Answer:
Option (B) is correct.
Explanation:
Net Pay for the employee:
= Wages Per Month - Federal Income Taxes Withheld - FICA Social Security - FICA Medicare - Health Insurance - Health Insurance
= $5,750 - $192 - $356.5 - $83.38 - $160 - $80
= $4,878.12
Therefore, the amount of net pay for the employee for the month of January is $4,878.12.
The difference between a profit center and an investment center is
Select one:
a. an investment center incurs costs, but does not directly generate revenues.
b. an investment center incurs no costs but does generate revenues.
c. an investment center is responsible for investments made in operating assets.
d. an investment center provides services to profit centers.
e. There is no difference; investment center and profit center are synonymous.
Answer:
c
Explanation:
investment center measures the use of capital
The difference between a profit center and an investment center is an investment center is responsible for investments made in operating assets. The correct option is (C).
What do you mean by the profit and investment center?
An extension of the profit center where revenues and costs are calculated is what is referred to as an investment center.
A branch or division of a business that directly contributes to or is anticipated to contribute to the overall bottom line is referred to as a profit center. It is handled as a distinct, stand-alone company that generates its own revenues and profits.
An organizational unit called an investment centre is answerable to top management for its profitability in respect to its own investment base. Assets used are measured in addition to revenues and expenses, as in profit centers.
Therefore, the difference between a profit center and an investment center is an investment center is responsible for investments made in operating assets.
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Accumulating capitala. requires that society sacrifice consumption goods in the present.b. allows society to consume more in the present.c. decreases saving rates.d. involves no tradeoffs.
Answer: A
Explanation: capital accumulation is increasing the capital structure of a society in form of profitable investments. means the gathering of objects of value; the increase in wealth; or the creation of wealth. And this can be enhance by motivating the public to sacrifice some consumer goods for some industrial good or asset.
Answer:
The correct answer is letter "A": requires that society sacrifice consumption goods in the present.
Explanation:
Capital Accumulation refers to the growth of capital by investing or saving. In any case, capital consumption is decreased when individuals plan to accumulate resources to obtain greater returns in the future. Because some become wealthier by accumulating capital and others stay poor, it is seen as negative, primarily because it widens the divide between the two sectors.
Island Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $375,000 and budgeted machine-hours were 12,500. Actual factory overhead was $387,920 and actual machine-hours were 13,150.
Required:
a. Compute the overhead application rate.
b. Compute the amount of overhead applied to production.
c. Determine the amount of over- or underapplied overhead.
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Island Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $375,000 and budgeted machine-hours were 12,500. Actual factory overhead was $387,920 and actual machine-hours were 13,150.
A) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 375,000/12,500= $30 per machine hour
B) Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 30*13,150= $394,500
C) Over/under allocation= real MOH - allocated MOH
Over/under allocation= 387,920 - 394,500= 6,580 overallocated
billions of dollars Personal consumption expenditures 1,000 Gross private domestic investment 500 Net exports 300 Imports 180 Federal government purchases of goods and 280 services State and local government purchases of goods 200 Transfer Payments 90 What is the value of GDP? $2,280 billion O $2,550 billion O $2,170 billion O $1,820 billion
Final answer:
To find the dollar value of GDP for Country A, add consumption, investment, and government spending, then subtract imports from exports. The calculation yields a GDP of $3,070 billion.
Explanation:
To calculate the dollar value of GDP for Country A, we need to use the formula: Consumption + Investment + Government spending + (Exports – Imports). The given values are
Consumption spending: $2,000 billion
Business investment: $50 billion
Government purchases: $1,000 billion
Exports: $20 billion
Imports: $40 billion
Substituting the given values into the formula, we get:
$2,000 billion + $50 billion + $1,000 billion + ($20 billion - $40 billion) = $3,070 billion.
Therefore, the dollar value of GDP for Country A is $3,070 billion.
Easy monetary policy reduces the real interest rate, which ______ the demand for dollars, ______ the supply of dollars, and ______ the equilibrium value of the dollar.a. Inflation rate; unemployment rate b. Exchange rate; real interest rate c. Growth of domestic real GDP; growth of foreign real GDP d. Real interest rate; exchange rate
The question is not complete! Here is the complete question and its answer!
Q.1. Easy monetary policy reduces the real interest rate, which ______ the demand for dollars, ______ the supply of dollars, and ______ the equilibrium value of the dollar.
