth is positive in the long run. D. Wil; velocity growth is positive in the long run.Why might we have reason to believe that Representative Green received the backing of those in the banking industry in the latest election? Explain with reference to your conclusion above about the results of Chair Powell's taking Representative Green's advice. ii) If Chair Powell takes Representative Green's advice, inflation in the long run will bethan expected, transferring wealth from :________.A. Lower; creditors to debtors B. Higher; debtors to creditors C. Higher; creditors to debtors D. Lower; debtors to creditors
Answers
Answer:
will, real economic growth is positive in the long run.
Lower; creditors to debtors.
Explanation:
Theory of money is the economical view that the inflation is dependent on the money supply in the country. When the money supply is higher then inflation will be lowered and purchasing power of the consumer will be high. When inflation is set to a minimum possible rate then real economic growth will be positive in the long run and negative in the short run.
The following is a list of accounts and adjusted amounts for Rollcom, Inc., for the fiscal year ended September 30, 2018. The accounts have normal debit or credit balances.
Accounts Payable $39,100
Accounts Receivable 66,500
Accumulated Depreciation 21,500
Cash 80,300
Common Stock 94,800
Equipment 90,700
Income Tax Expense 10,500
Notes Payable (long-term) 1,500
Office Expenses 6,300
Rent Expense 164,200
Retained Earnings 99,900
Salaries and Wages Expense 128,700
Sales Revenue 325,600
Supplies 35,200
Prepare the closing entry required at September 30, 2018.
Answers
Answer:
30-Sep-18
Dr Sales revenue 325,600
Cr Income tax expense 10,500
Cr Office expenses 6,300
Cr Rent expense 164,200
Cr Salaries and wages expense 128,700
Retained earnings $15,900
Explanation:
Preparation of the closing entry required at September 30, 2018
30-Sep-18
Dr Sales revenue 325,600
Cr Income tax expense 10,500
Cr Office expenses 6,300
Cr Rent expense 164,200
Cr Salaries and wages expense 128,700
Retained earnings $15,900
(325,600-10,500-6,300-164,200-128,700)
(To record closing entries)
Suppose the Eastwestern University theater department has received $250,000 from the school's endowment fund to put toward scholarships to improve the department and assist theater students entering the program.
Professor Bucktell proposes that they should hold auditions and give $60,000 scholarships to the five most talented applicants in hopes of bringing the best and most promising talent to the school
Professor Rammer thinks that they should divide the money up into $10,000 scholarships to be given to the 25 applicants to the program with the most financial need, regardless of talent.
Professor Buckteil's proposal is an example of economic_________
Professor Rammer's proposal is an example of economic ________
Answers
Answer: Professor Buckteil's proposal is an example of (Economic efficiency).
Professor Rammer's proposal is an example of (Economic equality)
Explanation:
Professor Bucktell's proposal is economic efficiency. This means when the available resources in the economy are shared using the efficient mean possible and the best possible operation that's available.
Professor Rammer's proposal is economic equality. This refers to when everyone is given a fair and equal chance. There's a level playing field for everyone. This can be seen when he said that the money of up to $10,000 scholarships should be given to the 25 applicants to the program with the most financial need, regardless of talent.
alton Corporation is currently selling 104 units of its product. The company is deciding the price that it should charge for a bulk order of 40 units. The variable cost per unit is $200. This order will not involve any additional fixed costs and the company's current sales will not be affected. The company targets a profit of $4,000 on the bulk order. What selling price per unit should the company quote for the bulk order
Answers
Answer:
the selling price per unit is $300
Explanation:
The computation of the selling price per unit is shown below;
= Variable cost + profit needed per unit
= $200 + ($4,000 ÷ $40 units)
= $200 + $100
= $300
hence, the selling price per unit is $300
what are the intermediaries of netflix
Answers
Identification of Audits and Auditors. Audits may be characterized as (a) financial statement audits, (b) compliance audits, (c) economy and efficiency audits, and (d) program audits. The work can be done by independent (external) auditors, internal auditors, or governmental auditors (including IRS auditors and federal bank examiners). Following is a list of the purpose or products of various audit engagements. [Students may need to refer to Chapter 1.]
a. Analyze proprietary schools’ spending to train students for oversupplied occupations.
