Answer:
Sell before assembly, the company will be better off by $3 per unit
Explanation:
the aim of a firm is to maximise profit. The decision the firm would make would be based on the decision that yields the higher profit
Profit = revenue - cost
Profit that would be earned from selling the unassembled unit = $52 - $24 = $28
Profit that would be earned from selling the assembled unit = $64 - ($15 + $24) = 25
The profit from selling the unassembled product is greater than the profit from selling the assembled product by $3. The firm would prefer to sell the unassembled unit
2. Which group listed below can be used to set indents and
spacing?
Explanation:
nothing is listed below
The rational rule of consumption is to consume more today if the: marginal benefit of a dollar of consumption today is greater than (or equal to) the marginal benefit of spending a dollar plus interest in the future. price of consumption today exceeds the dollar-plus-interest in the future. marginal benefit of a dollar of consumption today is less than the marginal benefit of spending a dollar plus interest in the future. real interest rate in the future is expected to be higher than the real interest rate today.
Answer:
marginal benefit of a dollar of consumption today is greater than (or equal to) the marginal benefit of spending a dollar plus interest in the future.
Explanation:
A rational consumer should consume more today when the marginal benefit of a dollar of consumption today is greater than (or equal to) the marginal benefit of spending a dollar plus interest in the future.
A rational consumer should continue to consume up until the point where the marginal benefit of a dollar of consumption today is equal to the marginal benefit of spending a dollar plus interest in the future
If the marginal benefit of a dollar of consumption today is less than the marginal benefit of spending a dollar plus interest in the future, a rational consumer should postpone consumption until the future.
Pension data for David Emerson Enterprises include the following:_______.
($ in millions)
Discount rate, 12%
Projected benefit obligation, January 1 $ 350
Projected benefit obligation, December 31 485
Accumulated benefit obligation, January 1 320
Accumulated benefit obligation, December 31 435
Cash contributions to pension fund, December 31 170
Benefit payments to retirees, December 31 58
Required:
Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31.
Service cost million
Answer:
$151 million
Explanation:
Calculation to determine the service cost component of pension expense for the year ended December 31.
Projected benefit obligation, December 31 $485 million
Add Benefit payments to retirees, December 31 $58 million
Less Interest cost ($42 million)
(350*12%)
Less Projected benefit obligation, January 1 ($350 million)
Service cost $151 million
Therefore the service cost component of pension expense for the year ended December 31 will be $151 million
Kevin O’Leary suggests that Jenn and Kelley decrease the price of their product by 50% and sell 10 times as many. That is, he predicts if they drop the price of their product from $40 to $20 they will increase their quantity demanded from 6,000 to 60,000. Calculate the price elasticity of demand for Pursecases using the midpoint formula from this information
Answer:
The price elasticity of demand for Pursecases using the midpoint formula from this information is -2.45.
Explanation:
From the question, we have:
New quantity demanded = 60,000
Old quantity demanded = 6,000
New price = $20
Old price = $40
The formula for calculating the price elasticity of demand is as follows:
Price elasticity of demand = Percentage change in quantity demanded /
Percentage change in price ................ (1)
Where, based on the midpoint formula, we have:
Percentage change in quantity demanded = {(New quantity demanded - Old
quantity demanded) / [(New quantity demanded + Old quantity demanded) /
2]} * 100 = {(60,000 - 6,000) / [(60,000 + 6,000) / 2]} * 100 = 163.636363636364%
Percentage change in price = {(New price - Old price) / [(New price + Old
price) / 2]} * 100 = {(20 - 40) / [(20 + 40) / 2]} * 100 = -66.6666666666667%
Substituting the values into equation (1), we have:
Price elasticity of demand = 163.636363636364% / -66.6666666666667% = -2.45454545454546
Rounding to 2 decimal places, we have:
Price elasticity of demand = -2.45
Therefore, the price elasticity of demand for Pursecases using the midpoint formula from this information is -2.45.
When The price elasticity of demand for Purchase then we are using the midpoint formula from this information is: -2.45.
Elasticity of demandAccording to the Elasticity of demand, are refers to the degree within the change in demand and also when there is a little change in another economic factor, like price or income.
Then New quantity demanded is = 60,000Old quantity demanded is = 6,000
After that New price are = $20
Then Old price is = $40
When The Price elasticity of demand is = Percentage change in quantity demanded / percentage change in price are
Percentage change in quantity demanded = * 100
= * 100
= 163.636363636364%[/tex]
Percentage change in price
= * 100
= * 100 = -66.6666666666667%[/tex]
Then Substituting the values into equation (1), we have:
Price elasticity of demand is =163.636363636364% [tex]-66.6666666666667% = -2.45454545454546[/tex}
Then the Price elasticity of demand is = -2.45
Thus, the value elasticity of demand for Purchase using the midpoint formula from this information is -2.45.
