Answer: Under economic growth conditions, firms with relatively more financial leverage will have higher expected returns.
Explanation:
Under economic growth conditions, firms and organizations with more financial muscle usually have higher expected returns.
This Growth, is as a result of the change in the company's earnings, revenue, GDP or some other sources over a period of time (usually a year) to the next. This growth are usually not affected by inflation.
Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
A. Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs.
B. Estimating the value of a human life is difficult but necessary in order to evaluate the proposal.
C. The benefits are usually easier to measure than the costs.
D. Both a and b are correct.
Answer:
B. Estimating the value of a human life is difficult but necessary in order to evaluate the proposal.
Explanation:
Cost benefit analysis is a method used to guage the cost involved in an undertaking or process compared to the benefit.
If the coat is higher than the benefit the activity is discarded.
However if the benefit is greater than the cost it is a good activity to adopt.
In this scenario there is a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway.
We will weigh the cost of setting up traffick barriers and the estimated value of human life.
If cost is more than the value of human life then the project is abandoned. But if value of human life is higher than the cost the project can proceed.
Although it is hard to estimate value of human life, we need to make an estimate in order to use the cost benefit analysis
Basic bond valuation Complex Systems has an outstanding issue of $1 comma 000-par-value bonds with a 16% coupon interest rate. The issue pays interest annually and has 11 years remaining to its maturity date. a. If bonds of similar risk are currently earning a rate of return of 9%, how much should the Complex Systems bond sell for today? b. Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond. c. If the required return were at 16% instead of 9%, what would the current value of Complex Systems' bond be? Contrast this finding with your findings in part a and discuss.
Answer:
a. Complex Systems' bond price today = $1,476.36
Explanation:
a. If bonds of similar risk are currently earning a rate of return of 9%, how much should the Complex Systems bond sell for today?
This can be calculated by adding the Present Value of Coupons and the Present Value of Par Value as follows:
Calculation of Present Value of Coupons
The present of coupons is calculated using the formula for calculating the present value of an ordinary annuity as follows:
Present value of coupons = C × [{1 - [1 ÷ (1 + r)]^n} ÷ r] …………………………………. (1)
Where;
C = Annual coupon amount = Par value * Coupon rate = $1,000 * 16% = $160
r = required rate of return or return of similar risk = 9%, or 0.09
n = number of years = 11
Substitute the values into equation (1) to have:
Present value of coupons = $160 × [{1 - [1 ÷ (1 + 0.09)]^11} ÷ 0.09] = $1,088.83
Calculation of Present Par of Value
To calculate this, we use the present value formula as follows:
Present Value of Par Value = Par value / (1 + r)^n
Since Par Value is $1000 and r and n are as already given above, we have:
Present value of Par Value = $1,000 / (1 + 0.09)^11 = $387.53
Therefore, we have:
Complex Systems' bond price today = Present value of coupons + Present value of Par Value = $1,088.83 + $387.53 = $1,476.36
b. Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond.
The following are the possible two reasons:
1. Interest may vary bust the coupon is fixed. What can cause the interest rate to vary is the bond rating by rating agency. But his will not affect the coupon rate which is fixed. When the rating is high, the interest will be low. But when the rating is low, the interest will be high. This indicates a negative relationship between the rating and the interest rate.
2. The level of demand may also influence the interest rate to change. When the demand is high, the interest will be low. But when the demand is low, the interest will be high. This also indicates a negative relationship between the demand and the interest rate.
c. If the required return were at 16% instead of 9%, what would the current value of Complex Systems' bond be? Contrast this finding with your findings in part a and discuss.
To do this, we simply change he required return to 16% (or 0.16) in part a and proceed as follows:
Present value of coupons at 16% = $160 × [{1 - [1 ÷ (1 + 0.16)]^11} ÷ 0.016] = $804.58
Present value of Par Value at 16% = $1,000 / (1 + 0.16)^11 = $195.42
Complex Systems' bond price today at 16% = $804.58 + $195.42 = $1,000.00
Comparing part c result with part a result shows that if the coupon rate is greater than the required rate of return, the bond is sold at a premium. That is, price of bond will be more than par. As it can be seen in part a, the price of bond is $1,476.36 when the coupon rate of 16% is greater than the required return of 9%.
Also, the bond will be sold at par when the coupon rate and require return are equal. This is shown in part c where the bond is sold at $1,000 when both coupon rate and required return rate are equal to 16%.