b. Determine the fair presentation in conformity with GAAP of an advertising agency’s financial statements.
c. Study the Department of Defense’s expendable launch vehicle program.
d. Determine costs of municipal garbage pickup services compared to comparable service subcontracted to a private business.
e. Audit tax shelter partnership financing terms.
f. Study a private aircraft manufacturer’s test pilot performance in reporting on the results of test flights.
g. Periodically have U.S. comptroller of currency examine a national bank for solvency.
h. Evaluate the promptness of materials inspection in a manufacturer’s receiving department.
i. Report on the need for the states to consider reporting requirements for chemical use data.
j. Render a public report on the assumptions and compilation of a revenue forecast by sports stadium/racetrack complex.
Required:
Prepare a three-column schedule showing (1) each of the engagements listed, (2) the type of audit (financial statement, compliance, economy and efficiency, or program), and (3) the
kind of auditors you would expect to be involved.
Answers
Answer:
Audit Engagements Type of Audit Kind of Auditors
a. Economy and efficiency Governmental auditors
b. Financial statement audit External auditors
c. Economy and efficiency Governmental auditors
d. Economy and efficiency Internal auditors
e. Compliance audit Governmental auditors
f. Compliance audit Internal auditors
g. Compliance audit Governmental auditors
h. Economy and efficiency Internal auditors
i. Program audit Governmental auditors
j. Financial statement audit External auditors
Explanation:
a) Data and Analysis:
Types of audit:
(a) financial statement audits = check conformity with standards.
(b) compliance audits = ensure that laid-down rules are being followed.
(c) economy and efficiency audits = resource and process improvement.
(d) program audits = performance analysis to determine effective achievement of goals.
Kind of auditors:
1. independent (external) auditors = independent consultants
2. internal auditors are company employees
3. governmental auditors (including IRS auditors and federal bank examiners)
Suppose you are an aide to a U.S. Senator who is concerned about the impact of a recently proposed excise tax on the welfare of her constituents. You explained to the Senator that one way of measuring the impact on her constituents is to determine how the tax change affects the level of consumer surplus enjoyed by the constituents. Based on your arguments, you are given the go-ahead to conduct a formal analysis, and obtain the following estimates of demand and supply:
Qd=500-5P
Qs-2P-60
(a) What are the equilibrium quantity and equilibrium price? Graph your solution.
(b) If a $2 excise tax is levied on this good, what will happen to the equilibrium price and quantity? Show the changes in your graph from part (a).
(c) How much tax revenue does the government earn with the $2 tax?
Answers
Answer:
(a) P = 80 and Q= 100
(b) P = 80.57 and Q= 97.15
(c) Tax revenue = 194.3
Explanation:
Qd= 500 - 5P
Qs = 2P - 60
(a)
In equilibrium
[tex]Qd = Qs \\500 - 5P = 2P - 60 \\7P = 560 \\P = 80 \\[/tex]
Putting this value of P back into the Qd or Qs equation
[tex]Qd = 500 - 5p\\Q = 500 - 5 (80) \\Q = 500 - 400 \\Q = 100[/tex]
Thus, equilibrium price is 80 and equilibrium quantity is 100
(b)
When a tax is imposed the supply curve shifts up to the left by the amount of the tax. The new supply curve is given by
[tex]Qs = 2(P-2) - 60 \\Qs = 2p - 4 - 60 \\Qs = 2P - 64[/tex]
The new equilibrium is
[tex]Qd = Qs \\500 - 5P = 2P - 64 \\7P = 564\\P = 80.57 \\[/tex]
Substitute it into Qs or Qd we get
[tex]Q = 500 - 5 (80.57 ) \\Q = 97.15[/tex]
(c)
[tex]Tax revenue = Tax rate * Quantity \\ = 2 * 97.15\\ = 194.3[/tex]
a. At equilibrium the quantity demanded is equal to the quantity that was supplied.
Qd = Qs
500 - 5p = 2p - 60
We collect like terms from here
500+60 = 2p+5p
560 = 7p
p = 560/7
p = 80 dollars.
Therefore the equilibrium price is 80 dollars.
