Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 10 years ago for $5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $9.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $15.2 million to build, and the site requires $960,000 worth of grading before it is suitable for construction.
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Cash Flow amount $ _____

Answers

Answer 1

Answer:

$25,760,000

Explanation:

The net amount of decrease and increase of cash a business or individual owns.

To find the proper cash flow amount used as the initial investment in fixed assets, use the following:

Calculation of initial investment outflow = cost of land + cost of plant + grading cost

= $9,600,000 + 15,200,000, + $960,000

= $25,760,000

Calculation of initial investment outflow = $25,760,000

Therefore the initial investment outflow is $25,760,000


Related Questions

It is based on perceived characteristics such as style, fashion or peer acceptance.

Answers

Answer:

Consumer buying behavior

Explanation:

Due to various factors that affect consumer's purchase decision, crucial among them is emotional factors.Thus, many consumer marketing put more efforts in creating a stimulating discretionary buying behavior through catchy and enticing advertisement to create and increase demand.

Hence, considering that often times consumer goods are discretionary products people may want but don’t necessarily need, such as entertainment services and vacation travel, it can be concluded that CONSUMER BUYING BEHAVIOR is based on perceived characteristics such as style, fashion or peer acceptance.

When the price increases by 30% and the quantity demanded drops by 10%, the price elasticity of demand is: quizet

Answers

Answer:

0.33 inelastic

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

10% / 30% = 0.33

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one .

According to the basic quantity equation of money, if price and output fall while velocity increases, then: Group of answer choices

Answers

Answer:

The quantity of money will fall as well.

Explanation:

According to the quantity theory of money, money supply (M) and price level (P) in an economy are in direct proportion to one another.

In other words, the percentage change in price level is proportionate to the percentage change in Money Supplied.

The formula is given as:

M*V= P*T

where,  V = Velocity of money  and T = volume of the transactions.

Cheers!

For each situation, list the assumption, principle, or constraint that has been violated, if any.
A) East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain.
B) Hilo Company is in its fifth year of operation and has yet to issue financial statements.
C) Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000.
D) Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely debited the "Computers" account.
E) Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000.
F) Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds debited the "Computers" account.
A. Going concern assumption
B. Periodically Assumption
C. Historial Cost Principle
D. Revenue Recognition Principle
E. Economic Entity Assumption
F. No Violation

Answers

Ansewer:

E i think

Explanation:

The following situations are correctly matched with the assumption, principle:

Revenue Recognition Principle: Before the sale but at the conclusion of the production cycle, East Lake Company records revenue. It is uncertain what the product will cost and how much can be sold.Periodically Assumption: Despite being in its fifth year of operation, Hilo Company has not yet released financial results.No Violation: Gomez, Inc. is holding goods at its $100,000 original cost. The fair value of the inventory is $110,000.Going concern assumption: On its balance statement, Bly Hospital Supply Corporation only lists current assets and current liabilities. Current assets and current liabilities are the amounts that are stated for equipment and bonds payable, respectively. It's doubtful that the "Computers" account would be debited during firm liquidation.Historial Cost Principle: Bly Hospital Supply Corporation only lists current assets and current liabilities on its balance sheet. The quantities for equipment and bonds payable are indicated as current assets and current liabilities, respectively. The "Computers" account would probably not be debited during corporate dissolution.Economic Entity Assumption: Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited from the "Computers" account.

What is the Going concern assumption?

According to the going concern principle, any organization's operations will continue for the foreseeable future. According to the guiding principle, every choice made by a company should be made with its continued operation in mind rather than its eventual closure.

Thus, the mention above correctly matched the assumption, and principle.

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Consider the following hypothetical data for an open economy​ (in millions):

Assets owned inside the U.S. by U.S. citizens​ = ​$140, 000140,000
Assets owned outside the U.S. by U.S. citizens​ = ​$23,35723,357
Assets owned outside the U.S. by foreign citizens​ = ​$110,000110,000
Assets owned inside the U.S. by foreign citizens​ = ​$22,78622,786

The value of the International Investment Position​ (IIP) of the U.S. is__________ ​$ nothing million.

