Answer:
Learning curve theory states that as the quantity of a product produced increase , the man-hours per unit expended producing the product decrease.
Explanation:
The learning curve states that if a person performs similar task again and again, then after a period of time there will be an improvement in his/her performance.
It is calculated using following formula.
Y = ax^b
.
Y = cumulative average time per unit or batch.
a = time taken to produce initial quantity.
X = the cumulative units of production or, if in batches, the
cumulative number of batches.
b = the learning index or coefficient, which is calculated as:
log learning curve percentage ÷ log 2. So b for an
90 per cent curve would be log 0.9 ÷ log 2 = – 0.152
Which of the following tools can the Fed use to contract the money supply? a. To expand the money supply? b. Increasing the discount rateselling short-term U.S. Treasury securities.c. Lowering the reserve requirement d. Buying short-term U.S. Treasury securities. e. Quantitative easing f. Decreasing the discount rate g. Raising the reserve requirement
The Federal Reserve can contract the money supply by increasing the discount rate or selling short-term U.S. Treasury securities. It can expand the money supply by lowering the reserve requirement, buying short-term U.S. Treasury securities, implementing quantitative easing, or decreasing the discount rate.
Explanation:There are several tools that the Federal Reserve (Fed) can use to contract or expand the money supply. To contract the money supply, the Fed can increase the discount rate or sell short-term U.S. Treasury securities. By increasing the discount rate, commercial banks will reduce their borrowing of reserves from the Fed, which decreases the money supply and raises market interest rates. Selling short-term U.S. Treasury securities also contracts the money supply as it takes money out of the economy.
On the other hand, the Fed can expand the money supply by lowering the reserve requirement, buying short-term U.S. Treasury securities, implementing quantitative easing, or decreasing the discount rate. Specifically, quantitative easing stimulates aggregate demand by purchasing long-term government and private mortgage-backed securities, thus making credit more available.
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The Fed can contract the money supply by raising the discount rate or selling short-term U.S. Treasury securities. Meanwhile, they can expand the money supply by lowering the discount rate, buying short-term U.S. Treasury securities or using quantitative easing.
Explanation:The Federal Reserve can contract or expand the money supply using several tools. To contract the money supply, the Fed can increase the discount rate or sell short-term U.S. Treasury securities. This reduces the amount of money banks can lend, thereby shrinking the money supply. Conversely, to expand the money supply, the Fed can lower the discount rate or buy short-term U.S. Treasury securities. They could also use a non-traditional method like quantitative easing, which involves purchasing long-term government and private mortgage-backed securities to stimulate aggregate demand.
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Assume Mexico can produce 18 tons of coffee or 6 tons of rice and Costa Rica 6 tons of coffee ord 3 tons of rice. According to comparative advantage. Costra Rica therefore should produce a. only coffee b. both coffee and rice c. neither coffee or rice. d. only rice
Answer:
d. only rice
Explanation:
Please see attachment
Consider the following account balances of Smiths Corp. at the end of the year:
Cash $12,000
Unearned Revenue $18,000
Interest Revenue $5,000
Supplies $3,500
Common Stock $25,000
Rent Expense $6,000
Accounts Receivable $11,700
Salaries Expense $7,500
1. How many of these accounts would be reported in the company’s income statement?
Answer:
Interest revenue, rent expense and salaries expense
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
So, the categorization is shown below:
Interest revenue, rent expense and salaries expense
OJ's Orange Juice produces orange juice to sell in a perfectly competitive market. Given uncertainty in weather patterns, OJ has to determine how much juice to produce prior to knowing the competitive price. It is estimated that the competitive price will be $5 with 20 percent chance and an 80 percent chance the price will be $2. If the marginal cost of producing orange juice is MC = 2Q, then to maximize expected profits, OJ should produce A. 0.25 units. B. 0.90 units. C. 1.15 units. D. 1.30 units
Answer:
so firm will maximize profit produce is 1.30 units
so correct option is D. 1.30 units
Explanation:
given data
competitive price = $5
chance = 20%
chance the price = $2
marginal cost MC = 2Q
to find out
maximize expected profits, OJ should produce
solution
we get here maximum profit as that
E(P) = MC = 2Q ..............1
as we know competitive firm maximum profit as P = MC
and profit = 0 in long run
so put here value in equation 1
E(P) = 0.2 × 5 + 0.8 × 2
2Q = 2.6
Q = 1.3
so firm will maximize profit produce is 1.30 units
so correct option is D. 1.30 units
Within an organizational structure, the person most likely to be evaluated in terms of controllable costs would be:
a. A payroll clerk.
