Answer:
Producer surplus
Neither
Consumer surplus
Explanation:
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Producer surplus is the difference between the price of the good and the least price the seller is willing to sell his product.
1. Price = $149
least price seller was willing to sell his laptop = $140.
Hence it's producer surplus.
2. Price = $59
there's no information on the least price the seller was willing to sell or the highest amount the buyer was willing to buy.
hence it's neither producer or consumer surplus
3. Price = $39
highest amount buyer was willing to buy = $46
Hence, it's consumer surplus
I hope my answer helps you
"In your opinion, how has social media affected customer service in a broad sense? Provide evidence that supports your opinion."
Explanation:
Social media directly impacted the relationship between consumer and company.
First, you need to consider how the internet and social media are widely used by thousands of people around the world as a way to connect with others and exchange information.
Realizing this phenomenon, companies decided to use social media as a way to interact with their customers and attract more audiences. Social media works as a space where the construction of the relationship takes place more instantly and a little less formally, which allows for more in-depth interaction and the creation of a valuable relationship between company and customer.
Through the social media it is possible that the time of an answer for example is drastically reduced, which alters the consumer perception in a positive way.
It is also possible that companies use social media as a tool to improve relationship marketing, which is the creation of value for the customer through content, photos and posts, which generate engagement, approximation, loyalty and connection with consumers.
6.2 Assignment: Intellectual Property 1. Clifford Witter was a dance instructor at the Arthur Murray Dance Studios in Cleveland. As a condition of employment, he signed a contract not to work for a competitor. Subsequently, he was hired by the Fred Astaire Dancing Studios, where he taught the method that he had learned at Arthur Murray. Arthur Murray sued to enforce the noncompete contract. What would be result? What additional information, if any, would you need to know to decide the case? 2. Greenberg worked for Buckingham Wax as its chief chemist, developing chemical formulas for products by testing other companies’ formulas and modifying them. Brite Products bought Buckingham’s goods and resold them under its own name. Greenberg went to work for Brite, where he helped Brite make chemicals substantially similar to the ones it had been buying from Buckingham. Greenberg had never made any written or oral commitment to Buckingham restricting his use of the chemical formulas he developed. May Buckingham stop Greenberg from working for Brite? May it stop him from working on formulas learned while working at Buckingham? Why?
Answer:
The overview of the given circumstances is described in the explanation segment below.
Explanation:
(1)...
Non-compete seems to be a standard procedure in several areas of the globe to safeguard information. There must have been 2 factors for something like a non-competent specified period in exchange, as shown in this scenario:
There's got to have been a state secret that is hidden from the public. Witter uses trade secrets for his previous venture.Neither of the circumstances confirms that realizing as well as trying to teach how and when to start dancing seems to be completely obvious and does not quantity to state secrets. If this were a style of dance that is already recognized mostly to Anthony Murray as well as Witter, therefore the case might have been dissimilar. And while this skill is trained to every learner, it isn't a secret.
Interestingly, Witter doesn't use trade secrets because it is a common experience of dance to learn well how to dance. Haven't broken the non-competition.
(2)...
Buckingham may, if he indeed wishes, promote to prevent Greenberg from operating on such formulations, and even using them for many other businesses, as he created certain formulas although employed at Buckingham. This also acknowledges that all these formulas have been created again for the corporation of Buckingham and therefore any exposure of such formulas to some of its rival businesses directly impacts the company of Buckingham.
They should negotiate through Brite the current landlord of Greenberg, not to require Greenberg to provide it, and that therefore Brite, and in so doing, is indicting the requirements including its Intellectual Property Act. Nevertheless, it seems from either the content of the issue that there was no Non-Disclosure Agreement among Buckingham as well as Greenberg.However although there would have been a long-standing contractual partnership involving Brite & Buckingham, hardly any agreement concerning digital content as well as Trade Secret sharing including non-disclosure had already been concluded.In consideration of it all, it would be very unlikely against Buckingham to just get a judge's order targeting Greenberg as well as Briton to prosecute them or even to prevent themselves from being used formulas established by Greenberg although employed for Buckingham.
We have the following data for a hypothetical open economy: GNP = $12 comma 00012,000 Consumption (C) = $7 comma 2007,200 Investment (I) = $1 comma 0001,000 Government Purchases (G) = $1 comma 6001,600 Tax Collections (T) = $1 comma 2001,200 What is the value of private savings plus public savings? $nothing (Enter your answer as an integer. Include a minus sign if necessary.) What is the value of the current account balance CA? $nothing (Enter your answer as an integer. Include a minus sign if necessary.)