By implication, we can also infer without doing any calculation that the bond will be sold at a discount if the coupon rate is less than the required rate of return.
Snap Dragon Photo reported the following figures on its December 31, 2016, income statement and balance sheet:Net Sales $440,000 Dec 31 2016 Dec 31 2015Cash $26,000 $28,000Accounts Receivable 56,000 58,000Merchandise Inventory 79,000 76,000Prepaid Expenses 8,000 14,000Property, plant and equipment, net 180,000 11,000Compute the asset turnover ratio for 2016.
Answer:
Assets turnover ratio= 1.64 times
Explanation:
The asset turnover is the he amount of sales generated by one dollar invested in asset. it measures how efficient the business is in generating sales using assets
Assets turnover ratio = net sales / Average assets
Asset at the beginning of year 2016
=26,000 + 56,000 + 79,000 + 8,000 + 180,000 = 349 ,000
Asset at the end of year 2016
$28,000 + 58,000 + 76,000 + 14,000 + 11,000= 187 ,000
Average assets = Opening value of asset+ closing value of assets/2
= 349 ,000 + 187 ,000= 268 ,000
Assets turnover ratio = net sales / Average assets
=440000/268,000= 1.64 times
Assets turnover ratio= 1.64 times
Total assets =
onceptual Connection: For each situation, identify the possible root cause(s) of the activity cost (such as plant layout, process design, and product design). a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is $12, the cost per machine hour is $8, and the cost per pound of materials is $10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is $50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is
Answer:
Explanation:
For each situation, identify the possible root cause or causes of activity cost, among these:
1. Plant Layout
2. Process design
3. Product design
(A) PROCESS DESIGN
The design of the process of production is the root cause of activity cost here. From the rates given, it's clear that the manual method of production costs more time and money than the mechanical production method.
A minor cause of activity cost here is the PRODUCT DESIGN; the cost of which varies with the use of labour and the use of machine.
(B) PRODUCT DESIGN
Change in design of the gear (removal of some component parts) reduces set up time and cost.
(C) PLANT LAYOUT
Redesign of manufacturing plant saves the time and cost of moves.
Gilbert Company generated sales revenues of $1,800,000 in 2017. Its cost of goods sold amounted to $990,000. Calculate Gilbert's gross profit percentage. Supporting Materials Cost of goods sold / Group of answer choices 55% 45% 222% 182%
Answer:
45%
Explanation:
The computation of the gross profit percentage is shown below:
As we know that
Gross profit percentage = Gross profit ÷ Sale revenue × 100
where,
Gross profit is
= Sales revenue - the cost of goods sold
= $1,800,000 - $990,000
= $810,000
And, the sales revenue is $1,800,000
So, the gross profit percentage is
= $810,000 ÷ $1,800,000
= 45%
Hence, the gross profit percentage is 45%
If a Starbucks tall latte cost $3.20 in the United States and 3 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
b. .938 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. then in the Euro area.
c. 1.067 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
d. 1.067 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. than in the Euro area.
Answer:
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
Explanation:
We can see in the example that the Euro is cheaper than the dollar in purchasing-power parity. More specifically, the exchange rate is .938 euros per dollar.
This is why it is more expensive to buy a tall latte in the U.S. than in Europe. The Euro is cheaper.
When reading a research report on an automobile company, a registered representative's use of fundamental analysis determines that the stock is a good investment. When attempting to determine the best time to execute orders to buy the stock, the registered representative could refer to:
Answer:
Explanation:
In this situation, the registered representative could refer to a chart showing a recent history of the market price of the stock. The chart provides all the price movements of the stock during a certain period of time as well as different time intervals. This allows the individual to point out key levels of support and resistance as well as any trend that may be occurring. These indications allow the individual to make a more educated decision on the best time to execute orders to buy the stock.
