Answer:
James Industries
The amount of the annual lease payments is:
= $149,258.
Explanation:
a) Data and Calculations:
Cost of equipment = $890,000
Residual value = $200,000
Net value = $690,000
Estimated useful life = 8 years
Lease period = 6 years
Lease Liability = $895,545.70
From an online financial calculator:
Annual PMT = $149,257.62
Sum of all periodic payments $895,545.70
Total Interest $205,545.70
Schedule of Lease Annual Payments:
Period PV PMT Interest FV
1 $690,000.00 $-149,257.62 $55,200.00 $-595,942.38
2 $595,942.38 $-149,257.62 $47,675.39 $-494,360.16
3 $494,360.16 $-149,257.62 $39,548.81 $-384,651.35
4 $384,651.35 $-149,257.62 $30,772.11 $-266,165.85
5 $266,165.85 $-149,257.62 $21,293.27 $-138,201.50
6 $138,201.50 $-149,257.62 $11,056.12 $0.00
Boyne Inc. had beginning inventory of $12,000 at cost and $20,000 at retail. Net purchases were $120,000 at cost and $170,000 at retail. Net markups were $10,000, net markdowns were $7,000, and sales revenue was $147,000. Compute ending inventory at cost using the conventional retail method.
Answer:
Ending inventory at cost $30,360
Explanation:
The computation of the ending inventory at cost using conventional retail method is shown below:
Particulars Cost Retail Cost to retail ratio
beginning inventory $12,000 $20,000
Add: purchase $120,000 $170,000
Add:Net markups $10,000
Less: net markdown -$7,000
Goods available for sale $132,000 $193,000
Cost to retail percentage 66% ($132,000 ÷ $200,000)
Less: net sales $147,000
Estimated ending inventory at retail $46,000
Ending inventory at cost $30,360
($46,000 ×0.66)
Alan does not want to lend his car to his co-worker, Linda, because he believes that all women are irresponsible drivers. Which of the following barriers to accepting diversity does this scenario illustrate?
a.Backlash
bPrejudice
c.Harassment
d.Pluralism
The sacred cow is a form of?
Answer:
According to Wiki:
Explanation:
Sacred cow is an idiom, a figurative reference to cattle in religion and mythology. A figurative sacred cow is a figure of speech for something considered immune from question or criticism, especially unreasonably so.
Answer:
Sacred cow is an idiom, a figurative reference to cattle in religion and mythology. A figurative sacred cow is a figure of speech for something considered immune from question or criticism, especially unreasonably so.
Explanation:
should you be concerned about data security? in a recent survey _______ americans reported that they do not trust businesses with their personal information online.
a) less than 30%
b) more than 75%
c) approximately 60%
e) approximately 45%
In a recent survey more than 75% Americans reported that they do not trust businesses with their personal information online. People should you be concerned about data security.
What is data security?Data security refers to the process of protecting data from unauthorized access and corruption throughout its lifecycle. For all apps and platforms, data encryption, hashing, tokenization, and key management are all data security solutions.
Thus, option B, more than 75% is correct.
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The Department of Defense uses an area cost factor (ACF) to compensate for variations in construction costs in different parts of the country and world. If a cold storage warehouse cost $1,050,000 in Rapid City, South Dakota, where the ACF is 0.91, and the cost of a similar facility built in Andros Island, The Bahamas, is $2,500,000, what is the ACF for Andros Island
Answer: 2.16
Explanation:
Cost at B = Cost at A * (Cost index of B / Cost index of A)
Cost at A = $1,050,000 Rapid City
Cost at B = $2,500,000 Andros Island
Cost index at A = ACF of 0.91
Cost index at B = ?
2,500,000 = 1,050,000 * (Andros ACF / 0.91)
2,500,000 * 0.91 = 1,050,000 * Andros ACF
Andros ACF = (2,500,000 * 0.91) / 1,050,000
Andros ACF = 2.16
Gary, a self-employed CPA, traveled to Dallas for five days on vacation, and while there spent another three days conducting business. Gary's plane fare for the trip was $650; meals cost $180 per day; lodging cost $350 per day; and a rental car cost $100 per day that was used for all eight days. Gary may deduct (disregard CARES Act, SECURE Act, and Stimulus Act):
Answer:
Gary, CPA
Gary may deduct (disregard CARES Act, SECURE Act, and Stimulus Act):
$2,134.