Answer:
The value of private savings plus public savings is $3,200
The value of the current account balance CA is $2,200
Explanation:
In order to calculate the value of private savings plus public savings we would have to make the following calculation:
Total saving = private saving+public saving
Total saving =GNP-Tax Collections-Consumption+Tax Collections-Government Purchases
Total saving =$12,000-$1,200-$7,200+$1,200-$1,600
Total saving =$3,200
To calculate the value of the current account balance CA we would have to make the following calculation:
value of the current account balance CA=GNP-Consumption-Investment-Government Purchases
value of the current account balance CA= $12,000 - $7,200 -$1,000-$1,600
value of the current account balance CA= $2,200
Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will . The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment.
Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply.
a. Extending the number of weeks for which unemployed workers are eligible for unemployment insurance benefits from the government
b. Taxing the price of placing a resume or posting a job opening on job-search website
c. Establishing government-run employment agencies to connect unemployed workers to job vacancies
Answer:
Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will DECREASE. The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will INCREASE. The temporary unemployment resulting from such sectoral shifts in the economy is best described as STRUCTURAL unemployment.
Structural unemployment is a non voluntary type of unemployment and it occurs because the skills of the workers are not the ones needed by the employers. In this case, labor that was used for producing cotton in Texas is no longer needed due to shifts in the world price of cotton.
Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply.
c. Establishing government-run employment agencies to connect unemployed workers to job vacancies
EVA/MVA The financial statements reflect historical data, but managers' performance must be evaluated on the basis of values. To provide this information, financial analysts have developed two measures: Market Value Added (MVA) and Economic Value Added (EVA). Market Value Added represents the difference between the money stockholders have invested in the firm versus the cash they could receive if the firm were sold. The equation for MVA is:
Answer:
MVA = (Shares outstanding * Stock price) - Total common equity
Explanation:
Market value added is the excess of equity over its book value. It is the difference between money invested by stockholders and the cash they will receive if the company is sold. The higher MVA of a company means performance of the company management is good and is in the favor of stockholders.
PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: Item Amount Federal Treatment Illinois income taxes $ 33,361 Deducted on federal return Indiana income taxes $ 18,480 Deducted on federal return Ohio Commercial Activity Tax $ 3,992 Deducted on federal return Illinois municipal bond interest $ 9,984 Excluded from federal return Indiana municipal bond interest $ 15,100 Excluded from federal return Federal T-note interest $ 2,492 Included on federal return PWD's federal taxable income was $104,000. Calculate PWD's Illinois state tax base.
Answer:
PWD's Illinois state tax base = $168,449
Explanation:
DATA
Illinois income taxes = $33,361
indiana income taxes = $18,480
Illinois municipal bond interest = $9,984
Indiana municipal bond interest = $15,100
Federal T-note interest = $2,492
Federal taxable income = $104,000
PWD's Tax Base = ?
Solution
PWD's Illinois Tax base can be calculated as follows
Formula
Illinois state tax base = Federal taxable income+Indiana income taxes+Illinois income taxes+Indiana municipal bond interest – federal t-note interest
Illinois state tax base = $104,000 + $18,480 + $33,361 + $15,100 - $2,492
PWD's Illinois state tax base = $168,449
Jay received the following fair market value amounts during the current year: Interest on Montgomery County bonds (used to build a bridge) $100 Interest on U.S. Treasury notes $200 Gain on sale of Montgomery County bonds $300 Common stock dividend in IBM Corporation common stock (no cash option) $400 What amount of taxable income should Jay report from these amounts
Answer:
$300
Explanation:
Given that :
Jay received the following fair market value amounts during the current year:
Interest on Montgomery County bonds
(used to build a bridge) $100
Interest on U.S. Treasury notes $200
Gain on sale of Montgomery County bonds $300
Common stock dividend in IBM Corporation
- common stock (no cash option) $400
From the above amounts that Jay received during the current year;
The following are free from an obligation and liability imposed as a result of tax.
