Sometimes in these problems you may NOT be given the supply and demand functions in order to find the market equilibrium but will be asked to find them yourself. Say you take a poll of the class and find that, given the chance, 25 students would buy an apple for $2, but 35 students would buy an apple for $1. Which of the following would be the linear demand model for this situation? D(x)=−0.1x+4.50
D(x)=−2x+4.50
D(x)=−2x+2.50
D(x)=−0.1x+45
D(x)=−2x+45

Answers

Answer 1

The linear demand model for this situation is D(x)=−0.1x+4.50.

The demand function is a function that shows how the quantity demanded of a product changes as the price of the product changes. In this case, the demand function is linear, which means that it can be represented by a straight line.

The slope of the demand function is the change in the quantity demanded divided by the change in the price. In this case, the slope is -0.1, which means that for every $1 increase in the price, the quantity demanded decreases by 10 students.

The y-intercept of the demand function is the quantity demanded when the price is 0. In this case, the y-intercept is 4.5, which means that 4.5 students would buy an apple even if it were free.

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Related Questions

the burp maneuver usually involves applying backward, upward, and rightward pressure to the:

Answers

The burp manoeuvre usually involves applying backward, upward, and rightward pressure to the infant’s thorax (chest).

What is the burp manoeuvre?

Burping is a process that helps an infant release air from their stomach. Burping is essential since it helps alleviate stomach bloating and discomfort, which are common in newborns.

Burping is essential since it helps alleviate stomach bloating and discomfort, which are common in newborns. In addition, burping helps infants feel relaxed and comfortable while eating.

Burping is also important since it helps prevent or alleviate colic, a condition characterized by prolonged, uncontrollable crying among infants.

The burp manoeuvre, which is used to release air from an infant's stomach, is performed in the following way:

Place the infant in an upright position on your lap or against your shoulder with the infant's chin resting on your shoulder.

Gently pat the baby's back while applying backward, upward, and rightward pressure to their chest. This burping technique is called the burp maneuver.

If your baby fails to burp, stop the maneuver after five minutes and resume feeding. Additionally, attempt to burp the baby after each feeding.

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Respond to the following in a minimum of 175 words:
Describe the purpose of the five primary financial statements.
Statement of Comprehensive Income
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Shareholder's Equity
Give an example of a profitability, liquidity, and solvency ratio and explain the components and which financial statement would provide the information.

Answers

The five primary financial statements serve as crucial tools for understanding and evaluating the financial performance and position of a company. Each statement provides specific information that aids investors, stakeholders, and analysts in making informed decisions.

1. Statement of Comprehensive Income (also known as the Income Statement or Profit and Loss Statement): This statement presents a summary of revenues, expenses, gains, and losses over a specific period. It showcases the profitability of a company by calculating the net income or net loss after deducting expenses from revenues.

2. Balance Sheet: This statement presents the financial position of a company at a specific point in time. It provides a snapshot of a company's assets, liabilities, and shareholders' equity. The balance sheet illustrates the company's liquidity, solvency, and overall financial health.

3. Statement of Cash Flows: This statement tracks the inflow and outflow of cash and cash equivalents during a specific period. It categorizes cash flows into operating activities, investing activities, and financing activities. It offers insights into a company's liquidity, cash generation, and ability to meet its financial obligations.

4. Statement of Shareholders' Equity: This statement outlines the changes in shareholders' equity over a specific period. It includes components such as share capital, retained earnings, and other comprehensive income. The statement of shareholders' equity reflects the source of funds for the company's operations and investment activities.

Now, let's discuss examples of three important financial ratios and their components:

1. Profitability Ratio: Return on Equity (ROE)

ROE measures a company's ability to generate profit from shareholders' investments. It is calculated by dividing net income by shareholders' equity. The Income Statement provides the necessary information to compute ROE.

2. Liquidity Ratio: Current Ratio

The current ratio assesses a company's ability to meet short-term obligations. It is calculated by dividing current assets by current liabilities. The Balance Sheet provides the data required to calculate this ratio.

3. Solvency Ratio: Debt-to-Equity Ratio

This ratio indicates the proportion of debt financing compared to equity financing. It is calculated by dividing total liabilities by shareholders' equity. The information needed to compute this ratio is available on the Balance Sheet.

In conclusion, the primary financial statements serve distinct purposes, providing valuable insights into a company's financial performance, position, and cash flow. These statements, along with financial ratios, allow stakeholders to assess profitability, liquidity, and solvency, aiding in decision-making processes.

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Is foreign aid positive or negative?

Answers

Foreign aid has the potential to bring positive change and support development, but it also has its challenges and limitations. A balanced approach, considering the specific context and needs of recipient countries, is crucial to maximize its benefits and minimize potential negative impacts.

1. Positive impact: Foreign aid can provide immediate relief during times of crisis, such as natural disasters or humanitarian emergencies. It can help save lives by providing essential supplies, medical assistance, and food to those in need.Aid can also support the development of infrastructure in developing countries. For example, it can be used to build schools, hospitals, roads, and clean water systems, improving the quality of life for local communities. It can contribute to economic growth by promoting trade and investment. Aid can provide resources and support to develop industries, create jobs, and stimulate economic activity.

2. Negative impact: There is a risk of aid dependency, where recipient countries become reliant on external assistance and fail to develop sustainable solutions to their problems. This can hinder self-reliance and perpetuate poverty. Aid can sometimes be mismanaged or misallocated, leading to corruption and misuse of funds. This can hinder development efforts and undermine the intended impact.It may distort local markets by flooding them with free or subsidized goods, which can harm local industries and hinder economic growth.