Crisp Cookware's common stock is expected t opay a dividend of $1.50 a share at the end of this year; its beta is 0.6. The risk free rate is 5.6% and the market risk premium is 4%. The dividend is expected to grow at some constant rate and the stock currently sells for $50 a share. Asuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years
Answer: $57
Explanation:
The following can be deduced from the question:
The risk free rate = 5.6%
The market risk premium = 4%
The stick beta = 0.6
The required return will be:
= Risk free rate + (Beta × Market risk premium)
= 5.6% + (0.6 × 4%)
= 5.6% + 2.4%
= 8% = 0.08
Crisp Cookware's common stock is expected to pay a dividend of $1.50 a share at the end of this year, Therefore,
D1 = $1.50
The current stock price will now be:
= D1/(Required return - Growth rate)
50= 1.5/(0.08 - growth rate)
(0.08 - growth rate) = 1.5/50
(0.08 - growth rate) = 0.03
Growth rate = 0.08 - 0.03
Growth rate = 0.05 = 5%
D4 = D1 × (1+Growth rate)³
D4 = 1.5 × (1 + 0.05)³
D4 = 1.5 × (1.05)³
D4 = 1.5 × 1.1576
D4 = $1.7364
The stock price at the end of the year 3
will be:
= D4/(Required return - Growth rate)
= 1.7364/(0.08 - 0.05)
= 1.7364/0.03
= $57
The market believe that the stock price at the end of 3 years will be $57
Sally is employed as a computer programmer for the Ellis Corporation. She has a savings account of $15,000 and owns a few shares of Ellis stock. She thinks of herself as an investor rather than as a worker. Marx would maintain that Sally has __________. Group of answer choices
Answer:
She is experiencing false class consciousness
Explanation:
False class consciousness was introduced by Karl Marx.
False Class consciousness refers to an unawareness by a social or economic class like Sally of her position and interests within the structure of the economic order and social system in which she lives. By thinking herself to be an investor instead of worker, Sally has a misguided or false view of her own position in Ellis corporation.
Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow.
July August September
Budgeted sales $54,000 $70,000 $58,000
Budgeted cash payments for
Direct material 15,160 12,440 12,760
Direct labor 3,040 2,360 2,440
Factory overhead 19,200 15,800 16,200
Sales are 15% cash and 85% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash: $44,000 in accounts receivable; $3,500 in accounts payable; and a $4,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($3,000 per month), and rent ($5,500 per month).
Required:
a. Prepare a cash receipts budget for July, August, and September.
b. Prepare a cash budget for each of the months of July, August, and September.
Answer:
Built-Tight
a) Cash Budget for July, August, and September:
July August September Total
Beginning balance $15,000 $16,900 $28,700 $15,000
Cash collections: 52,100 56,400 68,200 176,700
Cash Expenses:
Direct materials (15,160) (12,440) (12,760 ) (40,360)
Direct labor (3,040) (2,360) (2,440) (7,840)
Factory overhead (19,200) (15,800) (16,200) (51,200)
Operating expenses:
Sales Commission (5,400) (7,000) (5,800) (18,200)
Rent Expense (3,000) (3,000) (3,000) (9,000)
Accounts Payable (4,000) (4,000)
Interest expense (400) (400)
Loan repayment (4,000) (4,000)
Minimum Balance 15,000 15,000 15,000
Excess Cash $1,900 $13,700 $41,700 $56,700
Explanation:
a) Cash Collections:
July August September Total
Cash sales 15% $8,100 $10,500 $8,700 $27,300
85% a month after 44,000 45,900 59,500 149,400
Total collections $52,100 $56,400 $68,200 $176,700
b) It is assumed that the balance in accounts payable was paid in August when the company had enough balance to offset it. Any other assumption could have been made.
c) A cash budget shows the cash receipts and payments made during the budget period. As a budget, it shows the forecast for cash receipts and payments, which will help management to make decisions to avoid liquidity problems which can ruin a business. Management is able to plan ahead for the business' expenditures and investments. It also warns management to negotiate for loans to smoothen periods of cash shortages.
"On January 1, MM Co. borrows $360,000 cash from a bank and in return signs an 8% installment note for five annual payments of $90,164 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $90,164 annual payment at December 31, what amount goes toward interest expense
Answer:
1.Jan 01 Dr Cash 360,000
Cr Notes payable 340,000
2.Interest expense 28,800
Principal Reduction 61,364
Explanation:
MM Co.
1 . Journal entry
Since MM Co. borrows $360,000 cash on January 1 from a bank this means we have to
Debit Cash with the amounts of money he borrowed which is $360,000 and Credit Notes Payable with the same amount.
