A clothing retail company should opt for a CRM system over a traditional marketing research approach as it provides real-time data analytics, enables effective customer segmentation, and offers scalability and flexibility to adapt to market changes.
Explanation:A clothing retail company considering whether to use a traditional marketing research project approach or implement a CRM system should lean towards the latter for several reasons. Firstly, a CRM (Customer Relationship Management) system provides real-time data and analytics which can guide more informed decisions. This system can track customer behavior, preferences, and interactions with the brand across multiple channels, providing a holistic view of the customer journey. Secondly, a CRM system enhances the ability to segment customers based on varied criteria, facilitating more targeted and personalized marketing strategies. Using detailed customer profiles, the company can tailor their communications and promotions to meet specific customer needs. Lastly, CRM systems are designed for scalability and flexibility, enabling the company to easily adapt to changes in the market or in customer behavior without the need for starting new research projects from scratch. This adaptability is crucial in today's fast-paced retail environment in which trends and consumer preferences can shift rapidly. Overall, a CRM system can offer a dynamic and comprehensive approach to crafting a marketing strategy that is responsive to customers' evolving demands.
Given the list of assets below, which is the most liquid? $500 worth of General Motors common stock A $500 travelers check A one-ounce gold coin $500 worth of General Motors bonds
Answer:
A $500 travelers check
Explanation:
A $500 travelers check is the most liquid asset because it can be directly exchanged for currency. In fact, travelers checks are so liquid that they are included in the money aggregate M1, the money supply measure that is the most liquid.
ALCULATE: What Affects How Much We Pay in Taxes? Everyone has to pay taxes, but how much you pay depends on a lot of factors. In this activity, explore how three factors (your salary, the state you live in, and the cost of living) can have a big impact on how much you pay in taxes and how much you have leftover to spend on your
Answer:(1)The personal income tax, (2)The tax paid in one state differs from state to state.(3) Disposable income
Explanation:
A tax is a compulsory levy in which every law abiding citizens with a means of income is expected to pay to the government through the agency responsible for collection of taxes in their country. It is the civic duty of every citizens to pay tax.However, the payment of taxes depend on a lot of factors such as
Salary : The level of income of individuals determine the tax that such individuals will pay. It is known as personal income tax. The higher the income, then the higher the tax. While, the lower the income then the lower the tax.
State you live in : The state where the tax payer reside determine how much tax the tax payers will pay in terms of the kind of taxes to pay to the government. The kind of taxes differs from state to state.
Cost of living : This is the total amount of money it will cost an individual's to provide themselves with the basic necessities of life such as food, clothing and shelter. When the cost of living is high, it reduces the standard of living of the people because when tax has been removed from their income what is left for an individual for saving and spending known as disposable income will not be enough to meet their basic need.
The amount of taxes one pays is affected by their salary, the state they live in, and the cost of living in that state. Higher salaries and living in states with higher taxes or cost of living can lead to paying more in taxes, impacting one's disposable income.
Explanation:The amount of taxes one pays is significantly influenced by multiple factors. Firstly, your salary plays a critical role; the United States employs a progressive tax system, meaning the more you earn, the higher the percentage of your income you will pay in taxes. Additionally, the state you reside in can drastically affect your tax burden. Some states have higher tax rates or additional taxes on top of federal taxes, while others may have no income tax at all. Furthermore, cost of living is another crucial factor. In areas with a higher cost of living, residents might find their taxes going further towards public services like education and infrastructure, affecting their disposable income.
Understanding these variables is essential for managing your finances effectively and planning for the future. Employing strategies like budgeting, and investing for retirement early can help mitigate the impact of taxes on your income. It's also important to be aware of the potential consequences of failing to pay taxes, which can include fines or even jail time.
1. Barry Cain invested $38,000 cash to start an appliance repair business. 2. Hired an employee to be paid $500 per week, starting tomorrow. 3. Paid two years' rent in advance, $10,800. 4. Paid the worker's weekly wage. 5. Recorded revenue earned and received for the week, $2,900.
Answer:
No. Account Titles & Explanation Debit Credit
1.
Cash $38,000
Barry Capital Account $38,000
2.
No Entry Requires as Employee are only Hired there id no financial transaction involved in hiring the employees only.
3.