b. A cost center manager.
c. A production line worker.
d. A maintenance worker.
e. A sales representative.
Answer: (B) A cost center manager
Explanation:
According to the given question, the cost center manager is basically responsible for evaluating the controllable cost in an organization structure.
They are also keeps the cost in the specific line of budget by taking the various types of investment decisions and also managing the revenue in an organization.
The main function of the cost center manager is that it managing all the department such as IT, human resource department more efficiently by keeping the given cost below the budget.
Therefore, option (B) is correct.
IE 9-3 ... AS/AD Model – Suppose this economy was temporarily at Year 4, but then experienced a large LEFT shifts of AS. If the Price Level rises to $2.54, then Real Production GDP will have fallen to $4500 b and employment will be only __________. In the Business Cycle the economy will have moved beyond Point _________ .
Answer:
115, M, Stagflation
What is a warranty?
Answer:
A warranty is a promise made to the buyer of a good by the seller or manufacturer of the good about the condition of the product. If the product is not in certain condition or does not work as promised than the party issuing the warranty have to repair or replace the product up to a certain period of time.
Explanation:
Two key structural enhancements should improve the coordination of multinational forces. They are a(n) _____ and coordination centers.
Answer:
The correct word for the blank space is: Liaison network.
Explanation:
A liaison network is formed when countries contact others to fulfill their needs. Those countries set up a communication network that allows them to be in touch efficiently to break the distance barriers and to allow information to be shared at the same peace they happen.
Which of the following choices concerning the recognition of interest income for corporate bondare CORRECT?
a. If bonds are purchased at a premium in the secondary market, the premium can be amortized or added to the basis of the bond.
b. If bonds were issued at a discount, special original issue discount rules apply
c. The actual interest payments received are included in gross income.
Answer:
The correct answers are letters "A", "B", and "C".
Explanation:
Corporate bonds are securities that firm issues to be sold to investors to raise funds that will be using to keep the company up and running. Investors profit from the interest rate dealt in the bond agreement or sometimes they obtain physical assets of the organization as collateral. If in the secondary market bonds are issued at a premium, the premium can be amortized or applied to the bond base but if the bonds were issued at a discount, discount bond rules take into place. The interest payment received thanks to the bonds are recorded in the gross income.
The main transfer programs of the U.S. government include each of the following, except:
a. Social Security payments to the elderly.
b. payments on interest of the government debt.
c. direct "welfare" payments to low-income households.
d. wage payments to government employees.
Answer:
d. wage payments to government employees.
Explanation:
Transfer payment is when income is received but neither good or service is exchanged.
Examples of transfer payments in the US include- Social Security, Medicaid, and unemployment insurance .
I hope my answer helps you
Answer:
d
Explanation:
just did test
What caused the U.S. Congress, the OECD, the International Federation of Accountants, and other organizations to enact stricter rules on corporate governance in recent years?
A. Sudden increase in world trade
B. High-profile corporate scandals
C. Significant decline in world trade
D. Expansion of the European Union membership
Answer: The correct answer is "B. High-profile corporate scandals".
Explanation: High-profile corporate scandals caused the U.S Congress, the OECD, the International Federation of Accountants, and other organizations to enact stricter rules on corporate governance in recent years.
