Answer:
Required 1
Process cost summary for May
Inputs
Units Dollars
Beginning Work In Process 3,600 $269,340
Started 24,300 $3,027,360
Totals 27,900 $3,296,700
Output
Units Dollars
Transfer to Finished Goods 25,200 $3,024,000
Closing Work In Process 2,700 $272,700
Total 27,900 $3,296,700
Required 2
May 31
Finished Goods Inventory 3,024,000 (debit)
Work In Process 3,024,000 (credit)
Explanation:
Equivalent Units of Production Calculation
Materials
Units Completed and Transferred ( 25,200 × 100%) = 25,200
Units in Closing Work In Process ( 2,700 × 100%) = 2,700
Total Equivalent Units of Production = 27,900
Conversion Cost
Units Completed and Transferred ( 25,200 × 100%) = 25,200
Units in Closing Work In Process ( 2,700 × 80%) = 2,160
Total Equivalent Units of Production = 27,360
Calculation of Cost per Equivalent Unit of Production
Cost per Equivalent Unit = Total Cost / Total Equivalent Units of Production
Materials = ( $20,400 + $677,100) / 27,900
= $25.00
Conversion Cost = ( $248,940 + $2,350,260) / 27,360
= $95.00
Total Cost per Equivalent Unit = $120.00
The cost of completed units to finished goods inventory = 25,200 × $120.00 = $3,024,000.
The Meat Market has $747,000 in sales. The profit margin is 4.1 percent and the firm has 7,500 shares of stock outstanding. The market price per share is $22. What is the price-earnings ratio
Answer:
The price-earnings ratio= 5.4 times
Explanation:
The price earning ratio is used to compare the price of company's share to its earnings.
EPS = Total earnings available to ordinary shareholders/Number of shares
Total earnings available = Profit margin × Sales = $30,627
Earnings per shares = $30,627 /7.500 = $4.0836
The price-earnings ratio = Price/EPS= 22/4.0836 =5.38
The price-earnings ratio= 5.4 times
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of .75. The cost of equity is 11.6 percent and the pretax cost of debt is 6.7 percent. What is the capital structure weight of the firm's equity if the firm's tax rate is 40 percent?
Answer:
the capital structure weight of the firm's equity will be 57.14 %.
Explanation:
Weighted Average Cost of Capital is the return that is required by the providers of long term sources of finance.
A debt–equity ratio of 0.75 means:
Debt : Equity = 0.75 : 1
The Total Ratio will be = 0.75 + 1.00
= 1.75
Therefore, the capital structure weight of the firm's equity will be :
Equity Weight = Equity Ratio ÷ Total Ratio
= 1.00 ÷ 1.75
= 0.5714 or 57.14 %
Mountain Lake Corporation's accounting records show the following at year-end December 31, 2014:
Purchase Discounts $7,230 Beginning Inventory $32,660
Freight-In 8,730 Ending Inventory 29,170
Freight-Out 12,260 Purchase Returns and Allowances 4,190
Purchases 164,250
Assuming that Mountain Lake Corporation uses the periodic system, compute the cost of goods purchased and cost of goods sold.
1. Cost of goods purchased$=?
2. Cost of goods sold$=?
Answer:
Cost of goods purchased= $161,560
Cost of goods sold= $165,050
Explanation:
1. Cost of goods purchased (net) = Purchases - Purchase discount - purchase returns and allowances + Freight in
= $164,250 - $7,230 - $4,190 + $8,730
=$161,560
2. Cost of goods sold = Beginning inventory + Net purchase - Ending inventory
= $32,660 + $161,560 - $29,170
= $165,050
Stock market prices plunged tremendously in 1929, contributing to the Great Depression as the AD curve shifted greatly to the left. The ordinary AS/AD model predicts that a falling short-run aggregate supply would bring deflation and move the economy back to potential output. Which of the following describes the impact of dynamic feedback effects on this return to potential output?
a. expectations that stock prices would rise back again would cause the AD curve to shift left.
b. expectations that stock prices would fall further could shift the AD curve further to the left.
c. expectations that stock prices will fall further would cause the AD curve to shift to the right.
d. falling stock prices would make people feel poorer which would cause the AD curve to shift to the right.
