Answer:
The answer is $2,785,715.38
Explanation:
Annual payment(PMT) is $18,000. This periodic payment is called an annuity.
Number of years(N) for the payment is 40 years
Interest rate is 6%
So how much does the house worth after 40 years?
Using a Financial calculator:
N = 40; I/Y = 6; PMT = 18,000 CPT FV =2,785,715.38
After 40 years, the house will worth $2,785,715.38
Harvey quit his job at State University, where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The explicit costs of Harvey's firm in the first year were
Answer:
The explicit costs of Harvey's firm in the first year were $605,000
Explanation:
According to the given data we have the following:
In the first year, the firm sold 11,000 units of software
$55 goes for the costs of production, packaging, marketing, employee wages and benefits
Therefore, in order to calculate explicit costs of Harvey's firm in the first year we would have to make the following calculation:
explicit costs of Harvey's firm= units of software sold*costs of production, packaging, marketing, employee wages and benefits
explicit costs of Harvey's firm=11,000*$55
explicit costs of Harvey's firm=$605,000
The explicit costs of Harvey's firm in the first year were $605,000
Ann transferred land worth $200,000 with a tax basis of $40,000 to Brown Corporation, an existing entity, for 100 shares of its stock. Brown Corporation has two other shareholders, Bill and Bob, each of whom holds 100 shares. With respect to the transfer:
Answer:
Ann has a bias of $200,000 in her 100 shares in Brown Corporation.
Explanation:
The full question is as follows;
Ann transferred land worth $200,000 with a tax basis of $40,000, to Brown corporation, an existing entity, for 100 shares of its stock. Brown corporation has two other shareholders, Bill and Bob, each of whom holds 100 shares. With respect to the transfer: a. Ann has no recognized gain. b. Brown Corporation has a basis of $160,000 in the land. c. Ann has a bias of $200,000 in her 100 shares in Brown Corporation. d. Ann has a basis of $40,000 in her 100 shares in Brown Corporation. e. none of the above.
Answer
Ann has a bias of $200,000 in her 100 shares in Brown Corporation.
Explanation
From the question, we can see that Ann traded 200,000 worth of asset for 100 shares.
What this means is that the basis of her shares will be 200,000
We can also see that a capital gain of 160,000 is recognized. The capital gain is recognized because the land which was traded has a basis of 40,000 for 200,000. This makes it taxable due to the capital gain.
Hence, the land will enter Brown Corporation as 200,000 and not 160,000
ABC Company has the following authorized stock: Common stock: 1.00 par value, 100,000 shares On 1/11/15, ABC Company issued 10,000 shares of common stock for $5 per share (cash). How much cash does the company receive
Answer:
Amount of cash received = $50,000
Explanation:
The authorized share capital is the total maximum amount of shares in units that a company can raised as contained in its memorandum of association.
The issued share capital is the proportion of the authorized share capital that a company has decided to offer to investors to raise capital.
The total amount of issued share capital raised would be equal to
Issued share capital = units issued × price per units
= 10,000 × $5 = $50,000
Amount of cash received = $50,000
Based on the information given the amount that the company received is $50,000.
Using this formula
Cash received=Shares of common stock× Per share
Where:
Shares of common stock=10,000 shares
Per share=$5 per share
Let plug in the formula
Cash received=10,000×$5
Cash received=$50,000
Inconclusion the amount that the company received is $50,000.
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Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year: Utilities for the store $ 9 comma 600 Sales commissions 10 comma 100 Sales revenue 164 comma 800 Purchases of merchandise 89 comma 900 January 1 inventory 27 comma 000 Rent for store 13 comma 800 December 31 inventory 23 comma 500 What is operating income?
Answer:
$41,400
Explanation:
Calculation for Paper Clip Company Operating income
OPERATING NET INCOME for Paper Clip Company
Sales revenue 164,800
Less: Purchases of merchandise (89,900)
Utilities for the store (9,600)
Sales commission (10,100)
Rent for store (13,800)
Operating net income $41,400
Therefore the Operating net income will be $41,400
"Reginald greets and chats with his regular customers every morning when they come in for coffee. He offers them tastes of anything special he is cooking that day, and has a database with their birthdays, offering regulars a free meal on their birthday. Reginald knows his regular customers create repeat business and: "
Answer:
spread positive word of mouth
Explanation:
Reginald knows his regular customers create repeat business and spread positive word of mouth. This means that the repeat customers leave happy and tell their friends about the great experience they had at Reginald's restaurant. This creates enthusiasm in the repeat customers' friends which in term causes them to go to Reginald's business and try the food. This creates more repeat customers and increased profitability for Reginald's business.