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Mr. and Mrs. FB, a retired couple, decided to open a family restaurant. During March and April, they incurred the following expenses: Prepaid rent on commercial real estate ($2,100 per month from April through December) $ 18,900 Prepaid rent on restaurant equipment ($990 per month from April through December) 8,910 Advertising of upcoming grand opening 900 Staff hiring and training 11,500 $ 40,210 Mr. and Mrs. FB served their first meal to a customer on May 1. Determine the tax treatment of the given expenses on their tax return.
Answer:
$7,920 for rent on the equipment
$16,800 for rent on the commercial real estate
Explanation:
Calculation to Determine the tax treatment of the given expenses on their tax return.
First step is to calculate the Start Up Expenditure
Rent for April:
Commercial real estate $2,100
Equipment $990
Advertising during pre-operating phase $900
Staff hiring and training during pre-operating phase 11,500
Start Up Expenditure $15,490
Second step is to calculate the amount capitalized over 180 months
Amount capitalized over 180 months=$15,490 - $5,000 = $10,490
Amount capitalized over 180 months=$10,490 / 180 months
Amount capitalized over 180 months=$58.28 per month
Third step is to calculate the amortization deducted from this year’s tax return
Amortization deducted from this year’s tax return=(April – December = 8 months) ($58.28 x 8 months
Amortization deducted from this year’s tax return = $466.24
Now let Determine the tax treatment of the given expenses on their tax return
They can deduct ($990 x 8 months)$7,920 for rent on the equipment from May-December*
They can deduct ($2,100 x 8 months)$16,800 for rent on the commercial real estate fromMay-December
Categorize the statements according to whether they promote economic growth or inhibit economic growth. Promote economic growth Inhibit economic growth clear laws regarding the transfer of property from one person to another the creation of a price floor on sugar the enforcement of trademarks A nation's central bank declares it will print money to pay for government expenditure. the development of regulations that make creating small businesses difficult a corrupt government the use of competitive markets to allocate goods and services
Answer:
Categorization of Statements
Promotion of Economic Growth:
- clear laws regarding the transfer of property from one person to another
- the enforcement of trademarks
- A nation's central bank declares it will print money to pay for government expenditure.
- the use of competitive markets to allocate goods and services
Inhibition of Economic Growth:
- the creation of a price floor on sugar
- the development of regulations that make creating small businesses difficult
- a corrupt government
Explanation:
Economic growth can be increased by the reduction of the borrowing costs and interest rates and encouraging consumer spending and business investments.
The factors that inhibit economic growth also create market inefficiencies. They include lack of basic infrastructure, healthcare, and education, capital flight and economic uncertainties, ageing population, political instability, and rampant corruption.
The definition of Not Utilizing Staff Talent in the Eight Wastes refers to a. making more than the customer wants or more than you have demand for b. idle time when resources are not being used c. a product that is less than perfect d. not encouraging employee ideas or undermining their efforts e. both b and d
Answer:
d. not encouraging employee ideas or undermining their efforts.
Explanation:
Human resources management (HRM) can be defined as an art of managing, controlling and improving the number of people (employees or workers), functions, activities which are being used effectively and efficiently by an organization.
Hence, human resources managers are saddled with the responsibility of recruiting, managing and improving the welfare and working conditions of the employees working in an organization.
The definition of Not Utilizing Staff Talent in the Eight Wastes refers to not encouraging employee ideas or undermining their efforts.
g Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 27,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 114,000. Units completed and transferred out: 141,000. Ending Inventory: 31,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $45,000. Costs in beginning Work in Process - Conversion: $50,850. Costs incurred in February - Direct Materials: $311,160. Costs incurred in February - Conversion: $601,150. Calculate the cost per equivalent unit of conversion. Group of answer choices $4.76 $3.96 $5.29 $4.34 $5.69
Answer:
Conversion cost per equivalent unit = $4.76
Explanation:
Conversion cost per equivalent unit = Total conversion cost / Equivalent units
Conversion cost is the sum of the direct labour cost and the factory overhead cost.
