There is a way that you can implement to prevent employees to use Internet to exchange personal e-mail during work hours: Use of monitoring tool for IT admins and people and let employees sign the consent. Most common misinterpretation when employers use monitoring tools to see if their employees are violating their policies is privacy issues. This is wrong. Monitoring tools are needed for safety of both parties (company and employees). For employees, they could use these as an evidence that they are really following the rules and not violating anything. As for employers, this is their safeguard against violators.
On July 1, 2017, Crane Inc. made two sales.
1. It sold land having a fair value of $915,830 in exchange for a 3-year zero-interest-bearing promissory note in the face amount of $1,252,520. The land is carried on Agincourt’s books at a cost of $597,600.
2. It rendered services in exchange for a 5%, 6-year promissory note having a face value of $402,550 (interest payable annually).
Crane Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 11% interest.
Record the two journal entries that should be recorded by Crane Inc. for the sales transactions above that took place on July 1, 2017. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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.
The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below:
1st Quarter 2nd Quarter 3rd Quarter 3th Quarter
Budgeted unit sales 15,000 16,000 14,000 13,000
The company’s variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,000 will be paid in the second quarter.
Required:
Prepare the company's selling and administrative expense budget for the upcoming fiscal year.
Weller Company's selling and administrative expense budget can be calculated by adding the variable and fixed costs per quarter. Variable costs are the budgeted unit sales multiplied by the variable expense per unit, while fixed costs include advertising expenses, executive salaries, depreciation, insurance payments, and property taxes. The total expenses for the fiscal year are the sum of these quarterly totals.
Explanation:To prepare
Weller Company
's selling and administrative expense budget for the upcoming fiscal year, you need to consider both the variable and fixed costs per quarter. Variable costs are calculated based on the budgeted unit sales, while fixed costs are the sum of advertising expenses, executive salaries, depreciation, insurance payments, and property taxes.
Variable costs
per quarter are calculated as the budgeted unit sales for that quarter multiplied by the variable selling and administrative expense per unit ($2.50). For example, the variable costs for the first quarter are 15,000 units * $2.50/unit = $37,500.
Fixed costs
per quarter include advertising expenses ($8,000), executive salaries ($35,000), and depreciation ($20,000). Insurance payments of $5,000 are made in the first and third quarters, and a property tax payment of $8,000 is made in the second quarter.
Thus, the total selling and administrative expenses for each quarter are the sum of the variable and fixed costs. The total for the fiscal year is the sum of these quarterly totals.
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HD Corp. and LD Corp. have identical assets, sales, interest rates paid on their debt, tax rates, and EBIT. However, HD uses more debt than LD. Which of the following statements is CORRECT? Without more information, we cannot tell if HD or LD would have a higher or lower net income. HD would have the lower equity multiplier for use in the Du Pont equation. HD would have to pay more in income taxes. HD would have the lower net income as shown on the income statement. HD would have the higher net income as shown on the income statement.
Technical Performance Measures should be selected for those parameters that: [Use Technical Performance Measures to track progress in program risk areas during systems development.]
A. Are expected to have the highest degree of risk.
B. Will not be addressed at technical design reviews.
C. Are expected to exceed the objectives contained in the Capability Development Document (CDD).
D. Will not be subjected to formal test and evaluation.
Answer:
The correct answer is letter "A": Are expected to have the highest degree of risk.
Explanation:
A Technical Performance Measure or TPM is an instrument that shows how well a program meets its specifications or goals. Technical Performance Measures are useful for risk tracking to identify the factors of an objective that can potentially affect the original plan of an organization.
Technical performance measures should be selected for those parameters that are expected to have the highest degree of risk. Thus, Option A. is the correct statement.
What do you mean by technical performance measures?A Technical Performance Measure is a system that measures the risks involved in a technical system to determine how well an item meets the stated requirements.
Technical Performance Measure or TPM is a tool that shows how well a system meets its specifications or objectives. They are useful in tracking risks in order to identify objective factors that may influence an actual organizational process.
Thus, Option A. that is "Technical performance measures are expected to have the highest degree of risk" is the correct statement.
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Risk factors A. can be biological, psychological, or social. B. are best conceptualized as being mostly biological.