Answer:
Easy monetary policy reduces the real interest rate, which decreases the demand for dollars, increases the supply of dollars, and decreases the equilibrium value of the dollar.
Q.2. In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the ________ and affects net exports by changing the ________.
a. Inflation rate; unemployment rate
b. Exchange rate; real interest rate
c. Growth of domestic real GDP; growth of foreign real GDP
d. Real interest rate; exchange rate
Answer:
In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the real interest rate and affects net exports by changing the exchange rate.
Your grandmother has invested $9000 in a mutual fund each year on your birthday (she made her first payment when you turned 1 year old). The mutual fund has grown at an annual interest rate of 6.8%. How much is your account worth on the day of your 21st birthday immediately after your grandmother’s deposit?
Answer:
394,549
Explanation:
this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:
[tex]s_{n} =P*\frac{(1+i)^{n}-1 }{i}[/tex]
where [tex]s_{n}[/tex] is the future value of the annuity, [tex]i[/tex] is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:
[tex]s_{21} =9,000*\frac{(1+0.068)^{21}-1 }{0.068}[/tex]
[tex]s_{21} =394,549[/tex]
An issue log is a document that identifies the specific issues that must be resolved before a particular project management meeting adjournsa. Trueb. False
Answer:
An issue log is not a document that specifies the specific issues that must be resolved before a particular project management meeting adjourns
Explanation:
An issue log is also referred to as an issue register. It is a document on which it is recorded all negative issues affecting a particular project. It is a tool used for communicating all issues impacting on a project.
George Kyparisis owns a company that manufactures sailboats. Actual demand for George’s sailboats during each of the past four seasons was as follows: YEAR SEASON 1 2 3 4 Winter 1,400 1,200 1,000 900 Spring 1,500 1,400 1,600 1,500 Summer 1,000 2,100 2,000 1,900 Fall 600 750 650 500 George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 sailboats. Based on this data and the multiplicative seasonal model, what will the demand level be for George’s sailboats in the spring of year 5?
Using the multiplicative seasonal model, the projected demand for George’s sailboats in spring of year 5 is approximately 6,890 sailboats when the forecasted annual demand is given as 5,600 sailboats.
Explanation:To project the demand for George's sailboats in the spring of year 5 using a multiplicative seasonal model, we must first calculate the seasonal index for each season and then adjust the forecasted annual demand accordingly.
Steps to Calculate Seasonal Index:Find the average demand for each season over the past years.Calculate the average demand per season divided by the overall average demand across all seasons and years to get the seasonal index.Use the forecasted annual demand and multiply it by the seasonal index for spring to estimate spring's demand for year 5.Let's illustrate with the provided data:
Total demand over four years = (1,400+1,200+1,000+900) + (1,500+1,400+1,600+1,500) + (1,000+2,100+2,000+1,900) + (600+750+650+500) = 19,500.Total number of seasons = 4 years * 4 seasons/year = 16.Average demand per season = 19,500 / 16 = 1,218.75.Spring demand over four years = 1,500+1,400+1,600+1,500 = 6,000.Average spring demand = 6,000 / 4 = 1,500.Seasonal index for spring = Average spring demand / Average demand per season = 1,500 / 1,218.75 ≈ 1.2305.Forecasted annual demand for year 5 = 5,600.Projected spring demand for year 5 = Forecasted annual demand * Seasonal index for spring = 5,600 * 1.2305 ≈ 6,890 sailboats.Therefore, the predicted demand level for George’s sailboats in the spring of year 5, according to the multiplicative seasonal model, will be approximately 6,890 sailboats.
Assume that you starting a new retail shop business of selling premium and basic T-shirts in DeKalb. Name the various parts of your supply chain you will need (Drawing your supply chain flowchart can be your answer here) Describe the key strategies you will use in supplier selection and transportation/ logistics choices. (You can make any assumptions about your business as you feel. Show any numerical values to any parameter you feel will describe your thoughts better.) 2) Problem: What will be your measures of O
Answer:
Consider the following explanation
Explanation:
Key strategies to select the supplier:
Set your criteria- A list is to be created of the suppliers which can provide the needed products. They must fulfill the conditions applied by the firm, like the optimum quality, payment policies, return policies, etc. Define your process- The process which company want to follow to get the supply from the supplier must be define prior. Call for bids- Now the suppliers are invited for the bids. This is known as Request for Proposal. The full details of the products which are needed by the company are told to them. Now record their replies. Evaluate the bid submissions- Now there is the comparison of the bids of different suppliers. Through the correct analysis and evaluation, the supplier is chosen. Monitor the supplier- The selected supplier’s performance is monitored closely. They should conduct the regulate performance review. The company got satisfied with the performance and start giving them orders.