The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050. Refer to the data for Wilson Dover Inc. What is the value (in millions) of Wilson Dover's debt if its equity is viewed as an option?
Answer:
$313.81
Explanation:
Calculation for the value (in millions) of Wilson Dover's debt if its equity is viewed as an option
Total value = P = $500.0
Debt = X = $200.0
Volatility (σ) = 0.6
rRF = 5%
d1 = 1.910485
N(d1) = 0.9720
d2= 1.310485
N(d2)=0.9050
Using this formula
Vs= PN(d1) − Xe−RFtN(d2)
Let plug in the formula
Vs= $500(0.9720) − $200e−0.05(1)(0.9050)
Vs= $485.98 − $172.17
Vs= $313.81
Therefore the value (in millions) of Wilson Dover's debt if its equity is viewed as an option will be $313.81
Jewelcorp just began trading securities. The company is a closely-held corporation that is not trading stock on a national securities exchange. It has several dozen shareholders and $9 million in assets. Which of the following is true concerning the company’s requirement to report to the SEC?Not required to report information to the SEC. Required to report major business developments and must file annual and quarterly financial reports. Must file annual and quarterly financial reports Requirement to file depends on the company’s assets and shareholder base.
Answer:
Jewelcorp
Requirement to report to the SEC:
Not required to report information to the SEC.
Explanation:
Jewelcorp is not required to report information to the SEC. It is only publicly traded companies that are required to file their financial reports with the SEC.
The SEC Act of 1934 does not require private companies to file financial reports with the Security Exchange Commission. However, a private company can be required to file financial reports with SEC if it has over 500 common stockholders and $10 million in assets, which Jewelcorp does not possess.
Zapper has beginning equity of $279,000, net income of $62,000, dividends paid of $51,000 and stockholder investments of $17,000. Its ending equity is:
Answer:
$307,000
Explanation:
Equity is the remaining value of the owner;s interest in a company after all liabilities have been settled.
It can also be defined as the capital contributed by the owners and the attributable profit or losses after a trading period that is retained in the entity.
The net income and the stockholder investment , being an inflow ,will be added to the beginning equity while the dividends paid being an outflow is deducted.
Workings
Ending equity = Beginning equity + net income +Stockholder investment - Dividends paid
=279,000+62,000+17,000-51,000
307,000
A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. What is the marginal cost of producing the computers that Pam can assemble during her 2nd hour of work
Answer:
$1,840
Explanation:
In order to calculate the Marginal cost of producing the computers in 2nd hour of work, we need to add the marginal cost of computer and marginal cost of wage in the 2nd hour of work.
MC = MC(computers) + MC(wage)
MC = $1,800(w) + $40
MC = $1,840
Working
MC (computers ) = 3 x 600$ = $1,800
hour computers assembled
1st 4
2nd 7
If pam works 2 hours she can assemble 7 computers but she already assembled 4 computers in 1st hour.
So the 2nd-hour computers will be 3 ( 7 - 4) computers.
Alden Corp. has the following balances as of December 31, 2019:Total Assets $90,000Total Liabilities 60,000Total Equity 30,000Calculate the debt to equity ratio. A. 0.64.B. 0.92.C. 1.56.D. 256.
Answer:
2.00
Explanation:
Calculation of the debt to equity ratio
Using this formula
Debt to equity ratio= Total liabilities/Total Shareholders equity
Where,
Total liabilities=60,000
Total Shareholders equity =30,000
Let plug in the formula
Debt to equity ratio=60,000/30,000
Debt to equity ratio =2.00
Therefore debt to equity ratio will be 2.00
1. The Troller Corporation’s common stock has a beta of 1.15. If the risk-free rate is 3.5 percent and the expected return on the market is 11 percent, what is the company’s cost of equity capital?