Equivalent units are notional whole units which represent incomplete work and are used to apportion cost between work progress and completed work. These units are determined as follows:
Equivalent units = Degree of work done(%) × units of inventory
Equivalent units
Item Unit Equivalent unit
Completed unit 140,000 140000× 100% 140,000
Closing inventory 31,000 31,000× 30% 9,300
Total equivalent unit 149,300
Completed units = opening inventory + units started in the period - closing inventory
Completed units = 27000 + 114,000 - 31,000 = 140,000
The conversion cost = 50,850 + 601,150 = 652,000
conversion cost per equivalent unit = 652,000 /140,000 = 4.65
Conversion cost per equivalent unit = $4.76
The Sunland 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, Sunland has decided to locate a new factory in the Panama City area. Sunland 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 $612,100, useful life 26 years. Building B: Lease for 26 years with annual lease payments of $71,490 being made at the beginning of the year. Building C: Purchase for $655,200 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,850. Rental payments will be received at the end of each year. The Sunland Inc. has no aversion to being a landlord.
Instructions:
In which building would you recommend that Brubaker Inc. locate, assuming a 12% cost of funds?
Answer:
Building C
Explanation:
To solve this, we find the present value of each of the buildings.
Building A: We are told that it is to be Purchased for a cash price of $612,100, useful life 26 years. Thus;
PV = $612000
Building B: PV = 71490 + (71490 × ((1+r)ⁿ - 1)/(r(1+r)ⁿ)
Where,
r = 12% = 0.12
n = 26 - 1 = 25
Thus;
PV = 71490 + (71490 × (1 + 0.12)^(25) -1)/(0.12(1 + 0.12)^25)
PV = = $632196
Building C:
PV = 655200 - 6850 × ((1+r)ⁿ - 1)/(r(1+r)ⁿ)
Where;
r = 12% = 0.12
n=26
Thus;
PV = 655200 - (6850 × (1 + 0.12)^(25) -1)/(0.12(1 + 0.12)^25)
PV = $601474
Thus, the minimum PV is building C and therefore it is the one I will recommend that Brubaker Inc. locate
Paul Company had 100,000 shares of common stock outstanding on January 1, 2021. On September 30, 2021, Paul sold 40,000 shares of common stock for cash. Paul also had 6,000 shares of convertible preferred stock outstanding throughout 2021. The preferred stock is $100 par, 6%, and is convertible into 3 shares of common for each share of preferred. Paul also had 420, 8%, convertible bonds outstanding throughout 2021. Each $1,000 bond is convertible into 30 shares of common stock. The bonds sold originally at face value. Reported net income for 2021 was $270,000 with a 40% tax rate. Common shareholders received $1.20 per share dividends after preferred dividends were paid in 2021.
Required: Compute basic and diluted earnings per share for 2021. (Round your answers to 2 decimal places.)
Answer:
Basic EPS = [$270,000 - (6% * $100 * 6,000)] / [100,000 + 40,000 * 3/12]
Basic EPS = [$270,000 - $36,000] / 35,000
Basic EPS = $234,000 / 35,000
Basic EPS = 6.685714285714286
Basic EPS = 6.69
Diluted EPS = [$270,000 + ($420,00*8%*60%)] / [100000 + 40,000 * 3/12 + (420*30) + (6,000*3)]
Diluted EPS = [$270,000 + $2,016] / [35,000 + 12600 + 18,000]
Diluted EPS = $272,016 / 65,600
Diluted EPS = 4.146585365853659
Diluted EPS = $4.15
recommend two ways in which women and children can be protected from discrimination and violence
Answer:
People always assume woman and children need to be protected from discrimmination, when in reality, they are stronger to deal with it themselves. For examole, of they become activists and speak up for themselves, they would control the flow of discrimmination, and the children can be more edcated on what discrimmination is, and understand how to come to terms with their identitity without being silenced and viewed as weak
Explanation:
Answer: 1. Women/children could stand up for themselves
2. We are all created equal, we all deserve the same respect as anyone else. Woman, child, man, everyone should be treated as an equal
Explanation:
— I’m in 6th grade P.S.
:)
On January 1, 2021, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $290,000 for the machine and is leasing it to Zone for $37,000 per year, an amount that will return 7% to Calloway. The present value of the lease payments is $290,000. The lease payments are due each January 1, beginning in 2021. What is the appropriate interest entry on December 31, 2021
Answer and Explanation:
The appropriate interest entry on December 31, 2021 is presented below
Interest receivable $17,710 (($290,000 - $37,000) × 0.07)
To Interest revenue $17,710
(Being interest is recorded)
Here the interest receivable is debited as it increased the assets and credited the interest revenue as it also increased the revenue
Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:
Base price level 100
Current U.S. price level 105
Current South African price level 111
Base rand spot exchange rate $0.175
Current rand spot exchange rate $0.158
Expected annual U.S. inflation 7%
Expected annual South African inflation 5%
Expected U.S. one-year interest rate 10%
Expected South African one-year interest rate 8%
Required:
Calculate the following exchange rates (ZAR and USD refer to the South African rand and U.S. dollar, respectively)
a. The current ZAR spot rate in USD that would been forecast by PPP.
b. Using the IFE, the expected ZAR spot rate in USD one year from now.
c. Using PPP, the expected ZAR spot rate in USD four years from now.