Answer:
The correct answer is letter "A": can be biological, psychological, or social.
Explanation:
Risk factors can determine future outcomes and most likely are negatives. Those outcomes are the results of biological, psychological and social influences. On the other hand, protective factors are characteristics that lower the possibility that the outcome will be negative. Both risk and protective outcomes do not change over time.
Pharoah Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) On July 1, (1) Pharoah purchase $76,000 of inventory, terms 3/10, n/30, FOB shipping point. (2) Pharoah paid freight costs of $1,276. (b) On July 3, Pharoah returned damaged goods and received credit of $7,600. (c) On July 10, Pharoah paid for the goods.
Answer:
inventory 76,000 debit
accounts payable 76,000 credit
---to record purchase on account--
freigth-in 1,276 debit
cash 1,276 credit
--to record payment of freigth--
accounts payable 7,600 debit
returns and allowance 7,600 credit
--to record return of good to supplier--
accounts payable 68,400 debit
purchase discount 2,052 credit
cash 66,348 credit
--to record payment within discount period--
Explanation:
As the company determinates inventory on a periodic basis we do not adjust right away, we use discount and return accounts instead of inventory
76,000 original invoice nominal
-7,600 discount
68,400 nominal after return subject to discount of 3%
-2,052 discount
66,348 cash outlay to settle with supplier
IE 10-1 ... AS/AD Model – Suppose this economy is at Year 4 as a result of an "over-expansion" of the Money Supply by the FED. With the Price Level at $2.34 and employment at __________, the Real Production GDP will be $5200 b. In the PPF Model the economy will be at Point _________ ..
Answer:
Employment at 122 million. At Point S.
Explanation:
The economy system is known as Demand Inflation. This is the economic condition that exists when the total aggregate demand for goods and services is more than the total aggregate supply of goods and services. It is also referred to as the demand-pull inflation and it occurs when there is insufficient supply which leads to an increase in price. Therefore, employment is at approximately 122 million and the economy is at point S.
York Casting Services started the year with total assets of $110,000 and total liabilities of $50,000. The revenues and the expenses for the year amounted to $140,000 and $50,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $70,000. Calculate the amount of increase or decrease in stockholders' equity for the year.
Answer:
Net income: $
Revenue 140,000
Expenses (50,000)
Dividend paid (70,000)
Net income 20,000
Net income is the amount of increase in stockholders' equity.
Explanation:
Net income is the excess of revenue over expenses and dividend. A positive net income increases the stockholders' equity. Common stockholders are legal owners of a company, thus, any income not distributed as dividend increases their equity.
The following two policy proposals are currently being debated in Washington, D.C., in order to get the country out of this recession.(a) Cut taxes for middle-class American families; and(b) Inject capital into major commercial banks.The congress likes proposal (a), and the president likes proposal (b). Because the proposals are not mutually exclusive, either or both or neither may become law. Thus there are four possible outcomes, and the rankings of the two sides are as follows, where a larger number represents a more favored outcomOutcomeCongressPresident(a) becomes law41(b) becomes law14Both (a) and (b) become law33Neither (status quo prevails)22(a) The moves in the game are as follows. First, the Congress decides whether to pass a bill and whether it is to contain (a) or (b) or both. Then the president decides whether to sign or veto the bill. Congress does not have enough votes to override a veto, so the president’s decision will be final. Draw a game tree for this game and find the rollback equilibrium.(b) Now suppose the rules of the game are changed in only one respect: the president is given the extra power of a line-item veto. That is, if the Congress passes a bill containing both (a) and (b), the president may choose not only to sign or veto the bill as a whole, but also to veto just one of the two items. Show the new tree and find the rollback equilibrium.
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.
A major challenge in designing marketing communications is being able to grab the attention of the target audience in a crowded media field. Which of the following factor(s) contribute to creating this challenge?A. Fragmentation of mass mediaB. Proliferation of alternative ways to reach consumersC. Increasing skepticism of consumers in receiving marketers' messagesD. Desire of consumers to co-create the meaning of brandsE. All of the answers are correct.
Answer:
Letter E is correct. All of the answers are correct.
Explanation:
All of the alternatives cited correspond to marketing communications challenges.