The equilibrium quantity
Qd = 500 - 5p
= 500-5*80
= 500-400
= 100
The equilibrium quantity is 100
b. Qs = 2p+60
2p = Qs + 60
divide through by 2
p = 0.5Qs + 30
P = 0.5Qs + 30 + t
where we have tax = t = 2
= 0.5Qs + 30 + 2
= 0.5Qs + 32
p - 32 = 0.5Qs
divide through by 0.5
Qs = 2p - 64
The demand function is still the same at Qd = 500 - 5P.
At equilibrium: Qd = Qs
2P- 64 = 500-5P
collect like terms
7P = 500+64
7P = 564
divide through by 7
P = 564/7
P = $80.57
When we put this in the demand function
Q = 500-5P
Q = 500-5*80.57
Q = 97.14
This is the equilibrium quantity
500-5*80.57
= 400-402.85
= 97.15 dollars
c. the tax revenue = 2x97.15
= 194.3 dollars
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If in the textile markets we know that two brands, X and Z, are substitutes. Suppose that the supply of X increases and, at the same time, the supply of the Z decreases. Other things being equal, what would be the expectations for the change in the equilibrium quantities in the two markets
Answers
Answer:
Equilibrium quantity of X increases and that of z decreases.
Explanation:
If two goods are substitutes then 1 can be used in the place of the other. As supply of Z falls, we would have market demand to be greater than supply. This brings about a price rise. The price rise will make consumers of Z to want it less and opt for a cheaper good X. Increase in the demand for X causes its supply to rise in the market.
So we would have increase in equilibrium quantity of X and that of Z would fall.
4. The real interest rate is 3 percent, and the nominal interest rate is 5 percent. What is the anticipated rate of inflation? 1
pt.
Answers
Elliptical Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended June 30, 20Y6: Elliptical Consulting End-of-Period Spreadsheet For the Year Ended June 30, 20Y6 Unadjusted Adjusted Trial Balance Adjustments Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 15,780 15,780 Accounts Receivable 37,570 37,570 Supplies 3,980 (a) 3,340 640 Office Equipment 30,810 30,810 Accumulated Depreciation 4,170 (b) 1,990 6,160 Accounts Payable 10,140 10,140 Salaries Payable (c) 490 490 Jayson Neese, Capital 38,320 38,320 Jayson Neese, Drawing 4,880 4,880 Fees Earned 71,580 71,580 Salary Expense 28,180 (c) 490 28,670 Supplies Expense (a) 3,340 3,340 Depreciation Expense (b) 1,990 1,990 Miscellaneous Expense 3,010 3,010 124,210 124,210 5,820 5,820 126,690 126,690
Answers
Question Completion:
Prepare income statement, statement of owners' equity, and a balance sheet.
Answer:
Elliptical Consulting
1. ELlIPTICAL CONSULTING
Income Statement for the year ended June 30, 2076:
Fees Earned $71,580
Salary Expense 28,670
Supplies Expense 3,340
Depreciation Exp. 1,990
Miscellaneous Exp. 3,010 37,010
Net Income $34,570
Statement of Owners' Equity for the year ended June 30, 20Y6:
Jayson Neese, Capital $38,320
Net Income 34,570
Jayson Neese, Drawing (4,880)
Jayson Neese, Equity $68,010
Balance Sheet as of June 30, 20Y6:
Assets:
Cash $15,780
Accounts Receivable 37,570
Supplies 640 $53,990
Office Equipment 30,810
Accumulated Depreciation 6,160 $24,650
Total assets $78,640
Liabilities + Equity:
Accounts Payable $10,140
Salaries Payable 490
Total liabilities $10,630
Jayson Neese, Capital $68,010
Total liabilities and equity $78,640
Explanation:
a) Data and Calculations:
Elliptical Consulting End-of-Period Spreadsheet For the Year Ended June 30, 20Y6
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,780 15,780
Accounts Receivable 37,570 37,570
Supplies 3,980 (a) 3,340 640
Office Equipment 30,810 30,810
Accumulated Depreciation 4,170 (b) 1,990 6,160
Accounts Payable 10,140 10,140
Salaries Payable (c) 490 490
Jayson Neese, Capital 38,320 38,320
Jayson Neese, Drawing 4,880 4,880
Fees Earned 71,580 71,580
Salary Expense 28,180 (c) 490 28,670
Supplies Expense (a) 3,340 3,340
Depreciation Exp. (b) 1,990 1,990
Miscellaneous Exp. 3,010 3,010
Totals 124,210 124,210 5,820 5,820 126,690 126,690
Adjusted
Trial Balance
Account Title Dr. Cr.