Prepaid Rent $10,800
Cash $10,800
4.
Wages Expense $500
Cash $500
5.
Cash $2,900
Revenue $2,900
Explanation:
1. Cash paid is the capital contribution in the business so cash account will be debited and capital account will be credit as per their nature.
2. Hired an employee does not need any transaction as there is no financial involvement in just hiring an employee.
3. Prepaid expense is actually an asset for us as we paid expenses in advance which is not incurred yet. It will be recognized as expense with passage of time.
4. Payment to worker is an expenses against a credit to cash as wage is paid in cash.
5. Revenue earned should be recorded and also received so cash will be debited for the receipt from sales and revenue shold be debited due to its nature of account.
Wildhorse Company has the following information available for September 2020. Unit selling price of video game consoles $570 Unit variable costs $456 Total fixed costs $38,760 Units sold 600 Compute the unit contribution margin. Unit contribution margin Prepare a CVP income statement that shows both total and per unit amounts. WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020 Total Per Unit $ $ $ $ Compute Wildhorse’ break-even point in units. Break-even point in units units Prepare a CVP income statement for the break-even point that shows both total and per unit amounts. WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020 Total Per Unit $ $ $ $ Click if you would like to Show Work for this question: Open Show Work
Answer:
BEP 340 units or $193,800 of sales
Income Statment :
Sales revenue 340 units x $570 193,800
Variable Cost 340 units x $456 (155,040)
Contribution 38,760
Fixed cost (38,760)
Operating Income 0
Explanation:
The break even points is the point at whch operating income is zero.
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
570 - 456 = 114 each units generates 114 dollar to aford the fixed cost and make a gain
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
[tex]\frac{38,760}{114} = Break\: Even\: Point_{units}[/tex]
BEP 340 units
In dollars 340 x $570 each = 193,800
Answer:please refer to the explanation section
Explanation:
Unit contribution Margin = selling price per unit - Variable cost per unit
Unit contribution Margin = $ 570 - $ 456 = $ 114
Cost Volume Profit income statement
VOLUME UNIT COST ($) TOTAL ($)
Sales 600 units $570 342000
Variable costs 600 units $ 456 -273600
Contribution margin 600 units $114 68400
Total Fixed Costs -38760
Net income 29640
Break Even Point (units) = Fixed Costs/(Selling price - variable cost)
Break Even Point (units) = 38760/(570 - 456) = 340 units
Exercise 3-12 Oriole Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2017. ORIOLE DESIGN ADJUSTED TRIAL BALANCE DECEMBER 31, 2017 Debit Credit Cash $11,155 Accounts Receivable 21,655 Supplies 5,155 Prepaid Insurance 2,655 Equipment 60,155 Accumulated Depreciation-Equipment $35,155 Accounts Payable 5,155 Interest Payable 162 Notes Payable 5,400 Unearned Service Revenue 5,755 Salaries and Wages Payable 1,408 Common Stock 10,155 Retained Earnings 3,655 Service Revenue 61,655 Salaries and Wages Expense 11,455 Insurance Expense 958 Interest Expense 162 Depreciation Expense 7,400 Supplies Expenses 3,400 Rent Expense 4,350 $128,500 $128,500 Prepare an income statement for the year ending December 31, 2017. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) ORIOLE DESIGN Income Statement $ $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare a statement of retained earnings for the year ending December 31, 2017. (List items that increase retained earnings first.) ORIOLE DESIGN Statement of Retained Earnings $ : $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare an unclassified balance sheet at December 31. (List assets in order of liquidity.) ORIOLE DESIGN Balance Sheet Assets $ $ : $ Liabilities and Stockholders' Equity $ $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Answer the following questions. (Round interest rate to 0 decimal places, e.g. 5%.) (1) If the note has been outstanding 6 months, what is the annual interest rate on that note? (Hint: Assume that the amount of interest payable in the trial balance relates to the note payable in the trial balance.) The annual interest rate % (2) If the company paid $17,500 in salaries and wages in 2017, what was the balance in Salaries and Wages Payable on December 31, 2016? The balance in Salaries and Wages Payable $
Answer:
