Answer:
hi your question is incomplete here is the complete question
Consider a lake found in the town of Center Barnstead,
The town has a campground whose visitors use the lake for recreation. The town also has a fish cannery that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the fish cannery's waste decreases the campground's economic profit.
Suppose that the fish cannery could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the campground would no longer be affected. If the fish cannery uses the recycling method, then the fish cannery's economic profit is $1,500 per week, and the campground's economic profit is $1,800 per week. If the fish cannery does not use the recycling method, then the fish cannery's economic profit is $2,000 per week, and the campground's economic profit is $1,000 per week. These figures are summarized in the following table.
Action
Profit
Fish Cannery
Campground
Total
(Dollars)
(Dollars)
(Dollars)
No Recycling 2,000 1,000
Recycling 1,500 1,800
Total economic profit is highest when the recycling production method is .
When the fish cannery uses the recycling method, the campground earns $1,800−$1,000=$800$1,800−$1,000=$800 more per week than it does with no recycling. Therefore, the campground should be willing to pay up to $800 per week for the fish cannery to recycle water. However, the recycling method decreases the fish cannery's economic profit by $2,000−$1,500=$500$2,000−$1,500=$500 per week. Therefore, the fish cannery should be willing to use the recycling method if it is compensated with at least $500 per week.
Suppose the campground has the property rights to the lake. That is, the campground has the right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the fish cannery will the recycling method and will pay the campground per week.
Now, suppose the fish cannery has the property rights to the lake, including the right to pollute it. In this case, assuming the two firms can bargain at no cost, the fish cannery will the recycling method, and the campground will pay the fish cannery per week.
ANSWER
TrueTrueExplanation:
The campground will make the most economic profit when it has property rights to a clean lake : True. this is true because the Fish cannery will be using the recycling method and from the table it is seen that when the recycling method is used The Campground make the most economic profit
The fish cannery will use the recycling method regardless of who has the property right : TRUE . this is because the Fish cannery will use the recycling method anyways because the recycling method would not pollute the water hence not interfering with the campground activities in case they own the property rights.
Match the following terms with their definitions.
1. Internal control
2. Control procedures
3. Firewalls
4. Encryption
5. Environment
6. Information system
7. Separation of duties
8. Collusion
9. Documents
10. Audits
11. Operational efficiency
12. Risk assessment
13. Sarbanes-Oxley Act
a. Two or more people working together to overcome internal controls.
b. Part of internal control that ensures resources are not wasted.
c. Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports.
d. Should be prenumbered to prevent theft and inefficiency
e. Limits access to a local network.
f. Example: The person who opens the bank statement should not also be the person who is reconciling cash.
g. Identification of uncertainties that may arise due to a company's products, services or operations.
h. Examination of a company's financial statements and accounting system by a trained accounting professional.
i. Without a sufficient one of these, information cannot properly be gathered and summarized.
j. The organizational plan and all related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting data.
k. Component of internal control that helps ensure business goals are achieved.
l. Rearranges data by a mathematical process-
m. To establish an effective one, a company's CEO and top managers must behave honorably to set a good example for employees.
