Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $22,800 ($1,900/month) in advance on October 1.1.Record the payment of rent in advance on October 1.2.Record the adjusting entry for rent used till December 31.3. Calculate the year-end adjusted balances of prepaid rent and rent expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).
Answers
Answer:
1.
Debit Credit
Prepaid Rent $22,800
Cash $22,800
2.
Debit Credit
Rent expense(22,800*3/12) $5,700
Prepaid Rent $5,700
3.
Prepaid rent=22,800-5,700=$17,100
Rent expense=$5,700
Explanation:
1.
On October 1, , the following journal entry will be recorded in respect of the advance rent paid by the Hoosiers for one year of rent space at local mall:
Debit Credit
Prepaid Rent $22,800
Cash $22,800
2.
The year end given in this question is December 31 and the prepaid rent is paid for one year and since the rent is paid on October 1, therefore, only expense in respect of 3 months i.e. from October to the December will be recognised in this year in respect of rent expense. Remaining expense of nine months will be recognised in the next year.
The following adjusting Journal entry will be recorded in respect of rent expense in accounts on December 31.
Debit Credit
Rent expense(22,800*3/12) $5,700
Prepaid Rent $5,700
3. The year end adjusting balance of prepaid rent and rent expense will be calculated as
Prepaid rent=22,800-5,700=$17,100
Rent expense=$5,700
Journal entry refers to the primary record of transactions and events of a specific period. The journal entries for the question are given in the attachment.
What is journal entry?Journal entry refers to the primary record of transactions and event of an entity in chronological order during a specific period. Journal entry supports the preparation of subsidiary books.
Prepaid expense refers to the expenses paid in advance for a period. They appear in the balance sheet as assets of the entity.
Prepaid rent of Suppose Hoosiers is $22,800 in the month of October. In the month of December, the expense of 3 months will be recognized as the expense for the period.
Therefore rent expense will be:
[tex]\rm Rent\:expense = Rent\:per\:month \times 3\: months\\\\\rm Rent\:expense = \$1,900 \times 3\: months\\\\\rm Rent\:expense = \$5,700[/tex]
The prepaid rent will be the rent paid for next year for the period between January to September:
[tex]\rm Prepaid\:rent = \$1,900 \times 9\:months\\\\\rm Prepaid\:rent = \$17,100[/tex]
Prepaid rent of $17,100 will appear in the asset side of the balance sheet.
Learn more about Journal entries here:
https://brainly.com/question/17439126
Related Questions
An additional cost incurred only if a company pursues a particular course of action is a(n):
Answers
An additional cost incurred only if a company pursues a particular course of action is an incremental cost.
Explanation:
The company in order to manufacture it's goods has to make certain costs which are related to the production process. From the processing of the raw material to the final goods and it's distribution in to the market involves incurring of the cost.
But sometimes there are certain extra cost that the firm has to make because of a particular course of action that the firm takes up. This is different from the routine actions of the firm involved in the production of the goods and there fore it is known as the incremental cost because it has increased the cost of the firm.
The challenge of cost-benefit analysis and the tragedy of the commons are two problems associated with which type of good?
Answers
Answer:
Nonexcludable goods
Explanation:
The cost-benefit analysis, in microeconomics, public economics and industrial economics, generically indicates the set of techniques for evaluating investment projects based on the measurement and comparison of all costs and benefits directly and indirectly connected to them. The analysis is generally conducted by reporting each input unit in elementary cost units and each output unit in elementary benefit units. Each of these units is then attempted to give the most objective value possible, thus making it measurable and comparable. The total cost, therefore, is the sum of the values of the individual units of elementary costs, while the total benefit is, similarly, the sum of the values of the individual units of elementary benefits. It is possible, with this system, to evaluate direct and indirect benefits and costs. In order to have reliable results, it is important to limit the units of elementary benefits and costs as realistic as possible and to evaluate these units using prices that are as objective as possible. The challenge is about how the individuals uses inappropriately the goods. The problem is the state or control mechanisms can not always forbid to free using of goods. This is free riding problem or common pool resources. If the common resources is considered, the analysis will have a challange.Common-pool resources - goods that are characterized by the inability to exclude users and the competitive nature of consumption. The first condition means that the good supplier cannot prevent others from using the good. The second condition means that the consumption of a good by an individual deprives others of the use of the good's qualities to expand their own benefits. Common pool goods are characterized by the fact that if they are used excessively, the good is able to lose its value or be completely degraded.
