Suppose that you are the manager of a production department that uses 1600 boxes of specific parts per year. The supplier quotes you a price of $8.50 per box for an order size of 499 boxes or less, a price of $8.00 per box for orders of 500 to 1499 boxes, and a price of $7.50 per box for an order of 1,500 or more boxes. You assign a holding cost of 25 percent of the price to this inventory. What order quantity would you use if the objective is to minimize total annual costs of holding, purchasing, and ordering? Assume ordering cost is $200/order.
Answer:
1,500 or more boxes
Explanation:
To calculate which order quantity would minimize total cost, we will support the calculation by using the formulae of Economic Order Quantity (EOQ).
EOQ = √2 x Demand x Ordering Cost / Holding Cost
Order Size 499 or less
EOQ = √2 x 1,600 x 200 / 8.5 x 25%
EOQ = √640,000 / 2.125
EOQ = √301,176
EOQ = 549
Total Cost = 1,600 / 549 x 200 + (549 / 4) x (8.5 x 25%) + 1,600 x 8.5
Total Cost = 583 + 292 + 13,600
Total Cost = $14,475
Order Size 500 to 1,499
EOQ = √2 x 1,600 x 200 / 8 x 25%
EOQ = √640,000 / 2
EOQ = √320,000
EOQ = 566
Total Cost = 1,600 / 500 x 200 + (500 / 2) x (8 x 25%) + 1,600 x 8
Total Cost = 640 + 500 + 12,800
Total Cost = $13,940
Order Size 1,500 or more
EOQ = √2 x 1,600 x 200 / 7.5 x 25%
EOQ = √640,000 / 1.875
EOQ = √341,333
EOQ = 584
Total Cost = 1,600 / 1500 x 200 + (1500 / 2) x (7.5 x 25%) + 1,600 x 7.5
Total Cost = 213 + 1,406 + 12,000
Total Cost = $13,619
Hence, the total cost is minimized at the order quantity of 1,500 or more.
On January 1, 2021, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2022. Construction expenditures for 2021, which were incurred evenly throughout the year, totaled $6,000,000. Marjlee had the following debt obligations which were outstanding during all of 2021: Construction loan, 10% $ 1,500,000 Long-term note, 9% 2,000,000 Long-term note, 6% 4,000,000 Required: Calculate the amount of interest capitalized in 2021 for the building using the specific interest method.
The interest capitalized for Marjlee Company in 2021 for the building is $150,000, computed by applying the construction loan's interest rate (10%) to the full loan amount ($1,500,000).
To calculate interest capitalized for Marjlee Company in 2021 under the specific interest method, we first need to apply the interest rates to the respective debt amounts that are directly related to the construction of the building. Since the construction loan is explicitly for the building, we use its full amount at the interest rate given. Other long-term notes may not be specific to the construction, and the question doesn’t specify that they are, so we will only consider the construction loan for this method.
The interest on the construction loan is calculated as:
Construction Loan Amount: $1,500,000
Interest Rate: 10%
Interest Expense: $1,500,000 x 10% = $150,000
This interest expense of $150,000 on the construction loan would be capitalized as part of the cost of the building.
Marshmallow Systems is a start-up equipment manufacturer, and its main product is a smartphone. The firm sells the smartphone at cost, that is, the price is exactly the actual cost of production. The firm's intention behind pricing the phone this way is to build its customer base. In the context of pricing models, the strategy used by Marshmallow Systems is the:________
Answer: Loss leader strategy
Explanation:
A loss leader is one of the type of pricing based strategy in which the various types of products and the services are offering at low price in the market for the purpose of attracting the new consumers or users.
The main objective of the loss leader strategy is that the brands and products are offers at below its actual market cost due to the competition level in the market and to attract the consumers towards their business.
According to the given question, the Marshmallow system is one of the start up manufacturing company and the main product business of this company is smartphone. So, on the basis of the given context of the pricing model the Marshmallow company is using the loss leader strategy for attract the users.
Therefore, Loss leader strategy is the correct answer.
Final answer:
Marshmallow Systems employs a penetration pricing strategy by selling its smartphone at the production cost to build its customer base, contrasting with markup or premium pricing strategies. This approach aims to quickly gain market share in a competitive environment, prioritizing customer acquisition over immediate profits.
Explanation:
The strategy used by Marshmallow Systems, where the firm sells its main product, a smartphone, at the actual cost of production to build its customer base, is known as penetration pricing. This pricing strategy is often employed to enter the market by setting low prices to attract customers and develop or expand the market presence. Unlike other pricing models that may involve markups or varying prices for different customers, Marshmallow Systems' approach aims to penetrate the competitive market quickly by making their product financially accessible, thereby gaining market share before possibly adjusting prices in the future to achieve profitability.
Such a strategy contrasts with markup pricing, where firms set prices higher than the marginal cost to make a profit, or premium pricing, used by companies that position their offerings as high-end products. Penetration pricing is particularly useful in markets with fierce competition and where consumer adoption is critical to a new company's success. By aligning the price with the production cost, Marshmallow Systems ensures the focus remains on customer acquisition over immediate profit generation, setting the stage for future financial strategies.