Answer:
1. Internal control - The organizational plan and all related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting data. (J)
2. Control procedures - Component of internal control that helps ensure business goals are achieved. (K)
3. Firewalls - Limits access to a local network. (E)
4. Encryption - Rearranges data by a mathematical process. (I)
5. Environment - To establish one a company, CEO and top managers must behave honorably to set a good example for employees. (M)
6. Information system - Without a sufficient one of these information cannot properly be gathered and summarized. (I)
7. Separation of duties - Example: The person who opens the bank statement should not also be the person who is reconciling cash. (F)
8. Collusion - Two or more people working together to overcome internal controls. (A)
9. Documents - Should be pre-numbered to prevent theft and inefficiency (D)
10. Audits - Examination of a company's financial statements and accounting system by a trained accounting professional. (H)
11. Operational efficiency - Part of internal control that ensures resources are not wasted (B)
12. Risk assessment - Identification of uncertainties that may arise due to a company's products services or operations . (G)
13. Sarbanes-Oxley Act - Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports. (C)
Remsco has taxable income of $61,000 and a charitable contribution limit modified taxable income of $72,500. Its charitable contributions for the year were $7,540. What is Remsco's current-year charitable contribution deduction and contribution carryover
Answer:
Remsco's current-year charitable contribution deduction is $7,250
Contribution carryover is $ 290
Explanation:
Taxable income = $61,000
Charitable contribution limit modified taxable income = $72,500
Charitable contributions for the year = $7,540
Since, charitable contribution deduction is limited to 10% of charitable contribution limit modified taxable income ,
Remsco's current-year charitable contribution deduction = $72,500 x 10%
= $7,250
Therefore, contribution carryover = $7,540 - $7,250 = $ 290
Consider the following activities that take place in a veterinary clinic. (a.) Cleaning cages. (b.) Heating and air conditioning the clinic. (c.) Sending blood work to a lab. (d.) Dispensing medicine. Which of the following statements is true? A. Sending blood work to a lab is a facility level activity. B. Dispensing medicine is a facility level activity. C. Service entities cannot use ABC for overhead allocation. D. Heating and air conditioning the clinic is a facility level activity. E. Cleaning cages is a facility level activity
Answer: D. Heating and air conditioning the clinic is a facility level activity.
Explanation:
Facility Level Activities affect the entire operations/ facility of a firm and as such cannot be apportioned or traced to the individual products that the company makes. They are thus fixed and do not vary with production level.
From the above options, Heating and Air Conditioning the clinic affects the entire facility and cannot be apportioned to the services that the veterinary clinic offers. As such it is indeed a Facility Level Activity.
All projects are unique:________.
Select one:
A. Therefore all project management circumstances are equally unique.
B. So knowledge should not be transferred to avoid bias in future projects.
C. So knowledge cannot be transferred.
D. But they may have several common points.
Answer:
D. But they may have several common points
Explanation:
Although all projects are unique, they still share similar similarities. So knowledge can be transferred.
Cutco product line includes more than 100 choices. Is it realistic to think Cutco can enter global markets with all of its products for each market every time they consider a new market entry?
Answer:
On the balance of probability, they will have issues with brand acceptance. It is therefore not realistic that they can enter the global market with all the products at each point of entry.
Explanation:
The principles of marketing that to many choices may create confusion in the mind of the consumers. The cost of advertising and presenting the over 100 product lines to the new market will most likely sink the company.
The safest thing to do is to go into the markets with its best products in terms of the products with potential for quick acceptance, low competition in the new market and which also ranks high amongst the cash cows.
Cheers!
Dolan Company's accounting records reflect the following inventories:
Dec.31, 2013 Dec.31, 2012
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000
During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.
Dolan Company's total manufacturing costs incurred in 2013 amounted to________.
Answer:
cost of goods manufactured= $1,770,000
Explanation:
Giving the following information:
Dec.31, 2013 Dec.31, 2012
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials used + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 300,000 + (310,000 + 600,000 - 260,000) + 500,000 + 480,000 - 160,000
cost of goods manufactured= $1,770,000
Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - 0.5q, where p is the price in dollars per hour and q is hours per month. The firm faces a constant marginal cost of $1.If the firm will charge a monthly access fee plus a per hour rate, according to two-part tariff pricing, the total monthly access fee that the firm will collect from all the buyers taken together equals:a. $1.b. $5.c. $8.d. $16.
Answer:
d. $16.