Answer:
b. expectations that stock prices would fall further could shift the AD curve further to the left.
Explanation:
The AS/ AD model stated the aggregate supply and aggregate demand model which stated level of prices and its output by maintaining the relation between the supply and demand
As in the given situation, it is mentioned that the aggregate supply of short run decline and that brings deflation and it moves the economy back to the output i.e potential. It impacts the expectation of stock prices would result in declines and further it shifted the AD curve to the left side
Hence, the correct option is B.
Peterson Furniture Designs is preparing its annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows: Required: 1-a. Complete the final two columns of the table. Ending Inventory Item Quantity on Hand Total LC&NRV Alligator Armoires Bear Bureaus Cougar Beds Dingo Cribs Elephant Dressers Unit Cost Net When Realizable LC&NRV Acquired Value at per Item (FIFO) Year-End $ 25 $ 22 50 6062 40 40 20 1 6 20 40 450 1-b. Compute the amount that should be reported for the ending inventory using the LC&NRV rule applied to each item. Ending inventory 2. Prepare the journal entry that Peterson Furniture Designs would record on December 31.
Answer:
Peterson Furniture Designs
Ending Inventory
Q Purchase cost NRV Total LC&NRV
Alligator Armoires 60 $25 $22 $1,320
Bear Bureaus 85 $50 $50 $4,250
Cougar Beds 20 $60 $62 $1,200
Dingo Cribs 40 $40 $40 $1,600
Elephant Dressers 450 $20 $16 $7,200
Total $15,570
The value of the ending inventory using lower of cost or net realizable value (LCNRV) is $15,570. The individual LCNRV is underlined for each item.
Since the purchase cost ($17,550) is higher than the ending inventory, the journal entry should be:
December 31, 202x, adjusting value of ending inventory
Dr Cost of goods sold 1,980
Cr merchandise inventory 1,980
the differences between career and non career
In choosing between the range of alternative investments typically available to U.S. households, which of the following will play a role in influencing their selection of a particular investment type?
a. the expected rate of return, risk and liquidity of each kind of investment.
b. the interest rate and the expected rate of return.
c. the form of dividends, angel investor, future expectations.
Answer:
b. the interest rate and the expected rate of return.
Explanation:
For choosing the type of particular investment it is necessary to check the interest rate and the expected rate of return as every investor wants that there is a less interest rate, less or moderate risk but high rate of return and according to this they made the selection
Therefore the option b is correct
Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $33600. If the balance of the Allowance for Doubtful Accounts is $7640 debit before adjustment, what is the amount of bad debt expense for that period
Answer:
The amount of bad debt expense for that period is $41240.
Explanation:
As the Allowance for Doubtful Accounts has credit balance because it is a contra account receivable account. This account should have credit balance. As already account has debit balance so this balance needs to be added in the estimated uncollectible accounts for the period to calculate the bad debt expense for the period.
Estimated uncollectible accounts = $33600
Allowance for Doubtful Accounts Balance = $7640 debit
Bad debt expense = $33600 + $7640 = $41240
The sensitivity parameter in the consumption function that measures how sensitive consumption is to changes in consumer confidence is referred to as the marginal propensity to consume.
a. True
b. False
Answer: False
Explanation:
The Sensitivity Parameter that measures the sensitivity of changes in consumption to changes in consumer confidence is not the Marginal Propensity to Consume.
The Marginal Propensity to Consume rather measures what proportion of additional income is spent on consumption. For example, if you earn an extra $50 this month and you spend $40, the Marginal Propensity to Consume is 40/50 = 0.8.
A sharp increase in interest rates will decrease the price of bonds and increase the interest income available to new bondholders. This will increase the demand for bonds compared to the demand for stocks, all other considerations remaining constant.
A. True
B. False
Combs Co. is planning to sell 400 hair dryers and produce 380 hair dryers during March. Combs uses 500 grams of plastic and one-half hour of direct labor to produce one hair dryer. Plastic costs $10 per 100 grams and employees of the company are paid $15 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Combs Co. has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?
a. $2,800
b. $5,600
c. $2,660
d. $5,320
Answer:
Budgeted labour cost =$8,550
Explanation:
Labour budgeted is prepared using the production budget data. This is simply because the budgeted labour hour is a function of the budgeted production units.