In economics, common pool goods are a kind of goods consisting of natural or man-made system resources (e.g. irrigation or fishing grounds) whose size or specificity makes them expensive, but not impossible to exclude potential beneficiaries from obtaining benefits from their using. Unlike pure public goods, the goods in the common pool are struggling with overload problems or their abuse because they are publicly available. Common pool goods usually consist of a resource core (e.g., water or fish), which defines a time variable, while providing a limited amount of extraction of secondary units, which are referred to as variable flow.
Examples of common pool goods include irrigation systems, fisheries, pastures, forests, water and atmosphere. Pasture, for example, allows a certain amount of grazing. However, in the event of excessive grazing, pasture may become more susceptible to erosion and ultimately bring fewer benefits to its users. These types of goods also include traffic routes such as streets. As long as there are few vehicles, everyone is moving smoothly, but when there are too many, traffic jams form and everyone goes slower.
A group of welders is trying to decide if they should join the union or not. They have heard pros and cons about unions. As the manager of this group, you are in support of them joining the union because of its effect on productivity. What do you think the manager knows about unions that the welders may not?
Answers
Answer: Trade unions aid workers productivity by ensuring the following
Explanation:
(1) Quick conflict resolution ( trade unions ensure that workers grievance are effectively addressed by their employees which will avert any shutdowns of operations)
(2) Building of Trust: trade unions help workers in the trust building process which in helps them to work with Assurance of adequate compensation.
(3) Employees retention: since employees trust their employees they tend to be more committed and ready to work for longer periods.
In 2016, Carow sold 3,000 units at $500 each. Variable expenses were $250 per unit, and fixed expenses were $500,000. The same selling price is expected for 2017. Carow is tentatively planning to invest in equipment that would increase fixed costs by 20%, while decreasing variable costs per unit by 20%. What is Carow's break-even point in units for 2017? Select one:
Answers
Answer:
2,000 units
Explanation:
In this question we use the formula of break-even point in unit sales which is shown below:
= (Fixed expenses) ÷ (Contribution margin per unit)
where,
Fixed expenses would be
= $500,000 × 120%
= $600,000
As fixed expense is increased by 20% so it would be 100 + 20 = 120%
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $500 - $250 × 80%
= $500 - $200
= $300
As variable expense per unit is decreased by 20% so it would be 100 - 20 = 80%
Now put these values to the above formula
So, the value would equal to
= ($600,000) ÷ ($300)
= 2,000 units
Final answer:
Carow's break-even point in units for 2017 is calculated based on the increased fixed cost due to new equipment investment and the decreased variable cost per unit. The new fixed cost is $600,000, while the new variable cost per unit is $200. With a selling price of $500, the break-even point is 2,000 units.
Explanation:
To calculate Carow's break-even point in units for 2017, we need to consider the changes in fixed and variable costs that the new equipment will bring. The initial fixed costs are $500,000, and they will increase by 20%, resulting in a new fixed cost of $600,000 (500,000 × 1.20). The variable cost per unit, originally $250, will decrease by 20%, leading to a new variable cost of $200 (250 × 0.80). The break-even point in units is found by dividing the total fixed costs by the contribution margin per unit, which is the selling price minus the variable cost per unit.
Break-even point in units = Total fixed costs / (Selling price - Variable cost per unit)
Break-even point in units = $600,000 / ($500 - $200)
Break-even point in units = $600,000 / $300
Break-even point in units = 2,000 units
Thus, Carow's break-even point for 2017 is 2,000 units.
A company issues $15,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2012. Interest is paid on June 30 and December 31. The proceeds from the bonds are $14,703,109.