Explanation:
The computation of the total monthly access fee is shown below:
Given that
p = 5 - 0.5q
Constant Marginal cost = 1
Based on the above information,
As we know that
In case of the two-part pricing, the monopolist is equal to the hourly rate
i.e (p) = MC
5 - 0.5q = 1
0.5q = 4
So, q = 8
And,
p = MC = $1
Moreover,
Total monthly access fees equal the whole consumer surplus
As per the demand function,
when q = 0 and p = $5
So,
Monthly Access fee is
= (0.5) × ($5 - 1) x 8
= 4 × $4
= $16
Lynn, a company owner, looks at her financial statements. She wants to know how much the cash balance contributed to total assets on the balance sheet. What would you suggest
Answer:
conduct a vertical financial analysis using a total from the balance sheet
Explanation:
Based on what exactly Lynn wants, the best suggestion for her in this scenario would be to conduct a vertical financial analysis using a total from the balance sheet. This is a method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement. Doing so will give her the percentage that each asset contributed to the total balance sheet.
Pick a well-known business organization that has received recent press coverage and that provides its annual reports at its Web site. From the information in the articles and annual reports, answer these questions: 1. What is(are) the main industry(ies) in which the company competes ?
Explanation:
The commercial company chosen is Amazon.com Inc, this is a multinational that operates in the areas of artificial intelligence, electronic commerce and computing. Amazon was founded in 1994 by Jeff Bezos, with the main objective of being a company that sells books on the internet, at that time the idea did not seem so promising, because the internet was little used worldwide, but Bezos saw there a opportunity and called itself the first virtual book store in the world, and began to be noted for the strategy of offering aggressive discounts, which made the company gain name and popularity.
The success strategy used by Bezos was to offer the customer an easy shopping service, focusing on their needs and offering a huge amount of titles available to the customer. Bezos' innovation strategy has made Amazon a pioneer in setting market standards for the entire internet.
Question 16 (3 points) The 2011 and 2012 Balance Sheets for Jacob, Inc. contained the following entries: 12/31/201112/31/2012 Accounts receivable$206$116 Inventories$590$603 Net fixed assets$102$307 Accounts payable$329$333 Jacob had materials purchases in 2011 of $1,689 and materials purchases in 2012 of $2,770 . What did Jacob record as Cost of Goods Sold (COGS) on its 2012 income statement
Answer:
$2,857
Explanation:
Cost of goods sold (COGS) refers to the relevant cost incurred to acquire or produce the products being sold a company during a particular period.
The formula for calculating the COGS is as follows:
COGS = Beginning inventories + Purchases - Ending inventories
From the question, we have the following for 2012:
Beginning stock = $590
Purchases = $2,770
Ending inventory = 503
Therefore, we have:
COGS for 2012 = $590 + $2,770 - $503 = $2,857
Therefore, Jacob should record $2,857 as Cost of Goods Sold (COGS) on its 2012 income statement.
1. A piece of newly purchased industrial equipment costs $1,240,000 and is classified as seven-year property under MACRS. Calculate the annual depreciation allowances and end-of-the-year book values for this equipment.
Answer:
Solution for the question is given below
Explanation:
Year OpeningValue MACRS Depreciation Closing Book Value
1. 1,240,000 0.1429 177,196 1,062,804
2. 1,062,804 0.2449 260,280.69 802,523.30
3. 802,523.30 0.1749 140,361.32 662,161.97
4. 662,161.97 0.1249 82,704.03 579,457.93
5. 579,457.93 0.0893 51,745.59 527,712.33
6. 527,712.33 0.0892 47,071.94 480,640.40
7. 480,640.40 0.0893 42,921.18 437,719.21
"Parker Company stock is currently selling for $130.00 per share and the firm's dividends are expected to grow at 6 percent indefinitely. Assuming Parker's most recent dividend was $5.50, what is the required rate of return on Parker's stock
Answer:
Cost of equity = 10.7%
Explanation:
We will work out the required rate of return using the the dividend valuation model. The model states that the value of a stock is the present value of the future divided discounted at the cost of equity.