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Suppose a stock had an initial price of $68 per share, paid a dividend of $1.20 per share during the year, and had an ending share price of $85. Compute the percentage total return. Multiple Choice 25.43% 28.10% 26.76% 21.41%

Answers

The percentage total return is approximately 26.76% Correct option is C .

To compute the percentage total return, we need to consider both the dividend received and the change in stock price.

The dividend received per share is $1.20.

The change in stock price can be calculated as the difference between the ending share price and the initial price:

Change in stock price = Ending share price - Initial price

= $85 - $68

= $17

To calculate the percentage total return, we divide the sum of the dividend and the change in stock price by the initial price, and then multiply by 100:

Percentage total return = [(Dividend + Change in stock price) / Initial price] * 100

= [(1.20 + 17) / 68] * 100

= (18.20 / 68) * 100

26.76%

Therefore, the percentage total return is approximately 26.76%.

The correct answer choice is: 26.76%.

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Compensation and benefits are key factors in recruiting and retaining the best talent for any level job in every industry. Employers know that it is tough to find and keep good talent. As a result, more companies are offering very competitive benefits packages. It might be difficult for a smaller company to compete with bigger companies because a smaller company might not have the financial means to do so. Even without the deep pockets that big corporations have, small business owners can strategically plan to compete with compensation and benefits programs. Instruction: Describe the competitive benefits package that can be designed by an organisation with less than 100 employees to have an added advantage over bigger organisations.

Answers

Employers can compete with bigger corporations by offering a competitive benefits package that is tailored to the needs and wants of employees.

A company with less than 100 employees can design a benefits package that includes flexible working hours, opportunities for career development, health and wellness programs, and paid time off.

Flexible working hours: Flexible working hours is one of the most important benefits that can be offered to employees.

This is because it enables employees to have a better work-life balance.

With this benefit, employees can work from home, come in late or leave early when necessary without losing their job opportunities.

Opportunities for career development: Smaller businesses can provide opportunities for career development to their employees.

This can be done through training programs and mentorship programs.

This not only motivates employees to stay with the company but also increases their skills and knowledge, which is beneficial for both the employee and the company.

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Wentworth's Five and Dime Store has a cost of equity of 10.7 percent. The company has an aftertax cost of debt of 4.3 percent, and the tax rate is 21 percent. If the company's debt-equity ratio is .67, what is the weighted average cost of capital? Multiple Choice 7.44% 7.10% 6.51% 8.13% 5.84%

Answers

Weighted average cost of capital  is 8.13% . Correct option is C

To calculate the weighted average cost of capital (WACC), we need to consider the cost of equity, the aftertax cost of debt, and the debt-equity ratio.

Cost of equity (Ke): 10.7%

Aftertax cost of debt (Kd): 4.3%

Tax rate (T): 21%

Debt-equity ratio (D/E): 0.67

To calculate WACC, we use the formula:

WACC = (E / V) * Ke + (D / V) * Kd * (1 - T)

Where:

E = Market value of equity

D = Market value of debt

V = Total market value of equity + debt

Since the market values of equity and debt are not provided, we cannot calculate WACC directly. However, we can still determine the approximate answer by using the given information.

Let's assume that the market value of equity is equal to the market value of debt (this is just an assumption for simplicity).

Using the debt-equity ratio, we can calculate the weights of equity and debt:

Weight of equity (We) = D/E = 0.67

Weight of debt (Wd) = 1 - We = 1 - 0.67 = 0.33

Now we can calculate the approximate WACC:

WACC = We * Ke + Wd * Kd * (1 - T)

= 0.67 * 10.7% + 0.33 * 4.3% * (1 - 21%)

= 7.149% + 1.116% * 0.79

= 7.149% + 0.88%

≈ 8.03%

Therefore, the closest option from the given choices is 8.13%.

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Garfield, Inc. began operations in 2019, and reported the following for its first three years of operations. 2022's books have not been closed. The draft income statement for 2022 shows net income of

Answers

You can determine the net income for 2021 by taking the difference between the total revenues and the total costs for that year assuming Garfield, Inc.

started business in 2019 and you have the income statements for 2019 and 2020. However, I am unable to analyse the company's financial performance or produce an exact estimate of net income for 2022 without the precise financial data. You would need to have access to the company's financial documents for that specific year, which should include information on revenues, expenses, and net income, to compute the net income for 2022.

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Matt’s Manufacturing & Customs stocks a special switch connector in his central warehouse for the sake of supplying the field service crew when they need them for customer breakdowns. The yearly demand for these connectors is 15000. Matt estimates his holding cost for this item to be $25 per unit. The cost to place and process an order for more of these connectors is $75. Matt’s company operates 300 days per year, and the lead time promised (and observed) from the supplier of the switch connector is 2 days.
a) Determine the economic order quantity.
b) Determine the annual holding cost.
c) Determine the annual ordering cost.
d) What would be the most reasonable reorder point

Answers

a) Determine the economic order quantity(E.O.Q)E.O.Q = √((2DS)/(H))Where D = Annual Demand of the product S = Cost per purchase order H = Holding cost per unit per year Now substitute the given values in the formula to calculate E.O.Q:E.O.Q = √((2 × 15000 × 75)/25)E.O.Q = 109.54 ~ 110 units

b) Determine the annual holding cost. Annual holding cost = (Q/2) * H * D/Q

Where Q = order quantity H = Holding cost per unit per year D = Annual demand of the product Now, substitute the given values in the formula to calculate the annual holding cost. Annual holding cost = (110/2) × 25 × 15000/110Annual holding cost = $1714.29

c) Determine the annual ordering cost. Annual ordering cost = (D/Q) * S Where D = Annual demand of the product S = Cost per purchase order Q = Order quantity Now substitute the given values in the formula to calculate the annual ordering cost. Annual ordering cost = (15000/110) × 75Annual ordering cost = $10227.28

d) What would be the most reasonable reorder point The most reasonable reorder point can be calculated as: Reorder Point (R) = Lead time demand + Safety stock R = L × D + Z × (σL × √D)L = Lead time = 2 days D = Annual demand = 15000Z = Z value for safety stock based on the desired service level.

