Answer:
the amount of factory overhead applied in October is $274,200
Explanation:
First calculate the amount transferred to Finished Goods Account from the Work in Process Account.
Finished Goods T - Account
Debit
Opening Balance $14,700
Transferred from Work In Process Account $325,900
Totals $340,600
Credit
Closing Balance $340,600
Totals $340,600
Prepare the Work in Process T - Account to determine the balance that is Overhead Applied.
Work in Process T - Account
Debits
Opening Balance $23,900
Direct materials $91,000
Direct labor $151,900
Overheads (balancing figure) $274,200
Totals $541,000
Credits
Closing Balance $215,100
Transfer to Finished Goods $325,900
Totals $541,000
Conclusion :
the amount of factory overhead applied in October is $274,200
Rachelle transfers property with a tax basis of $800 and a fair market value of $960 to a corporation in exchange for stock with a fair market value of $765 and $42 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $153 on the property transferred. What is the corporation's tax basis in the property received in the exchange
Answer:
$842
Explanation:
The computation of corporation's tax basis in the property received in the exchange is shown below:-
corporation's tax basis = Fair market value + Transaction
= $800 + $42
= $842
Therefore, The corporation's tax basis should be equivalent to the shareholder's tax basis as the property is transferred for $800 (a substituted basis) and add gain recognized of $42. And If the corporation sells the property for $960, the recognized gain would be $52.
An asset has an average return of 10.19 percent and a standard deviation of 22.41 percent. What is the most you should expect to lose in any given year with a probability of 16 percent
Answer:
The answer is 32.6%
Explanation:
Solution
Given that
An assets has a return average of =10.19%
Standard deviation =22.41%
Probability in any given year =16%
Now
The most you should expect to earn in any given year with a probability of 16 percent is = 10.19 + 22.41
= 32.6
Therefore,what you should expect in given year to lose is 32.6%
Consider two ways of commuting in a crowded city: taking public transportation, such as subway and buses, or driving your own car.
A person who chooses to take public transportation in a crowded city imposes a NEGATIVE OR POSITIVE externality on drivers. A policy implication of this result is a SUBSIDY FOR OR TAX ON those who take public transportation.
Persons who choose to drive their own cars to get around in a crowded city impose a NEGATIVE OR POSITIVE externality on other drivers. A policy implication of this result is a TAX ON OR SUBSIDY FOR those who drive their own cars.
Answer: positive; subsidy for; negative; tax on.
Explanation:
A positive externality occurs when the activities of an economic agent is of benefit to another third party that is not part of the activity or transaction while negative externality is the cost an individual bears due to the market activities of another individual or firm. It should be noted that the third parties didn't plan to incur the costs or benefits mentioned above.
Therefore, an individual who chooses to take public transportation in a crowded city imposes a positive externality on drivers. We are told that the city is overcrowded, therefore using public transportation means there will be lesser vehicles on the road and this will be beneficial to the drivers and there may be subsidy for those who take public transportation.
The people who choose to drive their own cars to get around in a crowded city impose a negative externality because there will be traffic congestion and health hazards and a tax can be imposed on them.
On April 1, 2021, the Electronic Superstore borrows $21 million of which $7 million is due in 2022. Show how the company would report the $21 million debt on its December 31, 2021 balance sheet.
Electronic Superstore
Partial Balance Sheet
December 31, 2021
Current liabilities:
Long-term liabilities:
Total liabilities
Answer:
Electronic Superstore
Partial balance sheet as at December 31, 2021
Current Liabilities
Current portion of long term debt 7,000,000
Long term liabilities
Notes payable 14,000,000
Total Liabilities 21,000,000
george forgot to pay his monthly life insurance premium that was due march 1. the policy had a face value of $100,000. on march 21, george died. how much will the insurer pay george's beneficiary for this death claim
Answer: An amount equal to the face value of the policy, MINUS the overdue premiums and any interest or late penalties George owed them
Explanation:
Grace Periods are usually included in Life Insurance policies to safeguard the client in question in case they are late with their payment. This means that should they pay within the grace period they will not lose their coverage.
Normally in Life Insurance, a grace period of 30 days is standard. George died 20 days after his due date which meant that he was still under a grace period and so the Insurance company will still pay out to his beneficiaries but they will deduct all monies owed by George.
If annual demand is 12,000 units, the ordering cost is $6 per order, and the holding cost is $2.50 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?