Using effective-interest amortization, how much interest expense will be recognized in 2012?
a. $585,000b. $1,170,000c. $1,176,374d. $1,176,249
Answers
Answer:
Interest Expense for 2017 is $1,176,373
Explanation:
Interese Expense to be recognized in 2017 is $1,176,373
Interest Expense for Jan-Jun = $14,703,108 * 8%/2 = $588,124
Amortization of Discount= ($14,703,108 * 8%/2) - ($15,000,000* 7.8%/2)
= $588,124 - $585,000 = $3,124
Carry Amount of Bond on June 30 = $14,703,108 + ($14,703,108 * 8%/2) - ($15,000,000* 7.8%/2)
= $14,703,108 + $588,124 - $585,000 = $14,706,232
Interest Expense for Jun-Dec= [$14,703,108 + ($14,703,108 * 8%/2) - ($15,000,000* 7.8%/2)] *8% /2
= ($14,703,108 + $588,124 - $585,000) *8% /2
= $14,706,232 *8% /2 = $588,249
Interest Expense for 2017 = $588,124 + $588,249 = $1,176,373
Are the security needs of small businesses different than those of a larger corporation?
Answers
Answer:
Well, this is sort of a "Yes and No" and "Depends on the Situation" type of answer.
But in a way, yes. to understand this, we have to look at a key area that separates Small businesses from large corporations.
That is their "Risk".
Small Businesses may be sole proprietorship, partnerships or even family business. When going to raise capital, especially debt capital, what they lack is a "guarantee" that they can pay it back and that their business will continue for a foreseeable time in the future to be able to pay it back!
On the contrary, the corporations have a separate legal personality and a perpetual succession, meaning that if the owners pass away or change, that won't affect the on-going status of the company.
Such things matter the most as small business inherently faces such Risks of continuation and succession.
Moreover, larger corporations often have bigger balance sheets numbers, profits, and cash flows contrary to small and medium enterprises. Profits and cash flows are another angle the lenders look at when it comes to security needs.
So yes. Security needs can very much differ between small businesses and Larger corporations.
Explanation:
You are evaluating two different silicon wafer milling machines. The Techron I costs $245,000, has a three-year life, and has pretax operating costs of $63,000 per year. The Techron II costs $420,000, has a five-year life, and has pretax operating costs of $35,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $40,000. If your tax rate is 22 percent and your discount rate is 10 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Answers
Answer:
Techron I
EAC = -$120,263.94
Techron II
EAC = -$114,504.27
Explanation:
Techron I
Cost of Machine = $245,000
Useful Life = 3 years
Annual Depreciation = Cost of Machine / Useful Life
Annual Depreciation = $245,000 / 3
Annual Depreciation = $81,666.67
Salvage Value = $40,000
After-tax Salvage Value = $40,000 × (1 - 0.22)
After-tax Salvage Value = $31,200
Annual OCF = Pretax Operating Costs × (1 - tax) + tax × Depreciation
Annual OCF = -$63,000 × (1 - 0.22) + 0.22 × $81,666.67
Annual OCF = -$31,173.33
NPV = -$245,000 - $31,173.33 × PVIFA(10%, 3) + $31,200 × PVIF(10%, 3)
NPV = -$245,000 - $31,173.33 × 2.4869 + $31,200 × 0.7513
NPV = -$299,084.39
EAC = NPV / PVIFA(10%, 3)
EAC = -$299,084.39 / 2.4869
EAC = -$120,263.94
Techron II:
Cost of Machine = $420,000
Useful Life = 5 years
Annual Depreciation = Cost of Machine / Useful Life
Annual Depreciation = $420,000 / 5
Annual Depreciation = $84,000
Salvage Value = $40,000
After-tax Salvage Value = $40,000 × (1 - 0.22)
After-tax Salvage Value = $31,200
Annual OCF = Pretax Operating Costs × (1 - tax) + tax × Depreciation
Annual OCF = -$35,000 × (1 - 0.22) + 0.22 × $84,000
Annual OCF = -$8,820
NPV = -$420,000 - $8,820 × PVIFA(10%, 5) + $31,200 × PVIF(10%, 5)
NPV = -$420,000 - $8,820 × 3.7908 + $31,200 × 0.6209
NPV = -$434,062.78
EAC = NPV / PVIFA(10%, 5)
EAC = -$434,062.78 / 3.7908
EAC = -$114,504.27
On December 31, 2015, Alpha Corporation has outstanding 1,000 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 20,000 shares of $10 par value common stock. No dividends were paid in 2015. During 2016, Alpha distributed $40,000 in dividends. Use this information to determine for the 2016 the dollar amount of dividends that will be distributed to:
Answers
Answer:
The dollar amount of dividends that will be distributed for the 2016 is $0.26
Explanation:
The dividend distributed to preferred stock = 7% x 20,000 shares x $10 par value = $14,000
The dividend distributed to common share = total distribituion of $40,000 – distributed to preferred stock $14,000 = $26,000
The earning per common share (EPS) = Total dividend distributed/ number of shares outstanding = $26,000/ 1,000 shares = $26
The dollar amount of dividends = EPS/ par value = $26/ $100 = $0.26
Sea Company reports the following information regarding its production costs: Units produced 42,000 units Direct labor $35 per unit Direct materials $28 per unit Variable overhead $17 per unit Fixed overhead $105,000 in total Compute the product cost per unit under absorption costing.