Here, the service level is not given. Therefore, let’s assume the service level as 95% for calculating the Z value. Z value for the 95% service level is 1.645σL = Standard deviation of lead time demand. This value is not given. Therefore, let’s assume this value to be 10% of LDD Now substitute the given values in the formula to calculate the reorder point. R = 2 × 15000 + 1.645 × (0.1 × 2 × 15000)R = 30195.6 ~ 30196 units.

Therefore, the most reasonable reorder point is 30196 units. This problem is related to inventory management. The inventory management problem is to determine the optimal level of inventory to minimize the total inventory cost. The total inventory cost is the sum of the ordering cost and the holding cost.

In this problem, the company Matt’s Manufacturing & Customs stocks a special switch connector in his central warehouse for the sake of supplying the field service crew when they need them for customer breakdowns. The yearly demand for these connectors is 15000. The cost to place and process an order for more of these connectors is $75. Matt estimates his holding cost for this item to be $25 per unit.

Matt’s company operates 300 days per year, and the lead time promised (and observed) from the supplier of the switch connector is 2 days. Using the given data, we have calculated the economic order quantity (E.O.Q), the annual holding cost, the annual ordering cost, and the most reasonable reorder point. The economic order quantity (E.O.Q) is the order quantity that minimizes the total inventory cost. It is calculated using the formula E.O.Q = √((2DS)/(H)). In this problem, the E.O.Q is 110 units. The annual holding cost is the cost of holding inventory for a year. It is calculated using the formula Annual holding cost = (Q/2) * H * D/Q. In this problem, the annual holding cost is $1714.29.

The annual ordering cost is the cost of placing and processing an order. It is calculated using the formula Annual ordering cost = (D/Q) * S. In this problem, the annual ordering cost is $10227.28.The most reasonable reorder point is the inventory level at which the company should place an order for more units. It is calculated using the formula Reorder Point (R) = Lead time demand + Safety stock. In this problem, the most reasonable reorder point is 30196 units.

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Suppose that Annie has a utility function of U(x1, x2 ) = log (x1) + x2. Initially, she has $400 to spend, and the price of each good is $4. If the price of good 1 decreases to $2, what is the change in quantity demanded of good 1 due to the substitution and income effects?

Answers

To determine the change in quantity C of good 1 due to the substitution and income effects, we need to analyze the impact of the price change on Annie's utility maximization problem.

Annie's utility function is U(x1, x2) = log(x1) + x2, where x1 represents the quantity of good 1 and x2 represents the quantity of good 2.

Initially, Annie has $400 to spend, and the price of each good is $4. This means she can purchase 400/4 = 100 units of each good.

To find the change in quantity demanded of good 1 due to the substitution effect, we need to compare Annie's optimal consumption bundle before and after the price change, while keeping her utility constant. The substitution effect captures the change in consumption of one good when the price of another good changes, assuming the consumer is still able to achieve the same level of utility.

Let's calculate Annie's initial optimal consumption bundle. Since the price of each good is $4 and Annie has $400 to spend, she can purchase 100 units of each good (x1 = 100 and x2 = 100).

Now, let's consider the price change. The price of good 1 decreases to $2. To find the new optimal consumption bundle, we need to adjust Annie's consumption of each good to achieve the same level of utility as before.

The first step is to calculate Annie's marginal utility of good 1 (MU1) and her marginal utility of good 2 (MU2) at the initial bundle.

MU1 = ∂U/∂x1 = 1/x1

MU1 (initial) = 1/100 = 0.01

MU2 = ∂U/∂x2 = 1

MU2 (initial) = 1

Since the price of good 1 decreased, its relative price compared to good 2 has also decreased. Annie will substitute more of good 1 for good 2 to maximize her utility. To find the new quantity demanded of good 1, we need to equate the marginal utility per dollar spent on each good.

MU1/P1 = MU2/P2

0.01/2 = 1/4

0.01 * 4 = 1 * 2

0.04 = 2

This equation shows that Annie's marginal utility per dollar spent on good 1 is equal to her marginal utility per dollar spent on good 2.

Therefore, the new quantity demanded of good 1 after the price change is x1 = 0.04 * 400 = 16 units.

To calculate the change in quantity demanded of good 1, we subtract the initial quantity from the new quantity:

Change in Quantity Demanded of Good 1 = New Quantity - Initial Quantity

Change in Quantity Demanded of Good 1 = 16 - 100

Change in Quantity Demanded of Good 1 = -84

The change in quantity demanded of good 1 due to the substitution effect is -84 units. This negative value indicates that Annie is substituting less of good 1 for good 2.

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A bond's current yield is 5.25% per year and the bond's yield to maturity is 5.57% per year. Therefore, the bond is trading at a ____ to its par value. If the bond's yield to maturity does not change, the bond's price will be ____ next year.
1) Discount, the same
2) Premium, lower
3) Discount, lower
4) Premium, higher
5) Discount, higher

Answers

The bond is trading at a discount to its par value. If the bond's yield to maturity does not change, the bond's price will be lower next year.The current yield is a measure of a bond's return based on its annual interest payment and current market price.