A. 421
B. 234
C. 78
D. 26
E. 312
Answer:
240 units
Explanation:
We can find Optimal order quantity easily by Optimal order quantity formula using the fixed order quantity formula
Formula:: Optimal order quantity = [tex]\sqrt[2]{\frac{2CoD}{Ch} }[/tex]
Where
Co = Ordering cost per order
D = Annual demand
Ch = Holding cost per unit
Calculations
Lets put in the values
Optimal order quantity = [tex]\sqrt[2]{\frac{2CoD}{Ch} }[/tex]
Optimal order quantity = [tex]\sqrt[2]{\frac{2*6*12000}{2.5} }[/tex]
Optimal order quantity = 240 units
Note: There must have been a mistake in question options the answer is 240 and closest to 240 is option B
Orion Flour Mills purchased a new machine and made the following expenditures:
Purchase price
$65,000
Sales tax
5,500
Shipment of machine
900
Insurance on the machine for the first year
600
Installation of machine
1,800
The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash.
Required:
Record the above expenditures for the new machine.
Answer:
When buying PPE, the way to record it is to capitalize every expense that enabled the PPE to be brought to the location required and then set up for use. This includes the actual cost of the machine, the sales taxes (part of purchases price so must be included), the shipment of the machine as well as installation costs.
The Insurance paid (prepaid) is an expense for the period and so will not be capitalized.
Total cost of the machine therefore is;
= 65,000 + 5,500 + 900 + 1,800
= $73,200
Only the machine and the sales tax were purchased on account.
= 65,000 + 5,500
= $70,500
The rest in cash.
Journal Entry is
DR Machinery $73,200
DR Prepaid Insurance $600
CR Cash $3,300
CR Accounts $70,500
(To record purchase of equipment)
Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75% of the estimated economic life of the leased property. Based on this information alone, how should the lessee classify these leases
Answer: Lease A Capital lease
Lease B Capital lease
Explanation:
A Capital lease is known as a lease agreement in which the lessor ( someone giving out the property) agrees to transfer the ownership rights to the lessee ( someone acquiring or needing the services of the property). After completion of the agreed lease period.
In a capital lease, the lessor is usually mandated to transfer the ownership rights of the asset to the lessee upon the end of the agreed lease term between both parties.
Beamish Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 3,700 Variable costs per unit: Direct materials $ 132 Direct labor $ 93 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 12 Fixed costs: Fixed manufacturing overhead $148,000 Fixed selling and administrative expense $288,600 There were no beginning or ending inventories. The absorption costing unit product cost was:
Answer:
Absorption costing unit product cost = $270 per unit
Explanation:
Absorption costing values unit produced using the full cost per unit.
It categories cost as production and non-production cost
Full cost per unit =Direct labour cost + direct material cost + Variable production overhead + fixed production overhead
Fixed prod overhead per unit = Total fixed production overhead/Number of units
= $148,000/3,700 units=$40 per unit
Full cost per unit = 132+ 93+ 5 + 40 = $270 per unit
Absorption costing unit = $270 per unit
Flyer Company has provided the following information prior to any year-end bad debt adjustment:Cash sales, $167,000Credit sales, $467,000Selling and administrative expenses, $127,000Sales returns and allowances, $47,000Gross profit, $507,000Accounts receivable, $275,000Sales discounts, $31,000Allowance for doubtful accounts credit balance, $2,900Flyer estimates bad debt expense assuming that 2% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?a) $12,240.b) $9,340.c) $9,780.d) $6,440.
Answer:
The balance in the allowance for doubtful accounts after bad debt expense is recorded is $12,240. Option A
Explanation:
Cash sales = $167,000
Credit sales = $467,000
Selling and administrative expenses = $127,000
Sales returns and allowances = $47,000
Gross profit = $507,000
Accounts receivable = $275,000
Sales discounts = $31,000
Allowance for doubtful accounts credit balance = $2,900
Balance needed in the 'Allowance for doubtful accounts' = $467,000 × 2%
= $9,240
Credit balance in the allowance account = $2,900
Bad debts expense = Balance needed in the 'Allowance for doubtful accounts' + Credit balance in the allowance account
= $9,340 + $2,900
= $12,240
Morrow City Inc. manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. With a 75-cent price increase, demand is expected to fall by 7,000 units. Current Projected Demand 79,000 units 72,000 units Selling price $8.50 $9.25 Incremental cost per unit $5.80 $5.80 If the price increase is implemented, operating profit is projected to ________.