Answers
The product cost per unit under absorption costing for Sea Company is $82.50.
Explanation:To calculate the product cost per unit under absorption costing, we need to consider the total fixed overhead as well as the variable costs per unit. Here's the step-by-step calculation:
Calculate the variable cost per unit: Direct labor + Direct materials + Variable overhead = $35 + $28 + $17 = $80 per unit.
Calculate the total cost per unit: Variable cost per unit + (Fixed overhead / Units produced) = $80 + ($105,000 / 42,000) = $82.50 per unit.
Therefore, the product cost per unit under absorption costing for Sea Company is $82.50.
All of the following choices adhere to the NASAA Model Rule on Unethical Business Practices of Investment Advisers and Federal Covered Advisers EXCEPT when an investment adviser:[A] decides to borrow funds with a promissory note in writing from a client, who is also a controlling shareholder.[B] decides to borrow funds with a promissory note in writing from an institutional lending facility, who also happens to be a client.[C] decides to borrow funds with a promissory note in writing from an individual client.[D] decides to borrow funds through a margin account from a broker-dealer who also just happens to be a client.
Answers
Final answer:
Borrowing funds from an individual client with a promissory note by an investment adviser is considered unethical and does not adhere to NASAA Model Rule standards.
Explanation:
The question pertains to the ethical standards set by the NASAA Model Rule in the context of investment advisers and Federal Covered Advisers, especially regarding the borrowing of funds. Among the choices given, the one that does not adhere to the ethical standards is when an investment adviser decides to borrow funds with a promissory note in writing from an individual client. This is typically considered unethical because it can create a conflict of interest and may not be in the best interest of the client.
A stock's price fluctuations are approximately normally distributed with a mean of $104.50 and a standard deviation of $23.62. You decide to purchase whenever the price reaches its lowest 10% of values. What is the most you would be willing to pay for the stock?
Answers
Answer:
$ 74.23
Explanation:
We are given the following:
mean, μ = $ 104.50
standard deviation, σ = $ 23.62
Using the z-score table, we have
P(Z < z) = 10% (since we are evaluating lowest 10% of values)
hence P(Z < z) = 0.10
P(Z < -1.282 ) = 0.10
z = -1.282 (this evaluates to 0.1 on the z-score table)
Using z-score formula,
x = z *σ + μ
substituting the values,
x =- - 1.282 * 23.62 + 104.50
= 74.23
The most for the stock is $ 74.23
A business school administrator who is determining what classes will be offered in which roomsand who will teach each specific class is involved in which classical management function?
Answers
Answer:
The correct answer is organizing
One of the ten IG principles is a Continuous improvement. What is the importance of this principle to the organization program? A. Provide periodic program review and necessary adjustment against gaps and or shortcomings B. Ensure guidelines and policies are being followed to measure employee compliance C. Document management and report management software must be deployed for control D. None of the above
Answers
Answer:
The correct answer is letter "A": Provide periodic program review and necessary adjustment against gaps and or shortcomings.
Explanation:
Information Governance or IG principles are regulations that look for taking care of information security and control. Ten (10) are the IG principles and Continuous Improvement is the last one. This principle states that the programs reviewed by the IG are being transformed continuously which implies monitoring on a regular basis to avoid business gaps and shortcomings.
The Howe Co. stockholders equity account follows: Common stock (400,00 shares at $4par) $1,600,000 Paid in capital in excess in par 1,000,000 Retained earnings 1,900,000 Total stockholders equity $4,500,000 The earnings available for common stockholdes from this periods operations are $100,000,which have been included as part of the $1,9 million retained earnings. A. what is the maximun dividend per share that the firm can pay?(assume that legal capital includes all paid-in-capital) B. If the firm has $160,000 in cash, what is the largst per-share dividend it can pay without borrowing? C. Indicate the accounts and changes,if any,that will result if the firm pays the dividends indicated in parts A and B? D. Indicate the effects of an $80,000 cash dividend on stockholders equity.
