Answer:
A.3.63 times
B.95.5 days
C.21.0 times
D.13.5 days
Explanation:
a.
Inventory turnover = Cost of goods sold / Average inventories
Hence:
= $602,250 / $166,000
= 3.63 times
b.
Number of days’ sales in inventory = Inventory at year-end / Average day’s cost of good sold
= $157,575 / $1,650
= 95.5 days
Average day’s cost of goods sold
= Annual cost of good sold / 365
= $602,250 / 365 = $1,650
c.Accounts receivable turnover
= Sales / Average accounts receivable
= $821,250 / $39,100
= 21.0 times
d.
Number of days’ sales in accounts receivable
= Accounts receivable at year-end / Average day’s sales
= $30,400 / $2,250 = 13.5 days
Average day’s sales = Annual sales / 365
= $821,250 / 365
= $2,250
Final answer:
Explanation of inventory turnover, days' sales in inventory, accounts receivable turnover, and days' sales in accounts receivable for the year 2019.
Explanation:
Inventory Turnover for 2019:
Calculate Inventory Turnover = Cost of Goods Sold / Average Inventory
Inventory Turnover = $500,000 / $100,000 = 5 times
Days' Sales in Inventory for 2019:
Calculate Days' Sales in Inventory = 365 days / Inventory Turnover
Days' Sales in Inventory = 365 days / 5 = 73 days
Accounts Receivable Turnover for 2019:
Calculate Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
Accounts Receivable Turnover = $700,000 / $50,000 = 14 times
Days' Sales in Accounts Receivable for 2019:
Calculate Days' Sales in Accounts Receivable = 365 days / Accounts Receivable Turnover
Days' Sales in Accounts Receivable = 365 days / 14 = 26 days
A small clothing company plans to sell a new line of shirts. The selling price will be $35 per shirt. The labor costs will be $5 per shirt. The cost of materials will be $10 per shirt. The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year. How many shirts it has to sell in order to break-even?
Answer:
The correct answer is 4,000 shirts.
Explanation:
According to the scenario, computation of the given data are as follows:
Selling price = $35
Labor cost = $5
Cost of material = $10
So, Contribution margin amount = $35 - $5 - $10 = $20
And fixed cost = $60,000 + $20,000 = $80,000
So, we can calculate the breakeven units by using following formula:
Breakeven units = Fixed cost ÷ Contribution margin
= $80,000 ÷ $20
= 4,000 shirts
The market value of Fords' equity, preferred stock, and debt are $ 7 billion, $ 2 billion, and $ 13 billion, respectively. Ford has a beta of 1.7, the market risk premium is 8%, and the risk-free rate of interest is 3%. Ford's preferred stock pays a dividend of $ 3 each year and trades at a price of $ 27 per share. Ford's debt trades with a yield to maturity of 7%. What is Ford's weighted average cost of capital if its tax rate is 35%?
Answer: 9.48%
Explanation:
Given Data
Debts ;
$7 billion
$2 billion
$13 billion
Beta of Fords stock = Beta = 1.50
Market risk premium = Rp = 8.0%
Risk free rate of interest = Rf = 4.0%
Equity rate = 1.7
Market risk rate = 0.8
Risk free rate = 0.03
Therefore;
Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium
= 0.03 + (1.7 × 0.8)
= 0.166
Preferred Stock Cost ( PSC)= Dividend ÷ stock price
= 4 ÷ 30
= 0.1333
Total debt = 13 + 6 + 2 = 21 billion
D% = 13 billion ÷ 21 billion
= 0.619
E% = 6 billion ÷ 21 billion
= 0.286
P% = 2 billion ÷ 21 billion
= 0.095
RD = debt capital at 8% maturity rate
Tc= 30%
Rwac =(w/ preferred stock)
= Re × E% + PSC × P% + Rd ( 1- Tc) D%
Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)
= 0.094803 * 100
= 9.48%
At 30% tax rate Ford weighted average cost is 9.48%
D.L Marx and Company, a manufacturer of quality handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Barnes, the president, to believe that an aggressive marketing campaign will be necessary next year to maintain the company's present growth. To prepare for next year's marketing campaign, the company's controller has prepared and presented Mr. Barnes with the following data for the current year, 2017:
Total variable cost per bowl: $12.60Total fixed costs: $184,800Selling price: $28.00
Expected sales, 21500 units: $602,000Income tax rate: %40What is the projected net income for 2017?
