Answer:
D. lower unemployment in the short run, higher inflation in the long run
Explanation:
Remember, like it's name, monetary policy affects the money supply of a country, which in turn influences the Interest rate and inflation rate.
By means of expansionary monetary policy, an economy may experience reduced interests rates, which leads to lower unemployment in the short run. However, in the long run the high inflation rate may begin to occur leading to adaptive expectations.
1. On January 1, 2020, Scottsdale Company issued its 12% bonds in the face amount of $3,000,000, which mature on January 1, 2032. The bonds were issued for $$3,408,818 to yield 10%. Scottsdale uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. The 12/31/23 Premium on Bond Payable balance is:
Answer:
Premium ob bonds payable = $320,090.44 (credit balance)
Explanation:
January 1, 2020
Dr Cash 3,408,818
Cr Bonds payable 3,000,000
Cr Premium on bonds payable 408,818
January 1, 2021
Dr Interest expense 340,881.80
Dr Premium on bonds payable 19,118.20
Cr Cash 360,000
($3,408,818 x 0.1) - $360,000 = -$19,118.20
January 1, 2022
Dr Interest expense 338,969.98
Dr Premium on bonds payable 21,030.02
Cr Cash 360,000
($3,389,699.80 x 0.1) - $360,000 = -$21,030.02
January 1, 2023
Dr Interest expense 336,866.98
Dr Premium on bonds payable 23,133.02
Cr Cash 360,000
($3,368,669.78 x 0.1) - $360,000 = -$23,133.02
December 31, 2023
Dr Interest expense 334,553.68
Dr Premium on bonds payable 25,446.32
Cr Interest payable 360,000
($3,345,536.76 x 0.1) - $360,000 = -$25,446.32
"Value proposition in simple terms is the consideration of the value the product delivers against the ______________ necessary to obtain and use it. "
Answer:
Price
Explanation:
The value proposition refers to the promise made to the customers about what they wil get when they buy the product. This value proposition is determined by analizing the benefits the customers get and the costs they have to be able to get the product. So, according to that, the answer is that "Value proposition in simple terms is the consideration of the value the product delivers against the price necessary to obtain and use it" because the price would be the cost the customer has to pay to purchase the product.
Journalize the following transactions (assume a 360-day year when calculating interest):
Mar. 1 Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.
May 30 The note of March 1 was dishonored.
Answer:
Mar. 1 Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.
Dr Notes receivable 24,000
Cr Accounts receivable 24,000
May 30 The note of March 1 was dishonored.
Dr Accounts receivable 24,600
Cr Notes receivable 24,000
Cr Interest revenue 600
If the note would have been collected (paid by Batson Co.), the journal entry would have been:
May 30, note collected from Batson Co.
Dr Cash 24,600
Cr Notes receivable 24,000
Cr Interest revenue 600
Before telling her employees she would have to layoff half of the workforce, Alissa took them all to lunch at the most expensive restaurant in town. Alissa's attempt to handle the potential conflicts generated by her news is best described as
Answer:
Strategic
Explanation:
laying off half of the Employees means relieving them of their duties as staff of the organization. By taking them to lunch at the most expensive restaurant in town, Alissa aimed at being strategic with whatever conflict that may however occur when the employees hear of her intention. Layoffs can be demoralizing and damaging to these Employees so Alissa has to try the best way she can to be strategic as she deals with them
The total payroll of trolley company for the month of october was 960000 of which 180000 represented amounts paid to certain employees in excess of 137000 maximum subject ot social security tax $180,000 of federal income taxes and $18,000 of union dues were withheld. The state unemployment tax is 1%, the federal unemployment tax is .8%, and the current F.I.C.A. tax is 7.65% on an employee's wages to $118,500 and 1.45% in excess of $118,500. What amount should Trolley record as payroll tax expense?
Answer:
$68,760
Explanation:
The computation of the payroll expense is shown below:
FICA taxes ($960,000 - $180,000) × (7.65% - 1.45%) $48,360
Medicare ($960,000 × 1.45%) $13,920
State unemployment tax {($960,000 - $600,000) × 1%} $3,600
Federal unemployment tax {($960,000 - $600,000) × 0.80%} $2,880
Total $68,760
The table below shows a summary of Kaitlin's credit card statement for the month of February.