The model is given below:
P = D× (1+g)/(r-g)
P- price of stock, D- dividend payable now, g- growth rate in dividend, r- cost of equity
So we substitute
130 = 5.50× (1+r)/(r-0.06)
cross multiplying
(r-0.06)× 130 = 5.50 × (1+r)
130 r- 7.8 = 5.50 + 5.50r
collecting like terms
130 r - 5.50r=5.50 + 7.8
124.5 r= 13.3
Divide both sides by 124.5
r =13.3 /124.5= 0.1068
r=0.1068 × 100= 10.7%
Cost of equity = 10.7%
The company has an opportunity to sell 40,000 additional units at $12 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 16% and (2) administrative expenses would increase by $172,000.
Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit.
Answer:
$1,576,000
Explanation:
The computation of the combined total net income is shown below:
Particulars Normal volume Additional volume Combined total
Sales $6,000,000 $480,000 $6,480,000
(40,000 × $12)
Less: Costs and expenses
Direct material $800,000 $80,000 $880,000
($800,000 ÷ 400,000 × 40,000)
Direct labour $1,600,000 $160,000 $1,760,000
($1,600,000 ÷ 400,000 × 40,000)
Overhead $400,000 $64,000 $464,000
($400,000 × 16%)
Selling expenses $600,000 $0 $600,000
Administrative
expense $1,028,000 $172,000 $1,200,000
Total costs
and expenses $4,428,000 $476,000 $4,904,000
Incremental
income
(loss) from
new busines $1,572,000 $4,000 $1,576,000
We assume reduced price of $12 per unit instead of $13 per unit
Catering Corp. reported free cash flows for 2008 of $8.14 million and investment in operating capital of $2.14 million. Catering listed $0.95 million in depreciation expense and $2.14 million in taxes on its 2008 income statement. What was Catering's 2008 EBIT
Answer:
Catering's 2008 EBIT is $11.47 million
Explanation:
Operating cash flow = EBIT + Depreciation – Taxes
Also the same as EBIT = Operating cash flow - Depreciation + Taxes
When Operating cash flow = Free cash flows + Investment in operating capital
OCF = $8.14 million + $2.14 m illion
Operating cash flow = 10.28 million
EBIT = Operating cash flow - Depreciation + Taxes
EBIT = 10.28 million - 0.95 million + 2.1 4 million
EBIT = $11.47 million
Catering's 2008 EBIT is $11.47 million
How can computers be used to revise business messages?
Answer:
Please refer to the below for answers.
Explanation:
Computers can be used to revise business messages in the following ways;
•Style checker. This software also assist in revising business messages through identifying errors in writtings and then outlining options of how one would like to correct them.
•Commenting. When writting business messages, computers(commenting) can also be used to add comments or notes or provide additional information hence important in revising messages.
•Spell checker. Some softwares are installed in computers that assist to check spellings for correctness. The software compare typed words with thousands of correctly spelt words and then determine the correct spelling using algorithm.
•Thesaurus. When writting business messages, computer can help writers find the best words to express ideas or find word(s) that may be aptly applied. This is done through the use of Thesaurus; which is a focal point for finding synonyms and antonyms of words.
•Grammar checker. This is also a software installed in computers that could help revise business messages for grammar correctness in a sentence. It helps in finding grammatical errors and correct all types of English grammar and spelling mistakes. It basically proof read.
•Revision tracking. Computers assist in revising business messages through revision tracking. One can make changes to a file(delete, update) in a computer and same can be tracked through revision tracking. It refer to changes made in a document and then the version number of the document is updated.
PLEASE HELP urgent The division is evaluating a project requiring a capital cost of $254,000. The project has an estimated life of four years and no salvage value. The estimated net income and net cash flow from the project are as follows: look at screenshot* The company's minimum desired rate of return is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is .893, .797, .712, and .636, respectively. 1. Determine the average rate of return on investment 2. Determine the Net Present Value
Answer:
1. Average rate of return on investment = 12.11%
2. Net Present Value = – $14,845.09
Explanation:
1. Determine the average rate of return on investment
Average rate of return on investment is the total net incomes from an investment divided the estimated life of the investment, and this is then divided by the cost of acquisition of the investment. This can be calculated for this question as follows:
Average income = Total net income / Estimated life = 123,000 / 4 = $30,750
Average rate of return on investment = Average income / Acquisition cost = $30,750 / $254,000 = 0.1211, or 12.11%
2. Determine the Net Present Value
Net present value is the difference between the present value of the acquisition of an investment and sum of the present values of all the net flows from the investment over its useful life.