Oriole Design as the following Key results, explanation and workings have been shown below:
A
Net Profit $33,930Closing retained Earnings $37,585Net Assets $47,740Shareholders Equity $47,740B Interest rate on Notes Payable is 1.5%
C. Total Wages and Salaries Payable as at Dec 31 2016 = $7,453
Explanation:
Oriole Design
Income Statement
For the Year ending December 31 2017
Revenue $61,655
Expenses
Salaries & Wages $11,455
Insurance Expense $958
Interest Expense $162
Depreciation Expense $7,400
Supplies Expense $3,400
Rent Expense $4,350
Total Expenses = $27,725
Net Profit = $33,930
Oriole Design
Statement of Retained Earnings
For the Year Ending December 31 2017
Opening Balance $3,655
Add Net Profit $33,930
Closing Retained Earnings = $37,585
Oriole Design
Balance Sheet
As at December 31st 2017
Assets
Cash $11,155
Accounts Receivable $21,655
Supplies $5,155
Prepaid Insurance $2,655
Equipment $60,155
Less Accumulated Depreciation on Equipment -$35,155
Total Assets = $65620
Liabilities
Account Payable $5,155
Interest Payable $162
Notes Payable $5,400
Unearned Service Revenue $5,755
Salaries & Wages Payable $1,408
Total Liabilities = $17,880
Net Assets = $47,740
Shareholder's Equity
Common Stock $10,155
Closing Retained Earnings $37,585
Total Shareholder's Fund = $47,740
B. Notes Payable = $5,400
Interest Payable = $162
Duration of Notes as at December 31 2017 = 6months
Interest Rate = 162/5400 x 6/12 x 100%
=1.5%
C.
Salaries and Wages Payable Closing Dec 31 2017 = $1,408
Salaries and Wages expensed in 2017 = $11,455
Salaries and Wages Paid in Cash in 2017 = $17,500
Payment relating to Previous Year balance = $17,500 - $11,455 = $6,045
Payment outstanding from last year not yet cleared $1,408
Total Wages and Salaries Payable as at Dec 31 2016 = $6,045 + $1,408 = $7,453
Calculate the total revenue and expenses to prepare the income statement. Create the statement of retained earnings using the beginning balance and the net income. Prepare the balance sheet by summing up the assets, liabilities, and stockholder's equity. Lastly, answer the two associated questions using logical calculations.
Explanation:The first step in preparing the documents is to calculate revenues and expenses. The total revenue for Oriole Design in 2017 can be found by adding the Service Revenue of $61,655 to the Unearned Service Revenue of $5,755 resulting in $67,410. Expenses amount to $28,725 found by adding Salaries and Wages Expense, Insurance Expense, Interest Expense, Depreciation Expense, Supplies Expenses, and Rent Expense together. This results in a Net Income of $38,685 ($67,410 - $28,725).
Next, you should prepare the statement of retained earnings starting with the beginning balance of retained earnings of $3,655 and add the net income calculated above of $38,685 to get a total of $42,340.
Third, prepare the unclassified balance sheet. Assets total at $100,175 ($11,155 + $21,655 + $5,155 + $2,655 + $60,155), liabilities total at $12,175 ($5,155 + $162 + $5,400 + $1,408), and stockholders' equity is $88,000 ($10,155 + $42,340 (Retained Earnings from Statement of Retained Earnings) + $35,155). These balance out as they should.
As for the questions: (1) The annual interest rate can be found by multiplying the interest expense by 2 (as it was a 6 month note) and then dividing by the note payable amount. This gives us an interest rate of 6%. (2) The balance of Salaries and Wages Payable at the end of 2016 can be found by taking the total paid in 2017 and subtracting the Salaries and Wages Expense paid in 2017 and the amount Payable at the end of 2017. This is $4,553.
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Assume that a firm reports net income of $45,000 prior to making adjusting entries for the following items: expired rent, $3,500; depreciation expense, $4,100; and supplies used, $1,800. Assume that the required adjusting entries have not been made. What effect do these errors have on the reported net income
Answer:
The errors have resulted in the overstatement of net income by $9,400. Actual net income is $35,600
Explanation:
Expired rent is usually accounted for by debiting rent expense and crediting prepaid rent account. As such this is an additional expenses that will be deducted from sale to get the net income.
Depreciation expense on asset is recorded by debiting depreciation expense and crediting accumulated depreciation. Again, it is an additional expenses that will be deducted from sale to get the net income.