Key strategies for selecting the logistics:
Cultural alignment- The logistics selected must be operated both culturally and operationally. It affects the carrying cost, obsolescence cost, customer service cost, etc. When the 2 parties are not agreed an these points, then rest are ignored. Company infrastructure- The logistic company must have the good infrastructure. It should have those capabilities to provide proper supply chain visibility. IT capabilities- The company must have the optimum technology to be used in the business. The IT capabilities is essential for providing the global logistic services. Cost- The cost is always a important factor to select any logistics. It should not be too expensive. If company can afford that then only it will get selected. Before setting any benchmarks, the cost should be decided early. Intangible services- it should also provide extra value added services. It gives benefits to both the firms. They jointly invest in their common success.
Final answer:
The various parts of the supply chain in a retail shop business selling T-shirts and the key strategies for supplier selection and transportation/logistics choices.
Explanation:
In a retail shop business selling premium and basic T-shirts in DeKalb, the supply chain includes various parts such as suppliers, manufacturers, distributors, and retailers. Here is a flowchart representing the supply chain:
For supplier selection, key strategies can include considering the supplier's reliability, quality of products, pricing, and responsiveness to changes in demand. In terms of transportation and logistics choices, the business can choose between various modes of transportation (such as road, air, or sea) based on factors like cost, speed, and reliability.
Jennifer's pass-through business has total qualified business income of $100,000 and combined REIT dividends/PTP income of $20,000. Since her taxable income of $150,000, including $10,000 of net capital gain is below the applicable threshold, what is her pass through deduction?
A) $20,000
B) $24,000
C) $28,000
D) $30,000
Answer:
B. $24,000
Explanation:
The pass-through deduction or the section 199A deduction as it is officially called is a reduction by 20 percent of your income tax provided by the new tax law set in place for the 2018 tax year. It is eligible for small business owners who run a pass-through business and whose tax income doesn't exceed $157,500 for singles and $315,000 for married couples.
To calculate the figure, you simply need to find 20% of your business profit. Jennifer has a taxable income of $150,000, which is less than the $157,500 limit to qualify for the pass-through deduction. So her pass through deduction becomes
20% of $100000 + $20,000
= 20/100 x $120,000
= $24,000
Note: Real Estate Investment Trust (REIT) dividend income and qualified Publicly Traded Partnership (PTP) income also are eligible for the pass-through deduction by law, hence the addition of the $20,000.
Based on Jennifer's taxable income and her other income, the pass though deduction is B. $24,000
If a single person's taxable income is below $157,500, then their pass through deduction is the lower amount of:
20% of Business income and Combined REIT income 20% of Taxable income less Net Capital GainThis applies to Jennifer who has a taxable income of $150,000.
Pass through deduction is lower of:
= 20% x (100,000 + 20,000) = 20% x (150,000 - 10,000)
= $24,000 = $28,000
In conclusion, pass through deduction is $24,000
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ou expect to receive $10,000 at graduation in two years. You plan on investing it at 9 percent until you have $60,000. How long will you wait from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
22.79 years(Approx).
Explanation:
We use the formula:
[tex]A=P(1+\frac{r}{100})^{n}[/tex]
where
A=future value
P=present value
r=rate of interest
n=time period.
[tex]60,000=10,000(1.09)^{n}[/tex]
[tex]\frac{60,000}{10,000}=(1.09)^{n}[/tex]
[tex]6=(1.09)^{n}[/tex]
Taking log on both sides
log 6 = (n × log 1.09)
n = log 6 ÷ log 1.09
= 20.79 years
Hence,
The time to wait from now:
= 20.79 years + 2 years
= 22.79 years(Approx).
To determine how long it will take for an investment to grow from $10,000 to $60,000 at a 9% interest rate, we can use the compound interest formula and solve for the number of years. Using the given values and simplifying the equation, we find that it will take approximately 10.76 years for the investment to reach $60,000.
Explanation:To determine how long it will take for your investment to grow from $10,000 to $60,000 at a 9% interest rate, we can use the compound interest formula.