Answer:
a. Current spot rate / Base spot rate = Price level in home country / Price level in foreign country
CSR / 0.175 =105 / 111
CSR = (105/ 111) * 0.175
= $0.1655 / ZAR
b. Expected ZAR spot rate / Current ZAR spot rate = (1 + interest rate in home country) / (1 + interest rate in foreign country)
Expected ZAR spot rate / 0.158 = (1 + 10%) / ( 1 + 8%)
Expected ZAR spot rate = (1.1/1.08) * 0.158
= $0.1609 / ZAR
c. Expected ZAR spot rate / Current ZAR spot rate = (1 + inflation rate in home country) / (1 + inflation rate in foreign country)
Expected ZAR spot rate / 0.158 = (1 + 7%) / ( 1 + 5%)
= 1.07/1.05 * 0.158
= $0.1610 / ZAR
usiness Solutions sells upscale modular desk units and office chairs in the ratio of 3:2 (desk unit:chair). The selling prices are $1,250 per desk unit and $500 per chair. The variable costs are $750 per desk unit and $250 per chair. Fixed costs are $120,000. Required: 1. Compute the selling price per composite unit. 2. Compute the variable costs per composite unit. 3. Compute the break-even point in composite units. 4. Compute the number of units of each product that w
Answer:
1. Selling price per composite unit = Price of desk unit * (Ratio of desk unit) + Price of chair * (Ratio of chair)
= $1250*(3) + $500*(2)
= $3,750 + $1,000
= $4,750
2. Variable costs per composite unit = Variable cost per desk unit * (Ratio of desk unit) + Variable cost per chair * (Ratio of chair)
= $750*(3) + $250*(2)
= $2,250 + $500
= $2,750
3. Break even point in composite units = Fixed costs / (Composite selling price - Composite variable cost)
= $120,000 / ($4750 - $2750)
= $120,000 / $2000
= 60 units
4. Number desk units sold at break even point = 60 composite units* 3 per composite unit = 180 units
Number of chairs sold at break even point = 60 composite units * 2 per composite unit = 120 units
JRJ Corporation issued 10-year bonds at a price of $1,000. These bonds pay $60 interest every six months. Their price has remained the same since they were issued; that is, the bonds still sell for $1,000. Due to additional financing needs, the firm wishes to issue new bonds that would have a maturity of 10 years and a par value of $1,000 and pay $40 interest every six months. If both bonds have the same yield, how many new bonds must JRJ issue to raise additional capital of $2 million
Answer:
JRJ must issue 2,596 bonds to raise additional capital of $2 million.
Explanation:
From the question, we have the following:
Amount needed to be raised = $2 million = $2,000,000
Coupon rate = 8.0%, or 0.08
FV = Face value = 1000
Year to maturity = 10
NPER = Number of period = Year to maturity * Number of semiannuals in a year = 10 * 2 = 20
PMT = (FV * Coupon rate) / Number of semiannuals in a year =(1000 * 0.08) / 2 = 40
Rate = Semiannual interest / FV = $60 / $1000 = 0.06
The net proceeds can be calculated using the following excel function:
Net proceed = PV(rate, NPER, -PMT, -FV) ........... (1)
Substituting all the relevant value into equation (1), we have:
Net proceed = PV(6%, 20, -40, -1000)
Inputing =PV(6%, 20, -40, -1000) in any cell in excel sheet (Note: as done in the attached excel file), we have:
Net proceed = $770.60
Therefore, we have:
Number of bonds that must be raised = Amount needed to be raised / Net proceed = $2,000,000 / $770.60 = 2,596
All of the following regarding accounting for Treasury Stock are true except: Multiple Choice Corporations do not record gains or losses on transactions involving their own stock. Treasury Stock receives cash dividends but not stock dividends. Purchasing Treasury Stock reduces the corporation’s assets and equity by equal amounts. Treasury Stock is presented on the balance sheet as a contra equity account. Treasury Stock does not have voting rights.
Answer:
Treasury Stock receives cash dividends but not stock dividends.
Explanation:
Shares owned by the issuing company itself are considered as Treasury Stock. Prime reason company buys their own stock to reduce dividend expense and save cash. So, it does not make any sense to pay dividends to Treasury stock.
Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the work in process inventory consists of 180,000 units that are 30% complete with respect to conversion. Beginning inventory had $420,000 of direct materials and $139,000 of conversion cost. The direct material cost added in November is $2,220,000, and the conversion cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 60,000 were from beginning work in process and 640,000 units were started and completed during the period.