Nvidia Corporation, a global technology company located in Santa Clara, California, reported the following information in its 2017 financial statements ($ in millions): 2017 2016 Balance sheets Property, plant, and equipment (net) $ 521 $ 466 Income statement Net sales for 2017 $ 6,910 Required: 1. Calculate the company’s 2017 fixed-asset turnover ratio
Final answer:
The fixed-asset turnover ratio for Nvidia Corporation in 2017 is calculated by dividing its net sales of $6,910 million by the average net PP&E of $493.5 million, resulting in a ratio of approximately 14.01.
Explanation:
To calculate the fixed-asset turnover ratio for Nvidia Corporation in 2017, we divide the net sales by the average net value of property, plant, and equipment (PP&E) for the year. The formula for the fixed-asset turnover ratio is Net Sales / Average Net Fixed Assets. We can use the net values of PP&E for 2017 and 2016 to find the average.
First, we calculate the average net PP&E:
Average Net PP&E = (PP&E at the beginning of the year + PP&E at the end of the year) / 2 = ($466 + $521) / 2 = $493.5 million
Next, we use the formula to find the fixed-asset turnover ratio:
Fixed-Asset Turnover Ratio = Net Sales / Average Net PP&E = $6,910 million / $493.5 million ≈ 14.01
The fixed-asset turnover ratio for Nvidia Corporation in 2017 is approximately 14.01.
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,400 units): Direct materials $172,600 Direct labor 232,000 Variable factory overhead 266,700 Fixed factory overhead 90,000 $761,300 Operating expenses: Variable operating expenses $124,000 Fixed operating expenses 47,100 171,100 If 1,900 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is
Answer:
The amount of inventory that would be reported on the absorption costing balance sheet is $70,905
Explanation:
In order to Calculate the amount of inventory under absorption Costing to be reported on the balance sheet, we would have to use the following formula:
amount of inventory under absorption Costing = (Direct materials+Direct labor+Variable factory overhead+ Fixed factory overhead)/ (Production costs units)×units remain unsold
amount of inventory under absorption Costing =($761,300/20,400)×1,900
amount of inventory under absorption Costing = $70,905
The amount of inventory that would be reported on the absorption costing balance sheet is $70,905
McNeely entered into a contract with Wagner to pay $250,000 as a lump sum for all timber present in a given area that Wagner would remove for McNeely. The contract estimated that the volume in the area would be 780,000 board feet. Wagner also had provisions in the contract that made no warranties as to the amount of lumber and that he would keep whatever timber was not harvested if McNeely ended the contract before the harvesting was complete. The $250,000 was to be paid in three advances. McNeely paid two of the three advances but withheld the third payment and ended the contract because he said there was not enough timber. Wagner filed suit for the remaining one-third of the payment. McNeely said Wagner could not have the remaining one-third of the payment as well as the transfer; he had to choose between the two remedies. Is he correct
Final answer:
McNeely's assertion that Wagner must choose between remedies after a contractual breach is not automatically correct and depends on the contract and law. Contract terms and legal principles determine whether Wagner can claim both the unpaid payment and retain the timber, reflecting value-added steps from logger to construction.
Explanation:
The claim made by McNeely that Wagner must choose between the remaining one-third payment and taking ownership of the unharvested timber is not necessarily correct. This judgment would depend on the specific terms of the contract they entered and the applicable law governing such contracts. Typically, when a party breaches a contract, it can result in the other party being entitled to remedies that may include damages, specific performance, or restitution, among others.
The contract described appears to have a provision that allowed Wagner to keep any timber not harvested if the contract was terminated early by McNeely, which might suggest that Wagner could be entitled to the remaining third of the payment as well as retain the timber as a form of liquidated damages or agreed compensation for breach. However, if the contract terms are silent on the remedy of payment upon early termination by McNeely, a court's interpretation of the agreement and principles of contract law would determine Wagner's entitlement.
Value is added at each stage in the production and sale of timber, as reflected in the incremental price increases from the logger to the mill to the construction firm. Compensation for property use and the rights related to agreements for timber removal are crucial to understand in such a context.
Johnson Bakery agrees to supply Higgen’s Restaurant with all the bread that it requires for one year. When a shortage causes the price of wheat to rise sharply, Johnson can continue supplying bread only at a much higher price. The parties agree to modify the contract so that the buyer will pay a higher price. The change is
a. enforceable as long a the parties voluntarily agreed to the modification.
b. uneforceable due to the preexisting duty rule
c. unenforceable because Johnson is taking advantage of a shortage to boost profits
d. unenforceable because a valid contract already exists
Answer:
The correct answer to the following question will be "Option A".
Explanation:
It is indeed a legally enforceable arrangement among two or even more, individuals, where it would be usually made up through one party, can make a bid, as well as the other party signaling approval. The parties 'agreements describe there rights & obligations.The parties have agreed to amend the deal to make the seller charge a larger amount. The move is enforceable however soon as when the parties willingly consent to either the amendment.The other solutions have no relation with the specified scenario. So choice A is the right solution to that.
Final answer:
A voluntarily agreed upon modification of a contract due to an unforeseen increase in costs, like the one between Johnson Bakery and Higgen’s Restaurant, is generally enforceable. The agreement must be made in good faith and without coercion to align with the Uniform Commercial Code (UCC) governing commercial transactions.