The formula is:
A = P(1+r/n)^(nt)
Where:
A is the final amount ($60,000 in this case)P is the initial amount ($10,000 in this case)r is the annual interest rate (9% in this case)n is the number of times the interest is compounded per year (assume 1 for simplicity)t is the number of yearsSubstituting the given values, we can solve for t:
60,000 = 10,000(1+0.09/1)^(1*t)
Dividing both sides by 10,000:
6 = (1.09)^t
Take the natural logarithm of both sides:
ln(6) = ln(1.09^t)
Using the property of logarithms ln(a^b) = b * ln(a):
ln(6) = t * ln(1.09)
Dividing both sides by ln(1.09):
t = ln(6) / ln(1.09)
Calculating this using a calculator, we find that t ≈ 10.76.
Therefore, you will need to wait approximately 10.76 years for your investment to grow from $10,000 to $60,000 at a 9% interest rate.
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Onyx Company has prepared a static budget at the beginning of the month. At the end of the month, the following information has been retrieved from the records.
Static budget:
Sales volume: 1,000 units: Prices: $70 per unit
Variable expense: $32 per units:
Fixed expenses: $37,500 per month
Operating income: $500
Actual results:
Sales volume: 990 units: Price $74 per unit
variable expenses:$35 per unit: Fixed expenses:$33,000 per month
Operating income: $5,610
Calculate the flexible budget variance for fixed expenses.
a.$4,500U
b. $4,500F
c. $0
d. $5,490
1. The following data refers to the Daniels division of Tippett Inc. Daniels sells variablespeed drills. The standard drill sells for $ 40, and Daniels plans to sell 30,000 units in 2017. Tippett treats Daniels as an investment center with a total attributable investment of $ 800,000. Daniels' annual fixed costs are $ 200,000. Variable cost per standard drill is $ 24. The firm's required rate of return on investment is 15%.
1.1 What is the expected Return on Investment in 2017?
1.2 What is the expected residual income for Daniels in 2017?
1.3 A special order from a unit of the US Government has been received to buy from Daniel 10,000 units every year of the device at the price of $30 each. If the order is accepted, Daniels will have to incur additional annual fixed costs of $30,000 for administration and $150,000 to modify and expand the manufacturing facilities.
Based on the effect on ROI and/or Residual Income for the first year, will the manager accept this order? Why and why not?
Answer:
See below.
Explanation:
For part 1
Expected return can be computed by working out net profits from the production of drills.
Contribution per drill = Selling price - variable costs
Contribution = 40 - 24 = $16/ drill
Total contribution = 16 * 30,000 = $480,000
Profit = Contribution - Fixed costs
Profit = 480,000 - 200,000 = $280,000
Return on investment = Profit / Initial investment
ROI = 280,000 / 800,000 = 35%
Residual income = Net income - Equity charge
RI = 280,000 * (800,000*0.15) = $160,000
For part 2
We assume that this special order of 10,000 drills is in addition to the existing 30,000 drills bringing the total to 40,000 drills sold per year.
We first calculate the income effect of this isolated 10,000 additional drills.
Selling price = 30/drill
Variable cost / drill = 24
Contribution / new drill = 6
Total contribution from the order = 6*10,000 = $60,000
Total profit increment from this order = 60,000 - 30,000 = $30,000
This brings the total profit from 40,000 drills to
= 30,000+280,000 = $310,000
Total investment now has been increased by $150,000 bringing the total to 150,000 + 800,000 = $950,000
ROI has changed to = 310,000 / 950,000 = 32.63%
Residual income has changed to as,
RI = 310,000 - (950,000*0.15) = $167,500
Although the return on investment has fallen by around 2.37% the residual income has increased. Daniels may accept this order to ensure he has a good customer base and their total market share may actually improve thus this order might be strategically important for the future of the business.
Hope that helps.
On Aprilâ 1, 2017, Banne Services received a 9â-month note for $ 13 comma 000 at 11â%. Calculate the amount of interest due at maturity.â (Round any intermediate calculations to two decimalâ places, and your final answer to the nearestâ dollar.
Answer:
$1,073
Explanation:
The computation of the interest due is shown below"
= Total amount borrowed × interest rate × number of months ÷ total months in a year
= $13,000 × 11% × 9 months ÷ 12 months
= $1,073
The five months are calculated from April 1 to December 31. We assume the books are closed on December 31.
Simply we apply the simple interest formula so that the correct amount can come
uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $200,000 ($300,000), purchases during the current year at cost (retail) were $2,000,000 ($2,800,000). Sales during the current year totaled $2,500,000, and net markups were $200,000. What is the ending inventory value at cost?