Final answer:
The projected net income for 2017 is $198,660.
Explanation:
To calculate the projected net income for 2017, we need to calculate the total variable costs and the total fixed costs. The total variable cost is the variable cost per bowl multiplied by the expected sales volume, which is $12.60 multiplied by 21,500 units, equal to $270,900. The total fixed costs remain constant at $184,800. Next, we calculate the total revenue by multiplying the selling price by the expected sales volume, which is $28.00 multiplied by 21,500 units, equal to $602,000.
Now, we can calculate the gross profit by subtracting the total variable costs from the total revenue, which is $602,000 minus $270,900, equal to $331,100. Then, we calculate the income tax expense by multiplying the gross profit by the income tax rate, which is $331,100 multiplied by 0.40 (40%), equal to $132,440.
Finally, we calculate the projected net income by subtracting the income tax expense from the gross profit, which is $331,100 minus $132,440, equal to $198,660. Therefore, the projected net income for 2017 is $198,660.
Denise Cruz receives a regular salary of $900 a month and is entitled to overtime pay at the rate of one and one-half times the regular hourly rate for any time worked in excess of 40 hours per week. Cruz's overtime rate of pay is
Answer:
Overtime rate is $8.4375 per hour
Explanation:
Given the information:
regular salary of $900 a monthover time rate = 1.5 regular rateAs we all know that, overtime pay rate is more than the regular pay rate because that person work more than her/his standard hours
In this situation, the standard hours is 40 hours per week.
=> Total Number of Hours worked in a month
= 40 x 4
= 160 hours
=> Regular rate per hour
= $900 / 160 = $5.625 per hour
=> Overtime rate
= $5.625 x 1.5 = $8.4375 per hour
Hope it will find you well.
ABC Software operates stores within five regions. Regional managers are held accountable for marketing, advertising, and sales decisions, and all costs incurred within their region. In addition, regional managers decide whether new stores will open, where the stores will be located, and whether the stores will lease or purchase the facilities. Store managers, in contrast, are accountable for marketing, advertising, and sales decisions, and costs incurred within their stores. Ideally, on the basis of this information, what type of responsibility center should the software company use to evaluate its regions and stores
Answer:
The type of responsibility center ABC software company can use to evaluate its regions and stores is called Investment Center.
Explanation:
An investment center is a responsibility center that handles, revenues, expenses as well as investment base.
This kind of responsibility center is appropriate for large companies like ABC software.
It is designed to cater for the different regions and stores as well as the product specifications and managerial responsibilities.
It is applicable for companies with regional mangers and store managers that take decisions on which stores to open, marketing plan, advertising, sales, accounting and financial decisions.
The following transactions occurred during July: Received $1,040 cash for services provided to a customer during July. Received $4,800 cash investment from Bob Johnson, the owner of the business Received $890 from a customer in partial payment of his account receivable which arose from sales in June. Provided services to a customer on credit, $515. Borrowed $7,400 from the bank by signing a promissory note. Received $1,390 cash from a customer for services to be rendered next year. What was the amount of revenue for July
Answer:
$1,555
Explanation:
Revenue for July
Received cash for services provided to a customer $1,040
Add services provided to a customer on credit $515
Total July Revenue $1,555
Therefore the amount of revenue for July will be $1,555
On June 3, 2019, Hunt Company sold to Ann Mount merchandise having a sales price of $8,000 (cost $6,000) with terms of n/60, f.o.b. shipping point. Hunt estimates that merchandise with a sales value of $800 will be returned. An invoice totaling $120 was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 8, Mount returned to Hunt $300 of merchandise containing flaws. Hunt estimates the returned items are expected to be resold at a profit. The freight on the returned merchandise was $24, paid by Hunt on June 8. On July 16, the company received a check for the balance due from Mount. No further returns are expected. Prepare journal entries for Hunt Company to record all the events in June and July.