Supplies used is a debit to supplies expense and a credit to the supplies account (B/s). Hence, it is an additional expenses that will be deducted from sale to get the net income.
Hence the total additional expense to be recorded
= $3,500 + $4,100 + $1,800
= $9,400
When recorded, net income
= $45,000 - $9,400
= $35,600
Journalizing reversing entries
Ocean Breeze Associates accrued $8,500 of Service Revenue on December 31. Ocean Breeze Associates received $14,500 on January 15, including the accrued revenue recorded on December 31.
Requirements
Record the adjusting entry to accrue Service Revenue.
Record the reversing entry.
Journalize the cash receipt.
Answer:
Dr. Cr.
Adjusting Entry
December 31
Account Receivable $8,500
Revenue $8,500
Reversing Entry
January 1
Revenue $8,500
Account Receivable $8,500
Cash Receipt
January 15
Cash $14,500
Revenue $14,500
Explanation:
On December 31 the accrued revenue is recording to comply with the accrual principle by debiting account receivable and crediting revenue account.
A reverse entry of accrued revenue was made on January 1 to eliminate its effect. it does not mean that company has negative revenue it is made to adjust the the cash receipt event of the transaction when its effect will be nil by a credit entry with.
Cash received on January 15 is recorded against the revenue.
To journalize reversing entries for Ocean Breeze Associates, an adjusting entry is first made on December 31 to record the accrued revenue of $8,500. Then, a reversing entry is made on January 1st to cancel this. Lastly, on January 15, when the cash is received, it's divided and recorded between Accounts Receivable for $8,500 and Service Revenue for $6,000.
Explanation:Here are the steps for journalizing reversing entries for Ocean Breeze Associates:
Record the adjusting entry to accrue Service Revenue: At the end of December 31, the accrued revenue of $8,500 from services is recorded with a debit to Accounts Receivable and a credit to Service Revenue.Record the reversing entry: On January 1st, a reversing entry is made to cancel out the accrual entry. This is done by debiting Service Revenue and crediting Accounts Receivable.Journalize the cash receipt: On January 15, when Ocean Breeze Associates receives $14,500 including the accrued revenue, it is recorded as a debit to Cash and a credit to Accounts Receivable for $8,500 (the accrued amount) and to Service Revenue for $6,000 (the rest of the amount).Learn more about Journalizing reversing entries here:https://brainly.com/question/32462928
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The Alpha-Beta affiliated group has consolidated taxable income of $400,000 and tentative general business credit of $80,000 in the current year. The maximum general business credit that can be used on the consolidated return is
$80000 will be used on consolidation return
Explanation:
The maximum general business credit that can be used on the consolidated return is $80,000 because it the greater of the following
A) Total tentative general business credit
B) 25% of amount of regular tax liability which will be less than $80,000
So out of 2 conditions A) is greater so $80,000 can be used on consolidated return
Thus, maximum $80000 will be used.
A mine is for sale for $800,000. It is believed the mine will produce a profit of $250,000 the first year, but the profit will decline $25,000 a year after that, eventually reaching zero, whereupon the mine will be worthless. What rate of return would be earned on the mine
Answer:
[tex]r=-60.8\%[/tex]
Explanation:
Rate of Return
The rate of return RoR is the net gain or loss on an investment over a time period, expressed as a percentage of the investment's initial cost.
If C1, C2, ..., Cn are the net cash flows at each period of investment, then the actual value of each one of them is
[tex]A_i=C_i(1+r)^{-i}[/tex]
where r is the rate of interest assumed for the investment.
The total value of the cash flows is
[tex]A=\sum C_i(1+r)^{-i}[/tex]
We have the final value of the investment at the present time
[tex]A=800,000\ ;\ C_1=250,000\ ;\ C_2=25,000[/tex]
We can find the r as the RoR of the investment by setting the equation
[tex]800,000=250,000(1+r)^{-1}+25,000(1+r)^{-2}[/tex]
Simplifying by 25,000 and rearranging
[tex](1+r)^{-2}+10(1+r)^{-1}-32=0[/tex]
This is a second-degree equation for [tex](1+r)^{-1}[/tex]. Solving the equation we get only one positive value:
[tex](1+r)^{-1}=2.5498[/tex]
Or, equivalently
[tex]r=-0.608[/tex]
[tex]r=-60.8\%[/tex]
We get a negative RoR
Michael Hamwey is a realtor. He organized the business as a corporation on August 16, 2017. The business received $65,000 cash from Hamwey and issued common stock. Consider the following facts as of August 31, 2017.
a.
