Answer:
See explanation.
Explanation:
Implicit costs are the opportunity costs or costs of doing the next best alternative where as explicit costs are the direct accounting costs associated with an activity.
The rental income Darnell could receive if he chose to rent out his showroom is the implicit cost as this is an alternative he can chose against piano business.
The wages and utility bills that Darnell pays are the explicit costs as they are direct accounting costs of running the piano business.
The salary Darnell could earn if he worked as a financial adviser is the implicit cost as this is again the cost of an alternative.
The wholesale cost for the pianos that Darnell pays the manufacturer is the direct cost of goods sold and as such an explicit cost.
Accounting Profit = Revenue - Explicit costs
Accounting Profit = 723,000 - 423,000 - 267,000 = $33,000
Economic Profit = Revenue - Explicit Costs - Implicit Costs
Economic Profits = 723,000-423,000-267,000-2000-20,000 = $11,000
The economic profit earned from working as a financial adviser
Eco Profit as an adviser = 20000 + 2,000 - 33,000 = $ - 11,000
Since the Economic profit from working as an adviser is negative and less than that of selling pianos, it is profitable to stay in the piano business.
Hope that helps.
To achieve the social optimum, the government could set a tax equal to ________ per unit sold.
To achieve the social optimum, the government could set a tax equal to $6 per unit sold.
Explanation:
The social optimum seems to be the distribution chosen by a good social planner who is limited by resources allocation only. In particular, the social optimum can not be achieved if there are limitations on the social planner's policy tools.
Proponents of significant increases or cuts in the United States marginal tax rates have long provided statistical evidence of the existence of their proposals.
The elasticity of earned income figures was actually a relatively new description of behavioral reactions to marginal taxes that have historically been studied.
Assume real per capita GDP in West Swimsuit is $10,000 while in East Quippanova it is $2,500. The annual growth rate in West Swimsuit is 2.33%, while in East Quippanova it is 7%. How many years will it take for East Quippanova to catch up to the real per capita GDP of West Swimsuit? Choose one:
A. about 10 years
B. about 30 years
C. about 40 years
D. about 120 years
E. East Quippanova will never be able to catch up with West Swimsuit
Answer:
correct option is B. about 30 years
Explanation:
given data
real per capita GDP west = $10,000
annual growth rate = 2.33%
real per capita GDP east = $2,500
annual growth rate = 7%
to find out
How many years will it take for East to catch up GDP of West
solution
we know here that future value is equal to real GDP of west after time will be
future value = real per capita GDP west × [tex]rate^{t}[/tex]
future value = 10000 × [tex](1+0.0233)^{t}[/tex] .....1
and
future value = real per capita GDP east × [tex]rate^{t}[/tex]
future value = 2500 × [tex](1+0.07)^{t}[/tex] .....2
compare equation 1 and 2
10000 × [tex](1+0.0233)^{t}[/tex] = 2500 × [tex](1+0.07)^{t}[/tex]
4 [tex](1.0233)^{t}[/tex] = [tex](1.07)^{t}[/tex]
t = about 30 years
so correct option is B. about 30 years
It will take approximately 30 years for the real per capita GDP of East Quippanova to match that of West Swimsuit. The calculation was made using the formula for compound growth and by comprehending annual percentage growth rates for each nation.
Explanation:This problem involves computing compound growth over time, specifically in the matter of real per capita GDP (Gross Domestic Product). It's a common kind of calculation in economics. The formula we use to solve it is based on the law of exponential growth.
East Quippanova’s per capita GDP (E) is growing at a faster rate than that of West Swimsuit (W). So, in terms of the formula, we state that the GDP of East Quippanova will equal West Swimsuit's when E(1+ 0.07)^t = W(1+ 0.0233)^t. By substituting the given GDP per capita values in those formulas, we get 2,500(1+ 0.07)^t = 10,000(1+ 0.0233)^t.
Now, dividing both sides by 2,500, we have (1+ 0.07)^t = 4 (1 + 0.0233)^t. To isolate 't', we can take the natural logarithms of both sides and use the properties of logarithms to derive the final equation: t = ln(4) / (ln(1.07) - ln(1.0233)). Solving this equation we find that t is approximately equal to 30 years. Therefore, it will take roughly 30 years for East Quippanova to match the real per capita GDP of West Swimsuit.
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Suppose a Lexus LS400 and a Mercedes C300 are considered to be of equivalent value. The Lexus sells for 6,000,000 Japanese yen in Tokyo and the Mercedes sells for 50,000 euros in Stuttgart. Using the purchasing power parity theory, explain the exchange rate between the yen and the euro.
Answer:
1 EUR = 120 JPY
Explanation:
As the purchasing power parity theory, the exchange rate of currency 1 to currency 2 = Cost of good in currency 1 / cost of same valued item in currency 2
In this case, a Lexus LS400 and a Mercedes C300 are considered to be of equivalent value, then the exchange rate between the yen and the euro
= price of Lexus in Tokyo/ price of Mercedes in Stuttgart
= 6,000,000 JPY/ 50,000 EUR
= 120 JPY/EUR
Florence is a highly paid fashion consultant who earns $100 per hour. She has 16 hours per day that she can allocate to work or leisure, and she decides to work for 12 hours. Now suppose one of Florence's clients is featured on the front page of Vague, an influential fashion magazine. As a result, Florence's consulting fee now rises to $500 per hour. Florence decides to work only 10 hours per day. Draw Florence's new time allocation budget line, with income on the vertical axis and hours of leisure on the horizontal axis, and illustrate the indifference curve at her optimal choice. Choose the correct statement.