Explanation:
a) Data and Calculations:
Total Expenses:
Business use of trip = $244 ($650 * 3/8)
Trip plane fare = $650
Meals = 1,440 ($180 * 8)
Lodging = 2,800 ($350 * 8)
Rental car = 800 ($100 * 8)
Total expenses $5,690
3 days of expenses = $2,134 ($5,690 * 3/8)
b) Since Gary conducted some business for 3 days during his vacation, he is allowed to allocate his travel expenses between personal and business. Only the business portion of the expenses will be allowed by the IRS as business expenses.
Brian's Performance Pizza is a small restaurant in New York City that sells gluten-free pizzas. Brian's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Brian signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Brian's kitchen cannot fit more than three ovens, Brian cannot change the number of ovens he uses in his production of pizzas in the short run.
However, Brian's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Brian lets them know how many workers he needs for each day of the week. In the short run, these workers are_______ inputs and the ovens are_______ inputs.
Answer:
Variable and Fixed
Explanation:
Variable inputs are those which can be changed/altered in the short-run. The demand for these inputs can be changed with a change in production.
However, fixed inputs are those inputs which cannot be changed/altered in the short-run. The demand for these inputs remains unchanged in the short-run. It can only be changed in the long-run.
Since Brain has signed a lease obligation for the next three years, it cannot change the number of ovens in the short-run. This number of oven's is a fixed input at least for three years.
While, Brain can easily change the number of workers he wants to hire. Therefore, number of workers is a variable input in the short-run.
Thus, we can conclude that in the short run, these workers are variable inputs and the ovens are fixed inputs.
Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, $1,600,000; June, $1,490,000; July, $1,425,000; and August, $1,495,000.
Accounts Payable Merchandise Inventory
May 31 $150,000 $250,000
June 30 200,000 400,000
July 31 235,000 300,000
August 31 195,000 330,000
Use the available information to compute the budgeted amounts of (1) Merchandise purchases for June, July, and August (2) Cost of goods sold for June, July, and August.
Answer:
Explanation:
The merchandise purchase can be determined by using the formula:
Purchase = Cash payments + Ending Accounts Payable - Beginning Accounts Payable
For June:
Purchase = $(1490000 + 200000 - 150000)
Purchase = $(1690000 - 150000)
Purchase = $1540000
For July:
Purchases: $(1425000+235000 - 200000)
Purchases = $(1660000 - 200000)
Purchases = $1460000
For August:
Purchases: $(1495000 + 195000 - 235000)
Purchases: $(1690000 - 2235000)
Purchases: $1455000
The cost of goods sold = Beginning Inventory + Purchase - Ending inventory
For June:
Cost of goods sold= $(250000 + 1540000 - 400000)
Cost of goods sold= $(1790000 - 400000)
Cost of goods sold = $1390000
For July:
Cost of goods sold = $(400000 + 1460000 - 300000)
Cost of goods sold = $(1860000 - 300000)
Cost of goods sold = $1560000
For August:
Cost of good sold = $(300000+ 1455000 - 330000)
Cost of good sold = $(1755000 - 330000)
Cost ofgood sold = $1425000
In the second week of December, Security First agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $4,140. The terms of the initial agreement call for Security First to provide services from December 12, through January 10, or 30 days of service. The club agrees to pay Security First $4,140 on January 10, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.
Answer:
Security First
Debit Accounts Receivable $2,760
Credit Consulting Revenue $2,760
To record the accrued revenue for consulting services.
Explanation:
a) Data and Calculations:
Value of a consulting services contract = $4,140
Period of services = December 12 to January 10
Payment date = January 10
The fee will be divided by 30 days with 20 days' apportioned to the current year while 10 days' will be apportioned to the following year, thus:
Current year's revenue = $4,140 * 20/30 = $2,760
Next year's revenue = $4,140 * 10/30 = $1,380
Therefore, the unadjusted balance in Consulting Revenue will increase by $2,760 with the corresponding debit entry in the accounts receivable account.
The chapter argues that investment depends negatively on the interest rate because an increase in the cost of borrowing discourages investment. However, firms often finance their investment projects using their own funds.
If a firm is considering its own funds (rather than borrowing) to finance investment projects, will high interest rates discourage the firm from undertaking these projects? Explain.
Answer: Yes they will.