Laurel, Inc., has debt outstanding with a coupon rate of 5.9 % and a yield to maturity of 7.2 %. Its tax rate is 38 %. What is Laurel's effective (after-tax) cost of debt? NOTE: Assume that the debt has annual coupons. Note: Assume that the firm will always be able to utilize its full interest tax shield. The effective after-tax cost of debt is nothing%.
Answer:
effective (after-tax) cost of debt = 4.464 %
Explanation:
given data
coupon rate = 5.9 %
yield to maturity = 7.2 %
tax rate = 38 %
to find out
effective (after-tax) cost of debt
solution
we get here effective (after-tax) cost of debt that is express as
effective (after-tax) cost of debt = Yield to maturity × ( 1 - Tax rate) ..........1
put here value we get
effective (after-tax) cost of debt = 7.2% × ( 1 - 38 % )
effective (after-tax) cost of debt = 0.072 × ( 1 - 0.38 )
effective (after-tax) cost of debt = 0.072 × 0.62
effective (after-tax) cost of debt = 0.04464
effective (after-tax) cost of debt = 4.464 %
firm employs 100 workers and has 2 divisions, each in perfectly competitive markets. Division A produces tape measures and Division B produces saws. How should the firm allocate its workers to maximize efficiency?
Allocate workers between the divisions so the average cost of producing tape measures equals the average cost of producing saws.
Allocate workers to the division with the lowest marginal product of labor and divest from the other division.
Allocate workers so the marginal product of labor is the same in both divisions.
III only.
II and III only.
II only.
I only.
Answer:
Only III.
Explanation:
To begin with, we have to define the marginal product of labour. We can say that it is the change that occurs in output due to the use of one more unit of labor; thus, the marginal product of labour let us know when the labor force is more productive, which results in a higher income because it is cheaper to produce each item, and then is directly a measure of efficiency.
In this vein, if we want to maximize efficiency, we must maintain the marginal product of labour balanced in both divisions, thus , the answer is only III.
Option I is not a correct answer because the average cots of producing a product doesn't refer to the efficiency of the process. And option II does not specify to what extent workers should be moved.
Agile project management is superior to traditional project management in which of the following situations?
Select an answer:
a. when the project is relatively simple
b. when the project goal and solution are not clearly defined
c. when the team understands the work to be done
d. when you have a small, experienced team assigned to work on the project
Answer:
The correct answer is (d) when you have a small, experienced team assigned to work on the project .
Explanation:
Agile project management is a project management methodology that is defined by its signature iterative and incremental approach to achieving requirements throughout the project life cycle. Its particularly suited for small dynamic projects and relies heavily on teamwork.
Traditional project management is a project methodology that emphasizes on a sequential predetermined approach to the project life cycle. The procedures to be followed throughout every phase of the project's life is already laid out. Changes to the laid down plan are not anticipated.This project management style is preferred for larger projects.
In conclusion,when you have a small, experienced team assigned to work on the project then you should utilize the agile project management style. Since the team is small, they are more suited to handle a smaller or medium project and will have to rely more on their teamwork to ensure project success. A traditional project management approach would require a bigger team whose experience wouldn't add any substantial edge since the project plan is already laid out. Additionally, a traditional project management approach is inherently personnel intensive, whereas the available personnel is smaller.
The Agile project management is more superior than traditional project management in situations:
when you have a small, experienced team assigned to work on the projectWhat is the agile system of management?It is the system of project management that has to do with the break down of task into several phases.
This type of management has constant collaboration with all stakeholders.
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Sally acquired an apartment building 15 years ago for $150,000 and sold it for $410,000 in the current year. At the time of the sale, there is $65,000 of accumulated straight-line depreciation on the apartment building. Assuming Sally is in the 32 percent tax bracket for ordinary income, how much of her gain is taxed at 15 percent?