Hamwey has $14,000 in his personal bank account and $63,000 in the business bank account.
b.
Hamwey owes $9,300 on a personal charge account at a local department store.
c.
Hamwey acquired business furniture for $10,500 on August 24. Of this? amount, the business owes $3,000 on accounts payable at August 31.
d.
Office supplies on hand at the real estate office total $4,000
e.
Hamwey?'s business owes $115,000 on a note payable for some land acquired for a total price of $159,000.
f.
HamweyHamwey?'s business spent $18,000 for a Realty GroupRealty Group
?franchise, which entitles him to represent himself as an agent.
Realty GroupRealty Group is a national affiliation of independent real estate agents. This franchise is a business asset.
g.
Hamwey owes $196,000 on a personal mortgage on his personal? residence, which he acquired in 2012 for a total price of $424,000.
Requirements
1. Prepare the balance sheet of the real estate business of
Michael Hamwey ?Realtor, Inc., at
August 31?, 2017.
2. Does it appear that the realty business can pay its? debts? How can you? tell?
3. Identify the personal items given in the preceding facts that should not be reported on the balance sheet of the business.
Requirement 1. Prepare the balance sheet of the real estate business of
Michael Hamwey ?Realtor, Inc., at August 31?, 2017.
? (Do not classify the balance sheet into current and? long-term sections. If a box is not used in the balance sheet leave the box? empty; do not select a label or enter a? zero.)
Answer:
1. Michael Hamwey Realtor Inc.
Balance Sheet as at August 31 2017
Land $159,000
Furniture $10,500
RealtyGroup Franchise $18,000
Cash $65,000
Office Supplies $4,000
Accounts Payable $3,000
Liability for Land acquired $115,000
Net Assets = $138,500
Common Stock $65,000
2. no it wont be able to fulfill its debt obligation within 1 year without disposing of Assets or converting the loan to a long term liability
3. The Following items should not be included in the Balance sheet of the Realtor Inc because they are personal to Hamwey
a. Hamwey Bank balance $14,000
b. Hamwey bank balance in the Business Account $63,000
c. Hamwey's debt at local department store $9,300
d. Hamwey's Mortgage on his personal residence $196,000
Explanation:
1. Michael Hamwey Realtor Inc.
Balance Sheet as at August 31 2017
Land $159,000
Furniture $10,500
RealtyGroup Franchise $18,000
Cash $65,000
Office Supplies $4,000
Accounts Payable $3,000
Liability for Land acquired $115,000
Net Assets = $138,500
Common Stock $65,000
2. The Realtor Business looks unhealthy considering the Quick Ratio or working Capital ratio, and will be unable to fulfill its debt obligation without disposing of Assets or converting the Loan to a long term Liability.
Working Capital Ratio = (Bank + supplies in hand) divided by (the Accounts payable + Note Payable)
=$69,000/$118,000 = 0.58times
*assumption: note payable is assumed to fall due within 1 year
The Available resource in the Business isn't sufficient to meet its immediate obligations
3. The Following items should not be included in the Balance sheet of the Realtor Inc because they are personal to Hamwey
a. Hamwey Bank balance $14,000
b. Hamwey bank balance in the Business Account $63,000
c. Hamwey's debt at local department store $9,300
d. Hamwey's Mortgage on his personal residence $196,000
Final answer:
The balance sheet for Michael Hamwey Realtor, Inc. includes assets totaling $254,500 and liabilities of $118,000, with stockholder's equity at $65,000, indicating a positive financial position. Personal items such as Hamwey's personal bank account, charge account, and mortgage are excluded from the business balance sheet.
Explanation:
To prepare the balance sheet for Michael Hamwey Realtor, Inc. as of August 31, 2017, we first identify the assets, liabilities, and equity from the provided information. Assets include cash at the business bank account, business furniture, office supplies, a franchise, and land, while liabilities include accounts payable and a note payable. The equity is contributed through the issuance of common stock.