Required:
a. Determine the equivalent units of production with respect to direct materials and conversion.
b. Compute both the direct material cost and the conversion cost per equivalent unit.
c. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory.
Answer:
Victory Company
Materials Conversion Total
a. Equivalent units of production: 880,000 754,000
b. Cost per equivalent unit $3.00 $4.50
c. Total cost transferred out $2,100,000 $3,150,000 $5,250,000
Ending Work in Process 540,000 243,000 783,000
Explanation:
a) Data and Calculations:
Units transferred out = 700,000
Ending Work in process = 180,000
Total equivalent units:
Materials Conversion
Units transferred out 700,000 (100%) 700,000 (100%)
Ending Work-in-Process 180,000 (100%) 54,000 (30%)
Total equivalent units 880,000 754,000
Cost of production:
Materials Conversion Total
Beginning Inventory $420,000 $139,000 $559,000
Added in November 2,220,000 3,254,000 5,474,000
Total production costs $2,640,000 $3,393,000 $6,033,000
Cost per equivalent unit:
Materials Conversion
Total production costs $2,640,000 $3,393,000
Total equivalent units 880,000 754,000
Cost per equivalent unit $3.00 $4.50
Cost assigned:
Materials Conversion Total
Units transferred out 700,000 700,000
Cost per equivalent unit $3.00 $4.50
Total cost transferred out $2,100,000 $3,150,000 $5,250,000
Ending Work in Process 540,000 243,000 783,000
Total cost $2,640,000 $3,393,000 $6,033,000
Ignacio and Perla are married and both are government employees. They contribute 22) money to various organizations each year and file a joint return. Their adjusted gross income for 2018 is $100,000. They contributed to the following organizations in 2018:
$3,500 to the World Wildlife Foundation
$10,000 to the Salvation Army
$2,000 to a local city council candidate
$11,000 to a breast cancer research hospital
Donated clothing to Goodwill. (Ignacio purchased the items for $375, but the thrift shop value of the same items at a local second-hand store is equal to S60.)
How much can Ignacio and Perla deduct as charitable contributions for the year 2018?
A) $26,560.
B) $25,710
C) $26,500.
D) S24,560.
Answer: D. $24,560
Explanation:
The contributions to charity and the clothing to Goodwill can be considered charitable deductions but the goodwill clothing must be value at second-hand value.
= Donation to WWF + Salvation Army + Breast Cancer research + Goodwill
= 3,500 + 10,000 + 11,000 + 60
= $24,560
According to the theory of comparative advantage, consumers in all nations can consume more if there are
Answer:
no restrictions on trade
Explanation:
Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.
The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.
In 1817, David Ricardo who is an english political economist talked about the law of comparative advantage in his book “On the Principles of Political Economy and Taxation." where he asserted that countries can become better off by specializing in what they do or produce best and eliminate trade barriers (restrictions).
This simply means that, any country applying the principle of comparative advantage, would enjoy an increase in output and consequently, a boost in their Gross Domestic Products (GDP).
Hence, according to the theory of comparative advantage, consumers in all nations can consume more if there are no restrictions on trade.
The city of Bethville establishes an Internal Service Fund to account for printing services provided to the various departments of the government. Police chief, Winston Watson, authorizes the payment of $2,000 for printing services provided by the Printing Services Internal Services Fund. The accounting department makes the payment. What entry should be reported in the Printing Services Internal Service Fund for receipt of the payment
Answer:
Dr Cash $2,000
Cr Transfer in from General Fund $2,000
Explanation:
Based on the information given if Winston authorizes the payment of the amount of $2,000 for the printing services that was rendered by the Printing Services Internal Services Fund which means that if The accounting department makes the payment the Journal entry that should be reported in the Printing Services Internal Service Fund for receipt of the payment is :
Dr Cash $2,000
Cr Transfer in from General Fund $2,000
Officials from the City of Galveston and State of Texas gathered to celebrate the start of a beach restoration project that involves dumping sand and adding antierosion structures. The first cost of the project is $30 million with annual maintenance estimated at $340,000. If the restored/expanded beaches attract visitors who will spend $6.2 million per year, what is the conventional B/C ratio at the social discount rate of 8% per year
Answer:
The conventional B/C ratio is 1.83.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Officials from the City of Galveston and State of Texas gathered to celebrate the start of a beach restoration project that involves dumping sand and adding antierosion structures. The first cost of the project is $30 million with annual maintenance estimated at $340,000. If the restored/expanded beaches attract visitors who will spend $6.2 million per year, what is the conventional B/C ratio at the social discount rate of 8% per year. Assume the State wants to recover the investment in 20 years.