Budgeted labour hours = Production budget × standard hours per unit
= 380 × 1.5 hours=570
Budgeted labour cost= Budgeted labour hours × Standard labour rate
= 570 hours × $15 =$8550
Budgeted labour cost =$8,550
You will be paying $10,200 a year in tuition expenses at the end of the next two years. Bonds currently yield 9%. a. What is the present value and duration of your obligation
Answer:
Present value of obligation is $17,942.94
Duration 1.4785 years
Explanation:
Present value of obligation can be calculate by using following formula
PV = Tuition payment x ( 1 + yield rate )^-n
PV of First year payment = $10,200 x ( 1 + 9% )^-1 = 9,357.80
PV of Second year payment = $10,200 x ( 1 + 9% )^-2 = 8,585.14
PV of Obligation = PV of First year payment + PV of Second year payment
PV of Obligation = 9,357.80 + $8,585.14 = $17,942.94
Duration
Time in years PV of Payments Weight Duration (Time x Weight)
1 $9,357.80 0.5215 0.5215 x 1 = 0.5215
2 $8,585.14 0.4785 0.4785 x 2 = 0.9569
Total $17,942.94 1.0000 1.4785
Refer to highlight change metrics which of the following statements best describes why the business leaders altered their approach to the organizational crisis?
Answer:
A. Upon assessment of the competitive environment using evidence-based analytics, Continental's leaders recognized that the organization's emphasis was misplaced, and changed its strategic objectives
Explanation:
Evidence-based analytics refers to the method for decision making on a plan, procedure or policy based on the best available empirical evidence and guided by field-based experiential evidence and applicable contextual data.
It provides problem-solving based on research. This can be used to make such good decisions about crisis management within an organisation. It's used by successful leaders to make sound business decisions.
Therefore the correct answer is A.
We argued that when the economic growth in the US is greater than the (economic) growth rates of our trading partners, the trade deficit in the US should get larger, all else constant.
a. True
b. False
Answer:
The correct answer is the option B: False.
Explanation:
To begin with, given the fact that the economic growth of the United States is greater than the economic growth rates of its trading partners then the trade deficit in the US should get smaller, all else constant due to the fact that the economy is growing at a level that is higher than does of the partners and therefore that when that happens the country will be in a better position and the production of it will increase as expected and that will impact positively in the deficit by reducing it to small amounts.
Suppose a salesperson in a hardware store has a 10-year-old son with behavior problems. The supervisor gets to know about this. During one of their conversations, the supervisor says, "I've noticed that we haven't received any more customer complaints about your service and, in fact, one customer told me you went out of your way." This should be said by the supervisor during which stage of the counseling interview?
a. Selection of solution(s)
b. Consideration of possible solutions
c. Schedule a follow-up meeting
d. Discussion of what the problem is
Answer:
c. Schedule a follow-up meeting
Explanation:
In the given scenario the supervisor when talking to his son made the following statement: "I've noticed that we haven't received any more customer complaints about your service and, in fact, one customer told me you went out of your way."
This statement is one that should be asked during follow up meeting to review implemented solution.
Counseling interview will involve identifying the problem, consideration of solutions, choosing the appropriate solution, and finally the follow up meeting where review is done and feedback given.
The salesperson's son recieved positive feedback after solution implementation
A stock just paid a dividend of $5.37 and is expected to maintain a constant dividend growth rate of 4.6 percent indefinitely. If the current stock price is $77, what is the required return on the stock
Answer:
The required return on the stock is 11.89%.
Explanation:
To calculate this, the Gordon growth model (GGM) formula is used as follows:
P = d1 / (r – g) ……………………………………… (1)
Where;
P = current share price = $77
d1 = next dividend = Recent dividend * (1 + g) = $5.37 * (1 + 0.046) = $5.61702
r = required return = ?
g = dividend constant growth forever = 4.6%, or 0.046
Substituting the values into equation 1) and solve for r, we have:
77 = 5.61702 / (r - 0.046)
77(r - 0.046) = 5.61702
77r - 3.542 = 5.61702
77r = 5.61702 + 3.542
r = 9.15902 / 77
r = 0.1189, or 11.89%
Therefore, the required return on the stock is 11.89%.
Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check. Ryan's June bank statement shows $23,361 on deposit in the bank. Ryan's comparison of the bank statement to its cash account revealed the following: Deposit in transit 2,450 Outstanding checks 1,107 Additionally, a $48 check written and recorded by the company correctly was recorded by the bank as a $84 deduction. The adjusted cash balance per the bank records should be:
Answer:
The adjusted cash balance per the bank records should be: $24,740.
Explanation:
The correct Cash balance can only be verified using a Bank Reconciliation Statement.
Thus prepare a Bank Reconciliation Statement to extract the updated Cash Book Balance.
Bank Reconciliation Statement
Note : The Bank Statement amount has to be adjusted for an overstatement of $36.
Balance as per updated Cash Book (Balancing figure) $24,740
Add Unpresented Cheques $1,107
Less Lodgements not yet credited ($2,450)
Balance as per Bank Statement ($23,361 + $36) $23,397
Conclusion :
The adjusted cash balance per the bank records should be: $24,740.
Scranton, Inc. reports net income of $260,000 for the year ended December 31. It also reports $100,700 depreciation expense and a $6,500 gain on the sale of equipment. Its comparative balance sheet reveals a $41,500 decrease in accounts receivable, a $18,750 increase in accounts payable, and a $14,500 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.
Answer:
$399,950
Explanation:
The computation of cash provided (used) in operating activities using the indirect method is shown below:-
Cash flow from operating activities
Net income reported $260,000
Add: depreciation expenses $100,700
Less: gain on sale of equipment -$6,500
Add: decrease in accounts receivables $41,500
Add: increase in accounts payable $18,750
Less: decrease in wages payable -$14,500
Cash flow from operating activities $399,950
We simply added the cash inflows and deduct the cash outflows to reach out the operating activities
Consider each situation and determine whether the person is structurally unemployed, frictionally unemployed, or cyclically unemployed.
a. Julie had to leave her old job when she moved to a new city. She works in customer service and is looking for a new job.
b. Julie graduates from college and is looking for a job as an accountant.
c. Bob loses his job as the economy slips into a recession.
d. Jim got laid off from his job at an auto manufacturer as the company became more automated.
Answer:
The correct answers are:
a - Frictionally unemployed
b - Frictionally unemployed
c - Cyclically unemployed
d - Structurally unemployed
Explanation:
To begin with, the term of "Frictional unemployment" refers to the situation that is caused when a person does not have a job because of the fact that she has recently quit one and is looking for a new one. The name of frictional unemployement refers to the time that the person quits a job and gets a new one.
Secondly, the term of "Cyclical unemployment" refers to the situation that is caused due to the economics situations of the country. Therefore that this type of unemployment is caused because of the bad sales, the bad production and the bad moment that the economy is having. It is refered to the economic cycles.
Finally, the term of "Structural unemployment" refers to the situation that is caused when a person in without a job due to the specialties and necessities that the companies are requiring or looking for. Therefore that this type of unemployment is caused by the lack of education in the workforce.
The correct answers are:
Frictionally unemployedFrictionally unemployed Cyclically unemployed Structurally unemployed.Explain the types of employment mentioned above ?The clinical unemployment refers to the component of the overall unemployment that is an output of the cycles of direct economic upturn and downturns.
Structural unemployment is the involuntary unemployment that is due to the mismatch between the skills that the workers in the economy can offer. Frictional unemployment is a voluntary transmission within the economy.
Find out more information about the unemployed.
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When or how does a contract become a legal document and is binding on all parties involved?
What special asset does Heartland Telecom's acquisition of Surety Wireless identify? The acquisition identifies the asset goodwill . How should Heartland Telecom account for this asset after acquiring Surety Wireless? Explain in detail. Heartland Telecom should measure the ▼ of this asset each year. If this asset has increased in value, Heartland should ▼ . If the value of the asset has decreased, Heartland should
Answer: 1. Goodwill
2. a. Record no entry in the books
b. Record a loss in the books
Explanation:
1. The Special asset created by Heartland Telecom's acquisition of Surety Wireless is Goodwill.
Goodwill is the difference between what the company was worth and what it was purchased for if the purchase price was higher than the worth (market value).