Answer:
Cost of equity capital is 0.12125 or 12.125%
Explanation:
The cost of equity capital or the required rate of return is the minimum rate of return expected by the investors to invest in the stock of the company. The cost of equity capital can be calculated using the CAPM equation. The formula for CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
r is the cost of equity capital or required rate of returnrRF is the risk free raterM is the return on Marketr = 0.035 + 1.15 * (0.11 - 0.035)
r = 0.12125 or 12.125%
Pharoah Company sublet a portion of its warehouse for five years at an annual rental of $71700, beginning on May 1, 2017. The tenant, Sheri Charter, paid one year's rent in advance, which Pharoah recorded as a credit to Unearned Rent Revenue. Pharoah reports on a calendar-year basis. The adjustment on December 31, 2017 for Pharoah should be
Answer:
Adjusting entries
Dr Unearned rent revenue $47,800
Cr Rent revenue $47,800 to record accrued rent revenue.
Explanation:
Contract value for one year $71,700
One month of rent $71,700/12 = $5,975
We will need to get how many month that has passed from May to December i.e 8 months
Value of 8 month of rent = 8 × $5,975
= $47,800 i.e earned portion of the contract.
Balance unearned rent revenue at year end= $71,700 - $47,800
= $23,900
" Fiona wants to sell a local advertising calendar. She knows there are 1000 households in her community, and estimates 30 percent will buy the calendar. The printing company will charge a $100 set up fee and calendars will cost $1 each to print. What price will she need to charge to cover all costs and make a $500 profit. Group of answer choices"
Answer:
The answer is $3
Explanation:
Pr = Q(P-VC) - FC
Where Pr is the profit made
Q is the quantity of calendar to be sold
P is the price to be charged
VC is the variable cost
FC is the fixed cost
Quantity of calendar to be produced is
30 percent of 1000
0.3 x 1000 units
= 300 units
500 = 300(x-1) - 100.
500 = 300x - 300 - 100
300x = 500 + 300 + 100
300x = 900
x = 900/300
x = 3
The price to be charged to cover all costs and make a $500 profit is therefore $3
Regarding income taxes, which do you think is more important (and why)-- the average tax rate that a firm pays for the marginal tax rate the firm is paying?
Answer:
average tax rate
Explanation:
Based on these two tax rates I would say that the more important of the two is average tax rate. This is because the average tax rate is the total taxes you have paid divided by your total income. This therefore will always be less than the marginal tax rate because the this tax rate is divided by tax brackets which since the average tax rate is specific it will never reach the limit of the tax bracket making it less than the marginal tax rate.
The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company's financial condition and performance. Cute Camel Woodcraft Company is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet. Cute Camel Woodcraft CompanyBalance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Year 1 Assets Liabilities and equity Current assets: Cash and equivalents Accounts rece vable Inventories Total current assets Net fixed assets Net plant and equipment Current liabilities: $2,767 Accounts payable $0 176 996 $0 1,266 3,712 8,437 1,013 Accruals 2,970 Notes payable $6,750 Total current liabilities 937 $937 2,813 $3,750 Long-term debt 3,515 8,250 Total debt $4,687 Common equity: Common stock Retained earnings 9,141 7,313 3,937 Common stock Retained earnings Total common equity 9,141 7,313 Y 3,937 11,250 $15,000 $14,063 Total assets $18,750 15,000 Total liabilities and equity $18,750 Given the information in the preceding balance sheet-and assuming that Cute Camel Woodcraft Company has 50 million shares of common stock outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet.
Cute Camel's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2
This statement is,_________ because:
A) Cute Camel's total current asset balance actually increased from $6,750 million to $8,437 million between Year 1 and Year 2
B) Cute Camel's total current liabilities balance decreased by $1,687 mililion between Year 1 and Year 2
C) Cute Camel's total current liabilities balance increased from $1,013 million to $1,266 million between Year 1 and Year 2
Answer:
1. Year 2 Cash and Cash Equivalents = Current Assets - Accounts Receivable - Inventories
= 8,437 - 1,266 - 3,712
= $3,459
2. Year 2 Net Plant & equipment = Total assets - Total current assets
= $18,750 - 8,437
= $10,313
3. Year 2 Total current liability = Accruals + Notes Payable
= $176 + 996
= $1,172
4. Year 2 Retained earnings = Total Common Equity - Common Stock
= $14,063 - 9,141
= $4,922
5. This statement is False because:
A) Cute Camel's total current asset balance actually increased from $6,750 million to $8,437 million between Year 1 and Year 2
Current Assets are a pool of relatively liquid assets, which are available to support the company's current and future sales and they increased from Year 1 to 2.
Snapshot of balance sheet.
The balance sheet is a financial and accounting system the provides a summary of the financial conditions, that is balance of the individual and the organization. May be made for sole proprietorship or partnership.