Transaction types Amount
Unpaid balance from January (Beginning balance on February 1) $2802.38
Purchases made during the month of February $543.55
Payments made during the month of February $389.60
Complete the parts below. Write your answer to the nearest cent. (a) Suppose the credit card company charges 1.9% monthly interest on the unpaid balance from January. How much interest will this be? (b) What will Kaitlin's unpaid balance be on her March 1 statement? (Assume that this balance will include the interest from part (a), but will not include any interest on her February balance yet.)
Answer:
A) 32 percent interest B) Yes it will be paid
Explanation:
23 times 42 divided by 7
A project management office requiring compliance with standards and procedures that have been adopted is best described as a ________ form of PMO. Authoritative Directive Supportive Controlling
Answer: Controlling
Explanation:
A project management office (short form - PMO) is a management organisation that standardizes the project-related controlling processes and facilitates the sharing of resources, techniques, tools, and methodologies. They are the minders of best practices, project status and direction in a PMO.Hence, A project management office requiring compliance with standards and procedures that have been adopted is best described as a controlling form of PMO.
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. The demand curve would
Answer:
D
Explanation:
here is the full question :
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. The demand curve would _________ and the supply curve would__________
a
a. Shift to the right, shift to the left
b. shift to the left, shift to the right
c. shift to the left, shift to the left
d. shift to the right, shift to the right
as a result of the medical study, the demand for bikes would increase. this would shift the demand curve outwards or to the right.
the fall in price of parts needed to make bikes would reduce the cost of making bikes. this would lead to an increase in the supply of bikes. the supply curve would shift outward as a result.
You can ready yourself for an interview by:
a. Conducting a practice interview
b. Preparing answers to typical questions
c. Researching the company
d. All of the above
Please select the best answer from the choices provided
о А
o B
Mark this and return
Save and Exit
Nex
Submit
The correct answer is D. All of the above
Explanation:
Preparing for an interview implies as a candidate for a job knowing beforehand how to answer and behave during the interview. One of the best ways to achieve this is to prepare answers to typical questions because, in this way, your answers will be coherent, complete and you will show confidence when answering.
Besides this, you can conduct a practice interview or recreate the interview; this will help you to practice how to talk, introduce yourself, or behave during the interview.
Moreover, to be ready for the interview you should be well informed about the company because it is common some interview questions are related to the company goals or expectations of an employee, and in this way, you can answer appropriately and show your interest in working in the company.
Osborn Manufacturing uses a predetermined overhead rate of $20.00 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $276,000 of total manufacturing overhead for an estimated activity level of 13,800 direct labor-hours. The company actually incurred $275,000 of manufacturing overhead and 13,300 direct labor-hours during the period.
Required:
a. Determine the amount of underapplied or overapplied manufacturing overhead for the period.
b. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overhead increase or decrease the company's gross margin? By how much?
Answer:
1. Manufacturing overhead applied = Actual hours * Predetermined overhead rate
Manufacturing overhead applied = 13300 * $20
Manufacturing overhead applied = $266,000
From the question, Osborn Manufacturing actually incurred $275,000 of manufacturing overhead. Hence, the Manufacturing overhead is under-applied because the applied manufacturing overhead is less than the actual manufacturing overhead
Hence, Manufacturing overhead under-applied = $275,000 - $266,000
= $9,000
2. Since the applied manufacturing overhead is less than the actual manufacturing overhead, the gross margin would decrease by $9,000. The journal entry will use the under-applied manufacturing overhead for record.
On September 1, the board of directors of Colorado Outfitters, Inc., declares a stock dividend on its 15,000, $6 par, common shares. The market price of the common stock is $35 on this date.
Required: 1. 2. & 3. Record the necessary journal entries assuming a small (10%) stock dividend, a large (100%) stock dividend, and a 2-for-1 stock split. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
Sept 1,
DR Stock dividends $52,500
CR Common stock $9,000
CR Additional paid in capital $43,500
Sept 1,
DR Stock dividends $90,000
CR Common stock $90,000
Sept 1,
No journal entry required.
Workings
Small Dividends
Stock dividends
= 15,000 * 10% * $35
= $52,500
Common stock
= 15,000*10%* $6
= $9,000
Additional paid in capital
= 52,500 - 9000
= $43,500
Large Dividends
Stock dividends
= 15,000 * $6
= $90,000
Common stock
= 15,000 * $6
= $90,000
No entry for stock splits.