What happens is that we are currently living in the information age, which was potentially established by the use of the internet. The communication relationship between consumer and organization has changed with the creation of new communication media, which generated greater proximity and interaction between the company and the consumer. This is a positive factor that facilitates a greater understanding of the needs of the target audience as well as faster problem solving response and feedback, but the challenges have also increased as marketers have a much larger job of investigating them. find the media most used by the public you want to reach through marketing communication.
The proximity and interaction of new consumer relations, has generated in the consumer a sense of greater participation in the decisions of a business, consumers want to relate to companies that are appropriate to their emotional and social parameters, so the ideal is for organizations to be open. greater dialogue with consumers and consumer trends so that their results are improved, as well as engaging content that engages and strengthens customer relationships, not just empty promotional messages that don't add value to the consumer. Recognizing the right media to establish marketing communication is also an essential parameter for strengthening the relationship with the consumer and, consequently, positive results related to communication.
.In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007. A hamburger cost $5 in 2006 and $6 in 2007. Which of the following statements is correct? a. When 2006 is chosen as the base year, the consumer price index is 90 in 2007. b. When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007. c. When 2007 is chosen as the base year, the consumer price index is 100 in 2006. d. When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007.
Answer:
d.) When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007.
After calculating the total costs in 2006 and 2007 and the CPI, we find that all proposed statements are incorrect. The CPI in 2007 with 2006 as the base year is 150, and the inflation rate is 50%, not 150%.
To calculate the Consumer Price Index (CPI) and inflation rate, we will first need to determine the total cost of the consumer's basket in both years.
Using 2006 as the base year, the total cost of the fixed basket in 2006 is:
10 hot dogs × $3 per hot dog = $30
6 hamburgers × $5 per hamburger = $30
Total cost in 2006 (base year): $30 (hot dogs) + $30 (hamburgers) = $60
The total cost of the fixed basket in 2007 is:
10 hot dogs × $5.40 per hot dog = $54
6 hamburgers × $6 per hamburger = $36
Total cost in 2007: $54 (hot dogs) + $36 (hamburgers) = $90
The CPI for 2007 with 2006 as the base year is:
CPI = (Cost in Current Year / Cost in Base Year) × 100 = ($90 / $60) × 100 = 150
The inflation rate from 2006 to 2007 is the percentage increase in the CPI, which can be calculated as:
Inflation Rate = [(CPI in Current Year - CPI in Base Year) / CPI in Base Year] 100 × = (150 - 100) / 100 × 100 = 50%
Therefore, statement a is incorrect because the CPI in 2007 with 2006 as the base year is 150, not 90. Statement b is incorrect as the inflation rate is actually 50%, not 150%. Statement c cannot be correct because the CPI is always 100 in the base year, and 2006 is the base year in this example. Finally, statement d is incorrect because the inflation rate in 2007 is 50%, not 50 percentage points higher than in the base year.
Newcastle Coal Co. owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehouse in a new project. Should Newcastle Coal Co. include the value of the warehouse as part of the initial investment in the new project?
(A) Yes, because the firm could sell the warehouse if it didn’t use it for the new project.
(B) No, because the cost of the warehouse is a sunk cost.
(C) No, because the company will still be able to sell the warehouse once the project is complete.
Answer:
A) Yes, because the firm could sell the warehouse if it didn’t use it for the new project.
Explanation:
The option A is correct in our scenario, because the firm still have the option to sale the warehouse even they want to use it for the new project.The option B is not correct as the cost of warehouse is not sunk cost, such a cost that has been utilized and can't be recovered, but we can sale the warehouse and get the payment.The option C is incorrect as once the project is complete then it would be a part of that project so they will not sale the warehouse.Newcastle Coal Co. should include the $300,000 potential sale price of the warehouse as part of the initial investment in the new project, as it represents an opportunity cost. This is different from sunk costs, which are costs that have already been incurred and cannot be recovered, and do not influence future business decisions.
Explanation:When considering whether the value of a warehouse should be included in the initial investment for a new project, Newcastle Coal Co. should indeed consider the opportunity cost associated with using the warehouse instead of selling it. This is because the opportunity cost represents the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. In the case of Newcastle Coal Co., if they choose to use the warehouse for a new project, the $300,000 that could have been earned from selling it is an opportunity cost and should be factored into the initial investment decision for the new project.