Answers

Answer: $571 million

Explanation:

International Investment Position​ (IIP) is an Economic measure that is calculated to see the assets owned by the citizens of a country outside the country versus the assets owned by foreigners in the country in question. It is informally referred to as a nation's Balance Sheet with other countries.

It is calculated by;

Value of the International Investment Position of the US = Assets owned outside the US by the US citizens -  Assets owned inside the US for the foreign citizens

= 23,357 - 22,786

= $571 million

ZNet co. is a web based retail company. The company reports the following for the past year. The company's CEO believes that sales for next year will increase by 10% and both profit margin and the level of average invested assets will be the same as for the past year
1. Compute return on investment for 20172. Compute profit margin for 20173. If the CEO's forecast is correct, what will return on investment equal for 2018?4. If the CEO's forecast is correct, what will investment turnover equal for 2018?

Answers

Answer:

1. 17%

2. 42.5%

3. $2,748,900

4. 44%

Explanation:

1. Return on Investment for 2017

= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]

= [tex]\frac{2,499,000}{14,700,000}[/tex]

= 17%

2. Profit Margin 2017

= [tex]\frac{Operating Income}{Sales}[/tex]

= [tex]\frac{2,499,000}{5,880,000}[/tex]

= 42.50%

3. Should the sales increase by 10% in 2018 then the new sales figure will be;

= $5,880,000 + ($5,880,000 *10%)

= $6,468,000

Profit = Sales * Profit Margin

= 6,468,000 * 42.5%

= $2,748,900

Return on Investment for 2018

= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]

= [tex]\frac{2,748,900}{14,700,000}[/tex]

= 18.7%

4. Investment turnover equal for 2018

= [tex]\frac{ Sales}{Average Invested Assets}[/tex]

= [tex]\frac{6,468,000}{14,700,000}[/tex]

= 44%

Suppose you are a manager at an advertising agency who is eager to utilize Covey’s advice about delegation. Today, you need to work on a presentation for a potential new client. This requires delegating a routine status report about an ongoing advertising campaign to Patricia. You ask Patricia to complete the status report, making her haveresponsibility for its completion. Which of the following are true after you delegate the status report to Patricia? Check all that apply. You should guide Patricia through each step of the assignment to serve as a mentor. Patricia must have authority over the resources and personnel needed to complete the status report. You should help Patricia with the status report, to the extent you have time. Patricia will be held accountable for the results of the assignment. The advertising agency recently reorganized. Patricia now reports to both the regional sales manager and a senior product manager which means there unity of command. Unity of command in matrix organizations. Lower-level employees have the authority to act without first seeking approval for activities in a company. Continue without saving

Answers

Answer and Explanation:

In the first situation, the accounting and responsibility is chosen as of the superior assigned the work to the subordinate so there would be  accounting and responsibility that the given work should be completed within the prescribed time and under the full responsibility

In the second situation, there is a unity of command but it does not exist in the matrix organization. Here unity of command is reporting to one boss.

In the third situation, decentralization is there as there are the authority to take independent decisions by middle level and lower level employees

The following statements that are true after you delegate the status report to Patricia are:

A. You should guide Patricia through each step of the assignment to serve as a mentor.B. Patricia must have authority over the resources and personnel needed to complete the status report. D. Patricia will be held accountable for the results of the assignment.

According to Stephen Covey’s advice about delegation, he stated that when duties or responsibilities are delegated to a person that does not have the capacity to properly handle them, then the output may be disastrous.

Furthermore, Covey also said that when delegating to someone, it is important to give them space to work and not to interfere too much and hold them accountable to the results.

As a result of this, we can see that Patricia is in charge of the routine status report as a part of the ongoing advertisement campaign and she should have not only full authority, but also be held accountable for the outcome of the assignment.

Therefore, the correct answers are options A, B and D

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A company was formed with $60,000 cash contributed by its owners in exchange for common stock. The company borrowed $30,000 from a bank. The company purchased $10,000 of inventory and paid cash for it. The company also purchased $70,000 of equipment by paying $10,000 in cash and issuing a note for the remainder.