Answer and Explanation:
The Journal entry is shown below:-
1. Account Receivable Dr, $8,000
To Sales Revenue $8,000
(Being credit sales is recorded)
2. Cost Of Goods Sold Dr, $6,000
To Inventory $6,000
(Being Cost of goods sold is recorded)
3. Sales return and allowance Dr, $300
To Account Receivable $300
(Being sales returns is recorded)
4. Inventory $25
(300 × $6,000 ÷ $8,000)
(300 × 75%)
To Cost Of Goods Sold $225
(Being Cost of goods sold is recorded)
5. Freight (Expense) Dr, $24
To Cash $24
(Being freight paid is recorded)
6. Cash Dr, $7,700
($8,000 - $300)
Accounts Receivables Dr, $7,700
(Being collection of accounts receivables is recorded)
Rooney Company established a predetermined variable overhead cost rate at $9.40 per direct labor hour. The actual variable overhead cost rate was $8.40 per hour. The planned level of labor activity was 74,900 hours of labor. The company actually used 79,900 hours of labor. Required Determine the total flexible budget variable overhead cost variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Answer:
$32,900 favorable
Explanation:
The computation of the total flexible budget variable overhead cost variance is shown below:
= Total budgeted overhead cost - actual budgeted overhead cost
where,
Total budgeted overhead cost is
= $9.40 × 74,900 hours
= $704,060
And, the actual budgeted overhead cost is
= $8.40 × 79,900 hours
= $671,160
So, the total flexible budget variable overhead cost variance is
= $704,060 - $671,160
= $32,900 favorable
Since the standard cost is greater than the actual cost so it would have favorable variance
First Link Services granted 20 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within five years. The common shares have a market price of $8 per share on the grant date of the restricted stock award. 1. Ignoring taxes, what is the total compensation cost pertaining to the restricted shares? 2. Ignoring taxes, what is the effect on earnings in the year after the shares are granted to executives?
Answer:
(a). $160 million
(b). 32 million
Explanation:
According to the scenario, computation of the given data are as follows:-
We can calculate the Total compensation cost pertaining to the restricted shares by using following formula:-
a). Total Compensation Cost Pertaining to the Restricted Shares = Common Share × Market Price Per Share
= 20 million × $8
= $160 million
B). Effect on Earnings in the Year After the Shares are Granted to Executives = Total Compensation Cost ÷ Terminated Year
= $160 million ÷ 5
= 32 million
What is an expense statement?
A. a record of how much we owe and to whom.
B. a record of our income.
C. a record of our income and expenses.
D. a record of how we have spent our money.
Answer:
A record of how we have spent our money
Explanation:
i just did it
The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year. What is the time between two consecutive orders (in days), in the situation when inventory costs are minimized for the XO-01
Answer:
6.25 days
Explanation:
In order to compute the time first we have to find out the economic order quantity and the total number of orders in a year which is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
[tex]= \sqrt{\frac{2\times \text{8,000}\times \text{\$50}}{\text{\$20}}}[/tex]
= 200 units
Now the total number of years in a year is
= Annual demand ÷ economic order quantity
= 8,000 ÷ 200 units
= 40 orders
And, the time between two consecutive orders is
= 1 ÷ 40 orders × 250 days
= 6.25 days
XYZ, a calendar-year corporation, had accumulated earnings and profits of $5,000 as of January 1, 2019. XYZ’s earnings and profits for 2019 were $8,000. During 2019, XYZ distributed one stock right for each of the 10,000 outstanding shares of its only class of stock. The fair market value of each stock right was $15. The corporation gave shareholders the option of receiving the stock rights or cash. No other dividends were paid in 2019. Ms. Y is a 10% shareholder and elects to receive the stock rights. What is the amount of the distribution that is includible in Ms. Y’s 2019 gross income as a dividend?
Answer:
$1,300
Explanation:
Since Ms. Y was given the option to either receive the stock option or cash, the entire dividend distribution will be included in her gross income.