It is important to distinguish between sunk costs and opportunity costs. Sunk costs, such as the original cost of the warehouse, are irrelevant for future decisions as they have already been incurred and cannot be recovered. However, the current potential sale price of the warehouse is not a sunk cost, but rather a relevant factor in deciding whether to proceed with using the warehouse for a new project or to sell it.
The correct choice in this situation is (A) Yes, because the firm could sell the warehouse if it didn’t use it for the new project, as this considers the most economically sound approach of including opportunity costs in project evaluation.
TJ Industries has 7 million shares of common stock outstanding with a market price of $20.00 per share. The company alsohas outstanding preferred stock with a market value of $10 million, and 100,000 bonds outstanding, each with face value$1,000 and selling at 95% of par value. The cost of equity is 12%, the cost of preferred is 10%, and the cost of debt is6.45%. If US tax rate is 34%, what is the WACC?A. 8.92%B. 9.76%C. 1259%D. 13.43%
Answer:
WACC = Ke(E/V) + Kp(P/V) + Kd(D/V)(1-T)
WACC = 12(140,000,000/159,500,000) + 10(10,000,000/159,500,000) + 6.45(9,500,000/159,500,000)(1-0.34)
WACC = 10.53 + 0.63 + 0.38
WACC = 11.54%
Market value of the company: $
Market value of common stocks (7,000,000 x $20) 140,000,000
Market value of preferred stocks 10,000,000
Market value of bonds (100,000 x $950) 9,500,000
Market value of the company 159,500,000
Explanation:
In this question, there is need to calculate the market value of the company, which is the sum of market value of common stocks, market value of preferred stocks and market value of bonds.
Cost of each stock is given in the question. Thus, WACC is calculated as the aggregate of cost of each stock an the proportion of market value of each stock to market value of the company.
Suppose your city is committed to raising $100 million for a new arena. The mayor suggests putting a tax on taxicab rides since out-of-towners disproportionately use taxicabs.
(a) Evaluate the wisdom of this policy decision and explain your reasoning
(b) Use the rent gradient to show why New York did not build a new stadium for the Yankees in midtown Manhattan.
Answer:a)The decision on putting a tax on taxicab rides would not be a wise decision. The tax on taxi cabs can negatively affect local residents and businesses more than it would affect the out-of-towners. Adding a tax would further shift taxicab rides on the supply curve by the amount that is taxed. Therefore, people can just try to avoid taking taxicabs while they are visiting due to not willing to pay the price, but this could affect local residents. In addition, if the taxicab owners do not want to charge their customers more or people stop taking taxes the extra tax cost would make taxi drivers suffer. The mayor may be doing this because he is making efforts to have more funding money but is actually damaging the city and businesses if this is done. This could hurt both the taxicab driver and local residents, due to an increase in higher prices individuals would be less likely to pay these higher prices further suggesting this is a bad idea.
B)The city would not likely build a new stadium for the Yankees in the middle of town due to the relative value of the land that would be required (a high value of the rent gradient). The land that lies on the outskirts of town is less valuable than the land at the center. That is one reason why Yankee Stadium and Shea Stadium were built in the "outer" boroughs of Bronx and Queens.
You are the manager of a small U.S. firm that sells nails in a competitive U.S. market (the nails you sell are a standardized commodity; stores view your nails as identical to those available from hundreds of other firms). You are concerned about two events you recently learned about through trade publications: (1) the overall market supply of nails will decrease by 2 percent, due to exit by foreign competitors; and (2) due to a growing U.S. economy, the overall market demand for nails will increase by 2 percent.Based on this information, should you plan to increase or decrease your production of nails
Answer:
On the basis of given information, I'll increase my production of nails.
Explanation:
The reason for increase in production of nails are as follow:
The fact that overall market supply of nails will decrease by 2 % due to exit by the foreign competitors that means my competition will decrease and it will increase the market share for me.The fact that the overall demand of nails will increase by 2 % means that now I can increase my production in order to meet the supply and demand gap.These two facts show that it is good opportunity to increase the production as the demand has increased and competition has decreased.