Use the information above to answer the following question. What is the amount of the total assets to be reported on the balance sheet?

a. $150,000.
b. $160,000.
c. $90,000.
d. $80,000.

Answers

Here is your answer

A. $150,000

Patton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2021, paying $1,410,375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.*USE T ACCOUNTS

On July 1, 2018, Patton Company should increase its Debt Investments account for the Scott Company bonds by?

For the year ended December 31, 2018, Patton Company should report interest revenue from the Scott Company bonds of?

Answers

Answer:

On July 1, 2018, Patton Company should increase its Debt Investments account for the Scott Company bonds by?

I will assume that the bonds were purchased on January 2018 and not January 2021.

The journal entry to record the purchase of the bonds was:

January 1, 2018, investment on bonds

Dr Debt Investment 1,500,000

    Cr Cash 1,410,375

    Cr Discount on Debt Investment 89,625

the journal entry to record the interests received on July 1, 2018 would be:

Dr Cash 75,000

Dr Discount on Debt Investment 2,570.63

    Cr Interest revenue 77,570.63

Discount on Debt Investment = ($1,410,375 x 5.5%) - ($1,500,000 x 5%) = $77,570.63 - $75,000 = $2,570.63

Patton company should increase its Debt investment by $2,570.63 (amortized discount).

For the year ended December 31, 2018, Patton Company should report interest revenue from the Scott Company bonds of?

The journal entry to record accrued interests:

Dr Interest receivable 75,000

Dr Discount on Debt Investment 2,712

    Cr Interest revenue 77,712

Discount on Debt Investment = ($1,412,945.63 x 5.5%) - ($1,500,000 x 5%) = $77,712 - $75,000 = $2,712

Total interest revenue for 2018 = $77,570.63 + $77,712 = $155,282.63

Seminole Lighting, a specialty lamps and specialty light sources manufacturer, had the following information on its annual tax returns. Calculate Seminole’s taxable income and determine the federal income tax for the year. Sales $ 680,000 Interest Revenues $ 10,000 Operating Expenses $ 52,000 Depreciation $ 10,000 The federal income tax for the year is:

Answers

Answer:

Seminole’s taxable income is $628,000

Seminole’s federal income tax for the year is $213,520

Explanation:

In order to calculate Seminole’s taxable income we would have to calculate the following formula:

Seminole’s taxable income=Sales+Interest Revenues-Operating Expenses-Depreciation

According to the given data we have the following:

Sales $ 680,000

Interest Revenues $ 10,000

Operating Expenses $ 52,000

Depreciation $ 10,000

Therefore, Seminole’s taxable income=$ 680,000 +$ 10,000 -$ 52,000 - $ 10,000

Seminole’s taxable income=$628,000

To calculate Seminole’s federal income tax for the year we would have to make the following calculation:

Seminole’s federal income tax for the year=Seminole’s taxable income*tax rate

Seminole’s federal income tax for the year=$628,000*34%

Seminole’s federal income tax for the year=$213,520

Fanelli Corporation, a merchandising company, reported the following results for July: Number of units sold 6,100 Selling price per unit $ 590 Unit cost of goods sold $ 413 Variable selling expense per unit $ 50 Total fixed selling expense $ 125,600 Variable administrative expense per unit $ 28 Total fixed administrative expense $ 207,500 Cost of goods sold is a variable cost in this company. Required: a. Prepare a traditional format income statement for July. b. Prepare a contribution format income statement for July.

Answers

Answer:

Instructions are below.

Explanation:

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

I will assume that there is no beginning nor ending inventory.