1. Interest on Montgomery County bonds (used to build a bridge)
2. Interest on U.S. Treasury notes
3. Common stock dividend in IBM Corporation common stock (no cash option)
So; we can say they are not taxable
BUT only Gain on sale of Montgomery County bonds which is $300 only taxable
Thus, The amount of taxable income Jay should report from the above amounts is $300
On December 20, the company paid cash for equipment, $272,300, subject to a 2% cash discount, and freight on equipment of $11,410. Prepare entries on the books of Concord Company for these transactions. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
Dr equipment $ 278,264.00
Cr cash $278,264.00
Explanation:
The amount of cash paid for equipment=$272,300*(1-2%)=$266,854.00
The cash paid for freight on equipment is $11,410
The cash paid on freight would also be debited to the equipment's account since the cost of an asset includes the amount spent bringing it to its present location and condition .
Total cost of equipment =$266,854.00+$11,410.00
ctivity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Gas Cooker Charcoal Smoker Units 1,000 4,000 Number of batches 60 10 Number of batch moves 80 20 Direct materials $20,000 $100,000 Direct labor $20,000 $27,000 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection $288,000 Amount of direct materials cost Materials movement 16,900 Number of batch moves Scheduling 42,000 Number of batches $346,900 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 7.3809 for overhead rate calculations. Total cost Answer Gas Cooker Answer per unit Charcoal Smoker Answer per unit (b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing. Total cost Answer Gas Cooker Answer per unit Charcoal Smoker Answer per unit PreviousSave AnswersNext
Answer:
(a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.
Gas Cooker:
total cost = $20,000 + $20,000 + $147,618 = $187,618
cost per unit = $187.62
Charcoal Smoker
total cost = $20,000 + $27,000 + $199,284 = $246,284
cost per unit = $61.57
(b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.
Gas Cooker:
total cost = $20,000 + $20,000 + $48,000 + $13,520 + $36,000 = $137,520
cost per unit = $137.52
Charcoal Smoker
total cost = $100,000 + $27,000 + $240,000 + $3,380 + $6,000 = $376,380
cost per unit = $94.10
Explanation:
Gas Cooker Charcoal Smoker
Units 1,000 4,000
Number of batches 60 10
Number of batch moves 80 20
Direct materials $20,000 $100,000
Direct labor $20,000 $27,000
Manufacturing overhead follows:
Activity Cost Cost Driver
Materials acquisition $288,000 Amount of direct
and inspection materials cost
$48,000
$240,000
Materials movement $16,900 Number of batch moves
$13,520
$3,380
Scheduling $42,000 Number of batches
$36,000
$6,000
The information necessary for preparing the 2018 year-end adjusting entries for Winter Storage appears below. Winter's fiscal year-end is December 31.
a. Depreciation on the equipment for the year is $7,000.
b. Salaries earned (but not paid) from December 16 through December 31, 2018, are $3,400.
c. On March 1, 2018, Winter lends an employee $12,000 and a note is signed requiring principal and interest at 6% to be paid on February 28, 2019.
d. On April 1, 2018, Winter pays an insurance company $15,000 for a one-year fire insurance policy. The entire $15,000 is debited to prepaid insurance at the time of the purchase.
e. $1,500 of supplies are used in 2018.
f. A customer pays Winter $4,200 on October 31, 2018, for six months of storage to begin November 1, 2018. Winter credits deferred revenue at the time of cash receipt.
g . On December 1, 2018, $4,000 advertising is paid to a local newspaper. The payment represents advertising for December 2018 through March 2019, at $1,000 per month. Prepaid advertising is debited at the time of the payment.
Required: Record the necessary adjusting entries at December 31, 2018.
Answer:
Adjusting entries are entries that indicate the events of the company that have occurred but not yet recorded by the company.