Explanation of the answers is now given as follows:
From the question, we have:
First cost = $30 million, or $30,000,0000
Estimated annual maintenance cost = $340,000
Expected annual revenue = Amount to spend per year by the visitors = $6.2 million, or 6,200,000
r = social discount rate per year = 8%, or 0.08
n = number of recover the investment years = 20
Incorporating the formula for calculating the present value of an ordinary annuity, we have:
B = Present worth of annual revenue = Estimated annual revenue * ((1 - (1 / (1 + r))^n) / r) = $6,200,000 * ((1 - (1 / (1 + 0.08))^20) / 0.08) = $60,872,513.93
C = Present worth of cost = First cost + (Estimated annual maintenance cost * ((1 - (1 / (1 + r))^n) / r)) = $30,000,0000 + ($340,000 * ((1 - (1 / (1 + 0.08))^20) / 0.08)) = $33,338,170.12
B/C ratio = B / C = $60,872,513.93 / $33,338,170.12 = 1.83
Therefore, the conventional B/C ratio is 1.83.
The Anderson Company has equal amounts of low-risk, average-risk, and high-risk projects. The firm's overall WACC is 12%. The CFO believes that this is the correct WACC for the company's average-risk projects, but that a lower rate should be used for lower-risk projects and a higher rate for higher-risk projects. The CEO disagrees, on the grounds that even though projects have different risks, the WACC used to evaluate each project should be the same because the company obtains capital for all projects from the same sources. If the CEO's position is accepted, what is likely to happen over time? a. The company's overall WACC should decrease over time because its stock price should be increasing. b. The CEO's recommendation would maximize the firm's intrinsic value. c. The company will take on too many low-risk projects and reject too many high-risk projects. d. The company will take on too many high-risk projects and reject too many low-risk projects. e. Things will generally even out over time, and, therefore, the firm's risk should remain constant over time
Answer:
d. The company will take on too many high-risk projects and reject too many low-risk projects.
Explanation:
Weighted Average Cost of capital is the firm's is the rate which a firm has to pay to the lenders of fund. There can be different WACC for different projects as the WACC is based on the business risk. The beta factor can be different for all projects and since it is dependent on the nature of project and the risk it involves.
Using FIFO for Multiproduct Inventory Transactions (Chapters 6 and 7) [LO 6-3, LO 6-4, LO 7-3] Skip to question [The following information applies to the questions displayed below.] FindMe Inc., (FI) has developed a coin-sized tracking tag that attaches to key rings, wallets, and other items and can be prompted to emit a signal using a smartphone app. FI sells these tags, as well as water-resistant cases for the tags, with terms FOB shipping point. Assume FI has no inventory at the beginning of the month, and it has outsourced the production of its tags and cases. FI uses FIFO and has entered into the following transactions:
Jan. 2: FI purchased and received 260 tags from Xioasi Manufacturing (XM) at a cost of $7 per tag, n/15.
Jan. 4: FI purchased and received 60 cases from Bachittar Products (BP) at a cost of $2 per case, n/20.
Jan. 6: FI paid cash for the tags purchased from XM on Jan. 2.
Jan. 8: FI mailed 160 tags via the U.S. Postal Service (USPS) to customers at a price of $30 per tag, on account.
Jan. 11: FI purchased and received 360 tags from XM at a cost of $10 per tag, n/15.
Jan. 14: FI purchased and received 160 cases from BP at a cost of $3 per case, n/20.
Jan. 16: FI paid cash for the cases purchased from BP on Jan. 4.
Jan. 19: FI mailed 120 cases via the USPS to customers at a price of $15 per case, on account.
Jan. 21: FI mailed 260 tags to customers at a price of $30 per tag.
1. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases.
2. Which product line yields more dollars of profit? - Which product line yields more profit per dollar of sales?
3. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases. (Round your "Gross Profit Percentage" answers to 2 decimal places.)
Answer:
1-a. Dollars of gross profit from selling tags = $9,180
1-b. Dollars of gross profit from selling cases = $1,500
1-c. Gross profit percentage from selling tags = 72.86%
1.d. Gross profit percentage from selling cases = 83.33%
2-a. Tag yields more dollars of profit.
2-b. Tag yields more profit per dollar of sales.
Explanation:
Note: The requirements for this question are two not three as erroneously stated. This is because, the first and the third question are the same. Therefore, the two relevant requirements of the question are:
1. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases.
2. Which product line yields more dollars of profit? - Which product line yields more profit per dollar of sales?
The explanation of the answers is now given as follows:
1. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases.