Final answer:
Based on the information provided, it would be advisable to increase your production of nails.
Explanation:
Based on the information provided, the events of the decreasing market supply of nails by 2 percent and the increasing market demand for nails by 2 percent are both factors that affect the supply and demand of nails in the competitive U.S. market. With a decrease in market supply, it means that there will be fewer nails available in the market. On the other hand, an increase in market demand indicates that there will be a higher demand for nails.
Considering these two events, it would be advisable for you, as the manager of the small firm, to plan for increasing your production of nails. By increasing your production, you can meet the growing demand in the market and potentially capitalize on the exit of foreign competitors.
Labor markets and government policies are both important factors that influence _
Answer:
The correct answer is: Social mobility.
Explanation:
Social mobility refers to the economic hierarchy movement of individuals or groups within a society. It mainly explains how due to changes in income allows people to move upwards, downwards or sideways within the social stratification. Availability for occupations and government laws are the main factors that influence in people going from one point of the hierarchy to another.
Apple's $3 billion acquisition of Beats Electronics and Beats Music in 2014 was an attractive strategy option for entering promising new industries in headphones and streaming music services because it
Apple's $3 billion acquisition of Beats Electronics and Beats Music in 2014 allowed Apple to enter the headphones and streaming music industries, leveraging Beats' expertise and customer base. This acquisition helped Apple diversify its product offerings and revenue streams.
Explanation:Apple's $3 billion acquisition of Beats Electronics and Beats Music in 2014 was an attractive strategy option for entering promising new industries in headphones and streaming music services because it allowed Apple to leverage the expertise and existing customer base of Beats to expand its presence in these markets.
By acquiring Beats, Apple gained access to a popular brand known for its high-quality headphones and a streaming music service with a substantial user base. This acquisition provided Apple with an immediate and significant presence in the headphones and streaming music industries, which were both growing rapidly at the time.
Furthermore, Apple's acquisition of Beats helped the company diversify its product offerings and revenue streams. Prior to the acquisition, Apple primarily focused on hardware products like iPhones and Mac computers. By entering the headphones and streaming music markets, Apple was able to capture additional sources of revenue and potentially attract new customers who were interested in these types of products and services.
2014 2015 2016 2017 2018 Stock return 21.25% 14.45% 25.50% 35.70% 11.05% Given the preceding data, the average realized return on BLM’s stock is . The preceding data series represents of BLM’s historical returns. Based on this conclusion, the standard deviation of BLM’s historical returns is .
Answer: Average realized stock = 21.59%,
The preceding data series represents a sample
Standard deviation = 0.7522
Explanation:
Average realized stock = 21.25% + 14.45% + 25.50% + 35.70% + 11.05% = 1.07595/5 = 21.95%
Standard deviation =
21.25% - 21.95% = -7.14% (-7.14%)^2 = 0.509
25.50% - 21.95% = 3.91% (3.91%)^2 = 0.512
35.70% - 21.95% = 14.11% (14.11%)^2 = 1.990
11.05% - 21.95% = -10.54% (-10.54%)^2 = 1.110
_____
Sum = 3.761/5 = 0.7522
The average realized return on BLM’s stock is 21.59%.
The standard deviation of BLM’s historical returns is 0.753134.
What is the average realized return?The average realized stock return can be determined by adding the stock return and dividing it by the number of years.
Average realized stock return = (21.25% + 14.45% + 25.50% + 35.70% + 11.05%) / 5 = 21.59%
What is the standard deviation?
In order to determine the standard deviation, take the following steps:
Subtract the average realized stock return from the stock return for each year and square the result:
2014: (21.25% - 21.59)² = 0.001156
2015: (14.45 - 21.59)² = 0.509796
2016: (25.50 - 21.59)² = 0.152881
2017: (35.70 - 21.59)² = 1.990921
2018: (11.05 - 21.59)² = 1.110916
Add the squares together and divide by 5: 3.76567 / 5 = 0.753134
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On January 1, a company purchased a five-year insurance policy for $2,500 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Multiple Choice Debit Insurance Expense, $500; credit Prepaid Insurance, $500. Debit Prepaid Insurance, $500; credit Insurance Expense, $500. Debit Prepaid Insurance, $2,000; credit Insurance Expense, $2,000. Debit Insurance Expense, $500; credit Prepaid Insurance, $2,000. Debit Prepaid Insurance, $2,500; credit Cash, $2,500.