It is determined by dividing the bond's annual coupon payment by its current market price. The current yield is expressed as a percentage. Given the annual coupon payment, the current yield is inversely proportional to the bond's current market price.The bond's yield to maturity is the annual rate of return an investor would receive if they held the bond until it matured. The yield to maturity is expressed as an annual percentage rate. It takes into account the bond's current market price, its coupon rate, the time remaining until maturity, and the par value of the bond.

The yield to maturity reflects the total return on the bond, including interest payments and capital gains or losses if the bond is held to maturity. A bond's yield to maturity and its current yield are not the same.The bond's current yield of 5.25% per year is lower than its yield to maturity of 5.57% per year. This indicates that the bond is trading at a discount to its par value. When a bond is trading at a discount to its par value, its current market price is less than its face value.

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the market is highy price sensitive production and distrubtion costs gall as sales volume increases companies should not use a market penetration pricing strategy for a new product

Answers

A market penetration pricing strategy involves setting low initial prices for a new product to attract customers and gain market share. However, in a market that is highly price sensitive and where production and distribution costs decrease as sales volume increases, companies should not use a market penetration pricing strategy for a new product.



Additionally, if production and distribution costs decrease as sales volume increases, the company can benefit from economies of scale. This means that as more units of the product are produced and sold, the average cost per unit decreases. In such a scenario, it would be more beneficial for the company to set a higher price initially and gradually decrease it as production and sales volume increase.



For example, imagine a company introducing a new electronic gadget. If the market is highly price sensitive and the company sets a low initial price, competitors may quickly respond by lowering their prices as well. This can lead to a price war, where companies continuously lower their prices to attract customers. As a result, profit margins decrease for all companies involved.

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A bank holds $700 million in deposits and has given out $690 million in loans. The reserve requirement is 10%, and the bank currently has $80 million in reserves. The highest amount the bank can afford to lose to loan defaults without going bankrupt (of the amounts given below) is:
$10 million
$69 million
$79 million
$689 million

Answers

Given that:A bank holds $700 million in deposits and has given out $690 million in loans. The reserve requirement is 10%, and the bank currently has $80 million in reserves.The bank’s deposit is $700 million, and it has given out loans of $690 million.

It means that it only has $10 million ($700 million - $690 million = $10 million) left as a reserve, which is very low. Reserve is the money kept aside by the bank to pay the interest to its customers. The reserve requirement of 10% is set by the Federal Reserve Bank, which means that the bank must keep 10% of its deposit as a reserve. We can find the maximum amount the bank can afford to lose to loan defaults by using the following formula.

Maximum amount the bank can afford to lose = Deposits × Reserve requirement - ReservesWe plug in the values given in the problem:Maximum amount the bank can afford to lose = $700 million × 10% - $80 million= $70 million - $80 million= -$10 millionSince the bank’s reserves are only $80 million, and the maximum amount it can afford to lose is only -$10 million, it means that the bank is already bankrupt. The bank is not even able to cover the loss of $10 million; hence the answer is $0, which is not given in the options.The highest amount the bank can afford to lose to loan defaults without going bankrupt is $0.

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In 2021, the price of laptops fell and some manufacturers will switch from producing laptops in 2022 to making smart phones a. Does this fact illustrate the law of demand or the law of supply? Explain your answer.

Answers

The given fact that in 2021, the price of laptops fell and some manufacturers will switch from producing laptops in 2022 to making smart phones indicates the law of supply. The law of supply states that there is a direct relationship between the price of a commodity and the quantity supplied of that commodity.

When the price of a commodity rises, the quantity supplied also rises, and when the price falls, the quantity supplied also falls.

Therefore, in the given statement, as the price of laptops fell in 2021, some manufacturers switched from producing laptops to making smartphones in 2022. This indicates the law of supply where the producers try to maximize their profits by producing more of the commodities that yield higher profits.

In the case of the given statement, the switch from laptops to smartphones is due to the expectation of higher profits from the production of smartphones, which in turn meets the higher demand for smartphones, making it a profitable product.

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John Dough owns 100 percent of the shares of Doughboy Ltd. His wife, Kneada Dough, owns 100 percent of the shares of Yeast Ltd. and 100 percent of the shares of Flour Inc. Which of the following statements is correct?
a) Doughboy and Yeast are associated. b) Flour and Yeast are associated. c) Doughboy and Flour are associated. d) Doughboy is associated with both Yeast and Flour.

Answers

John Dough owns 100 percent of the shares of Doughboy Ltd., and his wife Kneada Dough owns 100 percent of the shares of Yeast Ltd. and 100 percent of the shares of Flour Inc.

Based on this information, the following statement is correct:Doughboy and Yeast are associated.What does associated mean?The term associated company or associated companies refers to two or more companies in which one company holds significant ownership interest in another company.

The associated company is often a subsidiary or a fellow subsidiary. An associated company is distinct from a subsidiary company, which is a company in which the parent company owns a majority share of ownership.The association between Doughboy Ltd. and Yeast Ltd.:John Dough and his wife Kneada Dough each have 100 percent ownership of Doughboy and Yeast Ltd., respectively.

As a result, these two firms are considered linked. Doughboy Ltd. and Yeast Ltd. are affiliated since one business has significant ownership in the other. Thus, the correct answer is option A: Doughboy and Yeast are associated.

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what exactly is an incremental analysis and what are
some examples where an incremental analysis might be applied in
either the business world or in your personal lives?

Answers

Incremental analysis is a decision-making strategy that involves examining the costs and benefits of a given situation and determining if the incremental benefits exceed the incremental costs. It is often used in business and personal life to make decisions, as it allows for a more comprehensive evaluation of the situation before making a choice.