Answer:
Capital gain taxed @ 15% = $260000
Explanation:
given data
Cost of Building = $150,000
sold = $410,000
accumulated depreciation = $65,000
tax bracket = 32 %
to find out
how much of her gain is taxed at 15 percent
solution
first we get here gain on sale that is express as
gain on sale = sold + Accumulated Depreciation - Cost of Building ..............1
gain on sale = $410,000 + $65,000 - $150,000
gain on sale = $325000
and
Unrecaptured depreciation of taxed @ 25% is = $65000
so Capital gain taxed @ 15% is = $325000 - $65000
Capital gain taxed @ 15% = $260000
Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours. During the quarter, the actual activity was 22,000 direct labor hours. Data for the first quarter are summarized as follows: Static budget (20,000 hours) Actual costs (22,000 hours) Direct materials cost $ 80,000 $ 87,000 Direct labor cost 160,000 174,000 Building rental 48,000 50,000 Total $288,000 $311,000 What is the flexible budget amount for the first quarter?
a.$311,000
b.$261,000
c.$288,000
d.$312,000
e.Cannot be determined.
To determine the flexible budget for Jason, Inc., variable costs for direct materials and labor were calculated per hour and then multiplied by actual hours worked. Fixed costs for building rental were added to these variable costs to get the total. The flexible budget amount for the first quarter is $312,000. The correct option is d.$312,000.
To calculate the flexible budget amount for Jason, Inc., which produces leather purses, we must adjust the static budget based on actual activity levels. A flexible budget calculates what costs should have been for the actual level of activity during the period. Since we have the actual costs for 22,000 hours and the budgeted costs for 20,000 hours, we need to determine the variable and fixed components of the costs.
The given costs are as follows:
Direct labor cost
Building rental
Generally, direct materials and labor costs are variable costs, meaning they change with the level of production activity. The building rental is a fixed cost, which remains constant regardless of the activity level.
We can estimate the variable cost per labor hour for materials and labor by dividing the static budget costs by the budgeted labor hours. The fixed cost for building rental doesn't change and remains at $48,000.
Now, let's calculate the flexible budget:
1. Direct materials cost per hour = $80,000 / 20,000 hours = $4 per hour
2. Direct labor cost per hour = $160,000 / 20,000 hours = $8 per hour
3. Total variable cost per hour = Direct materials cost per hour + Direct labor cost per hour = $4 + $8 = $12 per hour
The flexible budget for variable costs at 22,000 hours would therefore be $12 per hour * 22,000 hours = $264,000. Adding the fixed cost of building rental, we get $264,000 (variable costs) + $48,000 (fixed costs) = $312,000.
Thus, the flexible budget amount for the first quarter is $312,000
Naomi knows she has to order her store's Christmas holiday merchandise in April to ensure delivery before the holiday season. Naomi is concerned with the supply chain management goal ofA. providing products at the right time.B. providing products at the right locations.C. providing the right quantities.D. satisfying the service levels supply chain participants expect.E. minimizing system-wide costs.
Answer:
A. providing products at the right time.
Explanation:
Naomi is concerned about the seasonality of Christmas products. She knows that Christmas products not sold in Christmas season are unlikely to be sold in other time of the year. She also knows that customers tend to spend more money in the Christmas season, so there is a high expectation about relative higher sales. The only way Naomy could take advantage of the season is having stock available at the right time when customers desire Christmas products and are willing to pay a relatively higher amount of money. In this case, having products at the right time is the biggest Naomi's concern.
Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $205,200 of raw materials on credit; issued materials to production of $201,000 of which $31,800 were indirect. Minstrel incurred a factory payroll of $153,600, paid in cash, of which $41,800 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. Minstrel's beginning and ending Work in Process Inventory are $16,100 and $28,200 respectively. Compute the cost of product transferred to Finished Goods Inventory: a. $453,800. b. $575,900. c. $436,600. d. $427,600. e. $425,600.