Answer:
Debit Insurance Expense, $500; credit Prepaid Insurance, $500
Explanation:
Cost of insurance policy = $2,500
Duration of policy = 5 years
Annual amortization = $2,500/5
= $500
To recognize the purchase at the start of the year,
Debit Prepaid insurance $2,500
Credit Cash account $2,500
To recognize amortization at the end of the year
Debit Insurance expense $500
Credit Prepaid insurance $500
The right option is Debit Insurance Expense, $500; credit Prepaid Insurance, $500
Final answer:
The correct journal entry to adjust the prepaid insurance account at the end of the first year is to debit Insurance Expense for $500 and credit Prepaid Insurance for $500, as this reflects the consumption of one year of insurance coverage out of the five-year policy.
Explanation:
The question deals with how to record the expense of a prepaid insurance policy in accounting. Initially, the company recorded the payment of the insurance policy as a prepaid expense since the service will be provided over the next five years. At the end of each year, an adjusting entry should be made to reflect the portion of the insurance that has expired (i.e., used). In this case, one-fifth of the payment should be expensed each year since the insurance policy is for five years.
For a $2,500 policy that provides coverage for five years, this divides into $500 per year. Therefore, at the end of the first year, the correct adjusting entry to record the expense would be: Debit Insurance Expense for $500 and credit Prepaid Insurance for $500. This reflects that one year of insurance coverage has been used up.
Therefore, the correct answer to the multiple choice question is: Debit Insurance Expense, $500; credit Prepaid Insurance, $500.
Even Better Products has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of 0.30. Its projected earnings are $2 per share. Investors expect a 14% rate of return on the stock.
a.
At what price and P/E ratio would you expect the firm to sell? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Price $
P/E ratio
b.
What is the present value of growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
Explanation:
a.)
First, find the growth rate using the ROE and the retention rate;
g = ROE + retention rate
g = 0.20 * 0.30
g = 0.06 or 6%
Next, find price using Dividend discount model (DDM);
Price = Div/ (r-g)
where Div = next year's dividend
r = required return
g = growth rate ,
Div = earnings * (1- plowback rate)
Div = $2* 0.70 = $1.4
Next, plug in the numbers to the formula above;
Price = 1.4/ (0.14 - 0.06)
Price = $17.50
Price earnings ratio; PE = Price/ earnings per share
PE = 17.50/ 2 = 8.75
b.) Present value of growth opportunities (PVGO)
Use PVGO formula to find the answer. It is as follows;
PVGO = Price - (E/r)
whereby, E= earnings per share = $2
r = investors required rate of return = 14%
Price = $17.50
PVGO = 17.50 + (2/0.14)
= 17.50 + 14.2857
= 31.7857
Therefore, Present value of growth opportunities is $31.79
Suppose a perfectly competitive firm's total cost of production (TC) is:
TC(q) = q^3 -10q^2 + 30q + 5,
and the firm's marginal cost of production (MC) is:
MC(q)= 3q^2 -20q +30.
The firm's short-run supply curve is given by
O P = q^2 - 10q + 30 + 5/q.
O P = 3q^2 - 20q + 30 for prices above $2.5.
O P =q^2 - 10q +30 for prices above $5.
O P = 3q^2 - 20q + 30 for prices above $5.
O P = q^2 - 10q + 30 for prices above $10.
Answer:
P = 3q^2 - 20q + 30 for prices above $5.
Explanation:
Supply curve is rising Marginal cost
A price taker is a totally competitive firm that must accept the equilibrium price at which it sells items. Option (c) is the correct answer.
[tex]P = 3q^2 - 20q + 30 \\\\\text{for prices above 5}\\\\\text{Supply curve is rising Marginal cost}[/tex]
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Zippy is earning $40,000 per year working for Joe's Car Repair. He also has savings of $100,000, on which he is earning 10% annual interest. He decides to leave Joe's Car Repair to invest his savings in starting his own car repair business. In the first year, Zippy's Speedy Car Repair earns revenues of $200,000 and has explicit costs of $150,000. Zippy's economic profit (or loss) in the first year is?