Answer:
Operating profit is projected to be $35,100
Explanation:
Morrow City International
Analysis of the Current and Projected demand to determine the Operating Profit
Particulars Current Projected Changes in
Demand Demand Demand
Selling price $8.50 $9.25 0.75
Less: Cost Price $5.80 $5.80 0
Contribution $2.7 $3.45 0.75
Margin
Unit Sold 79,000 72,000 -7000
Total $213,300 $248,400 $35,100
Contribution
Note: Total contribution = Unit sold * Contribution margin
A company issued 1,000 shares of $10 par value common stock due to a previously declared stock dividend; the market value at both the date of declaration and distribution was $12 per share. Which of the following correctly describes the reporting of this stock issue within the financing activities section of the cash flow statement?
a) A cash outflow of $10,000
b) A cash outflow of $2,000
c) A cash outflow of $12,000
d) There is no cash flow
Answer:
d) There is no cash flow
Explanation:
There is no cash flow because a stock dividend refers to a dividend that is paid by issuing additional shares to shareholders of a company instead of paying them a cash dividend.
Therefore, there is no cash flow since no cash is received nor paid.
Note: To record stock dividends, the amounts is moved from retained earnings to paid-in capital; and the evidence that no cash is received nor paid is that the journal entries for the issue of stock dividend will be as follows:
Debit Retained for $12,000 (i.e. 1,000 * $12 = $12,000)
Credit Common Stock for $10,000 (i.e. 1,000 - $10 = $10,000)
Credit Additional Paid-In Capital in Excess of Par - Common Stock for $2,000 ($12,000 - $10,000)
Denver Co. recently used 14,000 labor hours to produce 7,500 units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll costs were $158,200. If the standard labor cost per hour is $11, Denver's labor efficiency variance is: Question 18 options: $11,300 (U). $11,000 (U). $11,000 (F). $11,300 (F).
Answer:
Direct labor time (efficiency) variance= $11,000 favorable
Explanation:
Giving the following information:
Denver Co. recently used 14,000 labor hours to produce 7,500 units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The standard labor cost per hour is $11.
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (2*7,500 - 14,000)*11
Direct labor time (efficiency) variance= $11,000 favorable
Given the following information, calculate the debt ratio percentage: Liabilities = $25,000Liquid assets = $5,000Monthly credit payments = $800Monthly savings = $760Net worth = $75,000Take-home pay = $2,300Gross income = $3,500Monthly expenses = $2,050
Answer:
33.33%
Explanation:
The debt ratio percentage is calculated as:
Liabilities / Net worth = Debt Ratio Percentage
$25,000 / $75,000 = 0.3333
0.3333 * 100 = 33.33%
The debt ratio is easy to calculate and is calculated by dividing the total liabilities of a person with the total net worth of the person. Dividing both gives a figure in decimal which is then multiplied by 100 to derive a percentage.
Kahn of Portland Oregon sent a letter to Lischner of Los Angeles inquiring whether Kushner’s property in Humboldt County was for sale. Lischner replied that he was interested in selling and asked Kahn about the fair market value. Kahn wrote that it was difficult to make an offer without a legal description of the property and asked for it and the annual taxes. These were provided by Lischner. Subsequently, Kahn wrote, "I hesitate to place a value on someone else’s property, but I can tell you that I have been offered a similar track of property for $2,000. Since your property is closer to mine, I would prefer to buy yours, and offer a four-year term contract at a total price of $2,500." The two parties ultimately agreed on a cash price of $2,500. Shortly after contracting with Kahn, Lischner went to Humboldt county and readily learned, upon the most superficial inquiry that the property was worth more than $2,500. He sold the property to Pacoima Lumber Sales, Inc. for $7,500. Thereupon, Kahn sued Lischner for $5,000. Lischner responded that he had been induced to contract by a fraudulent misrepresentation as to the value of the property by Kahn and therefore could rescind their contract of sale.What are the elements that must be present for fraudulent misrepresentation? Did Kahn commit fraud? Why, or why not.
Answer:
Misrepresentation & Fraud:
a) Elements for Fraudulent Misrepresentation:
1) A representation was in fact made: This means that it was not just a mere opinion expressed by the party misrepresenting.
2) That particular representation was false: The statement made was untrue.
3) The defendant had knowledge that the representation was false: The misrepresentation was intentional on the party of the defendant.
4) The statement was made with the intention that the other party rely on it and enter into a contract or agreement: The defendant was out to induce the other party to enter the contract.
b) Kahn committed a fraud since he intentionally induced Lischner to contract on the basis of fraudulent misrepresentation. The remedy available for Lischner is to rescind the contract.