Absorption costing income statement:

Sales= 6,100*590= 3,599,000

COGS= (6,100*413)= (2,519,300)

Gross profit= 1,079,700

Total selling expense= (6,100*50 + 125,600)= (430,600)

Total administrative expense= (6,100*28 + 207,500)= (378,300)

Net operating income= 270,800

Variable costing income statement:

Sales= 3,599,000

Total variable cost= 6,100*(413 + 50 + 28)= (2,995,100)

Total contribution margin= 603,900

Total fixed selling expense= (125,600)

Total fixed administrative expense= (207,500)

Net operating income= 270,800

Preferred stock is like long-term debt in that ___________. A. it promises to pay to its holder a fixed stream of income each year B. it gives the holder voting power regarding the firm's management C. the preferred dividend is a tax-deductible expense for the firm D. in the event of bankruptcy preferred stock has equal status with debt

Answers

Answer:

A. it promises to pay to its holder a fixed stream of income each year.

Explanation:

In Business, stock can be defined as having an equity or ownership by an individual in an organization. Generally, stocks are of two (2) types and these are;

1. Common stock.

2. Preferred stock.

Preferred stock refers to the securities which represents an individual's ownership or share in an organization and having a fixed claim over common stocks in earnings and assets.

Also, the preferred stock pay a fixed amount of interest regularly rather than being paid as a dividend only.

Hence, preferred stock is like long-term debt in that it promises to pay to its holder a fixed stream of income each year. This simply means that, the preferred stockholders are given more priority than the holders of common stocks. Therefore, in the event of liquidation of a firm the preferred stockholder can claim the assets belonging to a the firm.

There are four (4) types of preferred stocks and these are;

1. Perpetual preferred stock.

2. Exchangeable preferred stock.

3. Convertible preferred stock.

4. Cumulative preferred stock.

Physical Units Work in process, beginning 0 Completed and transferred out 89000 Work in process, ending 6000 Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?

Answers

Answer:

Total equivalent units= 95,000 units

Explanation:

Giving the following information:

Work in process, beginning 0

Completed and transferred out 89,000

Work in process, ending 6,000

Materials are added at the beginning of the process.

Because the materials are added at the beginning of the process, the equivalent units are the same as units started and completed.

Total equivalent units= 89,000 + 6,000= 95,000 units

Kerch Co. had beginning net fixed assets of $216,510, ending net fixed assets of $211,680, and depreciation of $40,435. During the year, the company sold fixed assets with a book value of $7,966. How much did the company purchase in new fixed assets?

Answers

Answer:

$43,571

Explanation:

The computation of the purchase in a new fixed asset is shown below:

Beginning net fixed assets $216,510

Less: depreciation expenses -$40,435

Net fixed assets -$176,075

Less: book value of sold assets -$7,966

Net fixed assets $168,109

Closing net fixed assets $211,680

purchases of net assets during the year $43,571 ($211,680 - $168,109)

We simply applied the above format

Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:

Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)

Answers

Answer:

                                              Assets       Liabilities      Stockholder's Equity

1. Authorizing and issuing   Not affect   Not affect        Not affect

  stock certificates in a

  stock split  

2. Declaring a stock               Not affect    Not affect      Not affect

   dividend

3. Issuing stock certificates    Not affect    Not affect    Not affect

   for the stock dividend

   declared in (2)

4. Declaring a cash dividend   Not affect    Increase      Decrease

5. Paying the cash dividend     Decrease Decrease     Not affect

   declared in (4)

Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create (in the entire mult-banking system), a maximum of:​

Answers

Answer:

The maximum money created is $50000

Explanation:

The given reserve requirement ratio is = 20 percent

The injection of cash = $10000

So,  first, we have to find the money multiplier and then multiply with the injected amount.

Since  the reserve requirement is 20 percent  so  the money multiplier =  1/ 20 = 0.5 or 5.