a. DATE DESCRIPTION DEBIT CREDIT
Dec 31 Depreciation Expenses $7,000
2018 Accumulated Expenses $7,000
(Record depreciation on equipment )
b. DATE DESCRIPTION DEBIT CREDIT
Dec 31 Salary expenses $3,400
2018 Salary payable $3,400
(Record salary incurred but not paid)
c. DATE DESCRIPTION DEBIT CREDIT
Dec 31 Interest receivables $660
2018 (12,000 * 6% * 11/12)
Interest revenue $660
(Record of interest earned)
d. DATE DESCRIPTION DEBIT CREDIT
Dec 31 Insurance Expenses $11,250
2018 (15,000 * 9/12)
Prepaid Insurance $11,250
(Record payment of insurance expenses)
e. DATE DESCRIPTION DEBIT CREDIT
Dec 31. Supplies Expenses $1,500
2018 Supplies $1,500
(Record of supplies)
f. DATE DESCRIPTION DEBIT CREDIT
Dec 31, Deferred revenue $1,400
2018 (4,200 * 2 month / 6 month)
Service revenue $1,400
(Record advance payment for services provided)
g. DATE DESCRIPTION DEBIT CREDIT
Dec 31, Advertisement Expenses $1,000
2018 Prepaid Advertisement $1,000
(Record payment for advertisement)
Chad, a sole proprietor of a private boat charter business, purchased and placed into service ten boats for $260,000 each on May 1, Year 1. These were the only assets Chad placed into service in Year 1. Assume the boats have a 10 year MACRS recovery period. What is the maximum amount, if any, that Chad can deduct in Year 1 if he does not elect out of bonus depreciation
Answer:
The maximum amount that Chad can depreciate in yer 1 if he decides not to elect bonus depreciation is $26,000
Explanation:
MACRS 10 year depreciation rate of recovery half year convention:
Year Depreciation % Purchase cost Depreciation
1 10% $260,000 $26,000
2 18% $260,000 $46,800
3 14.40% $260,000 $37,440
4 11.52% $260,000 $29,952
5 9.22% $260,000 $23,972
6 7.37% $260,000 $19,162
7 6.55% $260,000 $17,030
8 6.55% $260,000 $17,030
9 6.56% $260,000 $17,056
10 6.55% $260,000 $17,030
11 3.28% $260,000 $8,528
On January 2, 2021 Pod Company purchased 30% of the outstanding common stock of Jobs, Inc. and used the equity method to account for the investment. During 2021, Jobs reported net loss of $160,000 and distributed dividends of $100,000. The ending balance in the Investment in Jobs Company account at December 31, 2021 was $640,000 after applying the equity method. What was the purchase price Pod Company paid for its investment in Jobs, Inc.? "g"
Answer:
The purchase price is 7 million 435 thousnad 638.92 dollars
Explanation:
has 10 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 107.8 percent of par. What is the current yield on the bonds?
Answer:
4.62%
Explanation:
we need to calculate the yield to maturity of the bond:
YTM = [coupon + (face value - market value)/n] / [(face value + market value)/2]
coupon = $50face value = $1,000market value = $1,078n = 38 semiannual paymentsYTM = [$50 + ($1,000 - $1,078)/38] / [($1,000 + $1,078)/2]
YTM = $47.95 / $1,039 = 4.615 ≈ 4.62%
SPU, Ltd., has just received its sales expense report for January, which follows.Item AmountSales commissions $370,500Sales staff salaries 92,400Telephone and mailing 43,000Building lease payment 60,000Utilities 17,100Packaging and delivery 82,000Depreciation 36,750Marketing consultants 52,190You have been asked to develop budgeted costs for the coming year. Because this month is typical, you decide to prepare an estimated budget for a typical month in the coming year and you uncover the following additional data:1. Sales volume is expected to increase by 14 percent.2. Sales prices are expected to decrease by 10 percent.3. Commissions are based on a percentage of sales revenue.4. Sales staff salaries will increase 4 percent next year regardless of sales volume.5. Building rent is based on a five-year lease that expires in three years.6. Telephone and mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.7. Utilities costs are scheduled to increase by 2 percent regardless of sales volume.8. Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $57,000 in furniture that will be received at the start of next year and will be depreciated over a 10-year life using the straight-line method.9. Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, these costs are expected to average $64,500 per month.Required:Prepare a budget for sales expenses for a typical month in the coming year.
Answer:
SPU, Ltd.Sales ExpenseReport for January Sales Expense Budget
Item Amount Amount
Sales commissions $370,500 $380,133
Sales staff salaries 92,400 92,096
Telephone and mailing 43,000 52,942
Building lease payment 60,000 60,000
Utilities 17,100 17,442
Packaging and delivery 82,000 93,480
Depreciation 36,750 37,225
Marketing consultants 52,190 64,500
Total Sales Expenses $753,940 $797,818
Explanation:
1. Sales volume is expected to increase by 14 percent.
2. Sales prices are expected to decrease by 10 percent.
3. Commissions are based on a percentage of sales revenue.
Sales Commissions = $380,133 ($370,500 x 1.14 x 0.9)
4. Sales staff salaries will increase 4 percent next year regardless of sales volume.
Sales staff salaries = $96,096 ($92,400 x 1.04)
5. Building rent is based on a five-year lease that expires in three years.
6. Telephone and mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.
Telephone and mailing = $52,942 ($43,000 x 1.08 x 1.14)
Package and delivery = $93,480 ($82,000 x 1.14)
7. Utilities costs are scheduled to increase by 2 percent regardless of sales volume.
Utilities = $17,442 ($17,100 x 1.02)
8. Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $57,000 in furniture that will be received at the start of next year and will be depreciated over a 10-year life using the straight-line method.