Portfolio managers pick stocks for their clients’ portfolios based on the investment objective of the portfolio and several other factors. One key consideration is each stock’s contribution to portfolio risk and its statistical relationship with the portfolio’s other stocks. Based on your understanding of portfolio risk, identify whether each statement is true or false.
Answer:
False True True FalseExplanation:
First one is false because diversification reduces risk because it divides the risk amongst different securities. The portfolio risk will therefore be lower than the average of all stocks' standard deviations.
Second one is true because unsystematic risk is risk that will come with the type of stock or security purchased. It is usually referred to as diversifiable risk because using negatively correlated stocks can help diversify this risk.
Third one is True because the portfolio's risk when diversified is indeed likely to be smaller than the average of all stocks' standard deviation.
Fourth one is false because portfolio risk is reduced if stock that are negatively correlated are put into a portfolio because it means that when one stock is not doing so well, the other being negatively correlated, will be doing fine.
In each part that follows, use the economic data given to find national saving, private saving, public saving, and the national saving rate.
a.
Household saving 200
Business saving 400
Government purchases of goods and services 160
Government transfers and interest payments 110
Tax collections 195
GDP 2500
b.
GDP 6,150
Tax collections 1,425
Government transfers and interest payments 400
Consumption expenditures 4,520
Government budget surplus 100
c.
Consumption expenditures 4,300
Investment 1,000
Government purchases 1,000
Net exports 6
Tax collections 1,575
Government transfers and interest payments 500
Answer:
a. Public saving = Tax collections - Government purchases - Transfers and interest payments
=195 - 160 - 110
= -75
Private saving = Household saving + business saving
= 200 + 400
= 600
National saving = Private saving + public saving
= 600-75
= 525
National saving rate = National saving/GDP
= 525/2500
=0.21
= 21%
b. Private sector disposable income = GDP - Taxes + Transfers
= 6150 - 1425 + 400
= 5125
Private sector savings = Disposable income - consumption
= 5125 - 4520
= 605
Public savings = Govt budget surplus = 100
National savings = Private savings + Govt savings
= 605 + 100
= 705
National savings rate = National savings / GDP
= 705 / 6,150
= 0.1146
=11.46%
c. GDP = Consumption + investment + Government purchase + Net Export
= 4,300 + 1,000 + 1,000 + 6
= 6,306
Govt savings = Taxes - Transfers - Govt purchases
= 1,575 - 500 - 1,000
= 75
Private sector disposable income = GDP - Taxes + Transfers
= 6,306 - 1,575 + 500
= 5,231
Private sector savings = Disposable income - consumption
= 5,231 - 4,300
= 931
National savings = Private savings + Government savings
= 931 + 75
= 1,006
National savings rate = National savings / GDP
= 1,006 / 6,306
=0.1595
= 15.95%
A. Public saving =-75, Private saving, National saving= 525, National saving rate=21% B. Private sector disposable income=5125,C. GDP= 6,306, Govt savings=75
Calculation of Gross domestic productA. Public saving is = Tax collections - Government purchases - Transfers and also interest payments
Then =195 - 160 - 110
= -75
After that Private saving is = Household saving + business saving
= 200 + 400
Thus, = 600
Then National saving is = Private saving + public saving
= 600-75
Therefore, = 525
After that National saving rate = National saving/GDP
= 525/2500
=0.21
Thus, = 21%
B. Private sector disposable income is = GDP - Taxes + Transfers
= 6150 - 1425 + 400
= 5125
After that Private sector savings = Disposable income - consumption
= 5125 - 4520
= 605
Then Public savings = Govt budget surplus = 100
National savings = Private savings + Govt savings
= 605 + 100
= 705
Now, National savings rate = National savings / GDP
= 705 / 6,150
= 0.1146
=11.46%
C. GDP is = Consumption + investment + Government purchase + Net Export
Then = 4,300 + 1,000 + 1,000 + 6
= 6,306
After that Govt savings = Taxes - Transfers - Govt purchases
= 1,575 - 500 - 1,000
= 75
Now, Private sector disposable income = GDP - Taxes + Transfers
= 6,306 - 1,575 + 500
= 5,231
Then Private sector savings = Disposable income - consumption
= 5,231 - 4,300
= 931
Now, National savings = Private savings + Government savings
= 931 + 75
= 1,006
Then National savings rate = National savings / GDP
= 1,006 / 6,306
=0.1595
Therefore, = 15.95%