Note: See the attached excel file to see how the net present value (NPV) is calculated.
Net Present Value = – $14,845.09
Conclusion
Since the Net Present Value is negative, it therefore implies the project is not a good investment.
Waterway’s Market recorded the following events involving a recent purchase of merchandise:
Received goods for $75000, terms 1/10, n/30.
Returned $1100 of the shipment for credit.
Paid $400 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company’s inventory increased by:_______.
Answer:
$73,561
Explanation:
The computation of inventory increased is shown below:-
Inventory increase = (Received goods - Returned goods) × (1 - 0.01) + Freight charges
= ($75,000 - $1,100) × 0.99 + $400
= $73,900 × 0.99 + $400
= $73,161 + $400
= $73,561
Therefore for computing the increased inventory we have simply applied the above formula.
A monopolist can sell 26,000 units at a price of $30 per unit. Lowering price by $1 raises the quantity demanded by 1,000 units. What is the change in total revenue resulting from this price change
Answer:
If the company lowers the sales price by $1, income will increase by $3,000
Explanation:
Giving the following information:
A monopolist can sell 26,000 units for $30 per unit. Lowering price by $1 raises the quantity demanded by 1,000 units.
First, we need to calculate current sales revenue:
Sales= 26,000*30= $780,000
Now, with the lower price:
Sales= 27,000*29= $783,000
If the company lowers the sales price by $1, income will increase by $3,000
If the interest rate in the United Kingdom is 8 percent, the interest rate in the United States is 10 percent, the spot exchange rate is $1.75/£1, and interest rate parity holds, what must be the one-year forward exchange rate?
Answer:
The answer is $1.78 / £1
Explanation:
Solution
Given that
Interest rate of United kingdom = 8%
Interest rate of United States =10%
Spot exchange rate =$1.75£1
The next step is to find the one year forward rate of exchange
Thus
Forward Rate = S₀ * [ ( 1 + Rus) / ( 1 + RE) ]
=$ 1.75 * ( ( 1 + 10%) / ( 1 + 8%) )
$1.78
Therefore, the forward exchange rate is $ 1.78 / £1
Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $35,000.
What is its approximate internal rate of return?
Answer:
i think the answer218
Explanation:
if you add 176.000+35.000=211+7=218 you get the right answer
The approximate internal rate of return is 176.000+35.000=211+7=218. From calculating the cost and salvage value we get the internal rate of return.
What is internal rate of return?In financial analysis, the internal rate of return (IRR) is a statistic used to calculate the profitability of possible investments. IRR is a discount rate that, in a discounted cash flow analysis, reduces all cash flows' net present values (NPV) to zero. The same formula is used for NPV calculations and IRR calculations.
A useful tool for comparing investments is the internal rate of return (IRR), which is the interest rate at which the sum of all cash flows equals zero. If we substitute 13.92% for the 8% in the aforementioned case, NPV will be zero, and that represents your IRR. IRR is therefore defined as the discount rate at which a project's NPV equals zero.
IRR can be used to rank a variety of potential investments or projects on a pretty even basis because it is consistent for investments of all types. Generally speaking, the investment with the highest IRR would be regarded as the best when comparing options with other similar attributes.
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Morrow Company uses the high-low method to estimate the cost function. The information for 2020 is provided below: Machine-hours Labor Costs Highest observation of cost driver 900 $36,000 Lowest observation of cost driver 100 $14,000 What is the estimated total cost when 450 machine-hours are used
Answer:
Total cost at 450 machine hours = $23625
Explanation:
The high-low method is used to calculate the variable cost per unit element in a mixed cost. A mixed cost is a cost which is made up of both the fixed and the variable cost. The formula for variable cost per unit is,
Variable cost per unit = (Highest activity cost - Lowest activity cost) / (Highest activity units - Lowest activity units)
Variable cost per unit = (36000 - 14000) / (900 - 100)
Variable cost per unit = $27.5
Thus, the fixed element is = 36000 - (27.5 * 900)
Fixed cost element = $11250
Thus, the cost equation is,
Total cost = 27.5x + 11250
Where x is the number of machine hours.