Explanation:
When Johnson Bakery and Higgen’s Restaurant agree to modify their contract due to the unforeseen rise in the cost of wheat, this change is generally considered enforceable as long as the modification is made voluntarily by both parties. This is because both parties are entering into the new agreement freely, acknowledging the change in circumstances that affects the performance of the original contract. However, it's important to note that under the Uniform Commercial Code (UCC), which governs commercial transactions, a contract for the sale of goods can be modified without new consideration if the modification is made in good faith. This assumes that such modifications are not a result of coercion or unfair pressure.
Blue Packaging Company (BPC) expects to pay a dividend of $1.28 in exactly one year. BPC has recently invested in multiple wealth increasing projects and expects its operating cash flow to increase dramatically for a few years. BPC expects a dividend growth rate of 50% during years 2, 3, and 4. After that high growth period, a normal growth rate of 3.1% will occur. BPC shareholders require a 14.7% return. The value of BPC stock is closest to:
Answer:
$29.16
Explanation:
Present value (PV) of year 1 dividend = $1.28 / (1.147)^1 = $1.11595466434176
Year 2 dividend = $1.28 * 1.5 = $1.92
PV of year 2 dividend = $1.92 / (1.147)^2 = $1.4594001713275
Year 3 dividend = $1.92 * 1.5 = $2.88
PV of year 3 dividend = $2.88 / (1.147)^3 = $1.90854425195401
Year 4 dividend = $2.88 * 1.5 = $4.32
PV of year 4 dividend = $4.32 / (1.147)^4 = $2.49591663289539
Price at year 4 = (4.32 * 1.031) / (0.147 - 0.031) = $38.39586206896550
PV of price at year 4 = $38.39586206896550 / (1.147)^4 = $22.1835349009927
Current price = $1.11595466434176 + $1.4594001713275 + $1.90854425195401 + $2.49591663289539 + $22.1835349009927 = $29.16
To find the value of Blue Packaging Company (BPC) stock, we calculate the present value of dividends during a high growth phase at a 50% growth rate for three years and a normal growth rate of 3.1% thereafter, all discounted at a required rate of return of 14.7%.
The value of Blue Packaging Company (BPC) stock can be calculated using a dividend discount model (DDM), considering both a high growth phase and a normal growth phase. The high growth phase dividends are projected at a 50% growth rate for years 2, 3, and 4, and a normal growth rate of 3.1% thereafter. To calculate the present value of the stock, we must discount these expected dividends at the required rate of return of 14.7%.
We first calculate the dividends for the high growth period:
Next, we calculate the terminal value of dividends at the end of year 4 using the Gordon growth formula, which gives us the present value of all dividends expected to grow at the normal rate indefinitely from year 5 onwards:
Terminal Value at end of Year 4 = Dividend at Year 5 / (Required Rate of Return - Normal Growth Rate)Terminal Value at end of Year 4 = $4.32 * (1 + 0.031) / (0.147 - 0.031) = $35.32Now, we discount all dividends (years 1-4) and terminal value back to the present value using the required rate of return:
PV of Year 1 Dividend = $1.28 / (1 + 0.147)PV of Year 2 Dividend = $1.92 / (1 + 0.147)^2PV of Year 3 Dividend = $2.88 / (1 + 0.147)^3PV of Year 4 Dividend including Terminal Value = ($4.32 + $35.32) / (1 + 0.147)^4Finally, we sum these present values to get the estimated stock value:
Stock Value = PV of Year 1 Dividend + PV of Year 2 Dividend + PV of Year 3 Dividend + PV of Year 4 Dividend including Terminal ValuePerforming these calculations, we determine the closest value of BPC stock.
Company had 50,000 shares of common stock outstanding on January 1, 2021. On April 1, 2021, the company issued 20,000 shares of common stock. The company had outstanding fully vested incentive stock options for 5,000 shares exercisable at $10 that had not been exercised by its executives. The average market price of common stock was $12. The company reported net income in the amount of $269,915 for 2021. What is the basic earnings per share (rounded)?
Answer:
$4.15
Explanation:
Net income $269,915
Shares of common stock outstanding 50,000
Shares of common stock 20,000
Hence:
$269,915/(50,000 + (20,000 × 9/12)
=$269,915/50,000+15,000
=$269,915/65,000
= $4.15
Therefore the basic earnings per share (rounded) is $4.15
Which of these is NOT an example of price discrimination?
a. college book publishers giving a price discount to faculty airlines
b. charging less for people who stay over on a Saturday night colleges
c. giving some students more financial aid than they do other students
d. gas stations charging more for gasoline with higher octane and additional additives
Answer:
Giving some students more financial aid than they do other students.
Explanation:
Price discrimination can be defined as a pricing strategy whereby customers are charged different price for a similar good or service. In price discrimination, a certain group of customers may be asked to pay a high amount of money while another group will pay a lesser amount.
Price discrimination makes it possible for low income customers to purchase goods at a cheaper price, this is usually achieved from the collection of coupons.
Price discrimination also lowers congestion in the market as it helps to control the demand of a product.