Answer:
Please see attachment
Explanation:
Please see attachment
The budget line represents Florence's possible combinations of income and leisure given her wage rate and available hours. After her wage increase, her budget line shifts upward as she earns more for the same hours worked. Her indifference curve shows the combinations of income and leisure she is indifferent to, and her optimal choice is where it meets her new budget line.
Explanation:To answer your question, let's firstly recall what a budget line and an indifference curve represent. In this context, the budget line represents all possible combinations of income and leisure that Florence can achieve given her hourly wage and total time available. The indifference curve represents all combinations of income and leisure that provide Florence with the same level of satisfaction or utility.
Initially, Florence was earning $100 per hour and decided to work 12 hours each day. Therefore, she had 4 hours of leisure and earned $1,200 (12 hours * $100 per hour) per day. Her initial budget line would be a downward sloping line starting from the point (16, 0) representing no leisure and maximum income (i.e., working all 16 hours), to the point (0, 1,600) representing all leisure and no income. The slope of this line would be negative, representing the trade-off between leisure and income.
However, with Florence's fee increasing to $500 per hour and her deciding to work only 10 hours, her income increases to $5,000 (10 hours * $500 per hour) and her leisure time increases to 6 hours. The new budget line starts from the point (16, 0) and ends at (0, 8,000). As her income has increased, the new budget line shifts upward. On the other hand, her indifference curve, which is steeper to the left and flatter to the right, will be tangent to the new budget line at her optimal point of choice (10, 5,000).
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On October 1, 2021, Oberley Corporation loans one of its employees $39,000 and accepts a 12-month, 8% note receivable.Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022.
Answer:
2021 $975
2022 $2925
Explanation:
Assuming that the financial year of the Oberly Corporation is from January to December.
The amount of interest revenue that will be recognised by the Oberly Corporation in its financial statements for the year ended December 31, 2021 will be as follows:
Interest Revenue=Principal amount*interest rate*3/12
Interest Revenue=39000*10%*3/12=$975
Since the Oberly Corporation has extended loan to its employee on October 1,2021, therefore only interest revenue 3 months will be recognised in the year ended December 31, 2021.
The amount of interest revenue for the remaining 9 months will be recognised by the Oberly Corporation in its financial statements for the year ended December 31, 2022 and will be as follows:
Interest Revenue=39000*10%*9/12=$2,925
When the "full-cost approach" to marketing cost analysis is used, allocating fixed costs on the basis of sales:A. may make low-volume customers appear more profitable than they are.
B. increases each customer's contribution margin.
C. decreases the profitability of the whole business.
D. makes large-volume customers appear more profitable that they are.
E. increases the profitability of the whole business.
Answer:A. May make low volume customers appear more profitable than they are.
Explanation:
The allocation of fixed cost based on sales volume will increase cost allocated to large volume sales unit which will invariably reduce their profit and will reduce the cost allocated to low volume sales which may increase their profit.
It does not affect the overall firm profitability not customers contribution margin.
On January 1, 2020, Indigo signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $80,000. Of this amount, $16,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $16,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $48,600. The agreement also provides that 8% of the revenue from the franchise must be paid to the franchisor annually. Indigo’s revenue from the franchise for 2020 was $950,000. Indigo estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.)
Answer:
franchise (intangible) 58,140
franchise fee 82,460
Explanation:
we need to calculate the franchise intangible and franchise fee:
16,000 down payment
48,600 PV of the franchise payment
64,600 franchise(intangible assets)
amortized over 10 years using straight-line:
amortization: 64,600 / 10 = 6,460
year-end intangible:
64,600 - 6,460 = 58,140
fee based on sales: 950,000 x 8% = 76,000
total franchise fee: 76,000 for sales + 6,460 amortization= 82,460
Final Answer:
Indigo will pay the franchisor $76,000 annually based on the 2020 revenue of $950,000.
The annual amortization expense of the initial franchise fee is $6,460.
Explanation:
To solve this scenario, we need to perform two calculations: the annual payment to the franchisor based on revenue and the amortization of the initial franchise fee over the useful life of the franchise.
### Annual Payment to the Franchisor Based on Revenue:
Indigo has to pay 8% of its annual revenue to the franchisor. With an annual revenue of $950,000, the calculation is as follows:
Annual Payment to Franchisor = Annual Revenue * Percentage Paid to Franchisor
Annual Payment to Franchisor = $950,000 * 0.08
Annual Payment to Franchisor = $76,000
So, Indigo must pay $76,000 to the franchisor based on the revenue for the year 2020.
### Amortization of Initial Franchise Fee:
The initial franchise fee of $80,000 is a prepayment for the right to operate the franchise, and as no future services are required of the franchisor, this fee is to be amortized over the useful life of the franchise, which is estimated to be 10 years.