2. a. Goodwill should be accounted for by recoding it in the Long term Assets under Intangible Assets in the balance sheet. It should not be amotrized. If Goodwill increases, there should be no recording this gain on the books.
b. If the value of the asset has decreased, Heartland should record a loss in the books to represent the loss on this account.
A progressive tax is one which
Answer:
A progressive tax is one which charges more tax for those with higher income.
The amount of tax paid depends on the general income of the person.
Accel, Greylock Partners, Sequoia Capital, Benchmark, and Andreessen Horowitz are all in the business of providing funds to new businesses in exchange for an ownership share in the company. These companies are all seeking a high return on their investment, and they tend to be drawn to technology and biotechnology companies. Accel, Greylock, Sequoia, Benchmark, and Andreessen are all pints
A. venture capital firms.
B. business incubators.
C. C corporations.
D. for-profit arms of the SBA.
E. commercial banking organizations.
Answer:
The correct answer is the option A: venture capital firms.
Explanation:
To begin with, the ''venture capital firms'' are the ones that tend to finance start ups with high risks in tha investment due to the fact that those low start ups tend to show high improvements that could lead to a particular high income in the future for the owners and therefore for the investors too. Moreover, this type of funding is particulary design to make the investors become part of the organizations in which they invest in by giving them shares of the company or equity as well.
Waterway Industries required production for June is 172000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 350000 and 380000 pounds, respectively. How many pounds of direct material Z must be purchased
Answer:
Direct material purchase budget = 546,000 pounds
Explanation:
Raw material purchase budget is determined by adjusting the raw material usage budget for opening and closing inventory of materials.
Purchase budget = usage budgeted + closing inventory - opening inventory
Usage budget = Production budget × standard materials per unit
= 172,000 × 3 pounds= 516,000
Purchase budget =516,000 + 380,000 - 350,000=546,000
Direct material purchase budget = 546,000 pounds
QUICK ONE!
A truck costing $80,000 has an expected life of 8 years
Required:
c) Prepare a depreciation schedule using the reducing balance method? (assuming the rate is 1.5 times the straight-line rate)
Answer:
Rate is 1.5 times the straight line depreciation rate which is;
= [tex]\frac{80,000}{8}[/tex]
= $10,000 per year
Rate = [tex]\frac{10,000}{80,000}[/tex] * 100%
=12.5%
Reducing balance rate = 12.5% * 1.5
= 18.75%
The Depreciation Schedule would be;
Year Beginning Book Value Depreciation Expense Accumulated Depreciation Book Value
1 $80,000 80,000*18.75% = $15,000 $15,000 $65,000
2 $65,000 65,000 * 18.75% = $12,1875.50 $27,187.50 $52,812.50
3 $52,812.50 52,812.5 *18.75% = $9,902.34 $37,187.84 $42,910.16
4 $42,910.16 42,910.16 * 18.75% = $8,045.66 $45,233.50 $34,766.50
5 $34,766.50 34,766.50 * 0.1875 = 6,518.72 $51,752.22 $28,247.78
6 $28,247.78 28,247.78 * 0.1875= $5,296.45 $57,048.67 $22,951.33
7 $22,951.33 22,951.33 * 0.1875= 4,403.37 $61,452.04 $18,547.96
8 $18,547.96 18,547.96 * 0.1875 = $3,477.74 $80,000 $0
$3,477.74 + 15,070.22= $18,574.96
Depreciation for the last year was not sufficient to take the truck to $0 so the remainder will be depreciated in that year so that it may be completely depreciated.
Assume that the probability of a driver getting into an accident is 3.4%, the
average cost of an accident is $11,116.37, and the overhead cost for an
insurance company per insured driver is $170. What should this driver's
insurance premium be?
The correct answer is $547.96
Why is this the correct answer?Total cost is = (3.4% × $11,116.37) + $ 170The equation is Fixed cost + Variable cost , where the overhead cost becomes the fixed cost.What is variable cost?A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company's production or sales volume they rise as production increases and fall as production decreases.