Previous depreciation = $36,750
Current year's addition 475 ($57,000/10 years/12 months)
Total for the month $37,225
9. Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, these costs are expected to average $64,500 per month.
Trak Corporation incurred the following costs while manufacturing its bicycles.
Bicycle components $100,000
Advertising expense $45,000
Depreciation on plant 60,000
Property taxes on plant 14,000
Property taxes on store 7,500
Delivery expense 21,000
Labor costs of assembly-line workers 110,000
Sales commissions 35,000
Factory supplies used 13,000
Salaries paid to sales clerks 50,000
Required:
Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs.
Please find the answer below.
Explanation:
Bicycle components $100,000 - Direct materials
Advertising Expense $45,000 - Period costs
Depreciation on plant $14,000 - manufacturing overhead
Property taxes on plant $14,000 - manufacturing overhead
Property taxes on store $7,500 - manufacturing overhead
Delivery expense $21,000 - period costs
Labor costs of assembly-line workers $110,000 - Direct labor
Sales commissions $35,000 - Period costs
Factory supplies used $13,000 - Period costs
Salaries paid to sales clerks $50,000 - period costs
Cheers.
Partners, LLC members and S Corporation shareholders are not taxed on the amount they withdraw from the entity in a nonliquidating distribution when they have sufficient basis (disregarding any other limitation).
a. True
b. False
Answer:
Partners: True
LLC: True
S Corporation: False
Explanation:
When dividends are withdrawn from a business tax is only due on a S Corporation because the tax paid for the profits of an organization is not by the stockholder withdrawing the dividends which is why when dividend is withdrawn the tax is to be paid.
When dividends are withdrawn in a partnership or and LLC then no tax is payable as tax is already paid on the profits made by the business that is why dividends are not taxable when withdrawn.
When the attitude of continuous improvement exists throughout an organization, every manager and employee is challenged to continuously experiment with new and improved business practices.
a. True
b. False
Answer:
Option A
True
Explanation:
The attitude of continuous improvement entails that the members of an organization strive to improve on themselves, operations, and processes within the organization. It usually entails learning from both mistakes and business practices of other companies to ensure that there is a constant improvement in the day to day activities of the business.
During the process of continuous improvement, every manager and employee is definitely expected to try out new policies, and practices to see how well they fit in and aid the company to achieve her overall business goals.
This is the only way a strong "continuous improvement " attitude can be maintained company-wide.
Hence, the answer is option A: True.
You notice that Coca-Cola has a stock price of $ 40.68 and EPS of $ 2.04. Its competitor PepsiCo has EPS of $ 3.43. But, Jones Soda, a small batch Seattle-based soda producer has a P/E ratio of 35.2. Based on this information, what is one estimate of the value of a share of PepsiCo stock? g
Answer:
Estimate Value of a share= $71.81
Explanation:
The value of a share can be determined using the price earning ratio model. According to this model, the price of a share is estimated as the EPS of the company multiplied by a representative P/E ratio.
Value of share = EPS × P/E
The appropriate P/E ratio would be that of a similar operator in the same industry, in this case , Jones Soda.
Hence the estimate value of share =2.04 × 35.2=71.81
Estimate Value of a share= $71.81
There are two techniques of egg production: free range (where hens roam around the farm) or factory (where hens are fed and watered in wire cages). The free range technique has a much more elastic supply curve than the factory technique. When the demand for eggs falls:________.
a. egg production falls by a smaller percentage in the factory technique than in the free range technique.
b. egg production falls by a larger percentage in the factory technique than in the free range technique.
c. the production using both techniques falls by the same percentage.
d. the factory egg producers supply curve shifts inward.
e. the free range egg producers supply curve shifts inward.
Answer:
a. egg production falls by a smaller percentage in the factory technique than in the free range technique.