The answer to the statement is cute carmel total C.A increased between 1 and 2 year.
The balance sheet gives us information regarding the company. Both th investors and the analyst of the cute Carmel woodcraft company use it for accessing their performance.The sheet is made for the first and the second year basis. Year 2 the Cash and Cash Equivalents = Current Assets - Accounts Receivable - Inventories. Hence equals $3,459Next the both years Net Plant & equipment = Total assets - Total current assets Thus is $10,313. Thus Total CL = Accruals + N.Payable = $1,172. A 2 Retained earnings = Total Common Equity - Common Stock = $4,922.Hence the option A is correct.
Learn more about the balance sheet.
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Brand managers know that increasing promotional budgets eventually result in diminishing returns. The first one million dollars typically results in a 26% increase in awareness, while the second million results in adding another 18% and the third million in a 5% increase. Andrews’s product Adam currently has an awareness level of 80% . While an important product for Andrews, Adam’s promotion budget will be reduced to one million dollars for the upcoming year. Assuming that Adam loses one-third of its awareness each year, what will Adam’s awareness level be next year?
Answer:
52.88%
Explanation:
The computation of the awareness level for next year is shown below
But before that we need to find out the ending awareness i.e Y which is
= 80% × (1 - 1 ÷ 3)
= 53.33%
Now awareness after the promotion is
= 53.33% + 26%
= 79.33%
Now the ending awareness i.e (Y +1) is
= 79.33% × 2 ÷ 3
= 52.88%
Hence, the awareness level next year is 52.88%
Use the following information and the indirect method to calculate the net cash provided or used by operating activities:
Net income $ 87,100
Depreciation expense 13,800
Gain on sale of land 6,500
Increase in merchandise inventory 3,850
Increase in accounts payable 7,950
Answer:
The answer is $98,500
Explanation:
There are two ways to cash provided or used by operating activities - Direct method and indirect method. In direct method, the first line item is Net income or net loss.
Net income------------------------ $87,100
Depreciation expense---------- 13,800
Gain on sale of land------------ ($6,500)
Increase in merchandise inventory-------------------------------------------------($3,850)
Increase in accounts payable $7,950
Net cash provided or used by operating activities---------------$98,500
If a monopolist raises its price:________
a) the quantity demanded decreases.
b) it raises the barriers to entry.
c) the quantity demanded increases.
d) the quantity demanded remains the same.
Answer:
a) the quantity demanded decreases
Explanation:
As we know that'
A monopolist creates a monopoly in the market as the firm is a sole producer for the entire market due to which it charges high prices plus it is a price taker that means it offers cheap quality products at a lesser price
But if monopolist increased its price so the quantity demanded declines as the purchasing power reduced
Therefore option a is correct
Carpenters, Inc., a manufacturing company, acquired equipment on January 1, 2017 for $ 520 comma 000. Estimated useful life of the equipment was seven years and the estimated residual value was $ 20 comma 000. On January 1, 2020, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straightminusline method of depreciation. Calculate depreciation expense for 2020. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
Annual depreciation= $47,618
Explanation:
Giving the following information:
Purchasing price= $520,000
Useful life= 7 years
Residual value= $20,000
New useful life= 9 years
First, we need to determine the annual depreciation and accumulated depreciation before January 2020.
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (520,000 - 20,000)/7= 71,429
Accumulate depreciation= 71,429*3= $214,287
New annual depreciation:
Book value= 520,000 - 214,287= 305,713
Annual depreciation= (305,713 - 20,000) / 6
Annual depreciation= $47,618
Prepare a cost of goods manufactured schedule and a partial income statement based off the following information.
Cepeda Corporation has the following cost records for June 2017.
Indirect factory labor $4500 Factory utilities $400
Direct materials used $20,000 Depreciation, factory equipment $1,400
Work in process, 6/1/17 3,000 Direct labor $40,000
Work in process, 6/30/17 3,800 Maintenance, factory equipment $1,800
Finished goods, 6/1/17 5, 000 Indirect materials $2,200
Finished goods, 6/30/17 7,500 Factory manager’s salary $3,000
Instructions:
A) Prepare a cost of goods manufactured schedule for June 2017
B) Prepare an income statement through gross profit for June 2017 assuming sales revenue is $92,100.