Jan 01 Dr Cash 360,000
Cr Notes payable 340,000
2. Calculation of the amount goes toward interest expense and Principal reduction
Interest expense 28,800
(360,000*8%)
Principal Reduction 61,364
(90,164-28,800)
Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $28,000 at the beginning of 2021. No previously written-off accounts receivable were reinstated during 2021. At 12/31/2021, gross accounts receivable totaled $466,700, and prior to recording the adjusting entry to recognize bad debts expense for 2021, the allowance for uncollectible accounts had a debit balance of 51,300. Required: 1. What was the balance in gross accounts receivable as of 12/31/2020? 2. What journal entry should Johnson record to recognize bad debt expense for 2021? 3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021. 4. If Johnson instead used the direct write-off method, what wou
Answer:
1. What was the balance in gross accounts receivable as of 12/31/2020?
= allowance for doubtful accounts 2020 / 10% = $28,000 / 10% = $280,000
2. What journal entry should Johnson record to recognize bad debt expense for 2021?
Dr Bad debt expense (= 46,670 + 51,300) 97,970
Cr Allowance for doubtful accounts 97,970
3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021.
= credit balance allowance for doubtful accounts January 1 + debit balance allowance for doubtful accounts December 31 = $28,000 + $51,300 = $79,300
4. If Johnson instead used the direct write-off method, what would the bad debt expense be
The bad debt expense would equal $79,300. The allowance for doubtful accounts is used as an estimate of future bad debt expense, while the direct write off method directly writes off bad debt as they occur.
Explanation:
beginning balance of allowance for doubtful accounts $28,000
gross accounts receivable $466,700 x 10% = $46,670 bad debt
before adjustments, the allowance for doubtful accounts had a debit balance of $51,300
Jason just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $50, due at the beginning of each month or in one payment today. If the appropriate interest rate is 11%,.How much should he pay today for the annual membership?
Answer:
$570.91
Explanation:
For computing, the amount pay today for the annual membership we just need to apply the present value formula i.e to be shown in the attachment
Provided that
Future value = $0
Rate of interest = 11% ÷ 12 months = 0.916666%
NPER = 12 months
PMT = $50
The formula is shown below:
= PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the amount paid today for the membership is $570.91
Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:
Answer:
Answer is Debit Vacation Benefits Expense $660 Credit Vacation Benefits Payable $660
Explanation:
Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:
Annual salary is $858,000 in total
The total no of weeks is 52 weeks
858,000 wages per year / 52 weeks per year = 16,500 per week
So per week salary is
The weekly wages for our employees are 16,500 dollars
For each of the two weeks of vacations , will be $ 16500 x 2
= $33,000
For weekly vacation expense
sice its for 50 weeks
= $33000 / 50
= $660
Therefore, Debit Vacation Benefits Expense $660 Credit Vacation Benefits Payable $660
With reference to the Strategy Highlight 8.2, the Tata Group's corporate strategy is attempting to:______
a. pursue a focused differentiation strategy over a focused cost-leadership strategy.
b. integrate different strategic positions, pursued by different strategic business units.
c. depend on a single product market to generate most of its revenues.
d. move from unrelated diversification to related-constrained diversification.
Answer: integrate different strategic positions, pursued by different strategic business units
Explanation:
Tata group is a global enterprise that is made up of about 30 companies and operates in more than hundred countries. There are several companies under Tata such as Tata motors, Tata steels, Tata Communications, Tata consumer products, Tata chemicals etc.
Tata Group's corporate strategy is attempting to integrate different strategic positions, pursued by different strategic business units. Even though the companies are all under the general body of Tata Group, each business unit bears the profit and loss it makes.
Last year, Rotterdam, Inc. had sales revenue of $980,000. Costs other than depreciation and interest expense were 20 percent of sales. Depreciation expense was $50,000, interest expense was $95,000, and dividends paid were $23,000. The company also received dividends of $8,000 from a company in which it had 30% ownership stake. Which of the following statements is most CORRECT?a. The firm's taxable income was $637,400. b. The firm's after-tax income was $405,564. c. The firm's marginal tax rate was 39 percent. d. The firm's tax for the year was $113,900. e. None of the above
Answer:
e. None of the above
Explanation:
total revenue $980,000
- operating costs $196,000
- depreciation $50,000
- interests $95,000
income $639,000
+ dividends from outside corporation = $8,000 x (1 - 80% DRD) = $1,600
total taxable income = $639,000 + $1,600 = $640,600
current corporate tax is 21%, so the company's marginal tax rate would be 21%
income taxes for the year = $640,600 x 21% = $134,526
the company's after tax income = $640,600 - $134,526 = $506,074
Typically, the firms' lowest cost source of financing is ____________ as its cost is tax deductible and it also tends to offer the least amount of risk for investors. Group of answer choices Debt Preferred Equity Derivatives Common Equity Equity
Answer:
Debt
Explanation:
Debt is the lowest cost source of financing because the interest return given to holders of debt has a tax shield (tax deductible) that is provided by the Section 11j of the Income tax Act.