Listed below are year-end account balances ($ in millions) taken from the records of Symphony Stores. Debit Credit Accounts receivable-trade 709 Building and equipment 923 Cash-checking 41 Interest receivable 43 Inventory 20 Land 150 Notes receivable (long-term) 495 Petty cash funds 9 Prepaid rent 35 Supplies 8 Trademark 55 Accounts payable-trade 633 Accumulated depreciation 71 Additional paid-in capital 483 Allowance for uncollectible accounts 15 Cash dividends payable 28 Common stock, at par 12 Income tax payable 62 Notes payable (long-term) 876 Retained earnings 282 Deferred revenues 26 TOTALS 2,488 2,488 What is the amount of working capital for Symphony
Answer:
$101
Explanation:
The computation of the working capital is shown below:
As we know that
Working capital = Current assets - current liabilities
where,
Current assets = Account receivable + checking cash + interest receivable + inventory + petty cash funds + prepaid expense + supplies
= $709 + $41 + $43 + $20 + $9 + $35 + $8
= $865
And, the current liabilities is
= Account payable of trade + Allowance for uncollectible accounts + cash dividend payable + income tax payable + deferred revenues
= $633 + $15 + $28 + $62 + $26
= $764
So, the working capital is
= $865 - $764
= $101
Final answer:
The working capital for Symphony Stores is calculated by subtracting the total current liabilities ($749 million) from the total current assets ($865 million), resulting in a working capital of $116 million.
Explanation:
To calculate the working capital for Symphony Stores, we need to consider the company's current assets and current liabilities. Working capital is defined as the difference between current assets and current liabilities, and it represents the short-term liquidity and operational efficiency of a business.
According to the provided balance sheet, the current assets of Symphony Stores can be calculated by adding together Cash-checking ($41 million), Accounts receivable-trade ($709 million), Interest receivable ($43 million), Inventory ($20 million), Petty cash funds ($9 million), Prepaid rent ($35 million), and Supplies ($8 million). This results in total current assets of $865 million.
The current liabilities can be summed up by adding Accounts payable-trade ($633 million), Cash dividends payable ($28 million), Income tax payable ($62 million), and Deferred revenues ($26 million), yielding total current liabilities of $749 million.
To find the working capital, subtract the total current liabilities from total current assets: $865 million - $749 million = $116 million working capital.
The Atlantic City Expressway is a highway that runs from outside Philadelphia to Atlantic City, New Jersey. It is notoriously congested during the summer weekends when many people are driving to the beach about the same time. Because drivers who decide to take this road ignore the impact of their driving on overall traffic congestion the result is ________ cars on the road than the efficient number of cars and a deadweight loss is ________.
Answer:
more, created
Explanation:
In simple words, A negative externalize or dead weight loss relates to the expense to economy that is caused by market mismanagement, when market forces go out of balance. Primarily utilized in economics, the loss of dead weight may be extended to any deficit induced by inadequate prioritization
In the given case, the cars on the road are more than the handling capacity thus, it will obviously result in dead weight loss. .
The Atlantic City Expressway experiences a negative externality during peak travel times as more cars on the road than the efficient number lead to increased traffic congestion and a deadweight loss.
Explanation:The scenario described with the Atlantic City Expressway during summer weekends is an example of a market inefficiency known as a negative externality. When individual drivers choose to drive to the beach, they ignore the impact of their driving on the overall traffic congestion.
This behavior typically results in more cars on the road than would be considered efficient, as each driver does not account for the congestion they add to the road. Consequently, there is a deadweight loss, which is an indication of inefficient resource allocation, leading to a loss of societal welfare.
Such negative externalities can occur when the interstate highway system fails to account for the social costs of congestion, thus leading to overuse and traffic jams. While toll roads aim to offset the cost of the construction and maintenance of roads, they may not always be efficient due to the high cost of collection and the resulting stop-and-go traffic, which itself can contribute to congestion.
As cities and suburbs grow and more people rely on cars, the federal interstate system faces increased pressure. Policies to manage traffic and to fund infrastructure may not always keep up with this growth, exacerbating the issues of congestion, as seen in busy regions such as Washington, D.C., or the urban centers of India. The inefficiencies described lead to higher levels of pollutants, fuel consumption, commutes, and overall societal costs.
-g LotsofDebt, Inc. and Lots of Equity, Inc., both of which operate in the same industry. LotsofDebt, Inc. finances its $34.75 million in assets with $31.25 million in debt and $3.50 million in equity. Lots of Equity, Inc. finances its $34.75 million in assets with $3.50 million in debt and $31.25 million in equity. Calculate the debt ratio,-g You are considering a stock investment in one of two firms (LotsofDebt, Inc. and Lots of Equity, Inc.), both of which operate in the same industry. LotsofDebt, Inc. finances its $34.75 million in assets with $31.25 million in debt and $3.50 million in equity. Lots of Equity, Inc. finances its $34.75 million in assets with $3.50 million in debt and $31.25 million in equity. Calculate the debt ratio
Answer:
Lots of debt = 89.93%
Lots of equity = 10.07%
Explanation:
The calculation of debt ratio of Lots of debt and Lots of equity is given below:-
Debt Ratio = Debt ÷ Total assets
Lots of debt = Debt ÷ Total Assets
= $31.25 million ÷ $34.75 million
= 89.93%
Lots of equity = Equity ÷ Assets
= $3.50 million ÷ $34.75 million
=10.07%
Therefore for computing the debt ratio of Lots of debt and Lots of equity we simply applied the above formula.