AssetsCash: $63,000Business Furniture: $10,500Office Supplies: $4,000Franchise: $18,000Land: $159,000LiabilitiesAccounts Payable: $3,000Note Payable: $115,000Stockholder's EquityCommon Stock: $65,000To assess the ability of the business to pay its debts, we look at the ratio of assets to liabilities. Despite having substantial liabilities, the business's assets exceed its liabilities, indicating a positive net position which suggests the business can cover its debts in the short term.
Personal items that should not be reported on the balance sheet include Hamwey's personal bank account balance, personal charge account, and personal mortgage. These are separate from the business and do not impact its financial statements.
Which of the following statements is true if total fixed costs decrease while the sales price per unit and variable cost per unit remain constant? A. The contribution margin decreases. B. The contribution margin increases. C. The breakeven point increases. D. The breakeven point decreases.
Answer:
D. The breakeven point decreases.
Explanation:
Breakeven point of a business is defined as the point where it's total cost and total revenues are equal, at this point there is no gain or loss. Hen revenue is above this point profit is made, and when revenue is below this point there is loss.
The formula for break-even is
Breakeven point= Total fixed cost/(Sales price per unit- Variable cost per unit)
Since sales price and variable cost is constant, let's say
(Sales price per unit- Variable cost per unit)= constant (k)
So when we cross-multiply in the formula
Breakeven* k= Total fixed cost
It shows that Breakeven point is directly proportional to Total fixed cost.
So a reduction in Total fixed cost will result in a reduction in Breakeven point.
On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $534,000 by Elmira on December 31, 2023. The effective interest rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):1. How much sales revenue would Wright recognize on January 1, 2020, for this transaction?2. Prepare journal entries to record the sale of merchandise on January 1, 2020 (omit any entry that might be required for the cost of the goods sold), the December 31, 2020, interest accrual, the December 31, 2021, interest accrual, and receipt of payment of the note on December 31, 2022Required 1: How much sales revenue would Wright recognize on January 1, 2018, for this transaction? (Round your final answer to nearest whole number.)
ales revenue_________
Required 2: - Record the sale of goods on January 1, 2018 in exchange for the long term note.
- Record the interest accrual on December 31, 2018.
- Record the interest accrual on December 31, 2019.
- Record the interest revenue in 2020 and collection of the note..
Solution:
1. (i)
Sales revenue = Present value of the note receivable
= $528,000 x .86384 = $456,108
Present value of $1: n = 3, i = 5% (PV of $1)
(ii)
December 31, 2018:
Interest revenue: ($456,108 x 5%) = $22,805
December 31, 2019:
Interest revenue: (($456,108 + $22,805) x 5%) = $23,946
December 31, 2020:
Interest revenue: (($456,108 + $22,805 + $23,946) x 5%) = $25,143
2. Journal entries to record the sale of merchandise on January 1, 2020
Date General Journal Debit Credit.
Jan 01, 2018 Note receivable 528,000
Discount on note receivable 71,892
Sales revenue 456,108
Dec 31' 2018 Discount on note receivable 22,805
Interest revenue 22,805
Dec 31, 2019 Discount on note receivable 23,946
Interest revenue 23,946
Dec 31' 2020 Cash 528,000
Discount on note receivable 25,143
Interest revenue 25,143
Note receivable 528,000
The sales revenue that will be recognized is $456108.
How to calculate the sale revenue?From the information given, the sales revenue will be calculated thus:
= Value of note × PVF of receivable
= $528000 × 0.8638
= $456108
Also, the interest revenue will be calculated thus:
December 2018:
Interest Revenue = $22805
December 2019:
Interest revenue = $23946
December 2020:
Interest revenue will be:
= ($456108 + $22805 + $23946) × 5%
= $25143
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Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special oc- casions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each. (a) If Gina sells 20 shirts, what will her total rev- enue be
Answer:
The question is not complete, the complete question is written below:
Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special occasions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each.
(a) If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be?
(b) How many shirts must Gina sell to break even?
What is the total revenue for this?
The answers are:
a.) Total Revenue = $300; Total variable cost = $160
b.) Break even number of shirts to be sold = 34 shirts; Total revenue for this = $510
Explanation:
a.) Total revenue is the total amount realized after the sales of 15 shirts. To calculate this, we are told that she sold 20 shirts for $15 each, therefore total revenue = Number of shirts sold × price of one shirt
∴ Total revenue = 20 × 15 = $300.