Answer:
The ending inventory value at cost is ($100,000)
Explanation:
To calculate the cost of ending inventory using the retail inventory method, we need to know:
The cost-to-retail percentage = COGS/ sales during current year = (sales – net markup)/sales = ($2,500,000-$200,000)/$2,500,000 = 92% The cost of goods available for sale= Cost of beginning inventory + Cost of purchases = $200,000 + $2,000,000 = $2,200,000 The cost of sales during the period = Sales × cost-to-retail percentage = $2,500,000 x 92% = $2,300,000 The ending inventory = Cost of goods available for sale - Cost of sales during the period = $2,200,000 - $2,300,000 = ($100,000)Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,600 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $8 per unit of average inventory. Every time an order is placed for more of item X, it costs $16.
To determine the order size for item X, use the Economic Order Quantity formula.
a. The order size should be 400 units.
b. The annual ordering cost is $64 and
c. the annual holding cost is $1,600.
a. To determine the order size for item X, we need to use the Economic Order Quantity (EOQ) formula. The formula is given by:
EOQ = √(2DS/H)
Where:
D is the annual demand (1,600 units)S is the setup cost per order ($16)H is the holding cost per unit ($8)Plugging in the values, we get:
EOQ = √(2 * 1,600 * 16 / 8) ≈ 400
Therefore, the order size should be 400 units (rounded to the nearest whole number).
b. To calculate the annual ordering cost, we divide the total annual demand by the order size and multiply by the setup cost per order:
Annual ordering cost = (D / EOQ) * S
Substituting the values, we have:
Annual ordering cost = (1,600 / 400) * 16 = $64
c. Lastly, to calculate the annual holding cost, we multiply the average inventory level (which is half the order size) by the holding cost per unit:
Annual holding cost = (EOQ / 2) * H
Substituting the values:
Annual holding cost = (400 / 2) * 8 = $1,600
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The probable question may be:
Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,600 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $8 per unit of average inventory. Every time an order is placed for more of item X, it costs $16.
a. Whenever item X is ordered, what should the order size be? (Round your answer to the nearest whole number.)
b. What is the annual cost for ordering item X? (Round your answer to 2 decimal places.)
c.What is the annual cost for storing item X? (Round your answer to 2 decimal places.)
a. The order size should be approximately 39 units (EOQ). b. The annual cost for ordering item X is approximately $656.41. c. The annual cost for storing item X is approximately $1,287.00.
To find the Economic Order Quantity (EOQ), we can use the following formula:
EOQ = √((2 * D * S) / H)
Where:
D = Demand (annual usage) = 1,600 units
S = Ordering cost = $16 per order
H = Holding cost per unit = (Storage cost + Item cost) = ($8 + $25) = $33 per unit
a. Calculate the EOQ:
EOQ = √((2 * 1,600 * 16) / 33)
EOQ ≈ √(51,200 / 33)
EOQ ≈ √1,548.48
EOQ ≈ 39.31
So, the order size (EOQ) should be approximately 39 units.
b. To find the annual cost for ordering item X, use the EOQ and divide the annual demand by the order size, then multiply it by the ordering cost:
Annual ordering cost = (D / EOQ) * S
Annual ordering cost = (1,600 / 39) * 16
Annual ordering cost ≈ $656.41 (rounded to 2 decimal places)
c. To find the annual cost for storing item X, use the EOQ and multiply it by the holding cost:
Annual holding cost = EOQ * H
Annual holding cost = 39 * 33
Annual holding cost = $1,287.00
So, the annual cost for storing item X is $1,287.00 (rounded to 2 decimal places).
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The complete question is:
Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,600 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $8 per unit of average inventory. Every time an order is placed for more of item X, it costs $16.
a. Whenever item X is ordered, what should the order size be? (Round your answer to the nearest whole number.)
b. What is the annual cost for ordering item X? (Round your answer to 2 decimal places.)
c. What is the annual cost for storing item X? (Round your answer to 2 decimal places.)
Alternative explanations of wage disparities
Suppose that a labor economist finds that one of her research subjects has earned significantly higher wages throughout his lifetime than would be predicted by standard measured variables. The economist also notes that each of the subject's positions was found through connections at his family's exclusive country club.
Which one of the following most likely explains this person's unusually high earnings?