Explanation:
a) Fraudulent misrepresentation is the presentation of false facts by someone who attempts to persuade another into action with the intent to deceive. The remedy available to the deceived party is to rescind the contract or to plea for damages.
b) According to the britannica.com, "Fraud, in law, is the deliberate misrepresentation of fact for the purpose of depriving someone of a valuable possession."
Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 29 percent for the next three years, with the growth rate falling off to a constant 6.8 percent thereafter. If the required return is 15 percent and the company just paid a dividend of $3.15, what is the current share price
Answer:
The current price of the share is $69.85
Explanation:
To calculate the current share price, we will use the dividend discount model approach.
The dividend discount model (DDM) estimates the value of a share/stock based on the present value of the expected future dividends from the stock. We will use the two stage growth model of DDM here as the growth in dividends of the stock is divided into two stages.
The formula for current price under two stage growth model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n +
[( D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n
Where,
g1 is initial growth rateg2 is the constant growth rater is the required rate of returnSo, the price of the stock today will be,
P0 = 3.15 * (1+0.29) / (1+0.15) + 3.15 * (1+0.29)^2 / (1+0.15)^2 +
3.15 * (1+0.29)^3 / (1+0.15)^3 +
[( 3.15 * (1+0.29)^3 * (1+0.068)) / (0.15 - 0.068)] / (1+0.15)^3
P0 = $69.85196 rounded off to $69.85
If $1200 is borrowed at 9% interest, find the amounts due at the end of 4 years if the interest is compounded as follows. (Round your answers to the nearest cent.) (i) annually $ 1693.9 Correct: Your answer is correct. (ii) quarterly $ 1204.3 Incorrect: Your answer is incorrect. (iii) monthly $ (iv) weekly $ (v) daily $ (vi) hourly $ (vii) continuously $
Answer and Explanation:
(i) The computation of compound interest for annual is shown below:-
Compound interest = A = P × (1 + r ÷ n)^t
= $1,200 × (1 + 9% ÷ 1)^1 × 4
= $1,200 × (1.09)^4
= $1,693.897932
or
= $1,693.90
(ii) The computation of compound interest for quarterly is shown below:-
= $1,200 × (1 + 9% ÷ 4)^4 × 4
= $1,200 × (1.09)^16
= $1,713.145749
or
= $1,713.15
Since it is quarterly so we divide the interest rate by 4 and multiply the time period by 4
(iii) The computation of compound interest for monthly is shown below:-
= $1,200 × (1 + 9% ÷ 12)^4 × 12
= $1,200 × (1.0075)^48
= $1,717.6864
or
= $1,717.69
Since it is monthly so we divide the interest rate by 12 and multiply the time period by 12
(iv) The computation of compound interest for weekly is shown below:-
= $1,200 × (1 + 9% ÷ 52)^4 × 52
= $1,200 × (1.432883461 )^208
= $1719.460154
or
= $1,719.46
Since it is weekly so we divide the interest rate by 52 and multiply the time period by 52
(v) The computation of compound interest for daily is shown below:-
= $1,200 × (1 + 9% ÷ 365)^4 × 365
= $1,200 × (1.43326581 )^1460
= $1719.918972
or
= $1719.92
Since it is daily so we divide the interest rate by 365 and multiply the time period by 365
(vi) The computation of compound interest for hourly is shown below:-
= $1,200 × (1 + 9% ÷ 8760)^4 × 8760
= $1,200 × (1.433326764 )^35,040
= $1,719.992117
or
= $1719.99
(vii) The computation of compound interest for continuously is shown below:-
A = Pe^rt
= 1,200e^0.09 × 4
= 1,200e^0.36
= $1,720.00
Present Value of an Annuity of 1 Periods 8% 9% 10% 1 .926 .917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $97116 and is expected to generate cash inflows of $39000 each year for three years. The approximate internal rate of return on this project is
Answer:
9.92%
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 using a financial calculator:
Cash flow in year 0 = $-97116
Cash flow each year from year 1 to 3 = $39000
IRR = 9.92%
To find the IRR using a financial calacutor:
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.