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On January 1, 2013, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,501. During the first 11 months of the year, bad debts expense of $21,413 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2013, was $9,896. Required: (a) What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.) (b) As the result of a comprehensive analysis, it is determined that the December 31, 2013, balance of the Allowance for Bad Debts account should be $9,276. Show the adjustment required in the journal entry format.
Answer:Total of accounts written off=$25, 018, part b is in the explanation column
Explanation:
Total of accounts (Bad debt) written off=Opening Balance in bad debt allowance account+
bad debt expense recognized during the period −
Closing balance in bad debt allowance account
=$13,501+$21,413−$9,896
=$25, 018
T---account
Allowance for bad debts
$13,501 Balance from Jan 1st
$21,413 Bad debts expense
Bad debts written off $25, 018
$9,896 Balance on November 30
b)Adjusted journal entry for change in amount of allowance for bad debt account
December 31st 2013 Account Debit Credit
Allowance for bad debts $620
Bad debts expense $620
calculation
The balance in allowance for bad debt account as on November 30 is $9 896 , when it was supposed to be $9,276. Therefore the bad debt expense is overstated by
$9,896- $9, 276 = $620
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies, frizzles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies increases by 5%, the quantity of frizzles sold decreases by 4% and the quantity of mookies sold increases by 5%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and frizzles, and then between guppy gummies and mookies. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies. Relative to Guppy Gummies Recommend Marketing with Guppy Gummies Cross-Price Elasticity of Demand Complement or Substitute Frizzles Mookies
Answer:
Cross Price Elasticity of Demand is a measure of the complimentary or substitutional nature of two goods. It enables one to know if goods go together or are replacements for each other.
When the Cross Price Elasticity is Positive then both of the goods are Substitutes.
This is because when the price of one increased, some people abandoned it and went to the other one which then increased the demand of the latter.
If the Cross Price Elasticity is negative then both the goods are compliments because when the price of one increased, people decided to stop buying it and because the other good is a compliment (goes together) people didn't buy the latter either thereby reducing its demand.
The formula for Cross Price Elasticity is,
= % Change in Quantity Demanded of Good A / % Change in price of Good B
Guppy Gummies and Frizzles.
= -4%/ 5%
= - 0.8%
Cross Price Elasticity is Negative so they are Compliments.
It IS RECOMMENDED to market Frizzles with Guppy Gummies.
Guppy gummies and Mookies
= 5% / 5%
= 1
Cross Price Elasticity is positive so these are Substitutes.
It is therefore NOT recommended to market Mookies with Guppy Gummies.
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -37,500 -37,500 1 17,300 5,700 2 16,200 12,900 3 13,800 16,300 4 7,600 27,500 a) What is the IRR for each of these projects
Answer:
IRR for project A = 19.71%
IRR for project B= 18.76%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calcuated using a finanical calcuator
for project A :
Cash flow in year 0 = -37,500
Cash flow in year 1 = 17,300
Cash flow in year 2 = 16,200
Cash flow in year 3 = 13,800
Cash flow in year 4 = 7,600
IRR = 19.71%
for project B :
Cash flow in year 0 = -37,500
Cash flow in year 1 = 5,700
Cash flow in year 2 = 12,900
Cash flow in year 3 = 16,300
Cash flow in year 4 = 27,500
IRR = 18.76%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
A higher price point should create value for the customer. The buyers need to know that they are paying for __________, or an unforgettable experience. The product itself must live up to these expectations.
Answer:
Differentiation.
Explanation:
The concept of value for the customer corresponds to the expectation that the product will meet the needs, desires and features that he expects.
The customer's perception of the concept of value is affected in rational and irrational ways, such as brand image, product performance, high price, etc.
Therefore, when a company offers a product at a higher price, it is passing on to the consumer the higher production cost of an item, which has features that add greater value and functionality, such as differentiation, personalization or an unforgettable customer experience.
Differentiated products are those produced in a more heterogeneous way compared to standard products, therefore differentiated products have distinct characteristics that add greater value, such as new features, technology, design, durability, style, etc.