Answers
Answer:
Explanation:
The computations are shown below:
A. Dividend per share:
= (Total retained earning) ÷ (number of shares)
= ($1,900,000) ÷ (400,000 shares)
= $4.75 per share
B. Largest per share:
= (Cash) ÷ (number of shares)
= ($160,000) ÷ (400,000 shares)
= $0.40 per share
C. In part A, the cash and retained earnings is decreased by $1,900,000
whereas in part B, the cash and retained earnings is decreased by $160,000
D. The retained earning which is a part of stockholder equity is decreased by $80,000
1. Which of the following ratios are key components in measuring a company's operating efficiency? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
a. Profit margin unchecked
b. Equity ratio unchecked
c. Return on total assets checked
d. Total asset turnover checked
2. Which ratio summarizes the components applicable in 1.1?
a. Total asset turnover
b. Debt ratio
c. Return on total assets
d. Profit margin
3. What measure reflects the difference between current assets and current liabilities?
a. Return on total assets
b. Gross margin
c. Day's sales uncollected
d. Working capital
4. Which of the following short-term liquidity ratios measure how frequently a company collects its accounts? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
a. Days' sales uncollected checked
b. Days' sales in inventory unchecked
c. Accounts receivable turnover checked
d. Acid-test ratio unchecked
Answers
Answer:
Explanation:
1. c. Return on total assets checked
d. Total asset turnover checked
2) b. Debt ratio
3) d. Working capital
4) c. Accounts receivable turnover checked
Answer:
1. c. Return on total assets checked and
d. Total asset turnover checked
2) b. Debt ratio
3) d. Working capital
4) c. Accounts receivable turnover checked
Explanation:
1. This is used to show how well a company utilizes it assets to generate sales.
2. Debt ratio is used to indicate the percentage of a company’s capital that was obtained through debt.
3. Working capital is that capital set aside for the day to day running of an organisation.
4. Accounts receivable turnover checked This is the number of times with a period usually a year a company collects it receivables.
Bob and Carol refinanced their sole residence, valued at $500,000, in 2019. Under the refinancing arrangement, they refinanced their $300,000 indebtedness for $400,000, receiving $100,000 in cash that they used to pay for their daughter's wedding. What percent of the interest they pay on the refinanced property are they able to deduct?A) 25 % B) 50 % C) 75 % D) 100 %
Answers
The percentage of interest they pay on the refinanced property are they are able to deduct 75%
Explanation:
based on the IRS ,
The first $300,000 of the new loan is treated as home acquisition debt. The interest on that amount of the new loan qualifies as an itemisable deduction The last $100,000 of the new loan can be used for daughter's wedding is treated as home equity debt.$ 300,000/$ 400,000 or 75% will qualify for deduction.
hence it is said to be 75%
Based on the amount acquired from the refinancing agreement, the percentage that is deductible is C. 75%
Current tax laws allow one to deduct interest on up to $300,000 on home acquisition debt which is what Bob and Carol did.
The amount that is deductible is therefore:
= Interest deductible loan / Refinanced amount
= 300,000 / 400,000 x 100%
= 75%
In conclusion, option C is correct.
Find out more about refinancing at https://brainly.com/question/6433816.
On August 5, 2021, Blossom Furniture shipped 50 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $220 each. The cost of shipping the dining sets amounted to $1850 and was paid for by Blossom Furniture. On December 30, 2021, the consignee reported the sale of 40 dining sets at $720 each. The consignee remitted payment for the amount due after deducting a 5% commission, advertising expense of $470, and installation and setup costs of $650. The total profit on units sold for the consignor is
Answers
Final answer:
The total profit on units sold for the consignor is $13,390.
Explanation:
To calculate the total profit on units sold for the consignor, we need to consider the cost of the dining sets, the cost of shipping, and the deductions made by the consignee.
The total cost of the 50 dining sets is 50 x $220 = $11,000.
The cost of shipping the dining sets is $1850.
The consignee reported the sale of 40 dining sets at $720 each, which amounts to $28,800.