Total cost at 450 machine hours = 27.5 * 450 + 11250
Total cost at 450 machine hours = $23625
A registered representative wishes to sell a customer a limited partnership unit that is offered through his friend - the general partner in the venture. Under FINRA rules, this action is:
Answer:
only permitted if the member firm is notified in writing and gives prior written approval to the transaction
Explanation:
Under FINRA rules, registered representatives cannot effect private securities transactions.
But FINRA does allow an exemption from this prohibition on the condition that the member firm is notified in writing and gives prior written approval to the transaction
The traditional short-run Phillips curve implies a powerful role for monetary policy. According to the theory, place the events in order based on what happens when the central bank unexpectedly expands the money supply.
a. the economy is in equiblirium at full employment (u=u)
b. the central bank injects new money into the money supply
c. aggerate demand increases
d. the inflation rate rises and the unemployment rate falls to a new equilibrium
Answer: A -> B -> C -> D
Explanation:
The Short Run Phillips Curve holds that in the short run, there is an inverse relationship between Unemployment and inflation because there is a trade-off between the two. As one rises, the other falls.
The sequence of events is,
At first, the Economy is in Equilibrium at u=u*.
The Central Bank then embarks on Expansionary Monetary policy and injects money into the economy. This will have the effect of putting more money into people's pockets.
As this happens, people will then have more money to buy more goods and services which they will. This is a rise in Aggregate Demand in the economy.
As Aggregate Demand rises, the Economic equation kicks in which is that the higher the demand, the higher the price. This increase will therefore lead to an increase in price levels which is inflation. The Unemployment rate will then fall because as the Phillips Curve shows, Unemployment falls as inflation rises.
Employees at Between the Rounds believe that the company is fair to all employees, regardless of their age, gender, race, ethnicity, sexual orientation, or disability. It is accurate to say that Between the Rounds has a positive:_______.
Answer:
diversity climate
Explanation:
Here are the options :
ethnocentric culture.
diversity climate.
role conflict.
employee assistance program.
transgender population
The company is accepting of different tribes, genders and age. It is diverse
Street & Smith publishes the same baseball magazine with exactly the same stories but with 16 different covers to appeal to baseball fans in 16 different regions of the U.S. What is the market segmentation strategy?
Answer:
The answer is 'One product and multiple market segments'
Explanation:
The market segmentation strategy here is One product and multiple market segments.
The product is one product(the magazine story) and this one product (same story) covers 16 different regions of the U.S i.e the same product is selling in 17 market segments.
The advantage of this strategy is that it helps to avoid the additional costs of developing and producing additional versions of the product.
The Morris Corporation has $350,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris's annual sales are $1.75 million, its average tax rate is 30%, and its net profit margin on sales is 8%. If the company does not maintain a TIE ratio of at least 3 to 1, its bank will refuse to renew the loan and bankruptcy will result. What is Morris's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
8.14 times
Explanation:
The computation of the Time interest earned ratio is shown below:
As we know that
Times interest earned ratio = (Earnings before interest and taxes) ÷ (Interest expense)
where,
Earnings before interest and taxes = Income before income tax for the year + Interest expense
But before tha, we need to do the following calculations
The interest amount is
= $350,000 × 0.08
= $28,000
The net profit is
= $1,750,000 × 8%
= $140,000
The EBIT is
= Profit before tax + interest expense
= $140,000 ÷ (1 - 0.30) + $28,000
= $200,000 + $28,000
= $228,000
And, the interest expense is $28,000
So, the TIE ratio is
= $228,000 ÷ $28,000
= 8.14 times
Jarrett Baker is the founder of an enterprise software company located in Chevy Chase, Maryland. By looking at the income statements for Jarrett’s business over the past 3 years, you see that its working capital has declined from $42,400 in 2012 to $17,900 in 2013 to $3,100 in 2014. If this trend continues, in what ways could it jeopardize the future of Jarrett’s business?