The present value of the 4 annual payments is given as $48,600. This is the present value of the future payments based on a discount rate of 12%. The initial down payment of $16,000 is added to this present value to find the total initial franchise fee cost that should be amortized.
Total Cost of Initial Franchise Fee = Down Payment + Present Value of Future Payments
Total Cost of Initial Franchise Fee = $16,000 + $48,600
Total Cost of Initial Franchise Fee = $64,600
The amortization expense of this initial franchise fee over the useful life of the franchise (10 years) is calculated as follows:
Annual Amortization Expense = Total Cost of Initial Franchise Fee / Useful Life of Franchise
Annual Amortization Expense = $64,600 / 10
Annual Amortization Expense = $6,460
Indigo would record an amortization expense of $6,460 each year for 10 years to allocate the cost of the franchise fee over its useful life.
To summarize:
- Indigo will pay the franchisor $76,000 annually based on the 2020 revenue of $950,000.
- The annual amortization expense of the initial franchise fee is $6,460.
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: Price = $ 1,440 per unit; variable costs = $ 460 per unit; fixed costs = $ 3.9 million; quantity = 85,000 units. Suppose the company believes all of its estimates are accurate only to within ± 15 percent. What values should the company use for the four variables given here when it performs its Ross, Stephen; Ross, Stephen. Fundamentals of Corporate Finance (Kindle Locations 17643-17645). McGraw-Hill Higher Education. Kindle Edition.
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.
Del Norte Brick Co. is located near the intersection of Texas, New Mexico, and Mexico. Improved access to the company’s property is via a small bridge across the Rio Grande. The cost of the bridge was $780,000. Determine the depreciation and book value for year 3 according to the MACRS (Modified Accelerated Cost Recovery System) method.
Answer:
Depreciation for year 3 = $115518
BV = $57798
Explanation:
The modified accelerated cost recovery method employees a classification-based approach to depreciating certain assets, once classified are assigned respective rates of depreciation. for example, assets classified under automobiles, trucks and machinery are treated under 5-year MACRS and will be depreciated at 20%, 32%, 19.2% and so on.
In this question the bridge across Rio Grande being built by Del Norte Brick co is treated under 3-year MACRS, for which the rates are as follows:
33.33% for the first year
44.45% 2nd year
14.81% 3rd year
7.41% 4th year
We have been asked to determine 3rd years' depreciation and book value, determined as follows:
Depreciation year 1: $780000 33.33% = $259974
Depreciation year 2: $780000 44.45% = $346710
Depreciation year 3: $780000 14.81% = $115518
So the depreciation for year 3 = $115518
The book value is calculated as follows:
Book value = cost - accumulated depreciation
BV = $780000 - $722202
BV = $57798
Final answer:
To calculate year 3 depreciation for Del Norte Brick Co.'s bridge using MACRS, take $780,000 multiplied by 2.564%, resulting in a $19,999.20 expense. Summing up the depreciation from years 1 to 3 and subtracting from the initial cost gives a book value of $720,805.80 at the end of year 3.
Explanation:
To determine the depreciation and book value for year 3 using the Modified Accelerated Cost Recovery System (MACRS) method for the bridge owned by Del Norte Brick Co., it is important first to identify the class life of the asset according to the IRS guidelines. While the exact class life for a bridge is not specified in the question, most nonresidential real property falls under the 39-year MACRS class. For the purpose of this example, assuming the bridge qualifies for this recovery period, you would then consult the MACRS depreciation tables to find the corresponding depreciation percentage for year 3.
Under the MACRS system for a 39-year property class, the year 3 depreciation percentage is typically around 2.564% of the asset's cost. Here's the calculation for the bridge's depreciation expense in year 3:
Depreciation Expense Year 3 = Initial Cost imes Depreciation RateDepreciation Expense Year 3 = $780,000 imes 2.564%Depreciation Expense Year 3 = $19,999.20To find the book value at the end of year 3, you subtract the accumulated depreciation of the first three years from the initial cost.
Assuming there was no salvage value and the same percentage rate is applied in the first two years, the accumulated depreciation would be calculated as follows:
Year 1 Depreciation: $780,000 imes 2.461% = $19,195.80Year 2 Depreciation: $780,000 imes 2.564% = $19,999.20Year 3 Depreciation: $780,000 imes 2.564% = $19,999.20Total Accumulated Depreciation: $19,195.80 + $19,999.20 + $19,999.20 = $59,194.20Then we calculate the book value at the end of year 3:
Book Value End of Year 3 = Initial Cost - Total Accumulated DepreciationBook Value End of Year 3 = $780,000 - $59,194.20Book Value End of Year 3 = $720,805.80Therefore, the depreciation expense for year 3 is $19,999.20, and the book value of the bridge at the end of year 3 is $720,805.80.
What is the effect of the new technology on the production of​ carpet? (Give the number of yards before and after the​ change.)
Complete Question:
Suppose that before the new technology is introduced, the nation produces 15 thousand looms. After the new technology is introduced, the nation produces 27 thousand looms. (Hint: 5 compute your answers using the data in the table above and not the graphs.) What is the effect of the new technology on the production of carpet? Give the number of yards before and after the change.