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Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Activity Budgeted Activity Cost Activity Base Casting $282,600 Machine hours Assembly 150,360 Direct labor hours Inspecting 20,790 Number of inspections Setup 52,150 Number of setups Materials handling 42,770 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 4,990 4,430 9,420 Direct labor hours 4,300 6,440 10,740 Number of inspections 1,440 450 1,890 Number of setups 280 70 350 Number of loads 720 190 910 Units produced 10,000 5,000 15,000 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
Answer:
Casting = $ 30 per machine hour
Assembly = $ 14 per labor hour
Inspecting = $ 11 per inspection
Setup = $ 149 per setup
Materials handling = $ 47per load
Explanation:
Garfield Inc. Manufacturers
Activity Budgeted Activity Cost Activity Base
Casting $282,600 Machine hours
Assembly 150,360 Direct labor hours
Inspecting 20,790 Number of inspections
Setup 52,150 Number of setups
Materials handling 42,770 Number of loads
Activity Base Entry Dining Total
Machine hours 4,990 4,430 9,420
Direct labor hours 4,300 6,440 10,740
Number of inspections 1,440 450 1,890
Number of setups 280 70 350
Number of loads 720 190 910
Units produced 10,000 5,000 15,000
Activity Budgeted Activity Cost Activity Rate
Casting $282,600 $282,600/9420= $ 30 per machine hour
Assembly 150,360 150,360 / 10,740 = $ 14 per labor hour
Inspecting 20,790 20,790/1890= $ 11 per inspection
Setup 52,150 52,150 /350= $ 149 per setup
Materials handling 42,770 42,770/910= $ 47per load
The formula for Activity rate = Activity Cost/ Activity Base Cost
Sales for Green Inc. are expected to change by 30%. If Green's degree of operating leverage is 1.20, how much is Green's operating income expected to change?
Answer: 36%
Explanation:
From the question, we are informed that the sales for Green Inc. are expected to change by 30% and that Green's degree of operating leverage is 1.20.
Green's operating income is expected to change by:
= 30% × 1.2
= 36%
The company is considering the purchase of machinery and equipment to set up a line to produce a combination washer-dryer. They have given you the following information to analyze the project on a 5-year timeline:
Initial cash outlay is $150,000, no residual value.
Sales price is expected to be $2,250 per unit, with $595 per unit in labor expense and $795 per unit in materials.
Direct fixed costs are estimated to run $20,750 per month.
Cost of capital is 8%, and the required rate of return is 10%.
They will incur all operational costs in Year 1, though sales are expected to be 55% of break-even.
Break-even (considering only direct fixed costs) is expected to occur in Year 2.
Variable costs will increase 2% each year, starting in Year 3.
Sales are estimated to grow by 10%, 15%, and 20% for years 3 - 5.
Then to calculate:
The product’s contribution margin
Break-even quantity
NPV
IRR
Finally:
Explain how the project analyses do or do not support this decision.
In either case, what are the factors that should have been considered in management’s decision?
Answer:
Break-even quantity = 290 units
NPV = -$150,038.78
IRR = -12.07%
This project should be rejected because it has a negative NPV and IRR. You would not be able to even recover your own investment, the sales output is too small.
Explanation:
initial outlay -$150,000
selling price per unit $2,250
production costs:
labor $595materials $795total fixed costs $20,750
contribution margin per unit = $2,250 - ($595 + $795) = $860
contribution margin year 3 = $2,250 - $1,417.80 = $832.20
contribution margin year 4 = $2,250 - $1,446.16 = $803.84
contribution margin year 4 = $2,250 - $1,475.08 = $774.92
in order to calculate the break even point in units we must determine the total fixed costs per year = $20,750 x 12 = $249,000
break even point in units = $249,000 / $860 = 289.5 ≈ 290 units
sales during first year = 290 x 55% = 159.5 ≈ 160 units
sales during second year = 290 units
sales during third year = 290 x 1.1 = 319 units
sales during fourth year = 319 x 1.15 = 366.85 ≈ 367 units
sales during fifth year = 367 x 1.2 = 440.4 ≈ 440 units
net cash flow year 1 = $137,600 - $249,000 = -$111,400
net cash flow year 2 = $249,400 - $249,000 = $400
net cash flow year 3 = $265,471.80 - $249,000 = $16,471.80
net cash flow year 4 = $295,009.28 - $249,000 = $46,009.28
net cash flow year 5 = $340,964.80 - $249,000 = $91,964.80
using a financial calculator and a 10% discount rate, NPV = -$150,038.78 and IRR = -12.07%
In this exercise we have to use finance knowledge to calculate the quantity and taxes calculated on the product, so we have to:
1) [tex]Break-even \ quantity = 290 units\\NPV = -$150,038.78 \\IRR = -12.07%[/tex]
2) This project should be rejected because it has a negative NPV and IRR. You would not be able to even recover your own investment, the sales output is too small.