XYZ's distribution = 10,000 stocks x $15 = $150,000 which exceeds its retained earnings which were only $13,000. So only $13,000 can be considered as dividends, while the rest, $137,000 will be considered as return of capital (which reduces the stock's basis, but is not taxed as gross income).
So Ms. Y's share of the dividends = $13,000 x 10% = $1,300
That is the amount that she will include in her gross income.
Oriole Company uses the gross method to record sales made on credit. On June 10, 2020, it sold goods worth $247000 with terms 2/10, n/30 to Sandhill Co. On June 19, 2020, Oriole received payment for 1/2 of the amount due from Sandhill Co. Oriole’s fiscal year end is on June 30, 2020. What amount will be reported in the financial statements for the accounts receivable due from Sandhill Co.?
Answer:
$123,500
Explanation:
The computation of the amount reported in the financial statements is shown below
= Sales amount - the amount of sales received
= $247,000 - $247,000 × 50%
= $247,000 - $123,500
= $123,500
by deducting the amount of sale received from the sales amount we can get the amount i.e to be reported in the financial statements
What should organizations keep in mind when using logos?
In addition to its look or appeal, when the logo of a brand is easy to ______, customers prefer to choose that brand. This gives a competitive advantage to the brand.
Answer:
Identify
Explanation:
When a logo is not only aesthetically-pleasing, relevant, and adequate, but also easy to identify, customers will tend to like the logo so much that some of them could make their decision to buy based on the logo alone.
An attractive logo is a crucial part of the marketing mix (is both part of the product and the promotion aspect), and the marketing strategy in general, and for this reason, a great degree of attention should be paid to designing the logo.
Some of the largest firms in the world have memorable logos that almost any customer can identify, for example, Apple, has its famous apple logo, and Microsoft uses the stylized window logo for its operating system of the same name.
Answer:
remember
Explanation:
Suppose Proctor & Gamble (PG) and Johnson & Johnson (JNJ) are simultaneously considering new advertising campaigns. Each firm may choose a high, medium, or low level of advertising. What are each firm's best responses to its rival's strategies? Does either firm have a dominant strategy? What is the Nash equilibrium in this game? If PG picks high, then JNJ should pick ▼ medium high low ; if PG picks medium, JNJ should pick ▼ low medium high ; and if PG picks low, then JNJ should pick ▼ medium low high . If JNJ picks high, then PG should pick ▼ low high medium ; if JNJ picks medium, PG should pick ▼ medium low high ; and if JNJ picks low, then PG should pick ▼ medium high low . PG's dominant strategy is to pick ▼ low medium high and JNJ's dominant strategy is to pick ▼ high low medium . Identify the Nash equilibrium in this game. A. The Nash equilibrium is for both firms to pick medium. B. The Nash equilibrium is for both firms to pick low. C. The Nash equilibria are for PG to pick medium and JNJ to pick low and for PG to pick low and JNJ to pick medium. D. The Nash equilibrium is for both firms to pick high. E. This game has no Nash equilibria.
Answer:
B. The Nash equilibrium is for both firms to pick low
Explanation:
We can see the following responses from both players
If PG chooses High, JNJ will have the highest payoff when it selects Low
If PG chooses Medium, JNJ will have the highest payoff when it selects Low
If PG chooses Low, JNJ will have the highest payoff when it selects Low
Similarly,
If JNJ chooses High, PG will have the highest payoff when it selects Low
If JNJ chooses Medium, PG will have the highest payoff when it selects Low
If JNJ chooses Low, PG will have the highest payoff when it selects Low
Hence PG has a dominant strategy to pick Low. Similarly JNJ has a dominant strategy to pick Low as well.
Final answer:
In this game theory scenario involving Proctor & Gamble and Johnson & Johnson's advertising campaigns, the Nash equilibrium is when both firms choose a low level of advertising.
Explanation:
Nash equilibrium is a situation where each agent chooses a strategy maximizing their payoffs given others' strategies. In the context of Proctor & Gamble and Johnson & Johnson's advertising campaigns, the Nash equilibrium is when both firms pick a low level of advertising. While both firms have dominant strategies to pick low and high respectively, the optimal outcome is achieved when both go for a low advertising level.