Yards of carpet (Millions) Carpet looms (Thousands) 0 45 12 42
4 24 36 36 27 48 15 60 0
Answer and Explanation:
The nation was able to produce around 48 million of carpets before the new technology arrived. However, after the new technology arrived, they were able to produce 54 million carpets. (36 x 1.5)
New technology can significantly boost carpet production by automating processes and increasing efficiency. This might potentially double the output, from 100 to 200 yards per day, although actual figures would vary.
Explanation:The impact of new technology on carpet production can be significant. New technology can automate many of the processes, leading to increased efficiency. For instance, if a carpet factory was producing 100 yards of carpet per day with old machinery, introduction of new technology might enable them to manufacture 200 yards a day, doubling the output. It's important to note that the actual numbers would vary depending on the specific advancements in technology and the scale of the operation.
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Why are some people against outsourcing? Why do others support it? Choose a developing nation and a developed nation. What industries or companies may have an interest in outsourcing to these nations? What barriers to trade would prevent an American company outsourcing to one of those countries? Do you think outsourcing would promote or hinder a healthy American economy? Explain.
Answer:
People is against outsourcing because they think this business tactic is based on the idea of avoiding the employer's responsibilities. On the other hand, others believe it is a practice that allows companies to focus resources on the core activities delegating not critical functions to others with higher expertise or efficient execution levels.
Explanation:
Take as an example China and the USA. Technology companies as Apple have interest in outsourcing manufacture functions to these countries because labor cost is cheaper (labor arbitrage). By outsourcing the manufacture functions, Apple has to import to the USA the parts, and a rise in trade barriers that could increase the tariff of Chinese manufacture products could hinder this practice. If we think a world where labor rights are respected everywhere, I think outsourcing could be a good business practice because allow companies to optimize the use of resources, promoting specialization and higher levels of efficiency, increasing the production of goods and therefore, the economic well-being of the population. In that sense, I think outsourcing could promote a healthy American economy
For a cost to be considered allocable to a contract, it must be a cost that is incurred specifically for a contract, or a cost that is beneficial to both the contract and other work, or _________________. [Identify the five bases for cost allowability.]
a. A cost that is necessary for the overall operation of the business but not directly related to a contract
b. Any cost incurred by a contractor doing business with the Government
c. Any cost that is exempt from compliance with Government and industry accounting standards
d. Any indirect cost that is not part of the manufacturing overhead cost pool
Answer:
a. A cost that is necessary for the overall operation of the business but not directly related to a contract
Explanation:
Option B - Allocable costs cannot be considered if the contractor is doing business with the government.
Option C - If the cost is exempted, it cannot be specifically allowable for a contract, or a cost that is beneficial to both the contract and other work.
Option D - Indirect costs cannot be allowable.
Option A - It is the right answer because allowable cost should be significant for the operations with an indirect relation with the contract. If it is linked with the overall operations, it can be considered as allowable to a contract.
For a cost to be considered allocable to a contract, it must meet specific criteria, including being necessary for the overall operation of the business but not directly related to a contract. There are five bases for cost allowability in total.
Explanation:In order for a cost to be considered allocable to a contract, it must meet certain criteria. One of these criteria is that it must be a cost that is necessary for the overall operation of the business but not directly related to a contract. This means that the cost is incurred for the general functioning of the business and is not specific to a particular contract.
The other four bases for cost allowability are:
A cost that is incurred specifically for a contract
A cost that is beneficial to both the contract and other work
A cost that is exempt from compliance with Government and industry accounting standards
An indirect cost that is not part of the manufacturing overhead cost pool
What is a specialty good?
Answer:
The specialty goods are one of the type of consumer products an it basically categorized under the category of shopping and the convenience goods.
The specialty products are basically purchased by the consumers or users because of its unique characteristics and high efficient brands. Exotic perfumes, designer clothe and famous printing cloths are some examples of the specialty products.
The main objective of the specialty goods is that the customers group are wiling for purchasing the specific products due to its unique features or high brand and also make special efforts for purchasing the specific products and the services.
In a recent annual report, Fourth Wall Inc. (formerly Greencube) disclosed that 61,600,000 shares of common stock have been authorized. At the beginning of the fiscal year, a total of 35,949,592 shares had been issued and the number of shares in treasury stock was 7,331.269. During the year, 566,765 additional shares were issued, and the number of treasury shares increased by 3,114,188 Determine the number of shares outstanding at the end of the year. (Amounts to be deducted should be indicated by a minus sign.) n of Shares Outstanding Issued shares Treasury stock Shares outstanding
The number of shares outstanding at the end of the year 36,516,357
What is a share?A share is a unit of a company, allocated to an individual. The holders of shares are called shareholders hence are owners of the company.
Number of common stock outstanding at the end:
= Number of common stock the beginning + Number of additional common stock issued
= 35,949,592 + 566,765
= 36,516,357 shares
Hence, the number of shares outstanding at the end of the year 36,516,357
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To calculate the shares outstanding for Fourth Wall Inc. at the end of the fiscal year, we first update the totals for issued shares and treasury stock, then subtract the updated treasury stock from the issued shares, resulting in 33,394,899.731 shares outstanding.