Explanation:
Elasticity of supply is defined as the degree of responsiveness of supply to changes in price. Highly elastic supply responds more to change in price than low elastic supply.
In the given scenario where eggs are produced using factory and free range techniques, as demand falls price consumers are willing to pay also falls.
Since factory technique has a lower elasticity of supply, the fall in supply as a result of fall in price will be small.
However the fall in supply of free range will be higher because of its higher elasticity
Chou Co. has a net income of $47,000, assets at the beginning of the year are $254,000 and assets at the end of the year are $304,000. Compute its return on assets.
Answer:
Return on assets=28.54%
Explanation:
Return on asset is the average rate of return generated by the asset investment of a business. It is the net income earned as a proportion of the average investment.
Return on assets = net income / Average assets× 100
Average asset value = (opening balance + closing balance of assets)/2
=( 254,000 + 304,000)/2= 164700
Return on assets = 47,000/164,700 × 100 =28.54%
Return on assets=28.54%
If the interest rate is 10%, what is the present value of a security that pays you $1,500 next year, $1,400 the year after, and $1,300 the year after that?
Answer:
The present value is $3,497.3
Explanation:
In order to calculate the present value of a security that pays you $1,500 next year, $1,400 the year after, and $1,300 the year after we would have to make the following calculation:
Present Value = payment next year x P/F(10%, 1) + payment the year after x P/F(10%, 2) + payment the year after that x P/F(10%, 3)
Present Value= $1,500 x 0.9091 + $1,400 x 0.8264 + $1,300 x 0.7513
Present Value = $1,363.65 + $1,156.96 + $976.69
Present Value = $3,497.3
The present value is $3,497.3
Hazel Morrison, a mutual fund manager, has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%, and the market risk premium is 6.00%. Hazel expects to receive an additional $60 million, which she plans to invest in additional stocks. After investing the additional funds, she wants the fund's required and expected return to be 13.00%. What must the average beta of the new stocks be to achieve the target required rate of return? a. 2.04 b. 1.68 c. 1.85 d. 1.76 e. 1.94
Answer:
The average beta of the new stocks would be 1.75 to achieve the target required rate of return
Explanation:
In order to calculate the average beta of the new stocks to achieve the target required rate of return we would have to calculate the following:
average beta of the new stocks = (Required Beta-(portfolio /total fund) *old beta)/(additional portfolio/total fund)
To calculate the Required Beta we would have to use the formula of Required rate of return as follows:
Required rate of return=Risk free return + (market risk premium)*beta
0.13=0.0425+(0.06*Required Beta)
Required Beta = (0.13-0.0425)/0.06
Required Beta = 1.45
Therefore, average beta of the new stocks =(1.45-($40/$100) *1)/($60/$100)
average beta of the new stocks =1.05/0.6
average beta of the new stocks =1.75
The average beta of the new stocks would be 1.75 to achieve the target required rate of return
Suppose that Spain and Germany both produce rye and olives. Spain's opportunity cost of producing a crate of olives is 5 bushels of rye while Germany's opportunity cost of producing a crate of olives is 10 bushels of rye.By comparing the opportunity cost of producing olives in the two countries, you can tell that_______has a comparative advantage in the production of olives and_______has a comparative advantage in the production of rye. Suppose that Spain and Germany consider trading olives and rye with each other. Spain can gain from specialization and trade as long as it receives more than______of rye for each crate of olives it exports to Germany. Similarly, Germany can gain from trade as long as it receives more than_______of olives for each bushel of rye it exports to Spain. Which of the following prices of trade (that is, price of olives in terms of rye) would allow both Germany and Spain to gain from trade? a. 9 bushels of rye per crate of olives.b. 15 bushels of rye per crate of olives.c. 8 bushels of rye per crate of olives.d. 3 bushels of rye per crate of olives.
Answer:
1. By comparing the opportunity cost of producing olives in the two countries, you can tell that Spain has a comparative advantage in the production of olives and Germany has a comparative advantage in the production of rye.
Germany is able to produce more Rye if it is not producing olives meaning that they are more efficient in this giving them the comparative Advantage.
Spain is able to produce 2x more Olives than Germany for the same amount of Rye so they are more efficient in this manner.
2. Spain can gain from specialization and trade as long as it receives more than 5 bushels of rye for each crate of olives it exports to Germany.
If Spain can get more bushels per Olives than it can produce on it's own then they will make a gain.