Answer:
$0
Explanation:
While working at Joe's Car repair,
Total earnings:
= salary + interest
= $40,000 + $10,000
= $50,000
After starting his own business
Earnings:
= Revenue - explicit costs - Savings
= $200,000 - $150,000 - $100,000
= -$50,000
Economic profit (or loss):
= -$50,000 - $50,000
= $0
Therefore, there will be no economic profit or loss.
To calculate Zippy’s economic profit, subtract both explicit and implicit costs from his total revenue. The total implicit costs are $50,000, and explicit costs are $150,000. Zippy’s economic profit for the first year is $0.
To determine Zippy's economic profit for the first year, we need to consider both explicit costs and implicit costs.
Explicit Costs:
Zippy's car repair business has explicit costs of $150,000.
Implicit Costs:
Zippy's previous salary at Joe's Car Repair: $40,000.Forgone interest from his $100,000 savings (10% interest): $10,000.Total implicit costs = $40,000 + $10,000 = $50,000.
Economic Profit Calculation:
Economic profit = Total revenues - (Explicit costs + Implicit costs)Economic profit = $200,000 - ($150,000 + $50,000) = $200,000 - $200,000 = $0.Therefore, Zippy's economic profit in the first year is $0.
Barrington Corporation reports the following information.
2017 2016
Cash $15,960 $14,490
Net operating working capital $6,150 $3,300
Net long-term operating assets $9,360 $9,300
Net nonoperating obligations $2,700 $2,100
Net operating profit after tax $1,950 $1,620
Weighted average cost of capital 7.0% 7.0%
a. What is the company's residual operating income (ROPI) for 2017?
Select one:
A. $ 864
B. $1,068
C. $1,215
D. $ 988
E. None of the above
Answer:
Option (B) is correct.
Explanation:
Net operating assets (Beginning):
= Net operating working capital + Net long-term operating assets
= $3,300 + $9,300
= $12,600
Company's residual operating income (ROPI) for 2017:
= Net operating profit after tax - [Net operating assets (Beginning) × Weighted average cost of capital]
= $1,950 - [$12,600 × 7.0%]
= $1,950 - $882
= $1,068
Helena Company reports the following total costs at two levels of production. Classify each cost as variable, fixed, or mixed. 5,000 Units 10,000 Units Indirect labor $ 3,000 $ 6,000 Property taxes 7,000 7,000 Direct labor 28,000 56,000 Direct materials 22,000 44,000 Depreciation 4,000 4,000 Utilities 5,000 7,000 Maintenance 9,000 11,000
Answer:
Explanation:
Mainly there are three types of cost i.e variable cost, fixed cost, and the mixed cost. The variable cost is that cost which is change when the production level change in the same proportion like as in double units. whereas the fixed cost is that cost which remains constant whether production level changes or not . The mixed cost is that cost which include some part of variable cost and the fixed cost
So, the variable cost includes indirect material, indirect labor, and factory supplies
The fixed cost includes supervision, taxes ,and depreciation expense.
The mixed cost includes utilities,maintenance,etc
So, the categorization is shown below:
Indirect labor - Variable cost
Property taxes - Fixed cost
Direct labor - Variable cost
Direct material - Variable cost
Depreciation - Fixed cost
Utilities - Mixed cost
Maintenance - Mixed cost
Which of these is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for use in operations
c. Yields services over a number of years
d. All of these are major characteristics of a plant asset.
Answer:
d. All of these are major characteristics of a plant asset.
Explanation:
The total assets comprise of current assets, fixed assets, and the intangible assets
The current assets include cash, stock, account receivable, etc
Fixed assets include plant & machinery, land, equipment, furniture & fittings, etc.
And, the intangible assets include patents, copyrights, goodwill, etc.
The fixed assets have the physical substance plus it is acquired for use only and it provides the services to the number of years.
All the stated options, possessing physical substance, being acquired for use in operations, and yielding services over a number of years, are major characteristics of a plant asset. Therefore, the answer to the question is d. All of these are major characteristics of a plant asset.