A. Effort
B. Efficiency wages
C. Chance
D. Compensating differentials
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Final answer:
The unusually high earnings of the subject can likely be explained by the power of networking and personal connections, revealing the influence of social capital on wage disparities.
Explanation:
The unusually high earnings of the labor economist's research subject can most likely be explained by the influence of networking and the access to exclusive job opportunities through connections. This highlights the role that social capital and networking play in wage disparities, which is not explicitly listed in the options provided (A. Effort, B. Efficiency Wages, C. Chance, D. Compensating Differentials). While efficiency wage theory explains how pay can impact productivity and motivate employees, it does not account for the sociological factors at play where personal connections can lead to higher wages, regardless of productivity or effort. Employment discrimination, discussed by economist William A. Darity Jr., also offers insights into how systemic factors contribute to wage disparities beyond individual qualifications or market forces.
Suppose you are working for a firm producing cotton balls – an industry for which there are many different firms producing an identical product. The market price is $20 per case of cotton balls, and the firm is currently producing 30 cases. As the manager tasked with making production decisions for the firm, you begin by estimating the cost function, and find that the cost function is given by: c(????) = 10 + ???? + 1/3 ????^2 .
a. Is this a short run or long run cost function?
b. What adjustments to the production decisions would you make to increase profits?
c. Given your recommendation to (b) above, by how much would the firm’s profits increase?
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
HighGrowth Company has a stock price of $ 23. The firm will pay a dividend next year of $ 1.19, and its dividend is expected to grow at a rate of 3.7 % per year thereafter. What is your estimate of HighGrowth's cost of equity capital? The required return (cost of capital) of levered equity is nothing%
Answer:
Cost of equity = 8.87%
Explanation:
Given that,
Stock price = $23
Firm will pay a dividend next year = $1.19
Dividend is expected to grow at a rate = 3.7 % per year thereafter
cost of equity = (Dividend next year ÷ Stock price) ÷ Dividend growth rate
cost of equity = ($1.19 ÷ $23) + 3.7%
cost of equity = 5.17% + 3.7%
cost of equity = 8.87%
Final answer:
To estimate HighGrowth's cost of equity capital, you can use the Dividend Discount Model. Given a stock price of $23, a dividend of $1.19 next year, and a growth rate of 3.7%, the estimated cost of equity would be approximately 8.87%.
Explanation:
The student is asking how to estimate the cost of equity capital for HighGrowth Company using the dividend discount model (DDM).
According to the DDM, if a company is expected to pay a dividend of $1.19 next year and that dividend is expected to grow at a rate of 3.7% per year, with the current stock price at $23, the cost of equity can be estimated using the formula:
Cost of Equity = (Dividend_Year1/Current Stock Price) + Growth Rate
In this case:
Cost of Equity = ($1.19 / $23) + 3.7%
Calculating this, we would have:
Cost of Equity = 0.0517 + 0.037 = 0.0887 or 8.87%
Therefore, your estimate of HighGrowth's cost of equity capital would be approximately 8.87%.
The inflation rate is 12 percent, and the central bank is considering slowing the rate of money growth to reduce inflation to 8 percent. Economist Eric believes that expectations are very sluggish, whereas economist Kenji believes that expectations of inflation change quickly in response to new policies. True or False: Economist Eric is more likely to favor using contractionary policy to reduce inflation than economist Kenji. True False
Answer:
False
Explanation:
economist Kenji supports contractionary monetary policy because he believes that expectations adjust quickly in response to changes in policy and the efforts made by fed( an decrease in government spending and/or an increase in taxes) will be worth and the costs of reducing inflation will be less.
Whereas economist Eric, thinks that change in money supply is not a good idea to reduce inflation as it will work very slowly.
Final answer:
The statement is false; Eric, who believes in sluggish inflation expectations, would be less likely to favor aggressive contractionary policy to reduce inflation compared to Kenji, who expects quick adjustments to new policy. Inflation expectations play a crucial role in the effectiveness of monetary policy.
Explanation:
The question deals with the beliefs of two economists, Eric, who thinks that inflation expectations are sluggish, and Kenji, who believes they adjust quickly. Given this context, the statement is false. Economist Eric, believing that expectations adjust slowly, would likely be more cautious about using contractionary policy to reduce inflation, as such expectations can lead to a slower response in the economy and potentially higher costs of reducing inflation. On the other hand, Economist Kenji, who believes in quick adjustments, would favor the use of contractionary policy as he would expect a faster economic response to new policies, thus reducing the costs associated with slowing the economy.