Cash 15,780
Accounts Receivable 37,570
Supplies 640
Office Equipment 30,810
Accumulated Depreciation 6,160
Accounts Payable 10,140
Salaries Payable 490
Jayson Neese, Capital 38,320
Jayson Neese, Drawing 4,880
Fees Earned 71,580
Salary Expense 28,670
Supplies Expense 3,340
Depreciation Exp. 1,990
Miscellaneous Exp. 3,010
Totals 126,690 126,690
On December 30, 2014, Yang Corporation granted compensatory stock options for 5,000 shares of its $1 par value common stock to certain of its key employees. The options may be exercised after 2 years of employment. Market price of the common stock on that date was $30 per share and the option price was $30 per share. Using a fair value option pricing model, total compensation expense is determined to be $80,000. The options are exercisable beginning January 1, 2017, providing those key employees are still in the employ of the company at the time the options are exercised. The options expire on January 1, 2018.
Required:
Prepare the following selected journal entries for the company
a. December 30, 2014.
b. December 31, 2015.
c. January 1, 2017, assuming 90% of the options were exercised at that date.
d. January 1, 2018, for the 10% of the options that expired
Answers
Answer: See explanation
Explanation:
The selected journal entries for the company has been prepared and attached. Note that:
Cash on January 1, 2017 was calculated as: = (30 × 5000 × 90%)
= 30 × 5000 × 0.9
= $135000
Paid in capital - stock options was calculated as:
= (80000 × 90%)
= $80000 × 0.9
= $72000
Common stock was gotten as: (5000× 90% × 1)
= $5000 × 0.9 × 1
= $450
Check the attachment for further details
In Question 7, suppose the maintenance supervisor has complained that trainees are having difficulty trouble shooting problems with the new electronics system. They are spending a great deal of time on problems with the system and coming to the supervisor with frequent questions that show a lack of understanding. The supervisor is convinced that the employees are motivated to learn the system, and they are well qualified. What do you think might be the problems with the current training program
Answers
Answer:
Since the employees are unable to understand the process properly, and they are well qualified, the problem is that the information and techniques used during the training program are not sufficient. Maybe the trainees are given unclear messages or the information is incomplete. The training program must be revised and technical issues should be explained better or in a different way.
Patricia and Joe Payne are divorced. The divorce settlement stipulated that Joe pay $550 a month for their daughter Suzanne until she turns 18 in 3 years. Interest is 6% a year. How much must Joe set aside today to meet the settlement? (Do not round intermediate calculations. Round your answer to the nearest cent.)
Answers
Answer:
Present Value= $18,079.05
Explanation:
Giving the following information:
Monthly payment= $550
Number of months= 3*12= 36 months
Interest rate= 0.06/12= 0.005
To calculate the lump sum to set aside to pay the settlement, first, we need to calculate the future value:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
FV= {550*[(1.005^36) - 1]} / 0.005
FV= $21,634.85
Now, the present value:
PV= FV / (1+i)^n
PV= 21,634.85 / (1.005^36)
PV= $18,079.05
An order has been received from an overseas customer for 3700 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.90 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 1550 units for regular customers. The minimum acceptable price per unit for the special order is closest to:
Answers
Answer: $88.62
Explanation:
First find the costs associated with the order.
= Direct material + Direct labor + Variable manufacturing overhead + Variable selling expense + Contribution margin lost from cutting back production for regular customers
Contriution margin lost from cutting production = Selling price - Direct material - Direct labor - Variable manufacturing overhead - Variable selling expense
= 120.10 - 51.10 - 9.80 - 5.20
= $54
= (3,700 * 51.10) + (3,700 * 9.80) + (3,700 * 2.80) + ((5.20 - 2.90) * 3,700) + ( 54 * 1,550)
= $327,900
Price per unit = 327,900 / 3,700
= $88.62
Statement of Owner's Equity Zack Gaddis owns and operates Gaddis Advertising Services. On January 1, 20Y3, Zack Gaddis, Capital had a balance of $186,000. During the year, Zack invested an additional $9,300 and withdrew $65,100. For the year ended December 31, 20Y3, Gaddis Advertising Services reported a net income of $89,800.