The Fed can create the maximum money = 10,000 x 5 = 50,000

On September 1, a company established a petty cash fund of $230. On September 10, the petty cash fund was replenished when there was $81 remaining and there were petty cash receipts for supplies, $53, and postage, $80. On September 15, the petty cash fund was increased to $320.
Required:
Prepare the journal entries, if any, required on September 1, September 10, and September 15. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answers

Answer:

September 1, petty cash fund is established

Dr Petty cash fund 230

    Cr Cash 230

September 10, petty cash expenses

Dr Supplies expense 53

Dr Postage expense 80

Dr Cash short and over 16

    Cr Petty cash fund 149

September 10, petty cash is replenished

Dr Petty cash fund 149

    Cr Cash 149

September 15, petty cash fund in increased

Dr Petty cash fund 90

    Cr Cash 90

   

A customer wishes to place a buy order for a security that has not been registered with the SEC. The security may be purchased if the security:

Answers

Complete Question:

A customer wishes to place a buy order for a security that has not been registered with the SEC. The purchase order can be filled if the security:

A. is exempt from SEC registration

B. is traded by at least 2 market makers

C. has been trading in the market for at least 1 year

D. is sold to professional investors

Answer:

Is exempt from SEC registration

Explanation:

The Securities and Exchange Commission (SEC) is a regulatory agency that is saddled with the responsibility of regulating the capital market and ensuring investors are well protected by making sure standard rules are followed.

If a customer wishes to place a buy order for a security that has not been registered with the Securities and Exchange Commission (SEC). The security may be purchased if the security is exempt from SEC registration.

By standard, the SEC states and implore investors to purchase only securities that are registered with the securities and exchange commission (SEC) or only when an exemption is made available. If securities have been trading for about a year or is being traded by a minimum of two companies, no exemption would be given by the SEC.  

Also, there isn't any exemption for securities that is sold only to professional investors.

However, investors can purchase municipal and government securities even without it being registered with the securities and exchange commission.

In a nutshell, the customer can only purchase a security that has not been registered only if it is exempted from SEC registration.

If P represents the price of goods and services measured in money, then 1/P is the value of money measured in terms of goods and services True False

Answers

Answer:

The answer is True

Explanation:

There is an inverse relationship between the price level and value of money (also known as purchasing power). An increase in the price level is the same as an decrease in the value of money.

As the price level decreases money is able to buy more goods and services and as the price level increases, money is able to buy less goods and services. inflation decrease the value of money or consumers' purchasing power.

With perfect price discrimination the monopoly a. charges each customer an amount equal to the monopolist's marginal cost of production. b. eliminates all price discrimination by charging each customer the same price. c. eliminates profits and increases consumer surplus. d. eliminates deadweight loss.

Answers

Answer:

Option D, Eliminates the dead-weight loss.

Explanation:

Option D is correct because there is dead-weight loss under monopoly because it produces less as compared to perfect competition. Therefore, a monopolist eliminates this dead-weight loss by producing at the level where the marginal cost curve cuts the marginal revenue curve and charging each consumer their willingness to pay the amount

Suppose you invested $100 in the Ishares High Yield Fund (HYG) a month ago. It paid a dividend of $2 today and then you sold it for $101. What was your dividend yield and capital gains on the investment

Answers

Answer:

Dividend yield= 2%

Capital gain = 1$

Explanation:

Capital gain is the difference between the cost of the shares when it was purchased and the price now

Capital gains = Price of the share now - cost of the shares

Capital gain = 101- 100 = 1

Capital gain = 1$

Dividend yield is the dividend earned as a proportion of the price of the share

Dividend yield = Dividend/ price × 100 =

Dividend = 2, Price = 101

Dividend yield = 2/101× 100 =  1.98

Dividend yield= 2%

Assume the total cost of a college education will be $395,000 when your child enters college in 18 years. You presently have $65,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?

Answers

Answer:

8.87%

Explanation:

Calculation for the annual rate of interest you must earn on your investment to cover the cost of your child’s college education

Using this formula

FV = PV(1 + r)t

Based on the information we were told to calculate for annual rate of return, this means we would be Solving for r

r = (FV / PV)1 / t– 1

Where,

FV =$300,000

PV=$65,000

=1 / t =1/18 years

Let plug in the formula

r = ($300,000 / $65,000)1/18– 1

r=(4.6153846)^0.055555 -1

r=1.08867-1

r= 0.0887 *100

r=8.87%

Therefore the annual rate of interest you must earn on your investment to cover the cost of your child’s college education will be 8.87%

Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees?
A. A liquidated debt is involved, and there is an accord and satisfaction.
B. A liquidated debt is involved, and there is an accord but no satisfaction.
C. A liquidated debt is involved, and there is not a satisfaction or an accord.
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
E. An un-liquidated debt is involved, and there is an accord but not satisfaction.