Chip Conley, the founder of Joie de Vivre Hospitality, discusses that pay is not the most important factor for many of his employees. Many employees want to work hard and remain employed by the company due to the pleasure they get from doing their job, an idea called ________.
Answer:
Intrinsic Motivation
Explanation:
The right answer according to the given condition is Intrinsic motivation.
What is Intrinsic Motivation:
It is the type of an organizational idea that in an ideal organization employees are way more satisfied with the culture, environment and the work they do than the pay they get. Such type of idea is known as intrinsic motivation.
Hence, in this question, Chip Conley discusses about an idea called intrinsic motivation. Where intrinsic means internal rewards or encouragements that employees are getting due to which they are satisfied to work har irrespective of the pay they are getting.
Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,700 units for materials and 10,650 units for conversion costs. Beginning inventory consisted of $8,000 in materials and $8,800 in conversion costs. April costs were $30,000 for materials and $43,612 for conversion costs. Ending inventory still in process was 4,100 units (100% complete for materials, 50% for conversion). The cost per equivalent unit for conversion costs using the weighted average method would be:
Answer:
$4,92
Explanation:
Step 1 Calculate the Total Cost of conversion costs incurred during the process.
Total Cost of conversion costs
Cost of conversion in Beginning inventory $8,800
Add Cost of conversion for April $43,612
Total $52,412
Step 2 Calculate cost per equivalent unit for conversion costs
cost per equivalent unit = Total Cost of conversion / Total equivalent unit for conversion
= $52,412 / 10,650
= $4,92
Therefore, the cost per equivalent unit for conversion costs using the weighted average method would be $4,92.
What does it mean to characterize prices as sticky? that the aggregate price level tends to fluctuate wildly that prices do not change very easily that the aggregate price level is fixed that prices change frequently and there are few barriers to price movements that it is very difficult for policy makers to manipulate the aggregate price level
Answer:
that prices do not change very easily
Explanation:
In simple words,Price tightness or fixed prices or price resistance relates to a condition in which the value of a product does not instantly or readily adjust to the new business-clearing level as market forces of demand as well as supply curve changes.
The existence of price stickiness can be interpreted as an crucial part of macroeconomic analysis because it can clarify why short-term or even, probably, long-term markets do not achieve equilibrium.
Direct Materials Variances De Soto Inc. produces tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 770 tablets during July. However, due to LCD defects, the company actually used 800 LCD displays during July. Each display has a standard cost of $12.50. Eight hundred LCD displays were purchased for July production at a cost of $9,400. Determine the price variance, quantity variance, and total direct materials cost variance for July.
Answer:
The price variance for July is $600 favorable the quantity variance is $375 Unfavorable , and total direct materials cost variance is $225 favorable
Explanation:
In order to calculate the Direct material Price variance we would have to use the following formula:
Direct material Price variance = (Standard Price – Actual Price)*Actual quantity purchased
= (12.50-Actual cost)*800
= 12.50*800 – 9,400
= $600 favorable
In order to calculate the Direct material Quantity Variance we would have to use the following formula:
Direct material Quantity Variance = (Standard Quantity – Actual Quantity)*Standard Price
= (770-800)*12.50
= $375 Unfavorable
The Direct material cost variance = 600 – 375
= $225 favorable
Division P of Launch Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $65. Division Q of Launch Corporation currently buys 30,000 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $90 per wheel set. If Division Q were to buy the 30,000 wheel sets it needs annually from Division P at $87 per wheel set, the change in annual net operating income for the company as a whole, compared to what it is currently, would be:______
a. $600,000
b. $225,000
c. $750,000
d. $135,000
Answer:
b. $225,000
Explanation:
The computation of the change in annual net operating income is shown below:
First we need to do following calculations
Sales of Division P is
= Sale Units × Sales Price Per Unit
= 60,000 × $100
=$6,000,000
Variable Cost is
= Sale Units × Variable Cost Per Unit
= 60,000 × $65
= $3,900,000
Now Current Operating Income is
= Sales - Variable Cost
= $6,000,000 - $3,900,000
= $2,100,000
Operating Capacity of Division P is 75,000 Units
If Division Q buy 30,000 wheel sets annually from Division P at $87 than Operating Income of Division P:-
= 75,000 - 30,000
= 45,000 Units
Sales is
= 45,000 Units × $100 + 30,000 units × $87
= $45,00,000 + $26,10,000
= $71,10,000
Variable Cost is
= 75,000 Units × $65
= $48,75,000
Post Operating Income is
= Sales - Variable Cost
= $7,110,000 - $4,875,000
= $22,35,000
Increase in Operating Income of Division P is
= Post Operating Income - Current Operating Income
= $2,235,000 - $2,100,000
= $135,000
Increase in Operating Income of Division Q is
= Sale Units × (Outside Supplier Cost Per Unit - Division P Cost Per Unit)
= 30,000 Units × ($90 - $87)
= $90,000
If Q buy the Wheel From Division P. Q saves $3 per wheel set.