Incremental analysis is particularly useful when deciding whether or not to invest in a new project or product line, as it helps to determine the expected profitability of the investment. This can be done by examining the expected revenue and cost of the project, as well as the expected increase in demand for the product or service. Another example of where incremental analysis might be used in the business world is when deciding whether to invest in new equipment or technology. By examining the incremental cost of the new equipment compared to the incremental revenue it is expected to generate, the business can determine if the investment is worth it.

In personal life, incremental analysis might be used when deciding whether or not to purchase a new car or home. By examining the incremental cost of the new car or home compared to the incremental benefits it would provide, such as increased comfort or reduced maintenance costs, the individual can determine if the investment is worth it. In both business and personal life, incremental analysis is an important tool for making informed decisions that can have a significant impact on one's financial well-being.

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Charter Corporation, which began business in 2016, appropriately uses the instaliment sales method of accounting for its installment sales. The following data were obtained for sales made during 2016 and 2017: Required: 1. How much gross profit should Charter recognize in 2016 and 2017 from installment sales? 2. What should be the balance in the deferred gross profit account at the end of 2016 and 2017?

Answers

Charter Corporation, which began business in 2016, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2016 and 2017:

How much gross profit should Charter recognize in 2016 and 2017 from installment sales?

What should be the balance in the deferred gross profit account at the end of 2016 and 2017?

Solution:1. Gross profit to be recognized in 2016 and 2017:

Gross profit percentage = (Selling price - Cost)/Selling price

= ($ 200,000 - $ 150,000)/$ 200,000

= 25%

The installment sales revenue is $ 400,000, out of which only $ 120,000 (30% of $ 400,000) is recognized in 2016 and the remaining balance of $ 280,000 (70% of $ 400,000) is deferred to the next year, i.e. 2017.

Gross profit to be recognized in 2016:

Gross profit percentage = (Selling price - Cost)/Selling price

= ($ 200,000 - $ 150,000)/$ 200,000

= 25%

Gross profit recognized in 2016 = Gross profit percentage * Revenue recognized in 2016

= 25% * $ 120,000

= $ 30,000

Gross profit to be recognized in 2017:

Gross profit percentage = (Selling price - Cost)/Selling price

= ($ 200,000 - $ 150,000)/$ 200,000

= 25%

Gross profit recognized in 2017 = Gross profit percentage * Revenue recognized in 2017

= 25% * $ 280,000

= $ 70,0002.

Deferred gross profit account balance at the end of 2016 and 2017:

Deferred gross profit as on 31st December 2016 = Balance of deferred gross profit from 2016 + Gross profit deferred to 2017

= $ 0 + 25% * $ 280,000

= $ 70,000

Deferred gross profit as on 31st December 2017 = Balance of deferred gross profit from 2017 + Gross profit deferred to 2018

= $ 70,000 + $ 0

= $ 70,000

Therefore, gross profit to be recognized in 2016 is $ 30,000 and in 2017 is $ 70,000. The balance in the deferred gross profit account at the end of 2016 and 2017 is $ 70,000.

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Wynn Technology USB drives sell for $15 per drive. Unit variable expenses total $9. The break-even sales in units is 2,000 and budgeted sales in units is 3,480 . What is the margin of safety in dollars? 1) $33,000 2) $22,200 3) $63,000 4) $48,000

Answers

Margin of safety can be defined as the difference between the actual sales level and break-even sales level. It is the amount by which sales can fall from the budgeted level, without causing losses to the business.

Margin of safety in dollars can be calculated by using the following formula:

Margin of safety in dollars = (Actual sales - Break-even sales) * Selling price per unitGiven: Selling price per unit = $15Unit variable expenses = $9Break-even sales in units = 2,000Budgeted sales in units = 3,480Now, we need to find the margin of safety in dollars.We can first find out the actual sales by multiplying the budgeted sales with the percentage of actual sales.

Actual sales percentage = 100% - margin of safety percentageSince the break-even point is 2,000 units and budgeted sales are 3,480 units, the percentage of the budgeted sales above the break-even point is:(3,480 - 2,000) / 3,480 = 0.4255 or 42.55%Therefore, the percentage of actual sales will be 100% - 42.55% = 57.45%.Actual sales = Budgeted sales * Actual sales percentage= 3,480 * 0.5745= 1,999.26 ≈ 1,999 units

Now, we can calculate the margin of safety in dollars:Margin of safety in dollars = (Actual sales - Break-even sales) * Selling price per unit= (1,999 - 2,000) * $15= -$15Therefore, the margin of safety in dollars is -$15. However, margin of safety cannot be negative.

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You earn 6% on your corporate bond portfolio this year, and you are in a 24% federal tax bracket and an 9% state tax bracket. Your after-tax return is (Assume that federal taxes are not deductible against state taxes and vice versa). Mutiple Choice • 4.50% • 3.84%
• 4.02% • 3.12%

Answers

If you earned 6% on your corporate bond portfolio this year, and you are in a 24% federal tax bracket and a 9% state tax bracket, your after-tax return is 3.84%.Here's the step-by-step explanation on how to find the after-tax return:

Step 1: Calculate the federal tax rate. The federal tax rate is 24%.

Step 2: Calculate the state tax rate. The state tax rate is 9%.

Step 3: Calculate the total tax rate. The total tax rate is the sum of the federal and state tax rates, which is 24% + 9% = 33%.

Step 4: Calculate the after-tax return. To calculate the after-tax return, subtract the total tax rate from 100% and multiply the result by the bond yield.

That is, (100% - 33%) * 6% = 4.02%.Therefore, the answer is 4.02%.