Prepare a statement of owner's equity for the year ended December 31, 20Y3. Use the minus sign to indicate negative values.
Answers
Answer:
Zack Gaddis
Statement of owner's equity for the year ended December 31, 20Y3
Capital Retained Earnings Total
Beginning of the Year :
Opening Balance $186,000 - $186,000
During the year :
Additional Capital $9,300 - $9,300
Drawings ($65,100) - ($65,100)
Net Income - $89,800 $89,800
At the end of the year $130,200 $89,800 $220,000
Explanation:
The statement of owner's equity for the year ended December 31, 20Y3 is prepared as above.
A company must repay the bank a single payment of $20,000 cash in 3 years for a loan it entered into. The loan is at 8% interest compounded annually. The present value of 1 (single sum) at 8% for 3 years is 0.7938. The present value of an annuity (series of payments) at 8% for 3 years is 2.5771. The present value of the loan (rounded) is: Multiple Choice $15,876. $20,000. $25,195. $7,761. $51,542.
Answers
Answer:
Present Value of the loan = $19999.36 rounded off to $20000
Explanation:
The present value of loan will comprise of the present value of the principal amount of loan plus the present value of the interest that the loan will charge for the 3 year time period for which it is outstanding. As the interest payments are fixed and occur after equal intervals of time, they are considered an annuity.
To calculate the present value of the loan, we must discount the interest payments using the present value factor of annuity given in the question as 2.5771 and we must discount the principal to present value using the present value factor given in question as 0.7938.
We will first calculate the annual interest payment on loan.
Annual Interest payment = 20000 * 0.08 = 1600
Present value of the Interest payment - annuity = 1600 * 2.5771
Present value of the Interest payment - annuity = $4123.36
Present value of the Principal loan = 20000 * 0.7938
Present value of the Principal loan = $15876
Present Value of the loan = 15876 + 4123.36
Present Value of the loan = $19999.36 rounded off to $20000
(Land’s End) Geoff Gullo owns a small firm that manufactures "Gullo Sunglasses." He has the opportunity to sell a particular seasonal model to Land’s End. Geoff offers Land’s End two purchasing options: ∙ Option 1. Geoff offers to set his price at $65 and agrees to credit Land’s End $53 for each unit Land’s End returns to Geoff at the end of the season (because those units did not sell). Since styles change each year, there is essentially no value in the returned merchandise. ∙ Option 2. Geoff offers a price of $55 for each unit, but returns are no longer accepted. In this case, Land’s End throws out unsold units at the end of the season. This season’s demand for this model will be normally distributed with mean of 200 and standard deviation of 125. Land’s End will sell those sunglasses for $100 each. Geoff ’s production cost is $25. a. How much would Land’s End buy if they chose option 1? [14.3] b. How much would Land’s End buy if they chose option 2? [14.3] c. Which option will Land’s End choose? [14.4] d. Suppose Land’s End chooses option 1 and orders 275 units. What is Geoff Gullo’s expected profit? [14.4]
Answers
Answer:
Answer is explained in the explanation section below.
Explanation:
a)
Answer-a with option-1
the land end sale price is $100, purchase cost is $65 and salvege valu is $53
So the underage cost = Cu = 100-65 = 35 and overage cost = Co = 65-53 = 12
the critical ratio = Cu/(Cu+Co) = 35/47 = 0.7422
From the standard normal distribution function The Z value at 0.7422 = 0.66
The optimal order quantity = 200 + 0.66 x 125 = 282.5
The optimal order quantity = 282.5
b)
Answer-b with option-1
the land end sale price is $100, purchase cost is $55 and salvage value is $0
So the underage cost = Cu = 100-55 = 45 and overage cost = Co = 55-0 = 55
the critical ratio = Cu/(Cu+Co) = 45/100 = 0.45
From the standard normal distribution function The Z value at 0.45 = -0.12
the optimal order quantity = 200 - 0.12 x 125
The optimal order quantity = 185
c)
We have to calculate the expected profit in each case to determine which option Lands Ends should choose.