Increase in Operating Income of Company is
= Increase in Operating Income of Division P + Increase in Operating Income of Division Q
= $135,000 + $90,000
= $225,000
If a firm has a required rate of return equal to the ROE, Group of answer choices the firm can increase market price and P/E by increasing the growth rate. the firm can increase market price and P/E by retaining more earnings and increasing the growth rate. the amount of earnings retained by the firm does not affect market price or the P/E. None of the options are correct. the firm can increase market price and P/E by retaining more earnings.
Answer:
the amount of earnings retained by the firm does not affect market price or the P/E
Explanation:
A rate of return refers to the net gain or loss of an investment over a particular time period which is typically a year. It is expressed as a percentage of the investment's initial cost.
The rate of return is referred to as the annual return if the time period is typically a year.
If a firm has a required rate of return equal to the ROE, the amount of earnings retained by the firm does not affect market price or the P/E
In 2006, Jarrett Company purchased a tract of land as a possible future plant site. In January, 2014, valuable sulphur deposits were discovered on adjoining property and Jarrett Company immediately began explorations on its property. In December, 2014, after incurring $800,000 in exploration costs, which were accumulated in an expense account, Jarrett discovered sulphur deposits appraised at $4,500,000 more than the value of the land. To record the discovery of the deposits, Jarrett should ________.
Answer:
debit $800,000 to an asset account
Explanation:
To record the discovery of the deposits, Jarrett should debit $800,000 to an asset account because Jarrett Company purchased a tract of land as a possible future plant site which is an asset in which
In December, 2014, after incurring $800,000 in exploration costs, which were accumulated in an expense account, Jarrett discovered sulphur deposits appraised at $4,500,000 more than the value of the land which is why to record the discovery of the deposits, Jarrett should debit the $800,000 to an asset account.
Jarrett Company should capitalize the $800,000 exploration costs as part of the land's asset value on its balance sheet to accurately reflect the increased value due to the discovered sulfur deposits.
In 2006, the Jarrett Company purchased a tract of land for potential future use, which remained dormant until 2014 when neighboring lands discovered valuable sulfur deposits, prompting exploration on Jarrett's property. After incurring $800,000 in exploration costs by the end of 2014, the company unearthed sulfur deposits appraised at $4,500,000 more than the land's value. To correctly account for this discovery, Jarrett should capitalize the $800,000 exploration expenditure as part of the land's asset value on its balance sheet rather than treating it as an expense. This reclassification acknowledges the increased value of the land due to the discovered sulfur deposits, aligning with accounting practices that asset improvements or enhancements that significantly increase the asset's value should be capitalized.