Sales revenue from tags = Sales value of 160 tags mailed to customers on Jan. 8 at a price of $30 per tag + Sales value of 260 tags mailed to customers on Jan. 21 at a price of $30 per tag = (160 * $30) + (260 * $30) = $12,600
Sales revenue from cases = Sales value of 120 cases mailed to customers on Jan. 19 at a price of $15 per case = 120 * $15 = $1,800
Total number of tags sold = 160 tags mailed to customers + 260 tags mailed to customers on Jan. 21 = 420
Total number of cases sold = 120 cases mailed to customers on Jan. 19 at a price of $15 per case = 120
Using FIFO, we have:
Cost of tags sold = Value of 260 tags purchased on Jan.2 from Xioasi Manufacturing (XM) at a cost of $7 per tag + Value of the remaining 160 (i.e. 420 – 260 = 160) tags sold based on the 360 tags purchased on Jan. 11 from XM at a cost of $10 per tag = (260 * $7) + (160 * $10) = $3,420
Cost of cases sold = Value of 60 cases purchased on Jan.4 from Bachittar Products (BP) at a cost of $2 per case + Value of the remaining 60 cases sold based on the 160 cases purchased on Jan. 14 from BP at a cost of $3 per case = (60 * $2) + (60 * $3) = $300
Therefore, we have:
1-a. Dollars of gross profit from selling tags = Sales revenue from tags - Cost of tags sold = $12,600 - $3,420 = $9,180
1-b. Dollars of gross profit from selling cases = Sales revenue from cases - Cost of cases sold = $1,800 - $300 = $1,500
1-c. Gross profit percentage from selling tags = (Dollars of gross profit from selling tags / Sales revenue from tags) * 100 = ($9,180 / $12,600) * 100 = 72.86%
1.d. Gross profit percentage from selling cases = (Dollars of gross profit from selling cases / Sales revenue from cases) * 100 = 83.33%
2. Which product line yields more dollars of profit? - Which product line yields more profit per dollar of sales?
2-a. Which product line yields more dollars of profit?
From part 1 above, we have:
Dollars of gross profit from selling tags = $9,180
Dollars of gross profit from selling cases = $1,500
Since the dollars of gross profit from selling tags of $9,180 is greater than the dollars of gross profit from selling cases of $1,500, this implies that Tag yields more dollars of profit.
2-b. Which product line yields more profit per dollar of sales?
From part 1 above, we have:
Total number of tags sold = 420
Total number of cases sold = 120
Therefore, we have:
Tag's profit per dollar of sales = Dollars of gross profit from selling tags / Total number of tags sold = $9,180 / 420 = $21.86
Case's profit per dollar of sales = Dollars of gross profit from selling cases / Total number of cases sold = $1,500 / 120 = $12.50
Since Tag's profit per dollar of sales of $21.86 is greater than Case's profit per dollar of sales of $12.50, this implies that Tag yields more profit per dollar of sales.
Conifer Craft is a furniture firm that specializes in creating customized furniture for the commercial market. The firm has recently acquired a large amount of funds from investors and is looking to diversify by introducing customized products for the industrial market. The firm has completed a complete situation analysis for the purpose and the results are favorable. According to the market segmentation process model, the firm must next:_________
Answer:
implement a portfolio strategy
Explanation:
According to information regarding the company Conifer Craft, it is possible to identify that the company is diversifying its portfolio by launching customized products for the industrial market. Therefore, after this market segmentation process, it is recommended that the company develops and implements a portfolio strategy, which aims to reduce the aggregate risks of the diversification of new product lines, improving the decision-making process, identifying the potential for value of each product line according to a strategic vision, so that the company remains competitive and well positioned in the market.
While implementing an affirmative action plan, an employer is expected to do all of the following except:establish objectives that can be met by applying good faith efforts.set quotas for the underrepresented groups, and ensure they are met even if it is necessary to hire a less qualified candidate.make all employment decisions in a nondiscriminatory manner.ensure that hiring objectives do not establish a floor or a ceiling for employment of certain groups.
Answer:
set quotas for the underrepresented groups, and ensure they are met even if it is necessary to hire a less qualified candidate.
Explanation:
Business strategy sets the overall direction for the business because it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan.
Planning is a term used to describe the process of developing the organization's objectives and translating those into courses of action.
This ultimately implies that, planning is a strategic technique used by organizations to make an aggregate plan for its manufacturing (production) process typically ahead of time, in order to have an idea of the level of goods that are to be produced and what resources are required so as to reduce the total cost of production to its barest minimum.