Answers

Answer:

D. An un-liquidated debt is involved, and there is an accord and satisfaction.

Explanation:

The impact when debtor offers to pay the different type of payment like goods instead of money, non dispute debt arises when the unliquidated debt is involved that means the amount is owed as mentioned in the contract or it is under dispute

Plus it also accord and satisfaction

Therefore the correct option is d.

Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $86,670. The equlpment was expected to have a useful life of three years, or 6,480 operating hours, and a residual value of $2,430. The equipment was used for 1,200 hours during Year 1, 2,300 hours in Year 2, 1,900 hours in Year 3, and 1,080 hours in Year 4 Required:Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. r A. Straight-line method Year AmountYear 1 21,060 Year 2 28,080Year 3 28,080Year 4 7,020 B. Units-of-output method Year Amount Year 1 15,600Year 2 29,900Year 3 24,700

Answers

Answer:

purchase cost $86,670

useful life 3 years, 6,480 operating hours

residual value $2,430

a. the straight-line method

depreciation expense per year = ($86,670 - $2,430) / 3 = $28,080

depreciation year 1 = $28,080 x 9/12 = $21,060 depreciation year 2 = $28,080 depreciation year 3 = $28,080 depreciation year 4 = $28,080 x 3/12 = $7,020

b. units-of-output method.

depreciation per hour =  ($86,670 - $2,430) / 6,480 = $13

depreciation year 1 = 1,200 x $13 = $15,600 depreciation year 2 = 2,300 x $13 = $29,900 depreciation year 3 = 1,900 x $13 = $24,700 depreciation year 4 = 1,080 x $13 = $14,040

c. the double-declining-balance method.

depreciation year 1 = 2 x 1/3 x $86,670 x 9/12 = $43,335 depreciation year 2 = $14,445 + (2 x 1/3 x $28,890 x 9/12) = $28,090 depreciation year 3 = $4,815 + (2 x 1/3 x $9,630 x 9/12) = $9,630 depreciation year 4 = $1,605 + ($3,210 - $2,430) = $2,385

A firm in a purely competitive industry is currently producing 1,200 units per day at a total cost of $700. If the firm produced 1,000 units per day, its total cost would be $450, and if it produced 700 units per day, its total cost would be $425. Instructions: Round your answers to 2 decimal places. a. What are the firm's ATC at these three levels of production

Answers

Answer:

Explanation:

The average total cost is calculated as the total cost divided by the number of outputs. The firm's ATC at these three levels of production will be:

1. 1,200 units per day at a total cost of $700.

ATC = Total cost/output

ATC = $700/1200

ATC = $0.58

2. If the firm produced 1,000 units per day, its total cost would be $450.

ATC = Total cost/output

ATC = $450/1000

ATC = $0.45

3. If it produced 700 units per day, its total cost would be $425.

ATC = Total cost/output

ATC = $425/700

ATC = $0.61

Michael owns a machine shop. In reviewing the shop's utility bills for the past 12 months, he found that the highest bill of $2,400 occurred in August when the machines worked 1,000 machine hours. The lowest utility bill of $2,200 occurred in December when the machines worked 500 machine hours.
Requirement:
1. Calculate the variable rate per machine hour and the total fixed utility cost.
2. Show the equation for determining total utility cost for the machine shop.
3. If Matt anticipates using 1, 200 machine hours in January, predict the shop's total utility bill using the equation from Requirement 2.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Highest cost= $2,400 when the machines worked 1,000 machine hours.

Lowest cost= $2,200 when the machines worked 500 machine hours.