Answer:
c. $436,600
Explanation:
Direct materials to production = $201,000 - $31,800 = $169,200
Direct factory payroll = $153,600 - $41,800 = $111,800
Minstrel uses a predetermined overhead application rate of 150% of direct labor cost, then overhead = 150% * $111,800 = $167,700
Cost of product produced in one month = direct materials to production of $169,200 +a direct factory payroll of $111,800 + overhead $167,700 = $448,700
The cost of product transferred to Finished Goods Inventory = Cost of product produced in one month + Beginning WIP Inventory - Ending WIP Inventory
= $448,700 + $16,100 - $28,200 = $436,600
Calculating Transfer Price Burt Inc. has a number of divisions, including the Indian Division, a producer of liquid pumps, and Maple Division, a manufacturer of boat engines. Indian Division produces the h20-model pump that can be used by Maple Division in the production of motors that regulate the raising and lowering of the boat engine's stern drive unit. The market price of the h20-model is $720, and the full cost of the h20-model is $540. Required: 1. If Burt has a transfer pricing policy that requires transfer at full cost, what will the transfer price be? $
Answer:
The transfer price is $540
Explanation:
Since the transfer pricing policy of Burt stipulates that transfers should be made at full cost and the full cost is $540, thus, the transfer price is $540.
The transfer price according to Burt Inc.'s policy, which requires transferring at full cost, would be $540 for the h20-model pump.
Explanation:The subject in question involves transfer pricing, which is a concept used in managerial and cost accounting. In the scenario provided, Burt Inc.'s internal transfer pricing policy requires transfers at full cost. Therefore, the transfer price that the Indian Division would charge the Maple Division for the h20-model pump would be the full cost of the product. If Burt Inc. has a transfer pricing policy that requires transfer at full cost, then the transfer price for the h20-model pump will be the full cost of $540.
As stated: "The full cost of the h20-model is $540." This means that the transfer price from the Indian Division to Maple Division should be $540.
Addai Company has provided the following comparative information:
20Y8 20Y7 20Y6 20Y5 20Y4
Net income $273,406 $367,976 $631,176 $884,000 $800,000
Interest expense 616,047 572,003 528,165 495,000 440,000
Income tax expense 31,749 53,560 106,720 160,000 200,000
Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000
Total stockholders’ equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000
Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000
Average total stockholders' equity 3,569,855 3,249,164 2,749,588 1,992,000 1,150,000
You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:
20Y4–20Y8
Return on total assets 28%
Return on stockholders’ equity 18%
Times interest earned 2.7
Ratio of liabilities to stockholders’ equity 0.4
Required:
Determine the folllowing:
a. Return on total assets:
b. Return on stockholders' equity:
c. Times interest earned:
Answer:
Return on total assets: (Net income + Interest expense)/ Average total assets
Return on stockholders’ equity : Net Income / Average Total stockholder
Explanation: I got the answer right
Final answer:
The answer explains how to calculate Return on Total Assets, Return on Stockholders' Equity, and Times Interest Earned using the provided financial data.
Explanation:
a. Return on total assets:
To calculate Return on Total Assets, divide Net Income by Average Total Assets for each year. This ratio measures how efficiently the company is using its assets to generate profit.
b. Return on stockholders' equity:
Return on Stockholders' Equity is calculated by dividing Net Income by Average Stockholders' Equity. It shows how well the company is generating profit from the shareholders' investments.
c. Times interest earned:
To find the Times Interest Earned ratio, divide Earnings Before Interest and Taxes (EBIT) by Interest Expense. This ratio indicates the company's ability to cover its interest payments.
do the terms debit and credit signify increase or decrease?
The terms debit and credit in accounting refer to increases or decreases in an account's value. Debit usually signifies an increase in assets or expenses or a decrease in liabilities, equity, or revenue. On the other hand, credit typically represents a decrease in assets or expenses or an increase in liabilities, equity, or revenue.
Explanation:In accounting, the terms debit and credit are used to describe the increase or decrease of an account's value. A debit usually represents an increase in assets or expenses or a decrease in liabilities, equity, or revenue. In contrast, a credit typically signifies a decrease in assets or expenses or an increase in liabilities, equity, or revenue.