Pel Museum, a not-for-profit organization, received a contribution of historical artifacts, it need not recognize the contribution if the artifacts are to be sold and the proceeds used to ___________.
Group of answer choices:
O Acquire other items for collections.
O Support general museum activities.
O Repair existing collections.
O Purchase buildings to house collections.
Answer:
Acquire other items for collection.
Explanation:
A museum is a building where historical and scientific artifacts are kept. A museum is very important for the preservation of our cultural heritage.
The Pel museum which is a non-profit organisation does not need to make public any form of contribution that is made to an artifact. The amount of money gotten from the sale of these artifacts should be used to acquire other items for collection.
In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $186,000 of the fixed manufacturing expenses and $106,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
Answer:
-$173,000
Explanation:
The computation of the financial advantage or disadvantage is shown below:
But before that first we have to find the net operating income
Sales $830,000
Less:Variable expenses -$365,000
Contribution margin $465,000
Less:Fixed manufacturing expenses -$291,000 477
Less:Fixed selling and administrative expenses -$166,000 272
Net operating income $8,000
Now
Fixed manufacturing expense unavoidable is
= $291,000 - $186,000
= $105,000
And,
Fixed selling and administrative expense unavoidable is
= $166,000 - $106,000
= $60,000
Total expenses unavoidable=$266000
Hence financial disadvantage is
= -$105,000 -$60,000 -$8,000
= -$173,000
Final answer:
The financial advantage or disadvantage for the company of eliminating product L07E can be calculated by subtracting the avoidable fixed expenses from the company's total fixed expenses.
Explanation:
The financial advantage or disadvantage for the company of eliminating product L07E can be calculated by subtracting the avoidable fixed expenses from the company's total fixed expenses. The avoidable fixed expenses for manufacturing are $186,000 and for selling and administrative are $106,000. Therefore, the financial advantage (disadvantage) of eliminating product L07E would be:
Total fixed expenses - Avoidable fixed expenses
$186,000 (manufacturing) + $106,000 (selling and administrative)
= $292,000
So, the company would have a financial advantage of $292,000 if product L07E is discontinued for the upcoming year.
Morgan would like to purchase a bond that has a par value of $1,000, pays $80 at the end of each year in coupon payments, and has 10 years remaining until maturity. If the prevailing annualized yield on other bonds with similar characteristics is 6 percent, how much will Morgan pay for the bond
Answer:
Price of Bond = $1,147.201
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond for Morgan can be worked out as follows:
Step 1
PV of interest payments
PV of interest =
A × (1+r)^(-n)/r
A- interest payment- 80, r-yield on bond- 6%, n-years to maturity- 10
80 × (1- (1.06)^(-10)
= 588.8069
Step 2
PV of Redemption Value
= 1,000 × (1.06)^(-10)
= 558.3947769
Price of bond
= 588.80 + 558.394
Price of Bond = $1,147.201
g In the discussion case, Ikea's Sustainable Cotton Supply Chain, which statement accurately describes IKEA's supply chain? a. The long and complex chain involved farming, ginning, spinning, weaving, and stitching. b. The supply chain was long but all steps flowed easily across only a few locations. c. The company's supply chain was self-contained with IKEA owning all steps in the process. d. Nearly 100 percent of IKEA's cotton was sourced from just two countries, India and China.
Final answer:
Option A.) IKEA's supply chain for cotton is long and complex, involving multiple stages such as farming, ginning, spinning, weaving, and stitching, and it is not limited to two countries or a self-contained process.
Explanation:
The statement that accurately describes IKEA's supply chain is a. The long and complex chain involved farming, ginning, spinning, weaving, and stitching. IKEA's supply chain for cotton is not self-contained, and their cotton sourcing is not limited to just two countries. Rather, the supply chain includes multiple steps such as the extraction of raw materials (farming), the acquisition of components, and the production stages, including ginning, spinning, weaving, and stitching. These stages require coordination and occur across different locations, which makes the supply chain lengthy and complex. The complexity of this supply chain reflects the common pattern observed in the global economy, where specialization and the splitting up of the value chain allow various firms to focus on particular parts of the production process.
_______________________________ can set the stage for international financial investors first to send their funds to a country and cause an appreciation of its exchange rate and then to pull their funds out and cause a depreciation of the exchange rate and a financial crisis as well.
Answer:
Trade balance
Explanation:
A positive trade balance will result in currency appreciation because more goods are exported than imported, which means that there is a net inflow of the home country's currency, increasing its value against foreign currency.
This can lead first to more foreign direct investment because a trade balance is a sign of a strong economy, however, in the long run there can be a radical change in the business cycle: the appreciated currency will make the home country's goods more expensive, reducing the demand for them abroad, in turn decreasing exports, turning the trade balance into negative numbers, and causing a net ouflow of foreign direct invesment due to the weaker economy, and the capital losses because of the currency depreciation.
Which of the following statements is not correct? a. Monopolistic competition is similar to monopoly because in each market structure the firm can charge a price above marginal costs. b. Monopolistic competition is similar to perfect competition because both market structures are characterized by free entry. c. Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry.
Answer:
c. Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry.
Explanation:
reader beware your answer is right there.
The incorrect statement is that Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry. In reality, Monopolistic competition is characterized by free entry and exit in the long run, unlike an oligopoly which usually has significant barriers to entry.