While implementing an affirmative action plan, an employer is expected to do all of the following;
I. Establish objectives that can be met by applying good faith efforts.
II. Make all employment decisions in a nondiscriminatory manner.
III. Ensure that hiring objectives do not establish a floor or a ceiling for employment of certain groups.
You just received a bonus at your job of $4,000 which you decide to put in a savings account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks get deposited in the banking system. Round your answers to the nearest dollar.The reserve requirement is 18%, how much will your deposit increase the total value of checkable deposits?If the reserve requirement is 7%, how much will your deposit increase the total value of checkable deposits?Decreasing the reserve requirement _____ the money supply.a. Decreasesb. Increases
Answer:
$22,222.22
$57,142.86
INCREASES
Explanation:
Reserve requirement is the portion of deposit received by banks that the central bank requires to be kept as deposit.
If $4000 is deposited and reserve requirement is 18%
reserves would increase by $4000 x 0.18 = 4720
Increase in the total value of checkable deposit is determined by the money multiplier
Money multiplier = amount deposited / reserve requirement
$4000 / 0.18 = $22,222.22
$4000 / 0.07 = $57,142.86
It can be seen that the higher the reserve requirement, the lower the increase in the total value of checkable deposit
Which term refers to the interest the Federal Reserve Bank (Fed) charges banks for loans? open‑market sale fractional banking reserve ratio money multiplier discount rate Select the charge the Fed levies on banks borrowing funds that would result in the smallest increase in the money supply. two percentage points above the private level one percentage point above the private level the same as the private level one percentage point below the private level two percentage points below the private level
Answer:
Which term refers to the interest the Federal Reserve Bank (Fed) charges banks for loans?
discount ratethe discount rate is the interest rate that the Federal Reserve System charges banks for the loans it makes. The overnight rate or the federal funds rate is even lower, but it lasts a few hours only.
Select the charge the Fed levies on banks borrowing funds that would result in the smallest increase in the money supply.
two percentage points above the private levelthe higher the interest rate, the lower the increase in the money supply.
Mr. Renaldo purchased 30 acres of undeveloped ranch land 10 years ago for $935,000. He is considering subdividing the land into one-third-acre lots and improving the land by adding streets, sidewalks, and utilities. He plans to advertise the 90 lots for sale in a local real estate magazine. Mr. Renaldo projects that the improvements will cost $275,000 and that he can sell the lots for $20,000 each. He is also considering an offer from a local corporation to purchase the 30-acre tract in its undeveloped state for $1.35 million. Assume that Mr. Renaldo makes no other property dispositions during the year and has a 35 percent tax rate on ordinary income and a 15 percent tax rate on capital gain. Required: Compute the after-tax cash flow if Mr. Renaldo develops the land. Compute the after-tax cash flow if Mr. Renaldo sells the land.
Answer is in the photo. I can only upload it to a file hosting service. link below!
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You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 7 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 10% per year compounded semiannually, what will be your minimum selling price for the bond
Answer:
$12,341.80
Explanation:
The computation of the minimum selling price for the bond is shown below:
Semi-annual = 10% ÷ 2 = 5%
Semi-annual compounding periods = 7 × 2 = 14
Semi-annual coupon (for 10 bonds) = $10,000 × 6.6% × (1 ÷ 2) = $330
as we know that
Here We assume the selling price be S
The Present worth of the bond = PW of future cash flows
$9,500 = $330 × P/A(5%, 14) + S × P/F(5%, 14)
$9,500 = $330 × 9.898641 + S × 0.505068
$9,500 = $3,266.55 + S × 0.505068
S × 0.505068 = $6,233.45
= $12,341.80
A company making tires for bikes is concerned about the exact width of their cyclocross tires. The company has a lower specification limit of 19.930 mm and an upper specification limit of 20.070 mm. The standard deviation is 0.18 mm and the mean is 20.000 mm. b. The company now wants to reduce its defect probability and run a "six-sigma process." To what level would they have to reduce the standard deviation in the process to meet this target? (Round the answer to 5 decimal places.)
Answer:
Missing word "a. What is the process capability index for the process?"
a. Cpk = Min[USL-μ/3σ, μ-LSL/3σ]
Cpk = Min[(20.070-20)/(3*0.18) ,(20-19.930)/(3*0.18]
Cpk = Min[0.1296, 0.1296]
Hence, process capability index is 0.1296
b. 2 = Min[USL-μ/3σ, μ-LSL/3σ]
2 = Min[(20.070-20)/(3*σ) ,(20-19.930)/(3*σ]
2 = Min[(0.07/3*σ, 0.07/3*σ)]
= Min[0.07/6, 0.07/6]
σ = 0.07/6
σ = 0.0117
Hence, reduced standard deviation level is 0.0117