Explanation:
With high interest rates, the company will be able to make better returns if they invested the money and took advantage of those interest rates instead of spending the money on their project.
Assets like bonds will be better to go into because they will offer a return based on the higher interest rates which will bring in good returns.
The company is free to use those funds to invest in projects if these projects will lead to a better return than could be gotten from holding bonds but if that is not the case, they should simply buy bonds and hold them for superior returns.
Finance charges always include which of the following?
a. Mortgage broker fee
b. Title insurance charges
c. Document preparation fees
d. Credit report fee
Answer:
I believe the answer is C: Document Preparation Fees.
Bryant Company sells a wide range of inventories, which are initially purchased on account. Occasionally, a short-term note payable is used to obtain cash for current use. The following transactions were selected from those occurring during the year.
a. On January 10, purchased merchandise on credit for $30,000. The company uses a perpetual inventory system.
b. On March 1, borrowed $64,000 cash from City Bank and signed a promissory note with a face amount of $64,000, due at the end of six months, accruing interest at an annual rate of 8.50 percent, payable at maturity.
Required:
For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation.
Answer:
Finance charge = $2,720
Transaction a: This increases assets by $30,000 and also the liabilities by $30,000.
Transaction b: This increases assets by $64,000, increases liabilities by $66,720, but reduces Stockholder's Equity by $2,720.
Explanation:
Note: See the attached excel file for the accounting equation.
In the attached excel file, the finance charge of $2,720 is calculated as follows:
Finance charge = Amount borrowed * Interest rate * (Number of months the promissory will due / Number of months in a year) = $64,000 * 8.50% * (6 / 12) = $2,720
The effect of each transaction on the accounting equation are discussed below:
Transaction a: This increases assets by $30,000 and also the liabilities by $30,000.
Transaction b: This increases assets by $64,000, increases liabilities by $66,720, but reduces Stockholder's Equity by $2,720.
Cream and Crimson Foods has a target capital structure of calling for 41.00 percent debt, 5.00 percent preferred stock, and 54.00 percent common equity (retained earnings plus common stock). Its before-tax cost of debt is 12.00 percent. The tax rate is 40.00%. Its cost of preferred stock is 12.98%. Its cost of common equity is 13.18%. Find the WACC for Cream and Crimson Foods
Answer:
10.72%
Explanation:
WACC = (weight of equity x cost of equity) + [weight of debt x cost of debt x (1 - tax rate)] +( weight of preferred stock x cost of preferred stock)
debt = 0.41 x 12% x (1 - 0.4) = 2.95%
preferred stock = 0.05 x 12.98% = 0.65%
common equity = 0.54 x 13.18% = 7.12%
WACC = 2.95% + 0.65% + 7.12% = 10.72%
On January 1, 2022, The Eighties Shop has 100,000 shares of common stock outstanding. The Eighties Shop incurred the following transactions in 2022.
March 1 Issues 53,000 additional shares of $1 par value common stock for $50 per share.
May 10 Purchases 4,800 shares of treasury stock for $53 per share.
June 1 Declares a cash dividend of $1.40 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)
July 1 Pays the cash dividend declared on June 1.
October 21 Resells 2,400 shares of treasury stock purchased on May 10 for $58 per share.
Required:
Record each of these transactions.