The other sources of finance give a return in form of dividends. Dividends are are not tax deductible hence they attract a huge cost.
Massage Envy offers massage services on a subscription basis, so it targets consumers that desire to get multiple treatments per month. Massage Envy likely segments its market by
Answer:
C. usage rate.
Explanation:
As in the question, it is mentioned that Massage Envy offers massage services based on a subscription basis with a view to targeting the consumers that they get more or multiple treatments per month
So Massage Envy target the market segment via usage rate as it depicts the average sales per day so that they get to know how much they earned the revenue by offering multiple treatments to clients
hence, the correct option is C. usage rate
Lucy has just finished washing her car and is now checking its oil level. The oil dipstick shows her car’s oil is below the "Low" line. Lucy’s car must have more oil to operate well. What phase of the consumer decision-making process did Lucy just experience?
Answer:
recognition phase
Explanation:
There are 5 phases in the consumer decision-making process:
recognition: the customer realizes that he/she has an unsatisfied need or problem that must be satisfied or solved. In this case, Lucy realized that her car needs more oil and she has to purchase some. information search evaluations of alternatives purchase evaluation of decisiong n a certain economy, when income is $100, consumer spending is $60. The value of the multiplier for this economy is 4. It follows that, when income is $101, consumer spending is a. $60.25. b. $60.75. c. $61.33. d. $64.00.
Answer:
The answer is option (b) $60.75
Explanation:
Solution
Given that
A certain economy, Income is =$100
Consumer spending is =$60
The value of multiplier is =4
Now we need to know when the income is $101, consumer spending, the customer spending will be what?
Now,
Multiplier (k)= 1/1-MPC (marginal propensity to consume)
4=1/1-MPC
Thus
MPC= 1-1/4
MPC=3/4
MPC=.75
So,
MPC= Change in consumption/change in income.
.75=Change in C/101-100
Change in C=.75*1
Change in C=.75
Hence
The new consumption =60+.75=60.75
Therefore, when the income is $101, the consumer spending is $60.75
Based on the income and the amount of money spent from it, the consumer spending at that amount will be b. $60.75
The question can be answered with the Marginal Propensity to Consume (MPC) which is calculated as:
Multiplier = 1 / (1 - MPC)
4 = 1 / (1 - MPC)
MPC = 0.75
If the income is $101, the amount that will be spent is:
= Income + (Increase in income x Marginal Propensity to Consume)
= 100 + (1 x 0.75)
= $60.75
In conclusion, $60.75 will be the consumer spending.
Find out more at https://brainly.com/question/15245341.
As a financial advisor, what will you tell your client, Ryan, he should be willing to pay for an investment property that he plans to buy today and hold for 5 years and then sell, given the following cash flows and the fact that he expects 9% on any investment he makes?
Inflows Outflows Net
InitialOutlay $0
Year 1 $45,000 $55,000 10,000
Year 2 55,000 20,000 35,000
Year 3 55,000 20,000 35,000
Year 4 255,000 235,00 220,000
A. $189, 910.29.
B. $194, 589.33.
C. $178, 656, 73.
D. $191, 231, 57.
Answer:
The option (A) $189, 910.29 is correct
Explanation:
Solution
Given that
Years Net Cash flow Discount Factor at 11% Present Value
1 $ (10,000.00) 0.901 $(9,009.01)
2 $ 35,000.00 0.812 $ 28,406.79
3 $ 35,000.00 0.731 $ 25,591.70
4 $ 220,000.00 0.65 $ 144,920.81
Now,
The Net Present Value $189,910.29
Thus
After carrying out the financial analysis, it has been seen that if we go ahead to buy the Investment Property, then today we have Net present Value of $ 189,910.29.
So, i will inform my client to buy the Investment Property.