The question presents a scenario involving Fourth Wall Inc., where we must calculate the number of shares outstanding at the end of the fiscal year. Initially, the company had 35,949,592 shares issued and 7,331.269 shares in treasury stock. During the fiscal year, an additional 566,765 shares were issued, and the treasury stock increased by 3,114,188.
To find the outstanding shares at the year's end, we first add the newly issued shares to the initial amount of issued shares (35,949,592 + 566,765) which equals 36,516,357. Then, we update the treasury stock total (7,331.269 + 3,114,188) giving us 3,121,457.269 shares. Finally, to find the shares outstanding, we subtract the treasury stock from the total issued shares (36,516,357 - 3,121,457.269), resulting in 33,394,899.731 shares outstanding at the year's end.
Suppose New York wants to build a new facility to replace Madison Square Garden. Assume that the cost of building a new arena in midtown Manhattan is $2 billion and that all the costs occur right away. Also assume that New York will receive annual benefits of $100 million for the next 30 years, after which the new arena becomes worthless. Does it make financial sense to build the new facility if interest rates are 5 percent?
Solution:
Net Present Worth (NPW) ($ Million) = - 2,000 + 100 x PVIFA(5%, 30)
= - 2,000 + 100 x 15.3725**
= - 2,000 + 1,537.25
= - 462.75
Since NPW < 0, the project is financially not viable.
The NPV analysis of the proposed new arena in New York suggests that the present value of the benefits over 30 years at a 5% interest rate is $1.537 billion, which is less than the $2 billion upfront costs. Thus, it does not make financial sense to build the facility.
Financial Viability of Building a New Arena
To determine if it makes financial sense for New York to build a new $2 billion arena with annual benefits of $100 million for 30 years at an interest rate of 5%, we must perform a Net Present Value (NPV) analysis. This involves discounting future cash flows back to their present value to see if they cover the initial investment. First, we find the present value of the annual benefits using the formula for the present value of an annuity:
PV = P × [(1 - (1 + r)^-n) / r]
Where P is the annual payment ($100 million), r is the interest rate (5% or 0.05), and n is the number of periods (30 years). Plugging in the values, we get:
PV = $100 million × [(1 - (1 + 0.05)^-30) / 0.05]
= $100 million × 15.3725
= $1.537 billion
The present value of the benefits over 30 years is $1.537 billion, which is less than the $2 billion upfront cost. Therefore, based on the NPV analysis, it does not make financial sense to build the new facility as the costs outweigh the benefits.
Marla always strives to excel in her career. Several years ago, she finished College, finally achieving a Ph.D. Although she works as an educator and has a secure position at an urban college, she does not hold a faculty position at a prestigious university. It is obvious to her colleagues that Marla is unsatisfied with her position at work. She constantly gives coworkers subtle reminders of her superior academic credentials and only participates in work activities where she will assume a leadership role. Analyzing Marla's situation using Maslow's hierarchy of______________
Answer:
esteem needs
Explanation:
Esteem needs -
The term esteem needs , is used for the need of self - confidence and respect , is referred to as esteem needs.
It is a human mentality or behavior , where the human being deserves all respect and values from others .
Hence , the people works for the respect their whole life and therefore , expects to get the respect for the same .
Hence, from the given scenario of the question, the correct term is esteem needs.
Which of the following is NOT lawful authority and can be a cause of unauthorized commitments? [Identify the causes and consequences of constructive changes and unauthorized commitments.]
a. Apparent Authority
b. Evident Authority
c. Critical Authority
d. Rightful Authority
Answer:
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Critical Authority is not a lawful authority and can lead to unauthorized commitments, potentially resulting in breaches of trust, legal disputes, and financial and reputational damage.
Explanation:In a legal context, unauthorized commitments occur when actions are taken or commitments made by someone who does not have the legal authority to do so. From the given options, the one that does NOT represent lawful authority and could potentially lead to unauthorized commitments is Critical Authority.
The terms 'Apparent Authority', 'Evident Authority', and 'Rightful Authority' are all recognized legal concepts associated with someone's lawfully recognized power to make decisions or commitments. On the other hand, 'Critical Authority' is not a recognized legal term and hence does not represent lawful authority, leading to unauthorized commitments when used.
An unauthorized commitment can lead to serious consequences such as breach of trust, legal disputes, and potential financial and reputational damage for the individual or organization involved.
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Robinson Crusoe was trying to decide if they should continue making coin purses or outsource to a supplier. Their fixed costs to make them in house were $3,750, and the variable costs were $1.35 per unit. One of their suppliers in Mexico made a similar product for $5.75 per unit. Calculate the break-even point. Group of answer choices 594 units 852 units 652 units 2,778 units 15,972 units
Answer:
852 units
Explanation:
The break-even point is number of unit produced whereas the cost of in house produced equal to selling price of similar products
Selling price of similar products = fixed cost per unit + variable cost per unit
$5.75 = $3,750/ number of unit produced + $1.35
number of unit produced = $3,750/($5.75-$1.35) = 852 units
Halliford Corporation expects to have earnings this coming year of $3/share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 50% of its earnings. It will retain 20% of its earnings from that point onward. Each year, retianed earnings will be invested in new projects with an expected return of 25% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 12 percent, what price would you estimate for Halliford stock in years 0,1, and 2?