The consignee deducted a 5% commission of $1,440 (40 x $720 x 0.05), advertising expense of $470, and installation and setup costs of $650.
Therefore, the total profit on units sold for the consignor is
= $28,800 - $1,440 - $470 - $650 - $11,000 - $1,850
= $13,390.
A low-cost airline described as one of the excellent companies in the bestseller of the early 1980s, In Search of Excellence, is no longer in business. Industry analysts state that although the service and prices provided by the airline were what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. This scenario is illustrative of which aspect of the competitive environment
Answers
Answer: Monopolistic competition
Explanation:
This is a market in which large numbers of producer sells differentiated products in terms of quality or branding. The ability to differentiate the products makes it possible for the different firms to practice price discrimenation which is further strengthen through advertising of the product, the price differences may force a firm out of the market if the demand for it's products falls significantly.
The beginning Cash account balance is $38,700. During the period, cash disbursements (outflows) totaled $144,600.
If ending Cash is $51,200, then cash receipts must have been:
A. $105,900
B. $234,500
C. $132,100
D. $157,100
E. none of the abov
Answers
Answer:
D. $157,100
Explanation:
Amount in $
Beginning Cash account balance 38,700
Cash disbursement (outflows) (144,600)
Cash inflows xxxx
Ending balance 51,200
Cash inflows = 51,200 + 144,600 - 38,700
= $157,100
The right option is D. $157,100.
Which is true of output-choice models of oligopoly behavior?
a. Niether the Cournot nor the Stackelberg model can be constructed as a sequential game.
b. Both the Stackelberg and Cournot models can be constructed as sequential games
c. The Cournot, but not the Stackelberg, model can be constructed as a sequential game.
d. The Stackelberg, but not the Cournot, model can be constructed as a sequential game
Answers
The particular type of shareholder voting used has become less important with the influence of takeovers, leveraged buy-outs, and other challenges to management control.
A. True
B. False
Answers
Answer: B. False
Explanation:
Even in the case of take over or mergers or acquisition, a shareholder remains part of the organization because the shareholder still has the shares within the company and therefore could play a decisive role in the voting.
You have spent weeks designing the project, gathering data and analyzing it. Now it is time to present your findings to senior executives. Your best course of action is to _________.
Answers
Answer:
After spending weeks on a project, gathering data, followed by an analysis, when you are going to present your findings to the senior executes, In the very beginning of your report, in the executive summary, you can present and manifest and guide them about all the information, what they should know in making a decision
Explanation:
After spending weeks on a project, gathering data, followed by an analysis, when you are going to present your findings to the senior executes, you will have following 5 different course of actions;
Option 1: You can give them whole details through which you can have gone, meanwhile your discussion with the senior executives.
Option 2: Summary of the report in form of data tables can be provided without any recommendation and course of action suggested.
Option 3: You can also mention the information regarding the respondents of the research, if executives want to have follow-up and want to know to whom you have got your questionnaires filled up.
Option 4: In the very beginning, in the executive summary of the report, you can present and manifest and guide them about all the information, what they should know in making a decision
Option 5: You main focus could be primarily on the statistical analysis in your presentation, followed by the main recommendations at the end.
BEST POSSIBLE OPTION: As the senior executives are having very less time, therefore, it would be best for you present them with the information in the very beginning in the executive summary, in addition, all the information which they can consider to make a decision.
To recapitulate, keep the information needed to be considered for taking an action or decision, in your executive summary, in a best possible simple and short way.
Consider an asset that has a beta of 1.25. If the risk free rate is 3.25 and the mrket risk premium is 5.5% caculate the expected return on the asset.
Answers
Answer:
10.125%
Explanation:
The formula to compute the expected return on the asset is shown below:
Expected return on the asset = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 3.25% + 1.25 × 5.5%
= 3.25% + 6.875%
= 10.125%
The (Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is used in the computation part
Suppose Nationwide increases the insurance premium they charge for their auto policies by 18 percent. In response, the demand for State Farm auto policies in a small town increases from 6,000 to 7,500. What is the cross-price elasticity of demand for State Farm auto policies in this town?
a. Using the midpoint formula, the cross-price elasticity of demand for State Farm auto policies is:_______
b. In this instance, auto insurance from Nationwide and auto insurance from State Farm are _____.