I hope my answer helps you
A firm considers to buy a machine in 2020. The cost of that machine is $ 5 000 000. The firm uses 5 year straight line depreciation which allows it to write off $ 1 000 000 depreciation expense each year. The firm is subject to 20% corporate tax rate. The firm's revenue in 2021 is expected to be $ 6 000 000 if the investment is not done. The revenue will be $ 9 000 000 if the investment is done. The firm's total costs (including both COGS and General&Administrative Costs) will be $ 4 000 000 if the investment is not done. The total costs will be $ 5 500 000 if the investment is done. Also the following information is given for the year 2021
Without Investment With Investment
Inventories $ 300 000 $ 500 000
Acc. Receivables $ 200 000 $ 300 000
Acc. Payables $ 100 000 $ 150 000
Given the above information, calculate the free cash flow of that investment for the years 2020 and 2021.
Answer and Explanation:
The computation of the free cash flow of the investment for the year 2020 and 2021 is shown below:
Particulars Case 1 Case 2
Without Investment With Investment
Add: Earnings Before
Interest and
Tax × (1 - Tax Rate) $2,000,000 $2,500,000
Add: Non Cash Expenses $0 $1,000,000
less: Change in
(Current Assets
- Current Liabilities) ($400,000) ($650,000)
Less: Capital Expenditure $0 ($5,000,000)
Free Cash Flows $1,600,000 ($2,150,000)
Working notes:
1.
Particulars Without Investment With Investment
Revenue for the Year 2021 $6,000,000 $9,000,000
Less: Cost of Goods Sold $4,000,000 $5,500,000
(-) Depreciation $0 $1,000,000
Earnings Before
Interest and Tax $2,000,000 $2,500,000
Tax Savings on Depreciation
(Depreciation × 20%) $0 $200,000
2.
Current Assets Without Investment With Investment
Inventories $300,000 $500,000
Accounts Receivable $200,000 $300,000
Total $500,000 $800,000
(Less: Current Liabilities)
Accounts Payable $100,000 $150,000
Less: Change in
(Current Assets
- Current Liabilities) $400,000 $650,000
A company had beginning inventory... A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold
Answer:
COGS= $470
Explanation:
Giving the following information:
Beginning inventory= 10 units for $20 each
On March 2, it purchased 10 units at $22 each.
On March 6 it purchased 6 units at $25 each.
On March 8, it sold 22 units for $54 each.
We need to determine the cost of goods sold for the 22 units under the FIFO (first-in, first-out) method. Using this method, we need to use the cost of the firsts units incorporated into inventory.
COGS= 10*20 + 10*22 + 2*25= $470
g in computing the present value of lease payments, the lessee shoulduse the lessee's incremental borrowing rate unless the lessor's implicit interest rate is known to the lessee. expected rate of return. settlement rate. none of these answer are correct
Answer:
b on edg
Explanation:
For 2018, Rest-Well Bedding uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $6.00 per unit. The selling price of the product is $21.00. The estimated manufacturing overhead costs are $275,000 and estimated 40,000 machine hours. The actual manufacturing overhead costs are $350,000 and actual machine hours are 50,000. Using job costing, the 2018 actual indirect-cost rate is ________.
Answer:
Predetermined manufacturing overhead rate= $6.875 per machine-hour
Explanation:
Giving the following information:
The estimated manufacturing overhead costs are $275,000 and an estimated 40,000 machine hours.
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 275,000/40,000
Predetermined manufacturing overhead rate= $6.875 per machine-hour
One-year Treasury securities yield 4%. The market anticipates that 1-year from now 1-year Treasury securities will yield 2.1%. If the pure expectations theory is correct, what should be the yield today for 2-year Treasury securities? Write your answer as a percentage, i.e. for example write 8% as 8.
Answer:
3.05%
Explanation:
According to Pure Expectation Theory, the future short term interest rates are actually the forward rates.
Mathematically,
(1 + r2,0)^2 = (1 + r1,0)^1 * (1 + r1,1)^1
Here,
r2,0 is the rate of interest for 2 year treasury security from today
r1,0 is the rate of the interest for 1 year treasury security from today
r1,1 is the rate of the interest for 2 year treasury security from Year 1
By Putting Values, we have:
(1 + r2,0)^2 = (1 + 0.04)^1 * (1 + 0.021)^1
(1 + r2,0)^2 = 1.06184
By taking square-root on both sides, we have:
(1 + r2,0) = 1.0305
r2,0 = 3.05%
The systematic process of selecting, supporting, and managing a firm's collection of projects is called: Profile management. Heavyweight project management. Project portfolio management. Matrix project organization.
Answer:
Project portfolio management
Explanation:
Project portfolio management refers to managing the portfolios of the project i,e used by the project managers and the management who manages the project.