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The analysis of a two-division company (DV2) has indicated that the beta of the entire company is 2 . The company is 100-percent equity funded. The company has two divisions: Major League TV (MLTV) and Minor League Shipping (MLS), which have very different risk characteristics. The beta of a pure-play company comparable to MLTV is 2.50 while for MLS the beta of a comparable pure-play company is only 0.72. The risk-free rate is 3.5 percent and the market risk premium is 7 percent. Assume all cash flows are perpetuities and the tax rate is zero. (a) Calculate the cost of capital of the entire company. (Round answers to 2 decimal places, e.g. 25.25\%.)

Answers

The cost of capital of the entire company (DV2) is 14.50%.

To calculate the cost of capital of the entire company (DV2), we need to use the weighted average cost of capital (WACC) formula. The WACC takes into account the cost of equity and the cost of debt, weighted by their respective proportions in the capital structure.

Since the company is 100% equity funded, we do not need to consider the cost of debt. Therefore, the WACC formula simplifies to the cost of equity.

The cost of equity can be calculated using the Capital Asset Pricing Model (CAPM), which considers the risk-free rate, the market risk premium, and the beta of the company.

First, we need to calculate the cost of equity for Major League TV (MLTV). We can use the formula:

Cost of equity for MLTV = Risk-free rate + Beta of MLTV * Market risk premium

Substituting the given values:

Cost of equity for MLTV = 3.5% + 2.50 * 7% = 3.5% + 17.5% = 21%

Next, we calculate the cost of equity for Minor League Shipping (MLS) using the same formula:

Cost of equity for MLS = 3.5% + 0.72 * 7% = 3.5% + 5.04% = 8.54%

Now, we can calculate the weighted average cost of capital for the entire company (DV2) using the proportions of MLTV and MLS in the company's operations.

Weighted Average Cost of Capital (WACC) = (Cost of equity for MLTV * Proportion of MLTV) + (Cost of equity for MLS * Proportion of MLS)

Assuming equal proportions for MLTV and MLS:

WACC = (21% * 0.5) + (8.54% * 0.5) = 10.50% + 4.27% = 14.77%

Rounding the answer to 2 decimal places, the cost of capital for the entire company (DV2) is 14.50%.

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and notices that the security scan report shows several patches missing, as well as misconfigurations. Which statement summarizes the new employee's findings? Identified an increase in risk based on the vulnerablities identified in the scans Identified an increased risk based on the threats identified in the scans Identified an increase in vulnerabilities based on the scans, but no increase in risk Identified an increased threat landscape based on the scans, but risk level did not change

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The statement that summarizes the new employee's findings is "Identified an increase in risk based on the vulnerabilities identified in the scans."

When a new employee examines the security scan report and notices that there are missing patches as well as misconfigurations, it means that the system is vulnerable to attacks that could compromise its integrity.

As a result, the risk level of the system is increased as these vulnerabilities expose the system to potential harm.

The presence of these vulnerabilities can allow attackers to gain unauthorized access to the system, exploit the system, or even compromise the system.

Therefore, identifying an increase in risk based on the vulnerabilities identified in the scans is an accurate summary of the new employee's findings.

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t: When an economy 's long-run Average Total Cost decreases as the output increases, we call that property as a. constant returns to scale. b. economies of scale. c. diseconomies of scale. d. flexible returns to scale. When the government impose taxes on buyers then a. it increases producer surplus. b. it increases consumer surplus. C. consumer and producer surplus both decreases. d. consumer and producer surplus both increases

Answers

When an economy's long-run Average Total Cost decreases as the output increases, we call that property as Economies of Scale.

Economies of Scale are cost benefits that companies can achieve when production is done in a large scale or volume. These cost benefits occur when the cost of production per unit decreases with an increase in production quantity. When the economies of scale are maximized, the company has achieved the lowest average cost per unit of production.

In general, Economies of Scale exist when the output of a product is increased, and the cost of production is decreased, therefore, allowing for a higher volume of production. This results in a reduction in the overall unit cost for each product. There are many advantages that companies gain from Economies of Scale, such as being able to lower their prices, which helps to increase their market share.

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richman investments is concerned about the security of its customer data. management has determined that the three primary risks the company faces in protecting the data are as follows:

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Richman Investments is concerned about the security of its customer data. Management has determined that the three primary risks the company faces in protecting the data are Data Breaches, Internal Threats, Cyberattacks.

Data Breaches: One of the major risks is the potential for data breaches, where unauthorized individuals gain access to sensitive customer information. This could lead to identity theft, financial fraud, or reputational damage for the company. To mitigate this risk, Richman Investments should implement robust security measures, such as encryption, strong authentication protocols, and regular security audits.

Internal Threats: Another risk comes from within the organization itself, including employees or contractors who may misuse or intentionally compromise customer data. Richman Investments should establish strict access controls, monitor and restrict employee access to sensitive information, and provide comprehensive training on data security and privacy policies to minimize the risk of internal data breaches.

Cyberattacks: The third risk is posed by external cyber threats, including malware, phishing attacks, or hacking attempts targeting Richman Investments' systems and databases. Implementing strong firewalls, intrusion detection systems, and regularly updating security software are crucial measures to defend against such attacks. Regular employee training on identifying and reporting potential cyber threats can also enhance the organization's cybersecurity posture.

By addressing these primary risks and implementing appropriate security measures, Richman Investments can better protect its customer data and safeguard the privacy and trust of its clients.

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Consider a put contract on a T-bond with an exercise price of 10212/32. The contract represents $100,000 of bond principal and had a premium of $700. The actual T-bond price falls to 9916/32 at the expiration. What is the gain or loss on the position? $__________ (Round your rosponse to the nearest whole number.)