Take, for instance, a business purchases a piece of machinery costing $10,000. This transaction results in a debit to the business's Asset account (to increase it) and a credit to the Cash account (to decrease it because the business has less cash after the purchase).
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Lupe made a down payment of $2200 toward the purchase of a new car. To pay the balance of the purchase price, she has secured a loan from her bank at the rate of 11%/year compounded monthly. Under the terms of her finance agreement she is required to make payments of $200/month for 48 months. What is the cash price of the car? (Round your answer to the nearest cent.)
Answer:
Cash price of the car
= Down payment + A(1 - (1+r/m)-nm
r/m
= $2,200 + $200(1-(1+0.11/12)-4x12
0.11/12
= $2,200 + $200(1-(1+0.0091666667)-48
0.0091666667
= $2,200 + $200(1-(1.009166666667)-48
0.0091666667
= $2,200 + `$200(38.691421)
= $9,938
Explanation:
The cash price of the car is equal to the down payment plus the present value of the monthly installment. The present value of the monthly installment is obtained by using present value of annuity formula.
To find the cash price of the car, we need to calculate the total amount of money Lupe will pay over the course of the loan and subtract it from the purchase price. We can use the formula for compound interest to calculate the interest paid. By rearranging the equation, we can find the cash price of the car.
Explanation:To find the cash price of the car, we need to calculate the total amount of money Lupe will pay over the course of the loan. She is making monthly payments of $200 for 48 months, which amounts to a total of $200 x 48 = $9,600.
To calculate the cash price of the car, we need to subtract the down payment and the total amount paid over the loan from the purchase price. Let's denote the cash price as C. The purchase price minus the down payment is equal to C - $2200.
Since Lupe is paying 11% interest compounded monthly, we can calculate the total interest paid as follows:
Interest = Purchase Price x (1 + 0.11/12)^48 - Purchase Price
The total amount paid over the loan is the purchase price plus the interest paid:
Cash Price = Purchase Price - Down Payment + Interest
Substituting the given values, we have the equation:
C - $2200 = $200 - Purchase Price + Purchase Price x (1 + 0.11/12)^48 - Purchase Price
Simplifying the equation, we have:
C - $2200 = ($200 x 48) + Purchase Price x (1 + 0.11/12)^48
Now, we can solve for C:
C = ($200 x 48) + Purchase Price x (1 + 0.11/12)^48 + $2200
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A clothing store has ordered 100,000 swimsuits. It costs $22 to produce a swimsuit. They plan to sell them until August 31 at a price of $40 and then mark the price down to $30. Given values for demand through August 31 and after August 31, develop a worksheet to compute the profit from this order. (Hint: you select demand values. The point is to create a formula that will provide the correct profit for any demand level.)
Answer:
Total profit = $1800000 @ a given demand level of 100K units of swimsuit.
Explanation:
Lets first develop a formula representing the Total profit for any demand level, see as follows:
(Selling price per unit× d) - (cost per unit× d)= Total profit
We will be using the short forms of the components in this formula.
SP = selling price per unit
d= demand
cp= cost per unit
TP= Total profit.
Now lets substitute the values into the formula to compute profit at any demand level (in this case 100,000 units of swimsuits) as follows:
Total profit = ($40× 100000) - ($22× 100000)
Total profit = $4000,000 - $2200,000
Total profit = $1800000 @ a given demand level of 100K units of swimsuit.
(NOTE: The formula mentioned above can be used to compute the correct profit for any demand level, even though if there is a change in sp and/or cp, the formula can also be useful.)
A local marketing firm is considering launching a new and extensive social media marketing campaign. This investment of resources is being looked at through the length of the project since it is anticipated to last at least 5 years. What financial calculation should be used to compute the investment's value, taking into account the time value of money?'
Answer:
The marketing firm should use the Present Net Value calculation to see if the marketing campaign will add value to the company.