This is useful to analyze the risk and return in each project
Moreover, it is a process of choosing, supporting and managing the collection of firm projects in a systematic way
Hence, the third option is correct
_____ do NOT have the authority to make decisions. a. Self-managing teams b. Semi-autonomous work groups c. Employee involvement teams d. Self-designing teams e. Autonomous work groups
Answer:
C. Employee involvement teams
Explanation:
Employee involvement teams do not have the authority to make decisions but They can offer advice and suggestions to management regarding particular issues.
Employee involvement teams has
employees directly involved in helping an organization achieve its vision and meet its objectives by offering their ideas, skills, support and efforts towards solving problems.
A truck was purchased 3 years ago for $50,000 and can be sold today for $25,000. The operating costs are $9,000 per year, and it is expected to last 4 more years with a $5,000 salvage value. A new truck, which will perform that same service, can be purchased for $55,000, and it will have a life of 10 years with operating costs of $28,000 per year and a $10,000 salvage value. What is the value that should be used as P for the presently owned vehicle in a replacement study
Answer:
P = $25,000
Explanation:
Cost price of truck = $50,000
Present value = $25,000
Operating costs = $9,000 per year
Salvage value = $4,000
Find remaining amount for old truck:
Amount remaining = $50,000 - $25,000 = $25,000
Total amount, since it has a salvage value of $5,000:
Total = $25,00 + $5,000 = $30,000
For new truck:
Cost price = $55,000
Operating costs = $28,000 per year
Salvage value = $10,000
To find the value that should be used as P for the presently owned vehicle in a replacement study:
P = Cost of new truck - Total amount remaining from old truck
P = $55,000 - $30,000
P = $25,000
Therefore, the value that should be used as P for the presently owned vehicle in a replacement study is $25,000
QUESTION 12 For a strategic alliance, firms should seek partners that are: a. known for being opportunistic. b. radically different when it comes to strategic goals. c. willing to share costs and risks of new-product development. d. different in terms of vision and agendas. e. similar when it comes to capabilities.
Answer:
c. willing to share costs and risks of new-product development.
Explanation:
A strategic alliance is when two companies come together to carry out a project that benefits both companies while both companies still retain their independence.
If strategic alliance is carried out with a company that is opportunistic, the company might take advantage of the other company or take certain actions that would not benefit the other company.
strategic alliance has to be mutually beneficial to both companies, so, strategic goals and visions have to align.
Capabilities don't have to be the same for a strategic alliance.
I hope my answer helps you
The management of L Corporation is considering a project that would require an investment of $260,000 and would last for 6 years. The annual net operating income from the project would be $110,000, which includes depreciation of $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.):
Answer:
2.04 years
Explanation:
Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.
To derive cash flows from net income, add depreciation to net income.
$110,000 + $17,000 = $127,000
Payback period = $260,000 / $127,000 = 2.04 years
I hope my answer helps you
Use the 2012 segment information provided by BMW and Volkswagen to an- swer the following questions: a. Which company is more multinational? b. Which company is more internationally diversified? c. In which region(s) of the world did each company experience the greatest growth from 2011–2012? the greatest decline?
Answer with its Explanation:
a). The total revenue of Volkswagen and BMW in the 2012 segment given shows that the revenue is $192,676 and BMW which is $76,848. As the revenue of Volkswagen is more than the BMW hence Volkswagen is more multinational.
b). The regional sales section shows that the Volkswagen is more internationally recognized as per the regional sales which is substantially higher than the regional sales of BMW. So its crystal clear that Volkswagen is the one which more internationally diversified.
c). The 2012 segment information shows that the BMW greatest growth was in China then in USA and then greatest growth was in Rest of the Europe and the greatest decline was in Rest of the America.
For Volkswagen, the greatest growth was in North America then in Asia and then in South America. The greatest decline wasn't seen in the segment information but lowest increase was seen in Germany and then in the European countries.
Agent Jennings makes a presentation on Medicare advertised as an educational event. Agent Jennings distributes materials that are solely educational in nature. However, she gives a brief presentation that mentions plan-specific premiums. Is this a prohibited activity at an event that has been advertised as educational?
Answer:
Yes it is
Explanation:
Yes. When an event has been advertised as educational, going ahead to discuss plan-specific premiums is impermissible
The event for which Mary made the presentation is clearly an educational event so she should have concentrated fully on only educational contents that pertains to the event. Giving a presentation that mentions plan-specific premiums no matter how brief is a deviation from the main focus of the event. Therefore it is impermissible for her to do so.