Answer:
A. Cost of goods manufactured schedule for June 2017
Indirect factory labor $4,500
Factory utilities $400
Direct materials used $20,000
Depreciation, factory equipment $1,400
Maintenance, factory equipment $1,800
Factory manager’s salary $3,000
Indirect materials $2,200
Add Opening Work in Process Inventory $3,000
Less Closing Work in Process Inventory ($3,800)
Cost of goods manufactured $32,500
B. Income statement for June 2017
Sales Revenue $92,100
Less Cost of Sales
Opening Finished Goods Inventory $5,000
Add Cost of goods manufactured $32,500
Less Closing Finished Goods Inventory ($7,500) ($30,000)
Gross Profit $62,100
Explanation:
The cost of goods manufactured schedule include all manufacturing costs for the production period.
Income statement calculates the gross profit as Sales less Cost of Goods Sold.
Assume that Pope Enterprises held a $10,000, 10 percent, six-month note signed by Mary Drew. On December, 1, 2015, the maturity date, Drew dishonored the note. At this point, Drew owes a total of $10,500, which is comprised of the principal of $10,000 plus interest in the amount of $500 (or $10,000 x 10% x 6/12). Prepare the December 1 entry for Pope by selecting the account names and dollar amounts from the drop-down menus. If there are multiple debits or multiple credits, please enter the account titles in alphabetical order.
Answer:
Prepare the December 1 entry for Pope:
Dr Accounts receivable 10,500
Cr Notes receivable 10,000
Cr Interest receivable 500
Since the note was dishonored, it must be turned into an account receivable. The new account receivable must include the accrued interests on the note.
2. Think about the pros and cons associated with the concept of market pricing. What have your personal experiences been in relation to fairness and equity of your own compensation where you have worked
Explanation:
The market pricing system is an approach that differs from the formal salary structure because it is not an organizational process where the levels of remuneration are assigned according to a certain function.
In this wage definition strategy, the remuneration is calculated according to a present value, determined by the market itself and defined by conducting surveys whose objective is to analyze the service pricing strategies practiced by competitors.
This strategy can guarantee several significant advantages for an organization, such as increasing competitiveness by establishing a remuneration structure based on market value.
However, if this strategy is not duly reviewed periodically, what can happen is that there are flaws in the calculation of the current value, which generates an outdated salary system for employees and the company.
Travelwell manufactures and sells luggage and briefcases. Their marketing research indicates that durability is the attribute that consumers most desire in their luggage and briefcases. Travelwell now emphasizes durability in all of their promotional efforts. This strategy is intended to build brand equity.
a) true
b) false
Answer:
a) true
Explanation:
When we are talking about building brand equity, we are talking about increasing our customers' perception and value of our brand or company's name. Building brand equity emphasizes the brand itself over any specific product or service that our company offers. E.g. Rolls Royce is the most luxurious car manufacturer in the world, and they built brand equity upon luxury in all its vehicles, not one specific car.
In this case, Travelwell is emphasizing a characteristic that should apply to all its product line, not just one specific type of luggage.
Placker Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $155,000, variable manufacturing overhead of $3.40 per machine-hour, and 50,000 machine-hours. Recently, Job A881 was completed with the following characteristics: Total machine-hours 100 Direct materials $ 645 Direct labor cost $2,300 The total job cost for Job A881 is closest to:
Answer:
Total cost of job A881= $9,445
Explanation:
The total cost of Job 881 would be the sum of the direct cost and the manufacturing overhead
Total cost = Direct material + direct labour + variable manufacturing overhead + Fixed Overhead
Direct material and labour represent cost of material and labour incurred wholly and directly for Job A881
The overhead absorption rate(OAR) would be used to charge fixed manufacturing overhead to Job A881
The absorbed overhead = OAR × actual machine hours used for Job A881
OAR = budgeted overhead ÷ budgeted machine hours
OAR = $155,000 ÷ 50,000 machine hours = $3.1 per machine hour
Fixed manufacturing overhead absorbed = $3.1 × 100 = $3,100
Variable manufacturing overhead = $3.40 × 100 = $3,400
Total cost of job A881= 645 + 2,300 + 3,400 + 3,100 = $9,445
Total cost of job A881= $9,445
When a price ceiling is in effect:_______
a. there is no competition for goods.
b. demanders compete for goods in short supply by accepting reductions in quality.
c. suppliers compete for customers by inefficiently raising quality levels.
d. suppliers have an incentive to provide really good customer service.