3. Similarly, Germany can gain from trade as long as it receives more than ⅒ or 0.1 crate of olives for each bushel of rye it exports to Spain.
Similarly if Germany can get more crates of Olives per Rye than it can produce then it makes a gain. For each Bushel of Rye, Germany can create 0.1 crate of olives. Should they get more than this 0.1 crate then they make a gain.
4. The amount of Rye being exchanged for Olives should be between 5 and 10 bushels.
a. 9 bushels of rye per crate of olives.
c. 8 bushels of rye per crate of olives
At both 8 and 9 bushels of Rye per Olive Crate Germany would be getting more Rye per crate of olive than they can produce on their own and similarly at both 8 and 9 bushes of Rye for olives, Spain would getting more bushels than they could have gotten if they gave up olives to produce Rye.
On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $2,000. During the first year, the band performs 45 concerts. Compute the first-year depreciation using the units-of-production method. g
Answer:
Annual depreciation= $14,355
Explanation:
Giving the following information:
Original cost= $65,800
Number of units= 200
Salvage value= $2,000
During the first year, the band performs 45 concerts.
To calculate the annual depreciation under the units-of- production method, we need to use the following formula:
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units operated
Annual depreciation= [(65,800 - 2,000)/200]*45
Annual depreciation= $14,355
Matthew (48 at year-end) develops cutting-edge technology for SV Inc., located in Silicon Valley. In 2018, Matthew participates in SV’s money purchase pension plan (a defined contribution plan) and in his company’s 401(k) plan. Under the money purchase pension plan, SV contributes 15 percent of an employee’s salary to a retirement account for the employee up to the amount limited by the tax code. Because it provides the money purchase pension plan, SV does not contribute to the employee’s 401(k) plan. Matthew would like to maximize his contribution to his 401(k) account after SV’s contribution to the money purchase plan.
a. Assuming Matthew's annual salary is $400,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
b. Assuming Matthew's annual salary is S240,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
c. Assuming Matthew's annual salary is $60,000, what amount will SV contribute to Matthew's money purchase plan? What amount can Matthew contribute to his 401(k) account in 2010?
d. Assume the same facts as c. except that Matthew is 54 years old at the end of 2010. What amount can Matthew contribute to his 401(k) account in 2010?
Answer:
Explanation:
The concept of 401 K plan refers to the taxation saving plan made by contributing a certain amount. An employer donation to his/her 401 K account can span between the range of $16,500 and $22000( for the aged from 50 and above). Also, for an employer and employee, contribution can be make into their 401 K account up to $49000 and $54000 for aged from 50 and above.
a. Assuming Matthew's annual salary is $400,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
Given that;
Matthew is 48 years Old
His annual salary = $400,000
SV contributes 15 percent of an employee’s salary to a retirement account for the employee up to the amount limited by the tax code.
Thus;
15/100 × 400000 = 60000
However; from the tax code rule; people that are not up to age 50 and above are required to contribute $49000. So therefore; the employer will make a contribution of $49000 into Matthew's money purchase plan.
What can Matthew contribute to his 401(k) account in 2010?
He has exhausted his maximum contribution in 2010; as a result of that no contribution will be needed for that year , so he is contributing $0
b. Assuming Matthew's annual salary is $240,000, what amount will SV contribute to Matthew's money purchase plan? What can Matthew contribute to his 401(k) account in 2010?
Given that :
Matthew annual salary is $240,000
The SV contribution is 15% OF Matthew's annual salary = 15 /100 × 240,000= 36000
Since; Matthew is not up to 50 years; the maximum amount that can be deposited into his 401 K account is 49000
Thus;
SV contribution into Matthew's money purchase plan = $49000 -$36000
= $13,000
c. Assuming Matthew's annual salary is $60,000, what amount will SV contribute to Matthew's money purchase plan? What amount can Matthew contribute to his 401(k) account in 2010?
Given that :
Matthew annual salary is $60,000
The SV contribution is 15% OF Matthew's annual salary = 15 /100 × 60,000= 9000
Since; Matthew is not up to 50 years; the maximum amount that can be deposited into his 401 K account is 49000
Thus;
SV contribution into Matthew's money purchase plan = $49000 -$9000
= $40,000
d. Assume the same facts as c. except that Matthew is 54 years old at the end of 2010. What amount can Matthew contribute to his 401(k) account in 2010?