The stock price for Halliford Corporation during years 0, 1, and 2 would take into account the retained earnings during these years and their investment return. Dividends aren't paid out for these years as the company retains all its earnings. The future dividends are discounted back to their present value using the equity cost of capital.
Explanation:The question requires an estimate of the price of Halliford Corporation’s stock for the first three years considering the company's earnings retention and reinvestment strategy. First, we need to calculate the dividend payments made by the firm. For the first two years, Halliford Corporation retains all its earnings indicating there are no dividends paid during these years. Afterwards, the company retains 50% and 20%, meaning it pays out as dividends 50% and 80% of the earnings respectively.
The stock price at any given time is the present value of all its future dividends. If there are no dividends paid out in the first two years, the price in years 0, 1, and 2 can simply accumulate the retained earnings from those years times their respective investment returns. To get the price, we also need to discount the dividends paid in year 3 and 4 back to their present values using the equity cost of capital.
Please take note, this calculation only takes into account the given information and assumes that the earnings per share remain constant for all the years. The actual stock price might vary due to a plethora of other factors in real-world scenarios, including market demand and supply, overall economic conditions, and investor sentiment.
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The credit union will have $1.8 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: • Risk-free securities may not exceed 25% of the total funds available for investment. • Signature loans may not exceed 12% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). • Furniture loans plus other secured loans may not exceed the automobile loans. • Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $1.8 million be allocated to each of the loan/investment alternatives to maximize total annual return?
Answer:
Thus, the projected total annual return is $169,740.
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.
1. Which of the terms below is defined as "anything that keeps new firms from entering an industry in which firms are earning economic profits"?
A. economies of scale
B. game theory
C. oligopoly
D. barriers to entry
2. Economies of scale exist when a firm's ___________ average costs fall as it __________ output.
A. short-run; decreases
B. long-run; increases
C. long-run; decreases
D. short-run; increases
3. Which of the following terms is a barrier to entry?
A. patents
B. economies of scale
C. ownership of a key input
D. All of the above.
Answer:
1. D. barriers to entry
2. B. long-run; increases
3. D. All of the above
Explanation:
Anything that keeps new firms from entering an industry in which firms are earning economic profits is known as a barrier to entry.
When an industry have high barriers to entry, it is difficult for new firms to enter into the industry. Therefore, firms in an industry with high barriers to entry would continue to earn economic profit.
A firm earns economic profit where price is greater than average total cost.
An example of an industry with high barriers to entry are monopolies and oligopolies.
Monopolies are industries where there is only one firm operating in the industry.
Oligopolies are industries where there are only few firms operating in the industry.
A monopoly or oligopoly can arise for the following reasons:
1. Economies of scale : in the long run, when total average cost falls as output increases, the firm is said to be experiencing economies of scale. A firm can experience economies of scale because of its large size. The large size of the firm makes the firm enjoy discounts because of bulk buying or they borrow at lower costs because of their large size.
2. Ownership of a key input: A monopoly can arise if the firm owns a key input needed in the production process. Ownership of a key input prevents other firms from entering into the industry as they do not have assess to the input.
3. Patents: Patents are rights given to an inventor to prevent others from using, selling or making their invention for a period of time. When a firm makes an invention and gets a patent, it prevents other firms from entering into the industry and therefore the firm with the patent can function as a monopoly for the duration where the patent is effective.
At the other end of the spectrum is a perfect competition where there are no barriers to entry or exit of firms into the industry. Therefore, there are many sellers in the industry and the firms do not earn economic profit in the long run.
I hope my answer helps you.
Consumer Compensation. Suppose your college grants Coca-Cola a monopoly in selling soft drinks on campus. Your job is to compute how much each student should be paid to compensate for his or her consumer cost of the monopoly. Suppose Coca-Cola increased the price of soft drinks by $0.30 per can and each student consumed 10 soft drinks before the monopoly was granted.
a. Kate continues to buy 10 soft drinks at the higher price. What is the appropriate compensation? $ nothing (enter your response rounded to the nearest penny).
b. Elise buys only 4 soft drinks at the higher price. Her demand curve is linear. What is the appropriate compensation?
Final answer:
To compensate consumers for the consumer cost of a monopoly, we can calculate the appropriate compensation by determining the consumer surplus. For Kate, who continues to buy 10 soft drinks at the higher price, the appropriate compensation would be $3.00. For Elise, who buys only 4 soft drinks at the higher price, her consumer surplus would be $3.40.
Explanation:
In order to calculate the appropriate compensation for consumers affected by the monopoly, we need to calculate the consumer surplus, which represents the benefit that consumers would have received if the price did not increase.
a. For Kate, who continues to buy 10 soft drinks at the higher price, the appropriate compensation would be $0.30 x 10 = $3.00, as this is the additional amount she has to pay compared to the previous price.
b. For Elise, who buys only 4 soft drinks at the higher price, we need to calculate her consumer surplus. Assuming Elise's demand curve is linear, we can use the formula for the area of a triangle to calculate the surplus. The demand curve represents the willingness to pay, and the new price represents the actual payment. The consumer surplus is the difference between the maximum amount Elise is willing to pay and the actual payment. Let's assume that Elise's maximum willingness to pay for 4 soft drinks is $2.00 per can. The actual payment is $0.30 more per can, so her consumer surplus would be: (0.5 x 4 x ($2.00 - $0.30)) = $3.40.