Answer:
i got answer c
(i took the test)
Which one of the following reports helps track past due bills and bills that are due shortly? Multiple Choice Accounts Payable Aging Summary Customer Aging Summary Accounts Receivable Aging Summary Vendor Aging Report
Answer:
Accounts Payable Aging Summary
Explanation:
The account payable aging summary refers to the summary of the past due bills and the bills which are due shortly. It shows the amount which we have to pay in the prescribed time limit i.e 30 days 45 days etc
Therefore the reports which is needed to track the past due bills and that are due shortly we called as the account payable aging summary
Hence, the first option is correct
McLin, Inc., is a calendar year S corporation. Its AAA balance is zero. Determine the tax aspects of the following transactions. If an amount is zero, enter "0". a. McLin holds $90,000 of AEP. Tobias, the sole shareholder, has an adjusted basis of $80,000 in his stock. Tobias is paid a $90,000 salary. Ignore the 20% QBID.
Answer:
$10,000
Explanation:
Given that:
McLin holds $90,000 of AEP, this implies what is salary is made of;
Tobias, the sole shareholder, has an adjusted basis of $80,000 in his stock.
Tobias is paid a $90,000 salary income.
Ignore the 20% QBID
We are to determine the tax aspects of the transactions
Since the company receives a $90000 for salary expense. Thus Tobias basis is zero, then :
The tax aspect of the transaction is : ($90000 - $80000)
The tax aspect of the transaction = $10,000
Jorge owns a U.S. textile company. After a few years of resisting the trend, he realizes the only way his company can remain competitive is to outsource at least some of its production overseas. When looking for an international partner, Jorge should
Complete Question:
Jorge owns a U.S. textile company. After a few years of resisting the trend, he realizes the only way his company can remain competitive is to outsource at least some of its production overseas. When looking for an international partner, Jorge should;
A. Demand socially responsible behavior from his business partner.
B. Demand that his business partners adapt to U.S. culture and social behaviors.
C. Ignore the ethics of potential overseas business partners because the purpose of outsourcing is to make a profit.
D. Remind himself that his business responsibility is limited to his own actions.
Answer:
A. Demand socially responsible behavior from his business partner.
Explanation:
In this scenario, Jorge owns a U.S. textile company. After a few years of resisting the trend, he realizes the only way his company can remain competitive is to outsource at least some of its production overseas. When looking for an international partner, Jorge should demand socially responsible behavior from his business partner.
Its important to note that in order to grow your business successfully with a good reputation and customer satisfaction, you will have to bring in competent, credible, ethical and reliable professionals on board. Jorge should demand for socially responsible individuals from the outsourcing firm as this would go a long way to help his business achieve its aims, goals and by extension develop globally.
Hence, in order to build a wonderful and successful international brand, it's important that Jorge ask the recruiters (outsourcing firm) to go for individuals that are socially responsible. This simply entails, individuals who are ethical and do not have bad vices, criminal records or charges against them.
Laurel, Inc., and Hardy Corp. both have 7 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has four years to maturity, whereas the Hardy Corp. bond has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds
Answer:
Laurel bond % change = -6.6%
Hardy bond % change = -16.3%
Explanation:
current bond price $1,000
interest rate 7%
Laurel bond matures in 4 years, 8 semiannual payments
Hardy bonds matures in 15 years, 30 semiannual payments
if market interest increases to 9%
Laurel bond:
$1,000 / (1 + 4.5%)⁸ = $703.19
$35 x 6.59589 (annuity factor, 4.5%, 8 periods) = $230.86
market price = $934.05
% change = -6.6%
Hardy bond:
$1,000 / (1 + 4.5%)³⁰ = $267.00
$35 x 16.28889(annuity factor, 4.5%, 30 periods) = $570.11
market price = $837.11
% change = -16.3%
Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $111,000. Division sales for the year were $1,170,000 and its variable costs were $1,035,000. The fixed costs of the division were $245,000. If the windows division is dropped, 60% of the fixed costs allocated to it could be eliminated. The impact on Gion’s operating income from eliminating this business segment would be:
Answer:
$12,000 increase
Explanation:
The computation of the impact on operating income from eliminating this business segment is shown below:
= Lost revenue + Variable cost avoided + Eliminated Fixed cost
= -$1,170,000 + $1,035,000 + $245,000 × 0.60
= -$1,170,000 + $1,035,000 + $147,000
= $12,000
The $12,000 represent the increase in operating income