Tetious Dimensions is introducing a new product and has an expected change in net operating income of $790,000. Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $190,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable $5,000 $84,000 Inventory 98,000 184,000 Accounts payable 75,000 117,000 What is the project's free cash flow in year 1? The free cash flow of the project in year 1 is $ 701000. (Round to the nearest dollar.)
Answer:
$620,000
Explanation:
to determine the net cash flow generated by the project, we can use the indirect method to determine cash flows:
net income = $790,000 x (1 - 30%) = $553,000
net income adjustments:
depreciation expense $190,000increase in accounts payable $42,000increase in accounts receivable ($79,000)increase in inventory ($86,000)Project's cash flow $620,000
Without the With the change
project project
Accounts receivable $5,000 $84,000 $79,000
Inventory $98,000 $184,000 $86,000
Accounts payable $75,000 $117,000 $42,000
The receiving department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $3,600 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has depreciation of $1,200 per year and an operating cost of $750. Receiving has three employees who have an average salary of $50,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity Percentage of Time on Each Activity
Unloading 40%
Counting 25
Inspecting 35
No other resources are used for these activities.
Required:
Calculate the cost of each activity.
Unloading $
Counting $
Inspecting $
Answer:
Calculating the cost of each activity,
Unloading = $ 80,100
Counting = $ 37,500
Inspecting = $54,450
Explanation:
Given:
Unloading lease = $15,000 per year
Fuel for the forklift = $3,600 per year
Maintenance for the forklift = $1,500 per year
Inspection uses some special testing equipment that has depreciation of $1,200 per year
Operating cost = $750.
Receiving employees average salary = $50,000 per year
Salaries; 3 × 50,000 = 150,000
Unloading salary = 40% × 150,000 = 60,000
Counting salary = 25% × 150,000 = 37,500
Inspecting salary = 35% × 150,000 = 52,500
Unloading Counting Inspection
Equipment 15,000 1,200
Fuel 3,600
Operation cost 1,500 750
Labor 60,000 37,500 52,500
Total cost 80,100 37,500 54,450
Linea, an employee of Hard Labor Industries (HLI), is injured in a work-related accident. Based on the diagnosis of Newt, a doctor, Linea accepts $50,000 from HLI and waives the right to future claims. Newt's diagnosis later proves to have been wrong. In terms of the impact on Linea's agreement with HLI, Newt's mis-diagnosis is:_______.
a. obtain damages from HLI.
b. recover nothing.
c. set aside the settlement withHLI.
Answer: set aside the settlement withHLI.
Explanation:
From the question, Linea, who is an employee of Hard Labor Industries (HLI), is injured in a work-related accident and based on the diagnosis of Newt, who is a doctor, Linea accepts $50,000 from HLI and waives the right to future claims.
We are also informed that Newt's diagnosis later proves to have been wrong. In terms of the impact on Linea's agreement with HLI, Newt's mis-diagnosis is to set aside the settlement with HLI.
This will be necessary to make them understand that it was a mistake and make a settlement with Hard Labor Industries so that Linea won't be affected as they make think she has it planned in order to collect money from them so the hospital should make a settlement.
A company should pursue unrelated diversification instead of related diversification when: a. the bureaucratic costs of implementation do not exceed the value that can be created by realizing economies of scope. b. it wants to maximize growth. c. its core skills are highly specialized and have few applications outside its core business. d. the company's top managers are skilled at acquiring and turning around poorly run enterprises. e. its core technological skills are applicable to a wide variety of industrial and commercial situations.
Answer: Option C
Explanation:
Unrelated diversification can be defined as the form of diversification when the business adds some of the new products not related to the core strength or core products of the company.
It tries to penetrate into some other business. Example: A shoe making company starts making sports wear.
The companies whose core strength is skilled and specialized and has only few applications outside the core skills. These company can pursue unrelated diversification instead of related.
Fedor, Inc. has prepared the following direct materials purchases budget: Month Budgeted DM Purchases June $ 67 comma 000 July 75 comma 500 August 76 comma 300 September 78 comma 400 October 80 comma 000 All purchases are paid for as follows: 10% in the month of purchase, 40% in the following month, and 50% two months after purchase. Calculate total budgeted cash payments made in October for purchases.