Langhurst Company sold hardware for $12,000 cash and $18,000 of hardware to credit customers. Which of the following is the correct journal entry to record this transaction?
Answer:
Cash A/c Dr $12,000
Account receivable A/c Dr $18,000
To Hardware revenues A/c $30,000
(Being the sale of hardware is recorded)
Explanation:
The journal entry is shown below:
Cash A/c Dr $12,000
Account receivable A/c Dr $18,000
To Hardware revenues A/c $30,000
(Being the sale of hardware is recorded)
Since the sale is taken which increase the current asset i.e cash account and the account receivable by $12,000 and $18,000 respectively so we debited it and the revenue is an income so we credited it
A factory produces 130,000 televisions per quarter. A total of 9,000 production hours are used by the factory per quarter.
Compute the velocity in units per hour.
(Note: Round answer to two decimal places.)
a. 16.50 units per hour
b. 15.50 units per hour
c. 14.44 units per hour
d. 18.45 units per hour
Answer:
Option (c) is correct.
Explanation:
Given that,
Factory produces = 130,000 televisions per quarter
Total production hours used by the factory per quarter = 9,000
Therefore,
Velocity of units per hour = (Number of units produced ÷ Time taken to produce those units. )
Velocity of units per hour = (130,000 units ÷ 9,000 hours )
Velocity of units per hour = 14.44 units per hour
Erickson Air is a large airline company that pays a customer relations representative $8,000 per month. The representative, who processed 3,000 customer complaints in January and 2,500 complaints in February, is expected to process 40,000 customer complaints during 2018. Required Determine the total cost of processing customer complaints in January and in February. (Do not round intermediate calculations.)
The cost of processing customer complaints can vary widely depending on various factors. The total cost of processing customer complaints is $2.4 per customer complaint.
These factors include the complexity and severity of the issues raised, the efficiency of the complaint-handling system, the level of customer service required, and the resources needed for resolution.
Costs may encompass human labor, technology, training, and potential compensation or refunds. Additionally, the impact of unresolved complaints on brand reputation and customer loyalty should be considered.
Proactive measures like investing in quality products/services, effective communication, and streamlined complaint management systems can mitigate costs and foster positive customer experiences, benefiting both the company's bottom line and customer satisfaction.
Total cost of Representative for the whole year (Total processing cost) = 12000*8 = $96,000
Total number of customers complaints processed in a year = 40,000
Therefore, the cost of Processing per customer complaint = 96000 / 40000 = $2.4 per customer complaint.
Calculation of total cost of processing customer complaints:
Month Allocated Cost
January (2.4*3000) $7,200
February (2.4*2500) $6,000
Therefore, $2.4 per customer complaint.
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Final answer:
The total cost for processing customer complaints in January and February for Erickson Air is $16,000, based on a monthly salary of $8,000 for the customer relations representative.
Explanation:
To determine the total cost of processing customer complaints in January and February for Erickson Air, we first note that the cost for a customer relations representative is $8,000 per month. Since the representative processed 3,000 complaints in January and 2,500 complaints in February, we calculate the cost for these two months combined without needing to calculate the cost per complaint directly. The total cost is simply the sum of the monthly salaries for January and February.
Therefore, the total cost for processing complaints in January and February is:
$8,000 for January$8,000 for FebruaryThe combined total cost is $16,000.
Which of the following is NOT one of the major factors that is credited for contributing to the rise of advertising?
Answer:
Trick question. There are no following factors.
Explanation:
Perth Mining Company operates two mines for the purpose of extracting gold and silver. The Saddle Mine costs $12,000/day to operate, and it yields 50 oz of gold and 3000 oz of silver each of x day. The Horseshoe Mine costs $17,000/day to operate, and it yields 75 oz of gold and 1000 oz of silver each of y day. Company management has set a target of at least 650 oz of gold and 18,000 oz of silver. How many days should each mine be operated so that the target can be met at a minimum cost?
Answer:
Operate mine 1 four 4 days and mine 2 during 6 days to obtain minimum cost for the desired output of 850 gold and 18,000 silver
Explanation:
We generate the equation system on excel:
(50g + 3000s) Q_1 --> output generated on Mine 1
(75g + 1,000s) Q_2 --> output generated on Mine 2
12,000 Q1 + 17,000 Q2 = cost of the mines
we do solver to minimize the days of each mine considering a desired output of 18,000 silver and 650 gold:
and get the following:
M1 4 days output: (50g + 3000s) 4 = 200 g 12,000s
M2 6 days output: (75g + 1,000s) 6 = 450g 6,000s
Cost: 12,000 x 4 + 17,000 x 6 = 150,000
The student's question involves solving a linear programming problem to minimize the operating costs of two mines while meeting production targets for gold and silver.