Explanation:
The Present Net Value is a calculation that brings to present time all the future cash flows of an investment. Seeing the campaign marketing strategy as a potential investment, the firm has to identify the revenue entirely caused by the marketing campaign. Doing this, the firm will identify inflows (sales) per year that have to be subtracted to the outflows (marketing expenses). The net value of every year is discounted at a discount rate, and if the Present Net Value is higher than 0, it means that the marketing strategy is expected to bring value to the firm
If the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied______________.
a. there is a surplus and the interest rate is above the equilibrium level.
b. there is a surplus and the interest rate is below the equilibrium level.
c. there is a shortage and the interest rate is above the equilibrium level.
d. there is a shortage and the interest rate is below the equilibrium level.
When the demand for loanable funds exceeds the supply, there is a shortage and the interest rate rises above the equilibrium level. This situation persists until the demand and supply of loanable funds are once again balanced, restoring equilibrium in the market.
Explanation:If the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, the correct choice would be c. there is a shortage and the interest rate is above the equilibrium level. This concept is under the subject of economics and specifically deals with the loanable funds market, which is a theoretical model used to explain interest rate determination. In this model, the quantity of loanable funds is determined by savers (supply) and borrowers (demand).
In the scenario where demand exceeds supply, there's a shortage of loanable funds. Applying the basic principle of economics, when there is a shortage, the price of the commodity typically increases. In this context, the price of the commodity is the interest rate, so it will increase above the equilibrium level until the quantity demanded and the quantity supplied become equal again, restoring equilibrium in the market.
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Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $30,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.Required:1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.*2. Journalize the entries to record the following:*a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.)b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.)3. Determine the total interest expense for 20Y1.4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest?5. Compute the price of $31,951,110 received for the bonds by using the present value tables. (Round to the nearest dollar.)
Answer:
Cash 31,951,110 debit
Bonds Payable 30,000,000 credit
Premium on BP 1, 951, 110 credit
--to record issuance of bonds--
interest expense 1,402,444.5 debit
Premium on BP 97,555.5 debit
cash 1,500,000 credit
--to record payment of interest of Dec 31th--
interest expense 1,402,444.5 debit
Premium on BP 97,555.5 debit
cash 1,500,000 credit
--to record payment of interest of June 30th--
Interest expense for 20Y1: 1,402,444.5 dollars
4.- Yes, as the market is willing to accept a higher price o nthe bond as it yields above the market.
Explanation:
proceeds: 31, 951, 110
face value: 30,000,000
premium 1, 951, 110
the premium is the difference between the proceeds and face value.
It will be amortized over 20 payment periods:
1,951,110 / 20 = 97,555.5
this will be subtracted from the interest cash payment to determinate the interest expense:
30,000,000 x 5% = 1,500,000
1,500,000 - 97,555.5 = 1,402,444.5
Under straight line mehtod all entries are the same.
To record the cash proceeds from the bond issuance, debit Cash, Bonds Payable, and Premium on Bonds Payable. Journalize the first interest payment and amortization of the bond premium. Determine the total interest expense for the year. Explain the relationship between bond proceeds and face amount. Compute the bond price using present value tables.
Explanation:To journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1, you would debit Cash for $31,951,110 and credit Bonds Payable for $30,000,000 and Premium on Bonds Payable for $1,951,110.
To journalize the entries for the first semiannual interest payment on December 31, 20Y1, you would debit Interest Expense for $1,500,000 and the Premium on Bonds Payable for $714,198, and credit Cash for $2,214,198.
The total interest expense for 20Y1 would be $3,000,000.
When the contract rate is greater than the market rate of interest, the bond proceeds may or may not be greater than the face amount of the bonds. This depends on various factors such as the overall demand for bonds and the perceived creditworthiness of the issuer.
The price of $31,951,110 received for the bonds can be computed using the present value tables. By discounting the cash flows (interest payments and face value payment) at the market interest rate of 9%, you can calculate the present value of the bond.