Suppose your newspaper is trying to decide between two competing desktop publishing software packages, Macro Publish and Turbo Publish. You estimate that if you purchase x copies of Macro Publish and y copies of Turbo Publish, your company's daily productivity will be U(x, y) = 6x0.9y0.4 + x where U(x, y) is measured in pages per day (U is called a utility function). If x = y = 10, calculate the effect of increasing x by one unit. (Round your answers to two decimal places.) pages per day Interpret the result. This means that, if your company now has copies of Macro Publish and copies of Turbo Publish, then the purchase of one additional copy of Macro Publish will result in a productivity increase of approximately
Answer: 11.722
Explanation:
Two competing desktop publishing packages ; Macro publish and Turbo publish
If x and y copies of Macro publish and Turbo publish are purchased respectively ;
Daily Productitvity equals ;
U(x, y) = 6(x^0.9) (y^0.4) + x
where U(x, y) is measured in pages per day U is called a utility function
If x = y = 10
U(x, y) = 6(x^0.9) (y^0.4) + x
Therefore,
U(10,10) = 6(10^0.9) (10^0.4) + 10
U(10,10) = 119.716 + 10 = 129.716
The effect of increasing x by one unit results in
x = 11, y = 10
U(x, y) = 6(x^0.9) (y^0.4) + x
Therefore,
U(11,10) = 6(11^0.9) (10^0.4) + x
U(11,10) = 130.438 + 11 = 141.438
Productivity increase of approximately U(11,10) - U(10,10) = (141.438 - 129.716)
= 11.722 pages
Assume the U.S. dollar and the Mexican peso are traded in flexible currency markets. Which of the following would cause the U.S. dollar to depreciate relative to the Mexican peso? Higher price level in Mexico relative to the United States. Higher interest rates in the United States relative to Mexico. Higher incomes in Mexico relative to the United States. Increasing price level in the United States relative to Mexico. Decreasing price level in the United States relative to Mexico.
Answer:
Increasing price level in the United States relative to Mexico.
Explanation:
When the price level of a country increases, the goods it produces become more expensive to foreign consumers. This will decrease the demand for domestic goods from foreign buyers, which will result in a depreciation of the domestic currency against foreign currencies.
In this case, if the price level in the US increases, the US dollar will depreciate against the Mexican peso.
Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant rate of 7% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 13%. If Scampini has 45 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.Each share of common stock is worth $ , according to the corporate valuation model.
Answer:
$9.26 per stock
Explanation:
using the discounted cash flow model, the value of Scampini Technologies is:
company's value = free cash flow / (required rate of return - growth rate) = $25,000,000 / (13% - 7%) = $25,000,000 / 6% = $416,666,667
since the company does not have any debt, the price of each stock is:
stock price = total value of the company / total outstanding stocks = $416,666,667 / 45 million shares = $9.26 per stock
The company has a capital structure that consists of 50% debt and 50% common stock the company’s CFO has obtained the following information: The yield to maturity on the company’s bonds is 7% The coupon rate on the company’s bonds is 5% The next expected dividend is expected to be $7.00 The dividend is expected to grow at a constant rate of 5% per year The stock price is currently $75 per share The tax rate is 35% What is the WACC? brainly
Answer:
9.44%
Explanation:
Market price = Next dividend/(return on equity - growth rate)
Therefore, we have:
$75 = $7 / (Return on equity - 5%)
(Return on equity - 5%) * $75 = $7
(Return on equity * $75) - (75$ * 5%) = $7
(Return on equity * $75) - $3.75 = $7
(Return on equity * $75) = $7 + $3.75
Return on equity = $10.75 / $75 = 0.1433, or 14.33%
WACC = (50% * 14.33%) + [(50% * 7% * (100% - 35%)] = 9.44%
g Exhibit 31-3 Costs of Eliminating: Firm A Firm B Firm C 1st unit of pollution $ 20 $ 50 $ 500 2nd unit of pollution $ 60 $100 $ 700 3rd unit of pollution $120 $180 $1,000 4th unit of pollution $200 $350 $1,500 5th unit of pollution $300 $500 $2,500 6th unit of pollution $400 $600 $4,000 Refer to Exhibit 31-3. What is the cost to Firm A of eliminating 4 units of pollution
Answer:
$380
Explanation:
Firm A Firm B Firm C
1st unit of pollution $20 $50 $500
2nd unit of pollution $60 $100 $700
3rd unit of pollution $120 $180 $1,000
4th unit of pollution $200 $350 $1,500
5th unit of pollution $300 $500 $2,500
6th unit of pollution $400 $600 $4,000
Firm A's cost of eliminating four units of production = the sum of the costs of eliminating the four units = $20 (for the first unit) + $60 (for the second unit) + $120 (for the third unit) + $200 (for the fourth unit) = $380
This table does not show cumulative costs, instead it shows the marginal costs of eliminating an extra unit of pollution.