Given the values in the text of:
Initial outlay [tex]\$150,000[/tex] Selling price per unit [tex]\$2,250[/tex] Labor [tex]\$595[/tex] Materials [tex]\$795[/tex] Total fixed costs [tex]\$20,750[/tex]
Now calculating the margin for each unit we find that:
Contribution margin per unit: [tex]\$2,250 - (\$595 + \$795) = \$860[/tex] Contribution margin year 3: [tex]\$2,250 - \$1,417.80 = \$832.20[/tex] Contribution margin year 4: [tex]\$2,250 - \$1,446.16 = \$803.84[/tex] Contribution margin year 5: [tex]\$2,250 - \$1,475.08 = \$774.92[/tex]Knowing that break even point in units it is worth it 290, we have to:
Sales during year 1: [tex]290 * 55\% = 159.5 = 160 \ units[/tex] Sales during year 2: [tex]290 \ units[/tex]Sales during year 3: [tex]290 * 1.1 = 319 \ units[/tex] Sales during year 4: [tex]319 * 1.15 = 366.85 = 367 \ units[/tex] Sales during year 5: [tex]367* 1.2 = 440.4= 440\ units[/tex]
So to calculate the net cash we found that:
Net cash flow year 1: [tex]\$137,600 - \$249,000 = -\$111,400[/tex] Net cash flow year 2: [tex]\$249,400 - \$249,000 = \$400[/tex] Net cash flow year 3: [tex]\$265,471.80 - \$249,000 = \$16,471.80[/tex] Net cash flow year 4: [tex]\$295,009.28 - \$249,000 = \$46,009.28[/tex] Net cash flow year 5: [tex]\$340,964.80 - \$249,000 = \$91,964.80[/tex]
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a. Using the starting point formula, what is the price elasticity of demand for going from a price of $160 per unit to a price of $140 per unit
Answer:
Price Elasticity of Demand is -4
Explanation:
We can see the graph and easily calculate the Q1 which is 120 units at P1 $140 and Q2 which is 80 units at P2 $160 price.
The starting point formula for calculating price elasticity of demand is given as under:
Price Elasticity of Demand = (ΔQ / Q2) / (ΔP / P2)
Here
ΔQ = Q1 - Q2 = 120 - 80 = 40 units
ΔP = P1 - P2 = 140 - 160 = - $20
By putting value in the above equation, we have:
Price Elasticity of Demand = (40 Units / 80 Units) / (-$20 / $160)
Price Elasticity of Demand = -4
Price Elasticity of Demand is -4
Calculation of the price elasticity of demand:Since in the graph it is mentioned that Q1 which is 120 units at P1 $140 and Q2 which is 80 units at P2 $160 price.
So we know that
Price Elasticity of Demand = (ΔQ / Q2) / (ΔP / P2)
where
ΔQ = Q1 - Q2 = 120 - 80 = 40 units
ΔP = P1 - P2 = 140 - 160 = - $20
Now
Price Elasticity of Demand
= (40 Units / 80 Units) / (-$20 / $160)
= -4
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ExxonMobil targets consumers that fill up their gas tanks more than once a week with its Chase Visa fuel card. Here, ExxonMobil is using which segmentation variable?
Answer:
Behavioral
Explanation:
Behavioral segmentation is a type of segmentation where consumers are divided into segments based on specific behaviours.
the behaviour with which consumers are been segmented with here are the type of credit cards used to fill up their gas tanks
ou have a $4 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth of one stock with a beta of 0.9 and using the proceeds to purchase another stock with a beta of 1.4. What will the portfolio’s new beta be after these transactions? Show your work
Answer: 1.108
Explanation:
You have $4 million invested.
You would like to divest $100,000 from a stock with beta 0.9 to the tune of $100,000.