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During formation of Beecky partnership, Sam contributed property with an adjusted basis of $130,000 in exchange for a 25% interest in Beecky. The fair market value of the contributed property was $170,000 and the property was encumbered by a mortgage with a balance of $120,000. What amount of gain should Sam recognize from contributing the property into Beecky partnership?
Answer:
Sam would not recognize any gain on the contribution.
Explanation:
A partner does not recognize a gain on the contribution from the appreciated property to a partnership unless it is subject to a liability that exceeds the contributing partner basis in the property. Sam is contributing property with a basis of $130,000, subject to a liability of $120,000, for a 25 % in partnership. As a result Sam would have a basis in the contributed property, minus the $120,000 liability assumed by the partnership, plus Sam's portion of the liability, 25% x $120,000 or $30,000.
A firm has four branch offices throughout the state. Following are the operating results from last year. K City G City W City S City Branch office sales $300,000 $420,000 $ 540,000 $606,000 Branch office profit 120,000 294,000 318,000 104,000 Average total assets 805,000 914,000 1,650,000 745,000 Which branch had the highest return on investment?
A. K City.
B. G City.
C. W City.
D. S City.
Answer:
City K City G City W City S
$ $ $ $
ROI
= NP x 100 120.000 x 100 294,000 x 100 318,000 x 100 104,000 x 100
ATA 805,000 914,000 1,650,000 745,000
ROI 14.91% 32.17% 19.27% 13.96%
Where ROI refers to return on invetment, NP represents net profit and ATA denotes average total assets.
City G has the highest return on investment.
Explanation:
Return on investment is calculated as the ratio of net profit to average total assets multiplied by 100.
In​ 1982-84 dollars, the real average hourly wage rate in 2003 was ​$8.28 and in 2004​, it was ​$8.24. In 2003​, the CPI was 184.0 and in 2004​, the CPI was 188.9. Calculate the nominal wage rate in 2003 and in 2004.
Answer:
The nominal wage in 2003 = $15.22
The nominal wage in 2004 = $15.565
Explanation:
Inflation = [ ( CPI of 2003 - CPI of base year ) ÷ CPI of Base year ] × 100
= [ ( 184 - 100 ) ÷ 100 ] × 100
= 84%
Therefore,
The wage will increase by this inflation to be nominal
= 8.28 × (1.84)
= $15.23
Similarly
Inflation = [ ( CPI of 2004 - CPI of base year ) ÷ CPI of Base year ] × 100
= [ ( 188.9 - 100 ) ÷ 100 ] × 100
= 88.9%
Therefore,
The wage will increase by this inflation to be nominal
= 8.24 × (1.889)
= $15.565
Hence,
The nominal wage in 2003 = $15.22
The nominal wage in 2004 = $15.565
Administrative Expenses $ 686,200 Beginning Finished Goods $ 108,620 Beginning Raw Materials $ 427,150 Beginning WIP $ 20,625 Depreciation on Factory Equip $ 202,035 Direct Labor $ 756,908 Ending Finished Goods $ 93,612 Ending Raw Materials $ 501,302 Ending WIP $ 27,941 Factory Utilities $ 312,052 Indirect Materials Used from Raw Materials $ 87,712 Insurance (70% for factory 30% for admin) $ 210,855 Marketing Expenses $ 442,807 Raw Materials Purchases $ 2,422,920 Repair and Maintenance on Factory Equip $ 129,246 Sales $ 6,420,456 Sales Supervision $ 294,485 Direct Materials Used is:
1) 2,348,768
2) 2,261,056
3) 2,422,920
4) 2,850,070
Answer:
1) 2,348,768
Explanation:
The formula to compute the direct material used is shown below:
= Opening balance of raw material + purchase - ending balance of raw material
= $427,150 + $2,422,920 - $501,302
= $2,348,768
We simply added the purchase and deduct the ending balance to the opening balance of raw material so that the accurate amount can come