Explanation:The statement that is not correct is c. Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry. Monopolistic competition and oligopoly differ in terms of entry barriers. Monopolistic competition is characterized by free entry and exit in the long run, resembling perfect competition in this aspect. In contrast, an oligopoly structure denotes a market dominated by a few large producers, and it usually presents considerable barriers to entry, restricting the entry of new firms.
Learn more about Market Structures here:https://brainly.com/question/30280211
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Regulatory focus theory suggests that ____.consumers will react differently depending on which broad set of motives is most inconspicuouswhen prevention-focused motives are less salient, consumers seek to avoid negative outcomeswhen promotion-focused motives are less salient, consumers seek to gain positive outcomesconsumers will react differently depending on which broad set of motives is most salientwhen promotion-focused motives are most salient, consumers are less eager and less risk-seeking decision makers
Answer:
The correct answer is consumers will react differently depending on which broad set of motives is most salient.
Explanation:
All of us as consumers always try to implement different strategies when obtaining a product.
This has an impact on the reasons why people react to a stimulus and make decisions when choosing a product.
Consumers can react in various ways, positively or negatively. Regulatory focus theory suggests that consumers will react differently depending on which broad set of motives is most salient.
That is to say that the decision of a consumer when choosing a product will be positively influenced if the reasons are more prominent, since they will appeal to their emotions and their decision will be made quickly and accurately.
If your organization performs nonroutine tasks in a complex environment and you wanted to empower the managers closest to the environment to make decisions and quickly implement them, which type of organizational structure would you likely choose? Subordinates’ need for direction and supervision most influences which aspect of organizational structure? If your firm’s environment is stable, what type of structure would you likely choose?
To empower managers in a complex environment, a flat organizational structure with decentralized decision-making is preferred. Subordinate needs for direction influence whether a Theory X hierarchical or Theory Y flat structure is used. In stable environments, bureaucratic or hierarchical structures are typically chosen.
Explanation:If an organization performs nonroutine tasks in a complex environment and wishes to empower managers to make decisions quickly and implement them, a flat organizational structure would likely be chosen. Flat structures are characterized by fewer hierarchical levels, a broader span of control, and typically encourage decentralized decision-making which is essential for managers to respond with agility to the complexities of their environment. This approach aligns with the contemporary trend of breaking down traditional hierarchies in favor of promoting teamwork and collegial relationships within the workplace.
When subordinates' need for direction and supervision significantly influences an aspect of organizational structure, it is a reflection of whether an organization should be more aligned with Theory X, which suggests a more hierarchical, directive approach, or Theory Y, which supports employee autonomy within a flat structure. The relationship between leadership and subordinates varies with individual autonomy; those requiring more structure benefit from a well-defined work environment, while autonomous employees thrive under leaders who offer flexibility and empowerment.
For firms operating in a stable environment, a more traditional and structured organizational format, such as a bureaucratic or hierarchical structure, may be suitable. Such structures tend to have clear, defined roles and responsibilities, with established procedures that lend themselves to stability and consistency in operations.
Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, Waterways then uses different methods to determine the best decisions for making capital outlays. This year Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes. The following information is available to use in deciding whether to purchase the new backhoes.
Old Backhoes New Backhoes
Purchase cost when new $90,000 $202,784
Salvage value now $41,600
Investment in major overhaul needed in next year $55,510
Salvage value in 8 years $15,000 $90,000
Remaining life 8 years 8 years
Net cash flow generated each year $30,500 $43,800
(a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.)
(1) Using the net present value method for buying new or keeping the old
(2) Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.)
(3) Comparing the profitability index for each choice.
(4) Calculate the internal rate of return factor for the new and old blackhoes.
(5) Comparing the internal rate of return for each choice to the required 8% discount rate.
Answer:
Explanation:
Step 1
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2
Compute the net present value to make decision for buying the new Backhoes or keeping the old
Net Present Value Method
AM Express Inc. is considering the purchase of an additional delivery vehicle for $55,000 on January 1, 2014. The truck is expected to have a five-year life with an expected residual value of $15,000 at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be $58,000 per year for each of the next five years. A driver will cost $42,000 in 2014, with an expected annual salary increase of $1,000 for each year thereafter. The annual operating costs for the truck are estimated to be $3,000 per year.
Present Value of $1 at Compound Interest
Year 6% 10% 12% 15% 20%
1 0.943 0.909 0.893 0.870 0.833
2 0.890 0.826 0.797 0.756 0.694
3 0.840 0.751 0.712 0.658 0.579
4 0.792 0.683 0.636 0.572 0.482
5 0.747 0.621 0.567 0.497 0.402
6 0.705 0.564 0.507 0.432 0.335
7 0.665 0.513 0.452 0.376 0.279
8 0.627 0.467 0.404 0.327 0.233
9 0.592 0.424 0.361 0.284 0.194
10 0.558 0.386 0.322 0.247 0.162
Determine the expected annual net cash flows from the delivery truck investment for 2014.
revenue. 58000
less Driver cost. (42000)
less annual salary. ( 1000)
less annual cost. (3000)
earning before deprecation. 12000
less deprecation 55000 - 15000/5 = (8000)
earnings after depreciation. 4000
since there is no taxation you can go on and calculate net present value by using this formular
NPV = PVCIF - PVCOF
A lumber mill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: Grade Production Market Price Structural 25,000 board feet 1,350/1,000 bd. ft. No. 1 Common 75,000 board feet 750/1,000 bd. ft. No. 2 Common 100,000 board feet 300/1,000 bd. ft. Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common if the value basis is used.