Answer:
Total cash payment= $77,510
Explanation:
Giving the following information:
Purchases:
August= 76,300
September= $78,400
October= $80,000
All purchases are paid for as follows:
10% in the month of purchase
40% in the following month
50% two months after purchase.
Cash payment October:
Purchases on cash October= 80,000*0.1= 8,000
Purchases on account September= 78,400*0.4= 31,360
Purchases on account August= 76,300*0.5= 38,150
Total cash payment= $77,510
You Just won a prize that will pay you $800 today and $500 a year for the next three years. Which is the correct formula for computing the present value as of today at 6 percent?
PV = $500/1.06 + $500/1.062+ $500/1.063
PV = $800 PV $800/1.06$500/1.06+$500/1.06 $500/1.06
PV =$800+ $500/1.06 $500/1.06+ $500/1.061
PV = $800(1.06)+ $500 +$500/1.06 $500/1.06
Answer:
The correct answer is PV = $800 + $500/1.06 + $500/1.062 + $500/1.06^3
Explanation:
Solution
Given that:
A price was wan by you today at =$800
For the next three years =$500 a year
Now
We compute for the present value of today at 6%
Thus
Present value (PV) = $800 + $500/1.06 + $500/1.062 + $500/1.063
Because $800 is receivable today, its present value is equal to $800,
So,
500 receivable after a year will be divided by 1.06
PV = $800 + $500/1.06 + $500/1.062 + $500/1.06^3
Therefore the right formula for computing the present value as of today at 6 percent is PV = $800 + $500/1.06 + $500/1.062 + $500/1.06^3
Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of
Answer:
both taxes would fall more heavily on the buyers than on the sellers
Explanation:
Here are the options:
a. both taxes would fall more heavily on the buyers than on the sellers. b. the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers c. the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers O d. both taxes would fall more heavily on the sellers than on the buyers.
Tax is a compulsory sum levied on goods and services. Taxes increases the price of goods and services
Supply is elastic if a small change in price leads to a greater change in the quantity supplied.
Demand is inelastic if there's little or no change in demand when price is increased.
More burden of tax should fall on the consumers because their demand is inelastic. So, if prices rise as a result of the tax, there would be little or no change in quantity demanded.
But in the case of suppliers, they are sensitive to price and a rise in price would cause quantity supplied to fall and revenue would fall.
I hope my answer helps you
ProBuilder reports merchandise sales of $80,000 and cost of merchandise sales of $20,000 in its first year of operations ending June 30, 2016. It makes fiscal-year-end adjusting entries for estimated future returns and allowances equal to 3% of sales, or $2,400, and 3% of cost of sales, or $600.Required:a. Prepare the June 30, 2016, fiscal-year-end adjusting journal entry for future returns and allowances related to sales. b. Prepare the June 30, 2016, fiscal-year-end adjusting journal entry for future returns and allowances related to cost of sales.
Answer and Explanation:
The adjusting entries are as follows:
1. Sales returns and allowances $2,400
To Sales refund payable $2,400
(Being the returns and allowance is recorded)
For recording this we debited the sales returns as it increased the sales return and credited the sales refund payable as it increased the liabilities
2. Inventory returns estimated $600
To Cost of goods sold $600
(Being the cost of sales is recorded)
For recording this we debited the inventory returns as it increased the returns inventory and credited the cost of goods sold as it decrease the expenses
On January 1, 2021, Perez Co. issued at par $10,000 of 6% bonds convertible in total into 1,000 shares of Perez's common stock. No bonds were converted during 2021. Throughout 2021, Perez had 1,000 shares of common stock outstanding. Perez's 2021 net income was $4,500, and its income tax rate is 30%. No potentially dilutive securities other than the convertible bonds were outstanding during 2021. Perez's diluted earnings per share for 2021 would be:_________.a. $5.00.
b. $4.54.
c. $4.50.
d. $4.72.
Answer:
EPS = $4.50
diluted EPS = $2.46
Explanation:
no option is correct since EPS = $4.50, and the rest of the options are all higher amounts. Diluted EPS are always smaller than EPS.
common stock outstanding = 1,000 stocks
bonds shares (diluted) = 1,000 stocks
net income = $4,500
bond interest = $10,000 x 6% x (1 - 30%) = $420
diluted earnings per share = ($4,500 + $420) / (1,000 shares + 1,000 shares) = $4,920 / 2,000 shares = $2.46