Answers
Solution:
Cross-price elasticity of demand is given
Ec = (% Change in Quantity Demanded of good / % Change in Price of good)
A Greek letter "DELTA," which indicates the symbol Delta, suggests the change in the price and quantity demanded from the basic quantify or price.
% Change in Quantity Demanded in units = [ (6,900 - 6,000) / 6,000] * 100
= (900 / 6,000) * 100
= 15%
% Change in Price = [ (1.08x- x) / x] * 100
= (0.08 / 1) * 100
= 8%
Price has been denoted as x and 1.08x respectively, as no indication is available on what the actual price was; only information of how much it increased by is available to us.
Cross-Price Elasticity of Demand (Ec) equals (15% / 8%) = 1.875
Therefore, the cross-price elasticity of demand of State Farm Auto Policies is 1.875
The cross-price elasticity of demand can be calculated using the midpoint formula to measure the response of demand for State Farm insurance policies due to an 18% increase in the prices of Nationwide policies. The positive result reveals that the insurances from the two companies are substitute goods.
Explanation:The cross-price elasticity of demand measures the response of demand for a good to a change in the price of another good. It is calculated using the formula:
E = [(Q2 - Q1) / (Q2 + Q1) / 2] / [(P2 - P1) / (P2 + P1) / 2]
Where Q1 is the initial quantity, Q2 is the final quantity, P1 is the initial price, and P2 is the final price. Note that here the 'price' is not given in numerical terms, but in terms of an 18% increase.
So, for this problem, the initial quantity demand is 6,000 and the final quantity demand is 7,500. As for the percentage change in price, we consider it as -18% for Nationwide. Putting these values in the formula, we should obtain the cross-price elasticity. A positive value will indicate that Nationwide and State Farm auto insurance are substitutes. This is because as the price of Nationwide increases, people are switching to State Farm policies.
Learn more about Cross-Price Elasticity of Demand here:https://brainly.com/question/31293339
#SPJ12
4. Come Home Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5.00 per direct labor-hour; the budgeted fixed manufacturing overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted cash disbursements for manufacturing overhead for December total $105,000, then the budgeted direct labor-hours for December must be:
Answers
Answer:
9,000 hours
Explanation:
Budgeted cash disbursements for factory overhead for December total
= $105,000
Total budgeted factory overhead for December:
= Budgeted cash disbursements for factory overhead + Depreciation per month
= $105,000 + 15,000
= 120,000
Variable Factory Overhead:
= Total budgeted factory overhead for December - Fixed Overhead
= 120,000 - 75,000
= 45,000
Budgeted direct labor time for December:
= Variable Factory Overhead ÷ Variable Factory Overhead rate per direct labor hour
= 45,000 ÷ 5
= 9,000 hours
Which of the following formulas is used to calculate the materials price variance? a.(Actual Price × Actual Quantity) – (Standard Price × Standard Quantity) b.(Actual Price × Actual Quantity) – (Standard Price × Actual Quantity) c.(Variable Price × Actual Quantity) – (Total Price × Actual Quantity) d.(Fixed Price × Average Quantity) – (Standard Price × Actual Quantity) e.None of these choices are correct.
Answers
Answer:
b.(Actual Price × Actual Quantity) – (Standard Price × Actual Quantity)
Explanation:
The material price variance shows how favourable or otherwise the actual material price is compared to the standard price. Where the actual material price is higher than the standard price, it results in an unfavorable variance and when the standard price is higher than the actual price, it results in a favourable variance.
The formula for the material price variance
= (Actual price - Standard price) × Actual quantity
= (Actual price × Actual quantity) - (Standard price × Actual quantity)
Hence the right option is b.
The formula used to calculate the materials price variance is: (Actual Price × Actual Quantity) – (Standard Price × Actual Quantity). The correct option is A.
Explanation:The formula used to calculate the materials price variance is:
(Actual Price × Actual Quantity) – (Standard Price × Actual Quantity)
This formula compares the actual price per unit of materials used to the standard price per unit, and calculates the difference based on the actual quantity used. By subtracting the standard cost from the actual cost, we can determine if the materials cost more or less than expected.