Answer:
The multiple choices:
$35,000.
$23,333.
$70,000.
$17,500.
$0.
The fourth option,$17,500 allocated cost is the correct answer.
Explanation:
The joint cost of $70,000 can be apportioned between the logs of different grades using the sales price of each log as highlighted below:
The sales value of each =board feet*bd. ft
Structural market price =25,000*1350/1000=$33,750
No 1 common market price=75,000*750/1000=$56,250
No 2 common market price=100,000*300/1000=$30,000
Total market price $120,000
The joint cost allocated to No.2 common =market price of no.2 common /total market value*joint cost
the joint cost allocated to no.2=$30,000/$120,000*$70,000=$17,500
Novamalt Inc., a manufacturer of health drinks, plans to introduce its new range of woman health drinks into the market. It involves a specialized marketing research firm to forecast the sales of this product. The research firm analyzes past buying behavior of customers and uses time-series analysis for making the sales forecasts. Which of the following information bases is being used by the research firm in this scenario?A) what people sayB) what people doC) what people have doneD) what people will do
E) what people speculate
Answer:
The correct answer is the option C: what people have done.
Explanation:
To begin with, in order to accomplish that type of analyzes the researcher will need to carefully investigate about what the people have done in the past regarding the subject of interest such as, purchase behavior and post purchase behavior as well. Therefore that, in that order, the most important information to gather is the one that clarifies what the people have done in the past so in that way the researcher will be able to understand them better.
Final answer:
The research firm is using information based on what people have done (past buying behavior) to forecast sales of a new health drink for women through time-series analysis.
Explanation:
In the context of Novamalt Inc. enlisting a specialized marketing research firm to forecast the sales of its new range of woman health drinks, the marketing firm is utilizing past buying behavior of customers to make sales forecasts through time-series analysis. Thus, the correct answer to which information base is being used by the research firm in this scenario is C) what people have done. By analyzing historical data, the firm is able to project future sales trends, drawing on the assumption that past consumer behavior can be an indicator of future decisions in similar contexts.
Market research is integral to understanding and predicting consumer behavior, which is why companies often rely on time-series analysis and other statistical methods. These methods allow businesses to be better prepared for future scenarios and supports the overall strategic planning process.
Which of the following statements is true regarding the attraction-selection-attrition (ASA) process? The ASA process aids organizations in maintaining the relative heterogeneity of employee personalities and values. Individuals self-select the companies for which they choose to work. Due to economic circumstances, companies today hire people for fit with the job only and are much less concerned about fit with the culture. New organization members are rarely taught the "way of business" in the firm; they simply acquire that knowledge through daily activities. Person-organization misfit has only a minor impact on employee turnover.
Answer:
Individuals self-select the companies for which they choose to work.
Explanation:
In simple words, Benjamin Schneider developed the attractiveness-selection-attrition (ASA) paradigm as a behavioral testable theory that depicts why companies look and behave the manner they do. People are drawn by, chosen and maintained in psychological qualities in organisations whose participants are identical to oneself.
The statement that is true about the attraction-selection-attrition is The ASA process aids organizations in maintaining the relative heterogeneity of employee personalities and values.
The attraction-selection-attrition is a model that was created by Benjamin Schneider. The model is a theory of psychology that explains the reasons why firms are the way and feel the way that they are.
This framework is used to understand the behavior of organizations. In this theory, the organization is said to be due to the people that are there and the founders and top employees.
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On December 31, 2020, Kingbird Company had $1,216,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 25,500 shares of its common stock for $42 per share, receiving $1,071,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $145,000 cash, are used to liquidate the $1,216,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021. Show how the $1,216,000 of short-term debt should be presented on the December 31, 2020, balance sheet. (Enter account name only and do not provide descriptive information.)
Answer and Explanation:
The presentation of short term debt is presented below:
Kingbird Company
Partial Balance sheet
December 31, 2020
Particulars Amount ($)
Current Liabilities :
Notes Payable $145,000
Long term Debt :
Notes Payable 1,216,000
Notes Payable is come from is
= $1,216,000 - $1,071,000
= $145,000
The company's total notes payable is $1,216,000, out of which $1,071,000 are shown as a issue of common stock and $145,000 are liquidate using cash.
On January 2, 2018, the Matthews Band acquires sound equipment for concert performances at a cost of $66,400. The band estimates it will use this equipment for four years, during which time it anticipates performing about 200 concerts. It estimates that after four years it can sell the equipment for $1,000. During year 2018, the band performs 45 concerts.
Compute the year 2018 depreciation using the units-of-production method.