Here it is assumed that Matthew's age is 54 years, so we can say he is older than 50 years. Hence the amount that He can contribute into his 401 (k) account is = Allowed Contribution + Catch up contribution
The catch up contribution is the difference in the 401 (K) amount that can be deposited for people age above 50 and people aged below age 50
= $16500 + ( $54500 - $49000)
= $16500 + $5500
= $22,000
A company performing its long-lived asset impairment testing is reviewing the fair value of equipment. Each of the following valuation techniques may be appropriate for measuring the fair value of the equipment, except the:_______
a. Market approach.
b. Income approach.
c. Cost approach.
d. Net realizable value approach.
Answer:
d. Net realizable value approach.
Explanation:
An impairment usually arises when a company's asset (either intangible or fixed asset) overall future cash-flow ability (fair value) is lesser than its carrying value. This impairment of assets may be as a result of varying consumer demands, recession, damages, inflation or even a change in legal conditions.
For a long-lived asset, if its carrying value exceeds its fair value and isn't really recoverable, there's an impairment loss on the asset.
In the event that, a company performing its long-lived asset impairment testing is reviewing the fair value of equipment. Each of the following valuation techniques may be appropriate for measuring the fair value of the equipment;
1. Market approach: this measures and analyzes whether there's a decline in the market price of the asset.
2. Income approach: this determines if there were any operating or cash-flow losses on the asset.
3. Cost approach: this is an approach used to determine the level of cost associated with purchasing, maintaining and fabricating the asset.
railway cabooses just paid its annual dividend of 1.70 per share. The company has been reducing the dividends by 11.3 percent each year. How much are you willing to pay today to purchase stock in this company if your required rate of return is 12 percent?
Answer:
8.24
Explanation:
According to the given situation, the computation of purchase stock is shown below:-
Purchase price = Dividend in paid in next year ÷ (required rate of return - Growth rate)
= (1.70 ÷ (1 - 0.113)) ÷ (0.12 - (-0.113))
= 1.92 ÷ 0.233
= 8.24
Therefore for computing the purchase price we simply applied the above formula.
As a firm's sales grow, its current assets also tend to increase. For instance, as sales increase, the firm's inventories generally increase, and purchases of inventories result in more accounts payable. Thus, spontaneous liabilities that reduce AFN arise from transactions brought on by sales increases. True or false?
Answer: True
Explanation:
Current assets are the assets that a company had and which are expected to be either used or sold over the next year. Examples of current assets are cash, cash equivalents, stock inventory, accounts receivable, marketable securities, and other liquid assets.
It should be noted that when the sales of a from continue to grow, the current assets of such company also increases. An example is when there is an increase in the sales increase, this.will also have an impact on the firm's inventories as there will be an increase.
Angus Company agreed to sell goods for Longhorn Company on consignment, but wasn't willing to take ownership of the goods in case they were difficult to sell. Which of the following statements is true?
A. Angus owns the inventory and should report It on its balance snoot.
B. Long hum owns the inventory but should not report it on its balance sheet because Angus actually holds the inventory
C. Angus owns the inventory since possession is nineteenths of the law. but should not report it on its balance sheet.
D. Longhorn owns the inventory and should report it on its balance sheet.
Answer: D. Longhorn owns the inventory and should report it on its balance sheet.
Explanation:
Goods to be sold on consignment for a company means a company is selling goods for another company and will be paid for their services.
In that case, the company being sold for will retain the ownership of the goods because the company that is selling it for them is simply providing a service.
Angus in this scenario are simply holding the goods to sell it and so do not own the goods. Longhorn should therefore record it in their own books as inventory.
Dora Inc. reported the following on the company's cash flow statement: Sales $3,500,000 Net cash flow from operating activities 350,000 Net cash flow used for investing activities (100,000) Net cash flow used for financing activities (200,000) Free cash flow 290,000 What is the ratio of free cash flow to sales
Answer:
8.3%
Explanation:
Dora Inc. reported a sales of $3,500,000
The net cash flow from operating activities is $350,000
The net cash flow used for investing activities is $100,000
The net cash flow used for financial activities is $200,000
The free cash flow is $290,000
Therefore, the free cash flow to sales ratio can be calculated as follows
Free cash flow to sales ratio= Free cash flow/Sales × 100%
= $290,000/$3,500,000 × 100
= 0.0828×100
= 8.3%
Hence the ratio of the free cash flow to sales is 8.3%