Explanation:The student is asking about a mathematical optimization problem involving the operation of two mines with the goal of meeting certain production targets for gold and silver at a minimum cost. We are given the daily operation costs and yield of each mine. To find the minimum number of days to operate each mine (x for Saddle Mine and y for Horseshoe Mine), we need to establish a system of inequalities based on the gold and silver production requirements and then use linear programming to minimize the cost function, C = 12000x + 17000y. The constraints for gold and silver production are 50x + 75y ≥ 650 (for gold) and 3000x + 1000y ≥ 18000 (for silver). Solving this optimization problem will give us the values of x and y that meet the production goals at the lowest possible cost.
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3M’s preferred stock, which pays an annual dividend of $6 per share, was trading for $60 per share yesterday. However, news broke early this morning that some of the materials the company used for one of his most popular home products is a well-known carcinogenic. Consequently, the required rate of return for the stock went up to 12%. What will be the new price of the shares?
Answer:
$50
Explanation:
Given that,
Annual dividend per share = $6
preferred stock trading yesterday at = $60 per share
Required rate of return for the stock went up to = 12%
Cost of preferred stock = (Dividend ÷ share price)
0.12 = (6 ÷ New share price )
New share price = (6 ÷ 0.12)
New share price = $50
Therefore, the new price of the shares will be $50.
What outcome for hot dogs and hot dog buns is most likely based on the information above?
A) The demand for hot dogs increases, as well as the demand for hot dog buns.
B) The quantity demanded of hot dogs increases, and the demand for hot dog buns increases.
C) The quantity supplied of hot dogs increases, and the quantity supplied of hot dog buns also increases.
D) The supply of hot dogs increases to match the demand. Demand and supply for hot dog buns remains the same.
Answer:
The correct answer is letter "B": The quantity demanded of hot dogs increases, and the demand for hot dog buns increases.
Explanation:
According to the demand theory, as long as the price of a product decreases the quantity demanded increases. The theory explains the relationship between the price and quantity demanded of a good or service within a market. That relationship is said to be inversely proportional.
In that case, if the price of the hot dogs is reduced by half, the quantity demanded is likely to increase. Supplementary goods such as hot dog buns are prone to see an increase in their demand.
Answer: I aswell think it is B.
Explanation: If the quanity increases it means that the demand for hot dogs increases, and you cannot have hot dogs without buns, or else you will be stuck using bread, or nothing.
Super Carpeting Inc. (SCI) just paid a dividend (D₀) of $2.40 per share, and its annual dividend is expected to grow at a constant rate (g) of 5.00% per year. If the required return (r s ) on SCI’s stock is 12.50%, then the intrinsic value of SCI’s shares is per share. Which of the following statements is true about the constant growth model? The constant growth model can be used if a stock’s expected constant growth rate is more than its required return. The constant growth model can be used if a stock’s expected constant growth rate is less than its required return. Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.: • If SCI’s stock is in equilibrium, the current expected dividend yield on the stock will be per share. • SCI’s expected stock price one year from today will be per share. • If SCI’s stock is in equilibrium, the current expected capital gains yield on SCI’s stock will be per share.
Answer:
Consider the following calculations.
Explanation:
1)
Intrinsic value = D1 / (Required rate - growth rate)
Intrinsic value = (2.4 * 1.05) / 0.125 - 0.05
Intrinsic value = 2.52 / 0.075
Intrinsic value = $33.60
2)
The constant growth model implies that dividends growth rate remains constant from now to infinity.
3)
Current dividend yield = (D1 / current stock price) * 100
Current dividend yield = (2.52 / 33.6) * 100
Current dividend yield = 7.50%
Stock price 1 year from today = Present value (1 + growth rate)
Stock price 1 year from today = 33.6 * (1 + 0.05)
Stock price 1 year from today = $35.28
Capital gains yield = [(Ending value - beginning value) / beginning value] * 100
Capital gains yield = [(35.28 - 33.6) / 33.6] * 100
Capital gains yield = 5.00%
1. The intrinsic value of SCI’s shares is $33.6 per share.
2. The statement that is true is: The constant growth model can be used if a stock’s expected constant growth rate is less than its required return
3a. The current expected dividend yield on the stock is 7.50%.
3b. The Stock price in 1 year is $35.28 per share.
3c. The Expected Capital Gains Yield is 5.00%.
1) Intrinsic Value is calculated using this formula
Intrinsic Value = [D0 × (1 + g)] / [r - g]
Let plug in the formula
Intrinsic Value = [$2.40 * (1 + 0.05)] / [0.125 - 0.05]
Intrinsic Value = $2.52/ 0.075
Intrinsic Value = $33.6
2) The statement that is true is:
The constant growth model can be used if a stock’s expected constant growth rate is less than its required return.
3-a) Expected Dividend Yield is calculated using this formula
Expected Dividend Yield= D1 / P0
Let plug in the formula
Expected Dividend Yield= $2.52 / $33.6
Expected Dividend Yield= 0.075 or 7.5%
3-b) Stock price in 1 year is calculated using this formula
Stock price= Price now ×(1 + g)
Let plug in the formula
Stock price= $33.6 × (1 + 0.05)
Stock price= $35.28
3-c) Expected Capital Gains Yield is calculated using this formula
Expected Capital Gains Yield= Required Return - Expected Dividend Yield
Let plug in the formula
Expected Capital Gains Yield= 12.50% - 7.5%
Expected Capital Gains Yield= 5.00%
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