Answer:
Date General Journal Debit Credit
March 1 Bank A/c $2,650,000
(53,000 × $50)
Share Capital A/c $53,000
(53,000 × $1)
Share Premium A/c $2,597,000
[53,000 × $49 ($50 - $1)}
(Being additional 53,000 issued shares for $50)
May 10 Treasury Stock A/c $254,400
(4,800 × $53)
Cash A/c (4,800 × $53) $254,400
(Being purchase of 4,800 treasury stock for $53 )
June 1 Retained Earning A/c $207,480
(1,53,000- 4,800) × $1.4
Dividend Payable A/c $207,480
[(153,000 - 4,800) × $1.4]
(Being cash dividend declared)
July 1 Dividend Payable A/c $207,480
Cash A/c $207,480
(Being cash dividend paid)
October 21 Cash A/c (2,400 × $58) $139,200
Treasury Stock (2,400 × $53) $127,200
Paid in Capital from treasury Stock $12,000
(2400 × $5)
(Being 2,400 Treasury Stock sold for $58)
The Eighties Shop will record the journal entries for the 2022 transactions as follows:
Journal Entries:
March 1 Debit Cash $2,650,000
Credit Common Stock $53,000
Credit Additional Paid-in Capital $2,597,000
To record the issuance of 53,000 shares at $50 per share.May 10 Debit Treasury Stock $4,800
Debit Additional Paid-in Capital $249,600
Credit Cash $254,400
To record the purchase of 4,800 shares of treasury stock at $53 per share.June 1 Debit Dividend $207,480
Credit Dividends Payable $207,480
To record the declaration of cash dividends on 148,200 shares at $1.40 per share.July 1 Debit Dividends Payable $207,480
Credit Cash $207,480
To record the payment of dividends.Oct. 21 Debit Cash $139,200
Credit Treasury Stock $2,400
Credit Additional Paid-in Capital $136,800
To record the resale of 2,400 shares of treasury stock at $58 per share.Data and Calculations:
Outstanding Common Stock = 100,000 shares
March 1 Cash $2,650,000 Common Stock $53,000 Additional Paid-in Capital $2,597,000
May 10 Treasury Stock $4,800 Additional Paid-in Capital $249,600 Cash $254,400
June 1 Dividend $207,480 Dividends Payable $207,480 (148,200 x $1.40)
July 1 Dividends Payable $207,480 Cash $207,480
Oct. 21 Cash $139,200 Treasury Stock $2,400 Additional Paid-in Capital $136,800
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The cost of production for a new toy is $10. The prices of competitors’ products are: Product A – $25, Product B – $20, Product C – $23, Product D– $22.
a) What price should the company sell the new toy at if it prices at cost plus profit at 100 per cent profit mark-up?
b) What price should the company sell the new toy at if it prices using competitive pricing?
c) What price should the company sell the new toy at if it prices using penetration pricing?
d) What price should the company sell the new toy at if it prices using price skimming?
Answer:
a. The price that the company should sell the new toy at if it prices at cost plus profit at 100% profit markup is:
= $20.
b. The price that the company should sell the new toy at if it prices using competitive pricing is:
= $22.50 (average of competitors' prices)
c. The price that the company should sell the new toy at if it prices using penetration pricing is:
= $20 (lowest market price)
d. The price that the company should sell the new toy at if it prices using price skimming is:
= $25.
Explanation:
a) Data and Calculations:
Cost of producing a new toy = $10
Competitors' prices are:
Product A – $25
Product B – $20
Product C – $23
Product D– $22
Total = $90
Average price = $22.50 ($90/4)
Cost = $10
Markup 10 ($10 * 100%)
Price = $20
b) An important consideration in the pricing of products is customers' and competitors' reactions to the firm's selling price. The purpose of considering customers is to ensure that enough demand is generated to cover production cost and make profits. Competitors can wage price wars to discourage new entrants into their markets. Many pricing methods are in use, depending on the prevailing market realities.
The Crane Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Crane has decided to locate a new factory in the Panama City area. Crane will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.
Building A: Purchase for a cash price of $617,800, useful life 26 years.
Building B: Lease for 26 years with annual lease payments of $71,870 being made at the beginning of the year.
Building C: Purchase for $650,400 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,980. Rental payments will be received at the end of each year. The Crane Inc. has no aversion to being a landlord.
Required:
In which building would you recommend that The Nash Inc. locate, assuming a 12% cost of funds?
Answer:
building b
Explanation:
Nash would buy the cheapest building
The present value of building 2 and 3 has to be determined
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Building b
cash flow each year from year 1 to 26 = $-71,870
I = 12%
PV = . 567461.08
Building c
Cash flow in year 0 = $-650,400
cash flow each year from year 1 to 26 = $6,980
I = 12%
Pv = 595288.29
To find the PV 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 NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
building b is the cheapest
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,350,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021:
$7,000,000, 14% bonds
$3,000,000, 9% long-term note
Construction expenditures incurred during 2021 were as follows:
January 1 $ 960,000
March 31 1,560,000
June 30 1,232,000
September 30 960,000
December 31 760,000
Required:
Calculate the amount of interest capitalized for 2021 using the specific interest method.
Answer:
$291,000
Explanation:
First, we need to calculate the weighted average expenditure. the Weighted average expenditure is calculated and attached with the answer in PDF format please find it.