Understanding inflation expectations is crucial for policymakers. From the history of the Federal Reserve's actions and current research, it seems evident that when inflation expectations and actual inflation align, economic outcomes are more predictable, and monetary policies tend to be more effective. The effectiveness of contractionary monetary policy in reducing inflation depends largely on how quickly the public adjusts its expectations in response to policy changes.
NCH Corporation, which markets cleaning chemicals, insecticides and other products, paid dividends of $2.00 per share in 1993 on earnings of $4.00 per share. The book value of equity per share was $40.00, and earnings are expected to grow 6% a year in the long term. The stock has a beta of 0.85, and sells for $60 per share. (The treasury bond rate is 7%.). How much would the return on equity have to increase to justify the price/book value ratio at which NCH sells for currently?
Answer:
The reutrn on equity should be of 9.53%
Explanation:
We can solve the return on equity by considering the gordon model of dividend growth:
[tex]\frac{divends_1}{return_{equity}-growth} = Intrinsic \: Value[/tex]
current dividends 2 dollars
next year dividends: current x (1 + g) = 2 x (1 + 0.06) = 2.12
[tex]\frac{2.12}{return_{equity}-0.06} = 60[/tex]
[tex]\frac{2.12}{60} +0.06= Ke[/tex]
Ke = 0.09533 = 9.53%
As a contemporary manager, your employees will be motivated to provide you with important feedback if:
A. you provide closed-end surveys on a monthly basis.
B. you prepare daily, company-wide passive voicemail messages.
C you institute a respectful rank and file politeness plan, where middle and higherlevel managers are addressed as "Mr.", "Ms", or "Dr.".
D. you solicit open-ended responses from your employees.
Answer:D
D, is the is the answer.
Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely a. have no impact on the growth rate of real GDP per person. b. decrease the growth of real GDP per person for a few years. c. increase the growth of real GDP per person for several decades. d. permanently increase the growth rate of real GDP per person
Answer:
C) Increase the growth of real GDP per person for several decades.
Explanation:
Currently, the U.S. government is running a deficit of about 4% of GDP. This deficit affects economic growth, it causes tax increases or even more debt, and it leads to the misallocation of resources.
If the U.S. undertook a policy to increase national saving, it could reduce the deficit, or even, run a surplus. Under a surplus budget, the government could reduce taxes, or keep them low, and use most of the tax revenue for investments that produce growth, for example: infraestructure.
IE 9-6 ... AS/AD model – If this economy has an equilibrium in Year 5 with a Price Level of $2.54, then Nominal Income GDP will be __________ but Real Income GDP will be _____________ ..
Answer:
$4387 b but Real Income GDP will be $4500 b ..
Explanation:
This nominal GDP signifies the worth of all those ultimate assets including assistance that economics performed throughout a provided year. The aforementioned is calibrated by implementing the uses that remain contemporary throughout the year while which that output is generated. Meanwhile, in economics, a nominal worth is formulated into monetary sessions.
This is essential to identify amidst the nominal and real value of a nation's internal production including profit. Real GDP estimates a specific amount of production. An expansion in real production signifies that AD has grown quicker than this rate of inflation moreover this prosperity is encountering assertive germination. So according to the above eplaination the answer is mentioned below.
AS/AD model – If an aforementioned administration maintains equanimity into Year 5 including a Value Level concerning $2.54, later Nominal Earnings GDP will remain $4387 b still Real Income GDP will remain $4500 b ..
Which of the following is not one of the principles of corporate public relations that a company should follow
a. To make sure management thoughtfully analyzes its overall relation to the public
b. To create a system for informing all employees about the (company's) general policies and practices
c. To ensure secrecy and security regarding the company's actions
d. To create a system giving contact employees (those having direct dealings with the public) the knowledge needed to be reasonable and polite to the public
e. To create a system drawing employee and public questions and criticism back up through the organization to management
Answer:
C. To ensure secrecy and security regarding the company's actions
Explanation:
Ensuring secrecy and security regarding the company's actions is not one of the principles of corporate public relations that a company should follow.
A review of Plunkett Corporation's accounting records for last year disclosed the following selected information. Variable Costs Direct materials used $ 56,000 Direct labor $179,000 Manufacturing overhead $154,000 Selling costs $108,400 Fixed costs Manufacturing overhead $267,000 Selling costs $121,000 Administrative costs $235,900 What were Plunkett's product costs and period costs for last year?