Explanation:All of the options provided in the question are indeed major characteristics of a plant asset. A plant asset, also known as a fixed asset, characteristically possesses physical substance, meaning that it is tangible. Examples include machinery, buildings, and land. This asset is also typically acquired for use in operations — it contributes to the functions and profitability of a business. Lastly, a plant asset is expected to yield services over a number of years, meaning this asset has a prolonged use or lifespan that transcends just a single fiscal year. Though some might be confused, option d is the most correct response as it states that all of these are indeed characteristics of a plant asset.
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Which of the following is true of public stock companies?A. There exists an implicit contract based on trust between society and the public stock company.B. Public stock companies are not required to disclose financial statements.C. The public stock company is not an important institutional arrangement in developing economies.D. Society expects public stock companies to add value to society by making profits for shareholders.
Answer:
A. There exists an implicit contract based on trust between society and the public stock company
Explanation:
A public stock company is a type of company where members of the public can become shareholders or owners of the company by acquiring shares of the company.
A public stock company is usually run by a board of directors elected by shareholders.
There is an implicit trust between society and public trust companies that the public trust companies are acting in the best interest of members of the public and shareholders.
Profits of the public stock company distributed to shareholders are known as dividends. It's not all the time dividends are declared.
Public stock companies are required by law to disclose yearly financial statements.
Due to the high cost of capital required to run a company, public stock companies are usually important in developing economies.
I hope my answer helps you.
The budgeting process ________.
(A) usually begins about one month before the beginning of the budget period to allow for more current information to be considered
(B) does not need input from all levels because it is the role of management to control costs and meet revenue goals
(C) is standard among all types of companies
(D) requires significant coordination among the company's various business segments
Answer:
D. requires significant coordination among the company's various business segments
Explanation:
The budgeting process requires significant coordination among the company's various business segments
Yehle Inc. regularly uses material Y51B and currently has in stock 460 liters of the material for which it paid $2,530 several weeks ago. If this were to be sold as is on the open market as surplus material, it would fetch $4.55 per liter. New stocks of the material can be purchased on the open market for $5.45 per liter, but it must be purchased in lots of 1,000 liters. You have been asked to determine the relevant cost of 720 liters of the material to be used in a job for a customer. The relevant cost of the 720 liters of material Y51B is:
a. $3,924
b. $5,450
c. $3,510
d. $3,276
Answer:
3924
Explanation:
The relevant cost is the price of the actual quantity of materials to be used for the job. Although they can only buy in 1000, the relevant cost is the cost of buying the 720 liters of the material regardless of their surplus or loss.
relevant cost = 720 × 5.45 = $ 3924
Answer:a. $3924
Explanation:
The product Y51B which is in stock was bought for $5.5 , selling at a surplus will be $4.5 , however the firm must consider the replacement cost of the material if it's used for the production and this is the cost that will be used to value Y51B for the new project. Which is $5.45 * 720 units which gives $ 3924
A doctor’s clinic evaluates incoming disposable cottontipped applicators using the single sampling plan N= 8000, n =62 and c=1. Construct the OC curve using about 7 points.
Answer:
Calculated and constructed on the excel file
Explanation:
You could find the attached file for the constructed OC Curve. It was used 7 points and relevant numbers which were given.
Given an interest rate of 5.3 percent per year, what is the value at date t = 7 of a perpetual stream of $6,400 payments that begins at date t = 15?
The present value of a perpetual stream of $6,400 payments starting from date t=15, when calculated for date t=7 at an interest rate of 5.3% per year, is approximately $87,864.1135.
Explanation:This question is about calculating the present value of a perpetual stream of payments. The formula to calculate the present value of a perpetual stream is PV = C / r, where C represents the cash flow per period and r represents the interest rate.
However, we also need to take into account the fact that these payments start at a future date (t = 15). To calculate the present value at date t=7, we first need to calculate the present value of the future cash flows as of t=15, and then discount this back 8 years to date t=7.
In this example, C = $6400 and r = 0.053. That would give us a present value at t=15 of PV = $6400 / 0.053 = $120,754.717. We will then discount this amount back to t=7 by dividing it by (1+0.053)⁸, which gives a final value of $87,864.1135.
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