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The price of the T-bond has fallen below the exercise price and as a result, the put option has value. A put option allows the holder to sell a particular asset at a specified price (known as the exercise or strike price) on or before the expiration date.

In this case, the exercise price of the put contract is 10212/32.

This means that the holder of the put contract can sell the T-bond for 10212.375 per 100 of bond principal.

Given that the T-bond price has fallen to 9916/32 at the expiration, the holder of the put option can sell the bond for 9916.5 per 100 of bond principal.

Since this is less than the exercise price of 10212/32, the holder of the put option will exercise the option and sell the T-bond at the exercise price.

The gain on the position can be calculated as follows:

Gain on the position = Exercise price - Actual price - Premium= 10212.

375 - 9916.5 - 700= 595.875

Since the gain on the position is positive, the holder of the put option has made a profit of 596 (rounded to the nearest whole number).

The gain or loss on the position is 596.

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A(n) ____ swap allows the party making fixed-rate payments to terminate the swap prior to maturity.

a. forward
b. extendable
c. callable
d. putable

Answers

The correct option is the answer is c. callable.A callable swap allows the party making fixed-rate payments to terminate the swap prior to maturity.

Explanation:Callable swaps are interest rate swap agreements with an embedded option. Callable swaps are a blend of an interest rate swap and an embedded option that provides the buyer with the option to end the swap early. The buyer may pay an extra premium for the option, but if market interest rates fall, they can end the swap and refinance at a lower rate.

Callable swaps are a riskier product than traditional swaps. Callable swaps provide the buyer with the option to end the swap before maturity at their own discretion, giving them an interest rate advantage over the counter party. However, this may come at a cost, as the buyer may have to pay a higher premium for the option. Callable swaps are a great method to control interest rate risk, especially for a borrower who is concerned that rates will fall over time.

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a broker using e-mail must include which of the following on each page of his e-mail?

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A broker using email must include the following points on each page of their email:

1. Sender Information: At the top of each email, the broker must include their name, company, and contact information. This ensures that the recipient knows who sent the email.

2. Opt-Out Option: The email must include an opt-out option that gives the recipient the choice to unsubscribe from future emails.

3. Disclaimer: On every email page, the broker must include a disclaimer stating that the email is not a legal offer and that the recipient should consult an attorney before taking any action.

4. Confidentiality: Each page of the email should contain a confidentiality statement, ensuring that the message is intended solely for the recipient. If the message is received by mistake, the recipient must destroy the message.

A broker must adhere to these rules, and every page of their email should include all of the above-mentioned points.

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A 7-year, 1.4% coupon Treasury bond is priced at $1,000 (remember Treasury bonds pay interest semi-annually). What is the implied discount rate or YTM for this bond?
In the example above if interest rates for 7-year US Treasuries increase by 1 percentage point, what would happen to the price of the bond?

Answers

A 7-year, 1.4% coupon Treasury bond is priced at $1,000. Treasury bonds pay interest semi-annually. Let's solve for the implied discount rate or Yield to maturity (YTM).Steps to solve for implied discount rate or YTM.

The formula to solve for YTM is

Price = Coupon Payment / (1 + YTM/2)^2 + Coupon Payment / (1 + YTM/2)^3 + ... + Coupon Payment + Par Value / (1 + YTM/2)^n/2Where,

Price = $1,000Coupon Payment = $1,000 * 1.4% / 2 = $7Par Value = $1,000n = 7 years * 2 (since interest is paid semi-annually)

= 14Plug in the values in the formula

$1,000 = $7 / (1 + YTM/2)^2 + $7 / (1 + YTM/2)^3 + ... + $7 / (1 + YTM/2)^14 + $1,000 / (1 + YTM/2)^14YTM = 1.49% or

0.0149 * 2 = 2.98%

(since interest is paid semi-annually)Therefore, the implied discount rate or YTM for this bond is 2.98%.In the example above.

if interest rates for 7-year US Treasuries Treasury by 1 percentage point, the price of the bond would decrease. Bond prices and interest rates have an inverse relationship. As interest rates increase, bond prices decrease and vice versa.

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Tax Form Completion - Schedule A Paula Oates, age 37, is an unmarried custodial parent. Her household includes three dependent children: Harry (age 15), Holly (age 13), and Holland (age 3). Oates divorced her husband 2 years ago and receives monthly alimony payments of $5,000. with $3,500 of this amount designated as child support. Oates works for a CPA firm. For 2021, Oates, who has adjusted gross income of $40,000 (as reported on Form 1040, line 11), qualifies to itemize deductions and is subject to federal income tax liability. She has timely filed federal and state income tax returns every year and has never been previously audited by the Internal Revenue Service (IRS). State income taxes withheld from her paycheck totaled to $1,200. In 2021, Oates: - Paid $1,000 in medical insurance premiums. - Paid $1,000 in medical insurance premiums. - Paid $400 in state income taxes when she filed the prior year's tax return in the current year. - Paid $2,500 in real estate taxes on her vacation home. - Paid $4,000 in home mortgage interest (Form 1098). - Paid investment interest of $1,000, which does not exceed net investment income. - Had $30,000 of cash charitable contribution carryover from 2019. - Paid $900 toward continuing education courses and was not reimbursed by her employer. - Paid a $300 invoice related to the eye exam.

Answers

Schedule A is the tax form that taxpayers use to itemize deductions from their adjusted gross income. Schedule A is used to report medical and dental expenses, taxes, mortgage interest, charitable donations, and other items that qualify for itemized deductions.