To calculate the variable cost per unit and total fixed costs, 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= (2,400 - 2,200) / (1,000 - 500)

Variable cost per unit= $0.4 per hour

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 2,400 - (0.4*1,000)= $2,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 2,200 - (0.4*500)= $2,000

Total cost= 2,000 + 0.4x

x= machine hour

Finally, the total cost for 1,200 machine hours:

Total cost= 2,000 + 0.4*1,200

Total cost= $2,480

Which of the following is a typical complaint of host-country competitors (such as GM, Ford etc) against foreign firms (such as KIA in the US)?a) foreign firms burden the host-country with infrastructure requirements.b) foreign firms lure local workers away from host-country businesses.c) foreign firms do not have to obey host-country law and regulations.d) foreign firms receive financial support from host-country governments.

Answers

Answer:

Option (d) is the correct answer to this question.

Explanation:

The nation in which those State members or organizations are involved at the request of the state and/or foreign negotiation.

A foreign country 's government, in which a representative and foreign embassies live while on duty. The diplomat and staff serve their own country's values and policies while being host country guests.

Other options are incorrect because they are not related to the given scenario.

Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables.


Person Max Actual
bob 13 8
barly 12 8
bill 11 8
bart 10 8
brent 9 8
betty 8 8

Person Minimum Actual
carlos 3 8
courtney 4 8
chunk 5 8
cindy 6 8
craig 7 8
chad 8 8

Required:
a. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?
c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price?

Answers

Answer and Explanation:

a. The equilibrium quantity for the given two tables is

As if the equilibrium price is $8 so the six consumers i.e bob, barly,bill,bart, brent, betty) are paying more than the equilibrium price and on the other hand six producers (carlos, courtney, chunk, cindy, craig, chad) are accepted the price as the equilibrium price is more than the accepted price

Hence, the equilibrium quantity is 6

b. Now if all the buyers are free to ride so the quantity supplied by private sellers is 0 as the minimum accepted price is more than the willingness price as producers is not able to produced

c. At imposing $2 per bag tax on sellers, the new equilibrium price is $9 as the price rise to $9

Assume that the U.S. one-year interest rate is 3 percent and the one-year interest rate on Australian dollars is 6 percent. The U.S. expected annual inflation is 5 percent, while the Australian inflation is expected to be 7 percent. You have $100,000 to invest for one year and you believe that PPP holds. The spot exchange rate of an Australian dollar is $0.689. What will be the yield on your investment if you invest in the Australian market

Answers

Answer:

4%

Explanation:

you invest $100,000 today and purchase A$145,137.88

in one year, you will have A$152,394.78

since the PPP stands, the spot rate in one year should be:

0.703 US$ per A$ (since Australia's inflation rate is 2% higher than the US inflation rate, the Australian dollar will depreciate by 2%)

with your A$152,394.78, you can purchase $107,133.53

if you invested in the US instead, you would have $103,000

this means that your Australian investment yielded ($107,133.53 / $103,000) - 1 = 0.04 or 4%

Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $13,800 ($1,150/month) in advance on October 1.
Required:
1. Record the adjusting entries on December 31.
2. Record the payment of rent in advance of october 1.
3. Calculate the year-end adjusted balances of prepaid rent and rent expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).

Answers

Answer:

1.

Dec 31    Rent expense                   $3450 Dr

                  Prepaid Rent                       $3450 Cr

2.

Oct 1     Prepaid Rent                        $13800 Dr

                  Cash                                       $13800 Cr

3.

Year end balances at 31 December:

Rent Expense = $3450

Prepaid Rent = $10350

Explanation:

Assumption: The year end for the business in on 31 December.

1.

The rent is paid in advance thus it is an asset. On 31 December the adjusting entry will be made under the accrual principle to match the current period's rent expense and record it in the period to which it belongs to. Thus we will credit the rent expense for 3 months i.e. October, November and December. We will credit the asset account that is Prepaid Rent.

2.

The prepayment of rent is creating an asset account in the title of prepaid rent. The entry would be to record the asset prepaid rent by the full amount of the rent prepaid and credit the other asset account through which the payment is being made.

3.

The adjusted year end balance for rent expense will be the rent expense paid for this period that is $1150 * 3 = 3450

The balance in the prepaid rent account after adjusting the rent expense will be,

Prepaid rent = 13800 - 3450 = $10350

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