Now calculate the Average interest rate on General debt
Average interest rate on General debt = [ ( $7,000,000 x 14% ) + ( $3,000,000 x 9% ) ] / ( $7,000,000 + $3,000,000 ) = [ $980,000 + $270,000 ] / $10,000,000 = $1,250,000 / $10,000,000 = 0.125 = 12.5%
Now the specific loan of $2,350,000 is utilised and the remianing value of expenditure is $636,000 ($2,986,000 - $2,350,000) fromgeneral debt is utilized for the costruction purpose. The interest on both loan should be capitalised.
Interest capitalized = ( $2,350,000 x 9% ) + ( $636,000 x 12.5% ) = $211,500 + $79,500 = $291,000
Wally, Inc. issued 500 shares of $10 par preferred stock at $83 a share. Each share had a warrant attached that allowed the holder to purchase one share of $5 par common stock for $15. Soon after the preferred stock was issued, the preferred stock was selling ex-rights for $64 a share, and the warrants were selling for $16 each. The entry to record the issuance of the preferred stock would include a
Answer: credit to Additional Paid -in Capital on Preferred Stock for $28,200
Explanation:
The journal entry will be:
Debit: Cash = $500 × 83 = $41500
Credit: Preferred stock = $5000
Credit: Additional paid in capital on preferred stock = $28200
Credit: Paid in capital - Common stock warrants = $8300
Note that Additional paid in capital on preferred stock was calculated as:
Amount allocated to preferred stock = (64/64+16) × 41500 = 33200
Less: Preferred stock face value = $500 × $10 = $5000
Additional paid in capital on preferred stock = $28200
Almost ___________________ percent of U.S. banks are FDIC members.
a
50
b
99
c
90
d
75
Premium Company produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Premium Company reports the following cost data for the past year:
Budget Actual
Direct labor hours 7,100 hours 6,500 hours
Machine hours 6,800 hours 6,800 hours
Depreciation on sales staff automobiles $23,500 $23,500
Indirect materials $52,000 $54,500
Depreciation on trucks used to deliver uniforms to customers $13,500 $11,000
Depreciation on plant and equipment $64,000 $65,500
Indirect manufacturing labor $39,500 $41,500
Customer service hotline $21,500 $23,000
Plant utilities $900 $1,900
Direct labor cost $71,000 $85,000
-Requirements:
1. Compute the predetermined manufacturing overhead rate.
2. Calculate the allocated manufacturing overhead for the past year.
3. Compute the underallocated or overallocated manufacturing overhead.
4. Prepare the journal entry to close the allocated manufacturing overhead.
Answer:
See below
Explanation:
1. The predetermined manufacturing rates
= Estimated yearly overhead cost / Estimated yearly machine hour
Estimated yearly overhead cost = Budgeted manufacturing overheads - Plant utilities + Indirect materials + Plant depreciation + Indirect labor MFR costs
= $71,000 + $900 + $52,000 + $39,500
= $163,400
Estimated yearly machine hour = 6,800
= $163,400/6,800
= $24.03 per machine hour
2. The allocated manufacturing overhead for the past year
= Actual machine hours × Predetermined machine hours
= 6,800 × $24.03
= $163,404
3. Manufacturing overhead
Actual manufacturing overhead = Actual indirect materials + Actual indirect manufacturing labor + Actual depreciation on plant and equipment + Actual plant utilities
= $54,500 + $41,500 + $65,500 + $1,900
= $163,400
Over applied overhead = Actual manufacturing overhead - Applied manufacturing overhead
= $163,400 - $163,404
Over applied overhead = $4
4. Journal entry
Cost of goods sold Dr $4
...................To Over applied manufacturing overhead Cr $4
(Being over applied overhead to cost of goods sold)
The management of California Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation:
Year Income from Operations Net Cash Flow
1 $100,000 $180,000
2 40,000 120,000
3 20,000 100,000
4 10,000 90,000
5 10,000 90,000
The present value index for this investment is: ________-
a. .88
b. 1.45
c. 1.14
d. 0.70
Answer:
c. 1.14
Explanation:
Year Cash Flow PV Factor 10% PV of Cash flows
($) ($)
Year 1 180,000 0.909 163,620
Year 2 120,000 0.826 99,120
Year 3 100,000 0.751 75,100
Year 4 90,000 0.683 61,470
Year 5 90,000 0.621 55,890
Total = 455,200
Initial cash outflow = $400,000
Cash inflow = $455,200
So, we can calculate the present value index by using following formula,
Present value index = Cash inflow ÷ Cash outflow
= $455,200 ÷ $400,000
= 1.14
describe the difference between real gdp and nominal gdp.