The amount of income tax you owe is reduced by the amount of these deductions, so they are important to your tax situation.

Paula Oates, a 37-year-old single custodial parent with three dependent children, is the subject of this case study.

She is divorced from her husband and receives [tex]$5,000[/tex] in monthly alimony payments, [tex]$3,500[/tex]of which is designated as child support.

She is employed by a CPA firm and has an adjusted gross income of [tex]$40,000[/tex], making her eligible to itemize deductions and liable for federal income tax in 2021.

She has filed her federal and state income tax returns on time every year and has never been audited by the Internal Revenue Service (IRS). On her paycheck, she had [tex]$1,200[/tex] in state income taxes withheld.

In 2021, Oates had medical expenses totalling [tex]$1,000[/tex] and paid [tex]$400[/tex] in state income taxes when she filed the previous year's tax return in the current year.

She paid $2,500 in real estate taxes on her vacation home, [tex]$4,000[/tex] in home mortgage interest, and [tex]$1,000[/tex] in investment interest, which did not exceed net investment income.

Oates has a carryover of[tex]$30,000[/tex] in cash charitable contribution from 2019.

She paid $900 toward continuing equation  courses and was not reimbursed by her employer. Lastly, she paid a[tex]$300[/tex] bill for an eye exam. In her Schedule A, Oates should claim [tex]$10,700[/tex] in itemized deductions.

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Which of the following vesting schedules may a top-heavy qualified cash balance plan use?
Remember, any vesting schedule that would not provide vesting as fast as the maximum vesting schedule allowed is not a permitted vesting schedule. Vesting schedules that would provide vesting faster than the maximum are permitted
3 to 7 year graduated.
2 to 6 year graduated.
3-year cliff.
5 year cliff.

Answers

In qualified retirement plans, vesting is the process by which an employee becomes entitled to a portion of the funds in their account. A qualified plan is said to be top-heavy when more than 60% of the plan assets are attributed to the accounts of “key employees.”

Key employees are those who have at least 1% ownership in the company, an annual compensation of more than $150,000, or hold one of the top 20% highest paid positions in the company. A qualified cash balance plan is a type of defined benefit plan that provides a hypothetical account balance to the plan participants.The plan must follow specific vesting requirements as per Internal Revenue Service (IRS) regulations. A top-heavy qualified cash balance plan may use any of the permitted vesting schedules.

Any vesting schedule that would not provide vesting as fast as the maximum vesting schedule allowed is not a permitted vesting schedule. Vesting schedules that would provide vesting faster than the maximum are permitted.  The following vesting schedules may a top-heavy qualified cash balance plan use:3 to 7 year graduated2 to 6 year graduated 3-year cliff 5 year cliff

The vesting requirements for top-heavy plans must follow the IRS's safe harbor requirements, which state that the plan must provide 100 percent vesting after either three years of service or when the employee reaches normal retirement age, whichever comes first.

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a.void.b.enforceable.c.voidable at the option of the party having less bargaining power.d.voidable at the option of either party.

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The terms provided, "void," "enforceable," "voidable at the option of the party having less bargaining power," and "voidable at the option of either party," are all related to contract law.

Let's break down what each term means:

1. Void: A void contract is one that is considered legally invalid from the beginning. It has no legal effect, and neither party is obligated to fulfill its terms. For example, if someone signs a contract to perform an illegal activity, such as selling illegal drugs, the contract would be considered void.

2. Enforceable: An enforceable contract is one that is legally valid and binding. It means that both parties are obligated to fulfill their obligations as outlined in the contract. If one party fails to fulfill their obligations, the other party can seek legal remedies. For example, if you sign a contract to purchase a car, and the seller fails to deliver the car as promised, you can take legal action to enforce the contract.

3. Voidable at the option of the party having less bargaining power: This refers to a contract that is valid and enforceable but can be voided by one party if they have less bargaining power and are unfairly disadvantaged in the contract. For instance, if a minor enters into a contract that is unfair to them due to their lack of understanding or experience, they can choose to void the contract.

4. Voidable at the option of either party: This term indicates that both parties have the power to void the contract if certain conditions are met. For example, if one party was deceived or coerced into signing the contract, they can choose to void it. Similarly, if one party breaches a material term of the contract, the other party may have the option to void it.

Overall, these terms highlight different situations and circumstances in contract law. It's important to understand the specific conditions under which a contract may be considered void, enforceable, or voidable. The terms "voidable at the option of the party having less bargaining power" and "voidable at the option of either party" emphasize the ability to potentially void a contract under specific circumstances.

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A bond has an annual coupon rate of 3.9%, a face value of $1,000, a price of $975.91, and matures in 10 years. Part 1 ≈ Attempt 1/ What is the bond's YTM?

Answers

The bond's YTM is 4.23%. The bond's yield to maturity (YTM) can be calculated using the present value of the bond formula, which is as follows:

PV = C x [1 - (1 + r)^-n] / r + FV / (1 + r)^n

Where, C = Annual Coupon Rate, FV = Face Value, r = YTM, n = Number of years

Given data:

Annual Coupon Rate = 3.9%,

Face Value = $1,000,

Price = $975.91,

Maturity period = 10 years

Using the above formula, the value of r can be calculated as follows:

PV = 975.91

C = 0.039 x 1000 = 39

FV = 1000n = 10

r = Yield to Maturity

Putting the values in the formula:

975.91 = 39 x [1 - (1 + r)^-10] / r + 1000 / (1 + r)^10

Now using a financial calculator or a spreadsheet software (like MS Excel), we can find the value of r which satisfies the above equation.

Using the financial function "RATE", we get the bond's YTM as 4.23% (approx).

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