Answer:
$656,000 and $465,300
Explanation:
The computation of the product cost is shown below:
= Direct materials used + Direct labor + variable manufacturing overhead + fixed manufacturing overhead
= $56,000 + $179.000 + $154,000 + $267,000
= $656,000
The computation of the period cost is shown below:
= Variable selling cost + fixed selling cost + Administrative costs
= $108,400 + $121,000 + $235,900
= $465,300
Fulkron, Inc. provides the following data taken from its third quarter budget: Jul Aug Sep Cash collections 67,000 $33,000 $42,000 Cash payments: Purchases of direct materials 33,000 34,000 30,000Operating expenses 12,000 20,000 24,000Capital expenditures 0 33,000 6,000The cash balance on June 30 is projected to be $12,000.Based on the above data, calculate the shortfall the company is projected to have at the end of August.
Answer:
-$20,000 short fall
Explanation:
July:
Total cash available:
= Cash balance + Cash collections
= $12,000 + $67,000
= $79,000
End cash:
= Total cash available - Cash payments
= $79,000 - (33,000 + 12,000)
= $79,000 - $45,000
= $34,000
August:
Total cash available:
= Cash balance + Cash collections
= $34,000 + $33,000
= $67,000
End cash:
= Total cash available - Cash payments
= $67,000 - (34,000 + 20,000 + 33,000)
= $67,000 - $87,000
= -$20,000 (Short fall)
Hitzu Co. sold a copier costing $6,500 with a two-year parts warranty to a customer on August 16, 2017, for $13,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2018, the copier requires on-site repairs that are completed the same day. The repairs cost $104 for materials taken from the repair parts inventory. These are the only repairs required in 2018 for this copier. Based on experience, Hitzu expects to incur warranty costs equal to 3% of dollar sales. It records warranty expense with an adjusting entry at the end of each year.How much warranty expense does the company report in 2017 for this copier? Varranty expense 2. How much is the estimated warranty liability for this copier as of December 31, 2017? ted warranty liability 3. How much warranty expense does the company report in 2018 for this copier? Warranty expense
Answer:
1) 390 warranty expense
2) 390 warranty liability
3) zero as the amount is deducted from the liability
Explanation:
the warranty expense was determinated using an allowance of 3% of the sale:
$ 13,000 x 3% = $ 390
the warranty liability will be created for the same amount
On 2018 it will decrease the liability against inventory It will not recognize a warranty expense.
1. Suppose banks keep no excess reserves and no individuals or firms decide to hold more cash during the deposit expansion process. If someone suddenly discovers $50 million in buried treasure, explain what would happen to the money supply if the required reserve ratio is 10 percent. How would your answer change in the required reserve ratio was 20 percent?
Answer:
Increase by $500 m
Increase by $250 m instead of $500 m
Explanation:
Since all the deposits over and above the reserve requirements are loaned out by the banks,
We can calculate the Credit multiplier and see how a new 50 m deposit will affect the money supply.
Credit multiplier @ 10% reserve = 1 / 0.10 = 10 times
So a new deposit of 50 m will create new money of 10 * 50 = 500 m thus increasing the money supply by this amount.
For a 20% reserve ratio, Credit multiplier changes a,
Credit Multiplier = 1 / 0.2 = 5 times
This will change the money supply by = 5 * 50 = 250 m. This is the amount of new money that will be created with reserve ratio of 20%.
Hope that helps.
At the beginning of 2019, Patriots, Inc. has the following account balances: Accounts Receivable $45,000 (Debit) Allowance for Bad Debts $8,000 (Credit) Bad Debts Expense $0 During the year, credit sales amounted to $810,000. Cash collected on credit sales amounted to $770,000, and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 3.5%. The amount of bad debts expense for 2019 is ________.
A. $28,350
B. $18,350
C. $18,000
D. $56,875
Answer:
Option (A) $28,350
Explanation:
Data provided in the question:
Accounts Receivable = $45,000 (Debit)
Allowance for Bad Debts = $8,000 (Credit)
Bad Debts Expense = $0
During the year, credit sales = $810,000
Cash collected on credit sales = $770,000
Amount written off = $18,000
Percent of Bad debts expense = 3.5%
Therefore,
Bad debt expenses = credit sales × Percent of bad debts expense
= $810,000 × 3.5%
= $28,350
Hence,
Option (A) $28,350