Answer:
Nominal GDP measures a country's gross domestic product using current prices, without adjusting for inflation. Contrast this with real GDP, which measures a country's economic output adjusted for the impact of inflation.
Lucky Corporation produces a part used in the manufacture of one of its products. The unit product cost is $21, computed as follows: Direct materials $ 6 Direct labor 8 Variable manufacturing overhead 1 Fixed manufacturing overhead 6 Unit product cost $ 21 An outside supplier has offered to provide the annual requirement of 6,000 of the parts for only $14 each. The company estimates that 50% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
Answer:
Lucky Corporation
The total financial advantage of purchasing the parts from the outside supplier would be:
= $24,000.
Explanation:
a) Data and Calculations:
Direct materials $ 6
Direct labor 8
Variable manufacturing overhead 1
Fixed manufacturing overhead 6
Unit product cost $ 21
Cost of parts per unit from outside supplier = $14
Relevant Costs:
Direct materials $ 6
Direct labor 8
Variable manufacturing overhead 1
Fixed manufacturing overhead 3 ($6 * 50%)
Unit product cost $ 18 relevant
This relevant unit product cost of $18 is compared with the $14 charged by the outside supplier to determine financial advantage or disadvantage.
Total financial advantage of purchasing the parts from the outside supplier would be $$24,000 (6,000 * $4).
You buy an annuity which will pay you $12,000 a year for ten years. The payments are paid on the first day of each year. What is the value of this annuity today at a 7% discount rate?
Answer:
PV of annuity due = $90,182.8 (Approx.)
Explanation:
Given:
Payment per year = $12,000
Number of year = 10
Interest rate = 7% = 0.07
Find:
PV of annuity due
Computation:
PV of annuity due = P + P[{1-(1+r)⁻⁽ⁿ⁻¹)/r]
PV of annuity due = 12,000 + 12,000[{1-(1+0.07)⁻⁽¹⁰⁻¹)/0.07]
PV of annuity due = $90,182.8 (Approx.)
A business that is less profitable than similar businesses, or with lower sales or higher expenses than similar businesses, may have difficulty competing.
True
False
Answer:
True
Explanation:
The S&P 500 has been increasing steadily over the last several months. What does this signal about how investors view future profits? Investors believe future profits are unpredictable. Investors believe profits have been higher over the past few months than they are expected to be in the future. Investors believe future profits will be lower than previously expected. Investors believe future profits will be higher than previously expected.
Answer: Investors believe future profits will be higher than previously expected.
Explanation:
If the S&P 500 has been rising, this means that investors are buying more shares in the companies in the index.
This means that these investors believe that the profits to come to these companies is going to be higher than expected. If the profits are expected to be the same as previously thought then there would be little increase in stock prices because the relevant increases would have already occurred.
Leslie studies how individuals go about purchasing products for their personal consumption and what factors influence these decisions. Leslie studies
Answer:
Leslie studies how individuals go about purchasing products for their personal consumption and what factors influence these decisions. Leslie studies Consumer Buying Behavior.
Leslie does study about how individuals go for buying products for their personal consumption and the factors that influence these decisions. Leslie studies Consumer Buying Behavior.
What is Consumer Buying Behavior?Consumer buying behavior refers to the process that consumers go through when making a purchasing decision. It involves the different stages that a consumer goes through before, during, and after a purchase.
By understanding the factors that influence consumer behavior, marketers can create products and services that meet the needs of consumers, develop effective advertising and promotional campaigns.
When Leslie studies how individuals go buying products for their personal consumption and the factors that influence these decisions. Then Leslie studies Consumer Buying Behavior.
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Simon Company's year-end balance sheets follow.