Learn more about Materials price variance here:https://brainly.com/question/13375811
#SPJ3
"Big Burger has 100,000 shares of common stock outstanding at a market price of $40 a share. There are 10,000 shares of 8 percent preferred stock outstanding at a market price of $30 a share. The firm has 1000 bonds outstanding with a face value of $1,000 and a market price of $960. The firm’s tax rate is 34 percent. What weight should be assigned to the cost of common stock when computing the weighted average cost of capital?"
Answers
Answer:
weight % of equity = 76.05%
weight % of preferred stock = 5.70%
weight % of debt = 18.25%
Explanation:
calculation for equity:
total number of equity is 100,000
market price of stock = 40
so total value of stock = 40 × 100,000 = 4,000,000
calculation for preferred stock:
total number of share is 10,000
market price of stock = 30
so total value of stock = 30 × 10,000 = 300,000
calculation for debt:
total number of bond is 1,000
market price of bonds = 960
so total value of stock = 960 × 1,000 = 960,000
total value = 4,000,000 + 300,000 + 960,000 = 5,260,000
Calculation of weight percentage
weight % of equity =[tex]\frac{4,000,000}{5,260,000} = 0.7604 = 76.04%[/tex]
weight % of preferred stock [tex]= \frac{300,000}{5,260,000} = 0.0570 = 5.70[/tex]%
weight % of debt [tex]= \frac{960,000}{5,260,000} = 0.1825 = 18.25\%[/tex]
Once unexpended Research, Development, Test and Evaluation (RDT&E) funds have expired, they can be used for _____________________.New Procurement obligations only New RDT&E obligations only New obligations
Answers
Answer:
The correct answer is letter "D": Payments or adjustments to the original obligations.
Explanation:
Research Development Test & Evaluation (RDT&E) funds are dedicated to cover costs of specific research, development, testing and assessment activities. Once deadlines to present the research are due, the funds can be directed to maintenance of laboratories or any other payment or adjustment besides the initial purpose of that money.
The marginal revenue curve is a straight line beginning at the same point on the: Select one: a. horizontal axis as the demand curve but with twice the slope. b. horizontal axis as the demand curve but with half of the slope. c. vertical axis as the demand curve but with twice the slope. d. vertical axis as the demand curve but with half of the slope.
Answers
Answer:
The correct answer is letter "C": vertical axis as the demand curve but with twice the slope.
Explanation:
The marginal revenue curve portraits the relationship between the marginal revenue received by a company and the number of goods produced. It is said to graphically show the degree of market control possessed by the organization. The marginal revenue compared to the demand curve is located below since the marginal revenue is lower than the price.
The marginal revenue curve begins at the same point on the vertical axis as the demand curve, with twice the slope. This is represented mathematically by the MR curve equation P=10-2Q, where the demand curve is P=10-Q.
The student's question pertains to the relationship between the marginal revenue (MR) curve and the demand curve in the context of economics. When depicted graphically, the MR curve starts at the same point on the vertical axis as the demand curve but with a crucial difference in the slope. If the demand curve is a straight line, and the relationship between price (P) and quantity (Q) is linear, the marginal revenue curve will have exactly twice the slope of the demand curve.
Given the equations provided, where the demand curve is represented by Q=10-P, translating into P=10-Q, we therefore derive the marginal revenue curve equation as P=10-2Q. This demonstrates that the MR curve bisects any horizontal line drawn from the vertical axis to the demand curve and lies below the demand curve.
Thus, understanding these concepts allows us to conclude that the correct answer to the student's multiple-choice question is: a. horizontal axis as the demand curve but with twice the slope.
Arthur, a salesperson in a leading apparel store, is very courteous and friendly with customers who visit the store. However, while interacting with customers through emails, he tends to be rather blunt and aggressive, which has led to a couple of complaints being lodged against him. Which of the following does the scenario illustrate?A) virtual realityB) telepresenceC) augmented realityD) disinhibition
Answers
Answer:
(D). Disinhibition
Explanation:
Disinhibition or online disinhibition occurs when an individual feels that due to the anonymous nature of the internet and its platforms, such as email and social media, he or she can make certain rude, harmful or aggressive comments without any consequences.
Such rude comments would not have been made if the interaction was face to face.
Other reasons for this behavior may include; low empathy for others and the feeling that communication isn't happening in real time and so there won't be an immediate reply.
Therefore Arthur's behavior illustrates disinhibition.