The entire portfolio has a beta of 1.1.
This beta is an average of all the betas in the portfolio.
Proportion of Portfolio to be divested = [tex]\frac{100,000}{4,000,000}[/tex]
= 0.025
Beta of stock to be divested expressed as;
= 0.025 * 1.1
= 0.0275
This will be reinvested in a stock with beta 1.4
Beta of stock to be bought expressed as;
= 0.025 * 1.4
= 0.035
New beta
= 1.1 - 0.0275 + 0.035
= 1.108
A security held in a well-diversified portfolio that has a beta of zero in a one-factor model will have an expected return of:
Answer:
The answer is risk free rate.
Explanation:
Beta is a risk arising from systematic risk or market risk.
A portfolio with a beta of zero would have the same expected return as the risk-free rate. Such a portfolio would have zero correlation with market movements.
Market risk cannot be diversified. Examples of zero beta assets are cash and US treasury bill.
Robin Masters wants to establish an account that will supplement his retirement income beginning 30 years from now. Find the lump sum he must deposit today at 5%, compounded daily, so that $500,000 will be available when he retires. Round your answer to the nearest penny. Show your work using the fx tool.
Answer:
lump sum = $111,576.54
Explanation:
we can use the future value formula:
future value = principal x (1 + i)ⁿ
future value = $500,000i = 5% / 365 = 0.000136986n = 30 x 365 = 10,950principal = future value / (1 + i)ⁿ
principal = $500,000 / (1 + 0.000136986)¹⁰⁹⁵⁰ = $500,000 / 4.481228688 = $111,576.54
A stock has a beta of 1.15, the expected return on the market is 10.3 percent, and the risk-free rate is 3.8 percent. What must the expected return on this stock be
Answer:
11.28%
Explanation:
A stock has a beta of 1.15
The expected return on the market is 10.3%
The risk-free rate is 3.8%
Therefore, the expected return on the stock can be calculated as follows
Expected return= Risk-free rate+beta(expected return on the market-risk-free rate)
= 3.8%+1.15(10.3%-3.8%)
= 3.8%+(1.15×6.5)
= 3.8%+7.475
= 11.28%
Hence the expected return on the stock is 11.28%
Identify the number of fims present, the type of product, and the appropriate market model in the following scenario.
In a small town, there are four providers of broadband Internet access: a cable company the phone company, and two satellite companies. The Internet access offered by all four providers is of the same speed. Almost everyone in the city already has broadband, so any potential new company would have to engage in a price war with the existing companies and would be unlikely to cover its costs for years, if ever.
Answer:
No of Firms Present - 4 firms / few firms
Type of Product - Standadized Product
All the companies are offering a standadized product of broadband Internet access of the same speed.
Appropriate Market Model - Oligopoly
An Oligopoly is a concentrated market structure where a few firms dominate the market and offer the same products. Gaining entrance into this type of market is considered hard as the existing firms are already very entrenched and dislodging them will require a huge cash outlay. The Broadband internet market in this town is therefore an Oligopoly.
A machine costs $600000 and is expected to yield an after tax net income of $23000 each year. Managment predicts this machine has a 10 year service life and a $120000 salvage value, and it uses straight line depreciation. Compute this machine's accounting rate of return
Answer:
6.39%
Explanation:
The cost of the machine is $600,000
The net income is $23,000
The management predict a that it has a 10 years service life
The salvage value is $120,000
The first step is to calculate the average investment
Average investment= (Cost of machine+Salvage value)/2
= $600,000+$120,000/2
= $720,000/2
= $360,000
Therefore, the accounting rate of return can be calculated as follows
= Annual net income/Average investment
= $23,000/$360,000
= 0.0639×100
= 6.39%
Hence the accounting rate of return is 6.39%
If political influences, independent of any economic forces, lead to a larger government budget deficit, what will be the effect on the loanable funds market
Answer:
The government budget deficit will cause the interest rate to rise, reducing both saving and investment.
Another effect will be the crowding-out of the loanable funds market to private investment. This is because a government in deficit will need to issue more debt in the market, taking up many funds that could have been otherwise invested in private companies.