At December 2017 2016 2015
Assets
Cash $25,396 $29,685 $30,922
Accounts receivable, net 89,900 63,000 57,000
Merchandise inventory 100,500 84,000 60,000
Prepaid expenses 8,178 7,792 3,436
Plant assets, net 200,810 190,337 164,142
Total assets $434,784 $374,814 $315,500
Liabilities and Equity
Accounts payable $107,179 $62,710 $41,230
Long-term notes payable secured by mortgages on plant assets
80,922 85,345 69,028
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 84,183 64,259 42,742
Total liabilities and equity $434,784 $374,814 $315,500
The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:
For Year Ended December 31 2017 2016
Sales $565,219 $446,029
Cost of goods sold $344,784 $289,919
Other operating expenses 175,218 112,845
Interest expense 9,609 10,259
Income taxes 7,348 6,690
Total costs and expenses 536,959 419,713
Net income $28,260 $26,316
Earnings per share $1.74 $1.62
Compute days' sales uncollected.
Answer:
2017 Days' Sales Uncollected 49.37 days
2016 Days' Sales Uncollected 49.10 days
Explanation:
Computation for days' sales uncollected
Using this formula
Days' Sales Uncollected=Average receivables / Credit sales x 365 days
Let plug in the formula
2017 Days' Sales Uncollected= $76,450 / $565,219 x 365
2017 Days' Sales Uncollected= 49.37 days
[($89,900+$63,000)/2=$76,450]
2016 Days' Sales Uncollected= $60,000 / $446,029 x 365 days
2016 Days' Sales Uncollected= 49.10 days
[($63,000+$57,000)/2=$60,000]
Therefore 2017 Days' Sales Uncollected will be 49.37 days and 2016 Days' Sales Uncollected will be 49.10 days
Simon Company's year-end balance sheets follow. At December 2017 2016 2015 Assets. To compute the days' sales uncollected, we need to calculate the average accounts receivable and divide it by the average daily sales.
Average Accounts Receivable:
2017:
(Beginning Accounts Receivable + Ending Accounts Receivable) / 2
= ($63,000 + $89,900) / 2
= $76,450
2016:
(Beginning Accounts Receivable + Ending Accounts Receivable) / 2
= ($57,000 + $63,000) / 2
= $60,000
Average Daily Sales:
2017: Net Sales / 365
= $565,219 / 365
= $1,547.15
2016: Net Sales / 365
= $446,029 / 365
= $1,221.53
Days Sales Uncollected:
2017: Average Accounts Receivable / Average Daily Sales
= $76,450 / $1,547.15
= 49.48 days
2016: Average Accounts Receivable / Average Daily Sales
= $60,000 / $1,221.53
= 49.12 days
Therefore, the days sales uncollected for Simon Company are approximately 49.48 days in 2017 and 49.12 days in 2016.
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On January 1, 2021, Carla Vista Co. has the following balances:
Projected benefit obligation $3650000
Fair value of plan assets 3550000
The settlement rate is 10%. Other data related to the pension plan for 2021 are:
Service cost $330000
Amortization of prior service costs 82000
Contributions 555000
Benefits paid 250000
Actual return on plan assets 340000
Amortization of net gain 20000
The fair value of plan assets at December 31, 2021 is:_____.
a. $3990000.
b. $4195000.
c. $3650000.
d. $3927000.
Answer:
b. $4195000
Explanation:
Calculation to determine what The fair value of plan assets at December 31, 2021 is:
Fair value of plan assets $3,550,000
Add Actual return on plan assets $340,000
Add Contributions $555,000
Less Benefits paid ($250,000)
Fair value of plan assets at December 31, 2021 $4,195,000
($3,550,000+$340,000+$555,000-$250,000)
Therefore The fair value of plan assets at December 31, 2021 is:$4195000
Scenario planning compares to top-down strategic planning because:____.
A. Top-down planning addresses only pessimistic futures and scenario planning addresses optimistic futures.
B. Top-down strategic planning takes place at both the corporate and business levels of strategy whereas scenario planning takes place only at the corporate level.
C. Scenario planning helps create strategic plans that are more flexible, and thus more effective than those created through the more static strategic planning approach.
D. While in top-down strategic planning a top-down approach is used to develop strategies, in scenario planning a bottom-up approach is used.
Answer:
C. Scenario planning helps create strategic plans that are more flexible, and thus more effective than those created through the more static strategic planning approach.
Explanation:
Even though both models or techniques are important, they are different in their degree of effectiveness.
For example, scenario planning creates solutions which are flexible in overcoming barriers to the organizations goals such as a new government policy. Thus, they are generally considered more effective than those created through strategic planning approach such as the SWOT (Strength, Weakness, Opportunity, and Threats) analysis.