A company estimates that warranty expense will be 2% of sales. The company's sales for the current period are $176,000. The current period's entry to record the warranty expense is: Multiple Choice Debit Warranty Expense $3,520 credit Estimated Warranty Liability $3,520. Debit Estimated Warranty Liability $3,520 credit Cash $3,520. No entry is recorded until the items are returned for warranty repairs. Debit Warranty Expense $3,520 credit Sales $3,520.
Answer:
The answer is
Dr Warranty Expense $3,520
Cr Estimated Warranty Liability $3,520
Explanation:
Warranty expense is a contingent liability and it is defined as liabilities that may be incurred by a firm or business depending on the outcome of an uncertain future circumstance.
Current sales = $176,000
Warranty expense = $3,520(2% of $176,000).
The rule: Debit increases assets and expenses while credit reduces it.
Credit increases equity(stock), sales(revenue) and liabilities while debit reduces it.
Therefore the period entry is
Dr Warranty Expense $3,520
Cr Estimated Warranty Liability $3,520
The current period's entry to record the warranty expense is Debit Warranty Expense $3,520 credit Estimated Warranty Liability $3,520. This is due to the fact that the firm is recognizing the expense in accordance with the matching principle.
Explanation:In order to record the estimated warranty expense, the company should use the option: Debit Warranty Expense $3,520 credit Estimated Warranty Liability $3,520. This is due to the fact that the company is recognizing the expense at the time of the sale, in accordance to the matching principle of accounting.
Since the warranty expense is estimated at 2% of the sales and the company's total sales is $176,000, the total warranty expense would indeed be $3,520. Hence, to anticipate this potential future cost, the company would debit (increase) the Warranty Expense account and credit (increase) the Estimated Warranty Liability account by $3,520.
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Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $37,500. In addition, Jose incurred the following expenses before using the van: shipping costs of $850; paint to match the other fleet vehicles at a cost of $1,480; registration costs of $2,913, which included $2,700 of sales tax and a registration fee of $213; wash and detailing for $101; and an engine tune-up for $269.
What is Jose�s cost basis for the delivery van?
Answer:
$42,530
Explanation:
The computation of cost basis for the delivery van is shown below:-
Cost basis for the delivery van = Purchase price + Shipping cost + Paint + Sales tax
= $37,500 + $850 + $1,480 + $2,700
= $42,530
Here the shipping cost, paint, sales tax is business preparation cost. So, for computing the cost basis of delivery van we simply added the purchase price, shipping cost, paint and sales tax.
Your most senior employee is not willing to change how she does her job because she is satisfied with the current approach she uses. To get her to change, you need to focus on Lewin’s stage of planned change. Use your knowledge of organizational change to select the word or phrase that best describes the situation. The introduction of the new computer system isn’t going as planned, but you are doing all that you can to coordinate activities with the change agent to ensure that business is minimally affected. Coaching Transition management Change analysis
The word or phrase that best describes the situation in which your most senior employee is not willing to change how she does her job because she is satisfied with the current approach she uses is transition management. Transition management focuses on guiding individuals or organizations through the process of transitioning from the old ways of doing things to the new ways.
Explanation:The word or phrase that best describes the situation in which your most senior employee is not willing to change how she does her job because she is satisfied with the current approach she uses is transition management.
Transition management is a stage in Lewin’s planned change model that involves guiding individuals or organizations through the process of transitioning from the old ways of doing things to the new ways. It focuses on managing the emotional and psychological aspects of change to ensure a smooth and successful transition.
In this situation, the introduction of a new computer system is not going as planned, and your senior employee's resistance to change presents a challenge. To get her to change, you would need to apply transition management principles, such as communicating the benefits of the new system, addressing her concerns, providing training and support, and involving her in the change process.