With option-1 Geoff's sells 282.5 units at $65 for total revenue of 18363 and production cost of 282.5 = 7063
Geoff credits Lands ends for each returned sunglass so we need to evaluate how many sunglasses Land Ends return.
Expected lost sales = 125 x 0.1528 = 19.1
Expected sales = 200 - 19.1 = 180.9
expected left over inventory = 282.5 - 180.9 = 101.6
Expected profit = (100-65) x 180.9 - (65-53)x 101.6 = 5112
Expected profit = 5112
Similarly with option 2 the Expected profit = 4053
So option-1 is preferred.
d)
If the Land chooses option-1 and orders 275 units Then Geoff earn = 275 x $65 = $17875
and production cost = $25 x 275 = $6875
With order quantity 275 the z statistics = 0.6
and expected lost sales = 125 x 0.6 = 21.09
Expected left over inventory = 275-200+21.09 = 96.09
So the Geoff's buy back cost = 96.09 x 53 = $5093
and expected profit = $17875 - $5093 = $5907
expected profit = $5907
(A)The optimal order quantity = 282.5
(B) The optimal order quantity = 185
(C) Expected profit = 4053
(D) Expected profit = $5907
What is Optical order quantity?a) Answer-a with option-1
When the land end sale price is $100, the purchase cost is $65 and also the salvage value is $53
So the underage cost is = Cu = 100-65 = 35 and
overage cost is = Co = then is 65-53 = 12 the critical ratio = Cu/(Cu+Co) = 35/47 = 0.7422
From the quality Gaussian distribution function The Z value at 0.7422 is = 0.66
Then, The optimal order quantity is = 200 + 0.66 x 125 = 282.5
Thus, The optimal order quantity = 282.5
b) Answer-b with option-1
When the land end sale price is $100, the purchase cost is $55 and also the salvage value is $0
So the underage cost is = Cu = 100-55 = 45 and overage cost is = Co = 55-0 = 55
the critical ratio = Cu/(Cu + Co) = 45/100 = 0.45
From the quality Gaussian distribution function The Z value at 0.45 = -0.12
Then the optimal order quantity = 200 - 0.12 x 125
Thus, The optimal order quantity is = 185
c) Then We have to calculate the expected profit in each case to work out which option Lands Ends should choose.
With option-1 Geoff's sells 282.5 units at $65 for total revenue of 18363 and a cost of 282.5 = 7063
When Geoff credits Lands ends for every returned sunglass so we want to judge what number of sunglasses Land Ends returns.
Then the Expected lost sales is = 125 x 0.1528 = 19.1
After that Expected sales is = 200 - 19.1 = 180.9
Then expected left over inventory is = 282.5 - 180.9 = 101.6
After that Expected profit is = (100-65) x 180.9 - (65-53)x 101.6 = 5112
Thus, Expected profit is = 5112
Similarly, with option 2, the Expected profit is = 4053
So option-1 is preferred.
d) If the Land chooses option-1 and also orders 275 units Then Geoff earn = 275 x $65 = $17875 and also the cost is = $25 x 275 = $6875
With order quantity 275 the z statistics = 0.6 and also expected lost sales = 125 x 0.6 = 21.09
Then Expected left over inventory is = 275-200+21.09 = 96.09
So the Geoff's repurchase cost = 96.09 x 53 = $5093
and also expected profit is = $17875 - $5093 = $5907
Thus, Expected profit is = $5907
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Item13 Time Remaining 45 minutes 57 seconds00:45:57 Item 13 Time Remaining 45 minutes 57 seconds00:45:57 The world's largest manufacturer of peppermint candy canes was located in Albany, Georgia, until it could no longer afford to buy the sugar needed for its operation. It moved its manufacturing business to Mexico where there are no restrictions (like those that exist in the United States) on the amount of sugar that can be brought into the nation. The business moved to Mexico because of __________ established by the U.S. government.
Answers
Answer:
Quota
Explanation:
The world's largest manufacturer of peppermint candy canes moved its manufacturing business from Albany, Georgia to Mexico as there are no restrictions on the amount of sugar that can be brought into this nation (like those that exist in the United States.
The business moved to Mexico because of Quota established by the U.S. government.