Answer:
14,715
Explanation:
The computation of depreciation using the units-of-production method is shown below:-
Depreciation per concert = (Original cost - Salvage value) ÷ Estimated total concerts
= $66,400 - $1,000) ÷ 200
= $65,400 ÷ 200
= 327
Depreciation in 2018 = Concerts in 2018 × Depreciation per concert
= 45 × 327
= 14,715
Palante actually produced 8,000 units. The controller decided to compare their actual results to their budget. The following budget information is available: Expected Costs and Selling Price Based on 5,000 units: Variable manufacturing costs per unit $50 Fixed manufacturing costs per unit $20 Selling price per unit $80 Expected production level 5,000 units In the flexible budget, what is the total manufacturing cost? Group of answer choices $560,000 $80,000 $400,000 $500,000 $350,000
Answer:
$500,000
Explanation:
The computation of total manufacturing cost is shown below:-
Flexible Budget Manufacturing Cost = Variable cost of Manufacturing at actual units + Estimated Fixed Manufacturing Costs at the budgeted Units
= (8,000 Units × $50 per unit) + (5,000 Units × $20 per unit)
= 400,000 + 100,000
= $500,000
So, for computing the Flexible Budget Manufacturing Cost we simply applied the above formula.
Cullumber Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers.
During the month of June, the following merchandising transactions occurred.
June 1 Purchased books on account for $2,160 (including freight) from Catlin
Publishers, terms 2/10, n/30.
3 Sold books on account to Garfunkel Bookstore for $1,000. The cost of
the merchandise sold was $800.
6 Received $60 credit for books returned to Catlin Publishers.
9 Paid Catlin Publishers in full.
15 Received payment in full from Garfunkel Bookstore.
17 Sold books on account to Bell Tower for $1,700. The cost of the
merchandise sold was $950.
20 Purchased books on account for $900 from Priceless Book Publishers,
terms 3/15, n/30.
24 Received payment in full from Bell Tower.
26 Paid Priceless Book Publishers in full.
28 Sold books on account to General Bookstore for $1,950. The cost of the
merchandise sold was $980.
30 Granted General Bookstore $140 credit for books returned costing $50.
Required:
Journalize the transactions for the month of June for Cullumber Warehouse, using a perpetual inventory system. (If no entry is required, write "No Entry" for the account titles and enter 0 for the amounts. )
Answer and Explanation:
The journal entries are shown below:
On Jun 1
Merchandise Inventory $2,160
To accounts payable $2,160
(Being the purchased books on account is recorded)
On Jun 3
Accounts receivable $1,000
To sales revenue $1,000
(Being the credit sales is recorded)
Cost of goods sold $800
To Merchandise Inventory $800
(Being the cost of merchandise sold is recorded)
On Jun 6
Accounts payable $60
To Merchandise Inventory $60
(Being books returned is recorded)
On Jun 9
Accounts payable $2,100 ($2,160 - $60)
To Merchandise Inventory ($2,100 × 2%) $42
To cash $2,058
(Being payment fully paid at discount)
On Jun 15
Cash $1,000
To accounts receivable $1,000
(Being received payment is recorded)
On Jun 17
Accounts receivable $1,700
To sales revenue $1,700
(Being the credit sales is recorded )
Cost of goods sold $950
To Merchandise Inventory $950
(Being the cost of merchandise sold is recorded)
On Jun 20
Merchandise Inventory $900
To accounts payable $900
(Being the purchases made on account is recorded)
On Jun 24
Cash $1,666
Sales Discounts ($1,700 × 2%) $34
To Accounts receivable $1,700
(Being the payment received fully at discount is recorded)
On Jun 26
Accounts payable $900
To Merchandise Inventory ($900 × 3%) $27
To cash $873
(Being the payment is recorded)
On Jun 28
Accounts receivable $1,950
To sales revenue $1,950
(Being the credit sales is recorded)
Cost of goods sold $980
To Merchandise Inventory $980
(Being the cost of merchandise sold is recorded)
On Jun 30
Sales returns and allowances $140
To accounts receivable $ 140
(Being the sales returns is recorded)
Merchandise Inventory $50
To cost of goods sold $50
(Being the cost of merchandise returned is recorded)
Detailed journal entries for Cullumber Warehouse's transactions in June using a perpetual inventory system.
Journal Entries for Cullumber Warehouse for June:
Purchased books on account:Debit Purchases $2,160Credit Accounts Payable $2,160Sold books on account:Debit Accounts Receivable $1,000Credit Sales $1,000Debit Cost of Goods Sold $800Credit Inventory $800Received credit for returned books:Debit Accounts Payable $60Credit Inventory $60Paid Catlin Publishers:Debit Accounts Payable $2,100Credit Cash $2,100Received payment from Garfunkel Bookstore:Debit Cash $1,000Credit Accounts Receivable $1,000Sold books on account to Bell Tower:Debit Accounts Receivable $1,700Credit Sales $1,700Debit Cost of Goods Sold $950Credit Inventory $950Purchased books on account from Priceless Book Publishers:Debit Purchases $900Credit Accounts Payable $900Received payment from Bell Tower:Debit Cash $1,700Credit Accounts Receivable $1,700Paid Priceless Book Publishers:Debit Accounts Payable $900Credit Cash $900Sold books on account to General Bookstore:Debit Accounts Receivable $1,950Credit Sales $1,950Debit Cost of Goods Sold $980Credit Inventory $980Granted credit for returned books to General Bookstore:Debit Sales Returns and Allowances $140Credit Accounts Receivable $140Debit Inventory $50Credit Cost of Goods Sold $50