Answer and Explanation:
In this particular case, the working capital continues to fall and hits a value below zero otherwise the business would have a negative cash flow.
Company's assets are below its liabilities which including its current working capital would not be able to manage its debts. The Company would be faced with extreme difficulty in paying back its creditors.
If, as in the case at hand , the company continues to operate in low working capital and work capital declines over time, the company can encounter extremely serious financial problems.
Following Effects may include declining revenue from purchases, non-inventory management, or issues with the specific total accounts receivable.
Xochi is a corporate PR consultant. She has many clients and would like to find a more efficient way to access and send information than by e-mail alone. What tool should Xochi use to search and manage this informatio
Answer:
Enterprise social media network.
Explanation:
Enterprise social media network is the use of social network to link people who share common interest. Enterprise social network could be internal to a business such as Yammer, communicator which are meant to communicate among employees or external to a business such as use of Google+ or other social media network platforms which connects a business to it's customers.
The advantage of Enterprise social media networks is that they can be searched such that people can follow, tag or view activity. Here, users can check and send messages conveniently and efficiently to people compare to email alone.
With regards to the above scenario, Xochi should use Enterprise social media network tool to search and manage information.
A manufacturer sells 50 boats per month at $25000 per boat, and each month demand is increasing at a rate of 4 boats per month. What is the fastest you could drop your price before your monthly revenue starts to drop
Answer:
For the revenue per month to drop, the price per boat per month has to drop more than $2,000
Explanation:
Given:
Number of boats sold per month = 50
Cost of each boat = $25,000
Each month demand increases at a rate of 4 boats per month.
Required:
Find the fastest price could drop before monthly revenue starts to drop.
Revenue, R = Price × Quantity
R = P × Q
Differntiate both sides with respect to time, t:
[tex] \frac{dR}{dt} = \frac{dP}{dt} Q + \frac{dQ}{dt} P [/tex]
[tex] = \frac{dP}{dt} 50 + 4 * 25,000[/tex]
For the fastest price could drop before monthly revenue starts to drop, [tex] \frac{dR}{dt} < 0 [/tex]
Thus,
[tex] = \frac{dP}{dt} 50 + 4 * 25,000 < 0[/tex]
[tex] = \frac{dP}{dt} 50 + 100,000 < 0[/tex]
[tex] = \frac{dP}{dt} 50 < -100,000 [/tex]
[tex] \frac{dP}{dt} = \frac{-100,000}{50} [/tex]
[tex] \frac{dP}{dt} = -2,000[/tex]
Since the answer is negative, it indicates a drop in price.
Therefore, for the revenue per month to drop, the price per boat per month has to drop more than $2,000
Expenses for a Pizza restaurant include raw material for pizza at $4.00 per slice, $116.00 as monthly rental and $45.00 monthly as insurance. Lost sale expense is considered to be $4.00 per unhappy customer. Leftover Pizza can be sold for $3. The restaurant is open 25 days in a month. Today the restaurant prepared 200.00 pizza slices and sells them for $10.00/slice. There was a party at a nearby office so the demand for pizza went up to 212.00 slices. How much profit did the restaurant earn today
Answer:
The restaurant earned a profit of $1145.56 which is approximately $1146
Explanation:
the formula is given as:
Q x (sale price – material cost) – ( rental + insurance)/day - loss
Q = 200
Sale price = $10
Material cost = $4
rental = $116
insurance = $45
lost sale expense = $4
day = 25
increased demand = 212
= 200(10 - 4) - (116 + 45)/25 - (212 - 200)4
= 200(6) - 6.44 - 48
= 1200 - 6.44 - 48
= $1145.56
This is approximately $1146