Loyalty/reward programs are becoming more and more prevalent. With the onset of more loyalty programs, it becomes important for companies to design programs that are differentiated from other competitor programs. What are at least three key aspects that a company must consider when developing a successful loyalty/reward program
Answer:
A loyalty/reward program refers to prizes, discounts and other incentives that companies provide to their customers as art of aan strategy to encourage them to continue buying their products or services. Three key aspects that a company must consider when developing a successful loyalty/reward program are:
-Exclusivity because the customer has to feel that it is special to be part of the program and not that everyone gets the same benefits as the program won't provide any value for the customer.
-Customer knowledge because you need to understand your customers to make sure that the program would be relevant to them by appealing to their needs and desires.
-Contribution to the brand because you have to make sure that all the efforts support your brand as that is your image and the incentives offered have to provide value to it.
The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:Observation 1 2 3 4 5 6Time (secs) 109 117 117 128 125 129Required:What is the normal time for this task if the employee worked at a 32 percent slower pace than average and an allowance of 14 percent of job time is used?
Answer:
Standard Time = 206.6 secs
Explanation:
In order to calculate the time for this task if the employee worked at a 32 percent slower pace than average, we need to calculate the normal time first by using the following formula
Normal Time = Average element-time / performance rating
Average element time = Sum of observations / No. of observations
Average element time = 109 +117 +117 +128 +125 +129 / 6
Average element time = 725/6 = 120.83
Performance rating = 100 - 32 = 68%
Normal Time = 120.83 / 0.68 = 177.7 secs
Standard Time = Normal Time / (1-Allowance)
Standard Time = 177.7 / (1-0.14)
Standard Time = 206.6 secs
Flexible Budget for Selling and Administrative Expenses for a Service Company Digital Solutions Inc. uses flexible budgets that are based on the following data:
Sales commissions 14% of sales
Advertising expense 20% of sales
Miscellaneous administrative expense $6,000 per month plus 12% of sales
Office salaries expense $29,000 per month
Customer support expenses $14,000 per month plus 20% of sales
Research and development expense $32,000 per month
Required:
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Answer:
Flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000
$400,000, $500,000, $600,000
Sales commissions $56,000 $70,000 $84,000
Advertising expense $80,000 $100,000 $120,000
Miscellaneous administrative expense $54,000 $66,000 $78,000
Office salaries expense $29,000 $29,000 $29,000
Customer support expenses $94,000 $114,000 $134,000
Research and development expense $32,000 $32,000 $32,000
Total Expense $345,000 $411,000 $477,000
Explanation:
A Flexible Budget is a Master Budget that has been adjusted to the Actual level of Activity instead of estimated level of Activity.
Department Y started 675 units during the accounting period. They had a beginning balance in goods in process inventory of 225 units and an ending balance of 150 units. _____ units were completed and transferred out.
a. 750
b. 620
c. 650
d. None of above
Answer:
a. 750
Explanation:
units completed and transferred out = beginning work in process + units started - ending work in progress = 225 units + 675 units - 150 units = 750 units
The number of units completed and transferred out refer to the total number of finished units during a certain period and their cost is referred to as cost of goods manufactured.
Last year Mason Inc. had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $195,000 and its net income was $10,549. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $5,250 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income in this amount, by how much would the ROE have changed
Answer:
Return on equity (ROE) would have changed by 6.27%.
Explanation:
In accounting ratio, we know that:
Asset Turnover = Sales/Total Assets .............................. (1)
From equation (1), we can solve for Total Assets as follows:
Total Assets = Sales / Asset Turnover ............................ (2)
Substituting the values in the question into equation (2), we have:
Total Assets = $195,000 / 1.33 = $146,616.54
Also, we know that:
Equity Multiplier = Total Assets/Total Equity ......................... (3)
We can solve Total Equity from equation (3) as follows:
Total Equity = Total Assets / Equity Multiplier ..................... (4)
Substituting the relevant values into equation (4), we have:
Total Equity = $146,616.54 / 1.75 = $83,780.88
As a result, we have:
Return on Equity = Net Income/Total Equity = $10,549 / $83,780.88 = 0.1259, or 12.59%
If the company had operated more efficiently, we would have:
New net income = Net income + Amount of increase in net income = $10,549 + $5,250 = $15,799
New return on equity = New net Income / Total Equity = $15,799 / $83,780.88 = 0.1886, or 18.86%
Change in return on equity = New return on equity - Return on Equity = 18.86% - 12.59% = 6.27%
Therefore, return on equity (ROE) would have changed by 6.27%.