The variable cost of production is the cost that changes with the volume of products produced. In this example, the variable cost is the cost of materials used in making shirts, while the rent on equipment is the fixed cost, because its price remains the same irrespective of the volume of production. To calculate the total variable cost, we will multiply the variable cost of one shirt, with the total number of shirts produced;
cost of 1 shirt = $8
∴ cost of 20 shirts = 8 × 20 = $160
b.) The break even point is the point where the total cost equals total revenue. In order to calculate this, we will first of all calculate the total cost, which includes both the variable and fixed costs.
Total cost: Total fixed cost + Total variable cost
Total fixed cost = $350 (cost of renting equipment)
Total variable cost = 8 × 20 = $160 (calculated above)
∴ Total fixed cost + Total variable cost = 350 + 160 = $510
Therefore, to break even, the total revenue must also equal this cost price of $510. Now to calculate the number of shirts sold that equals this amount;
$15 = 1 shirt
∴ $510 = 1/15 × 510 = [tex]\frac{510}{15} = 34[/tex]
Therefore when 34 shirts are sold, total revenue = total cost.
Total revenue for 34 shirts = $510 (calculated and explained above).
The variance of an investment's returns is a measure of the:
A. probability of a negative return.
B. historic return over long time periods.
C. average value of the investment.
D. volatility of the rates of return.
Answer:
B. historic return over long time periods.
Explanation:
Variance is a metric applied in statistics to determine the squared deviation of a random variable from its mean value.
The variance of a return of investment is a measure of the historic return over large time periods. The historical return approach is more commonly used in the exercise of investing. It follows the data which is a finite set of historical returns of investment and assumes that each possible result has an equal probability.
Describe an important benefit of the safe harbor provisions of the DMCA. Describe an important weakness of the safe harbor provisions from the perspective of the entertainment industries. Describe an important weakness from the perspective of the public.
Answer:
A - Insulate the online user from a seeming liability that could arise from using someone's else resources.
B - It is widely acknowledged that the provisions of the DMCA have reduced a large number of legal procedures, instead of stopping copyright infringement.
C - The public believe that some of the DMCA provisions threaten fair use of contents, stifle competition and eventual innovation in public policy participation.
Explanation:
A - Insulate the online user from a seeming liability that could arise from using someone's else resources. The foremost objective of DMCA provisions is to strike a balance between copyright owners and the users of such. Inadvertently, it us expected that there will be attendant cases and issues emanating from such. DMCA seeks to provide adequate guidelines to addressing such.
B - It is widely acknowledged that the provisions of the DMCA have reduced a large number of legal procedures, instead of stopping copyright infringement. As there's tendency to subject the most noblest of initiative to abuse, DMCA is not an exception. The manipulation and selective interpretation of the guidelines have thus stifle many legal proceedings that could otherwise have occasioned. Resultantly, threatening the effectiveness of its foremost objective.
C - The public believe that some of the DMCA provisions threaten fair use of contents, stifle competition and eventual innovation in public policy participation. The manipulation and selective interpretation of the guidelines have thus diluted its pristine mission of establishment. Thus, fair play I'm in the use of contents, robust competition and intellectual innovation are under threat by the constant misapplication of DMCA provisions.
The safe harbor provisions of the DMCA protect ISPs from liability for infringing content uploaded by their users. However, this creates weaknesses from the perspectives of the entertainment industries and the public.
Explanation:The Digital Millennium Copyright Act (DMCA) includes safe harbor provisions that provide benefits and protections for Internet service providers (ISPs). An important benefit of these provisions is that they protect ISPs from being held liable for infringing content uploaded by their users. This encourages ISPs to host user-generated content and allows them to focus on their primary function of providing Internet access.
However, from the perspective of the entertainment industries, a weakness of the safe harbor provisions is that they may limit their ability to hold ISPs accountable for hosting pirated content. This puts the burden of policing and enforcing copyright infringement on the content creators themselves.
From the perspective of the public, an important weakness of the safe harbor provisions is that they may allow ISPs to escape liability even if they are aware of infringing content on their platforms. This can make it challenging for content creators and rights holders to protect their intellectual property rights.
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"The premium on a pound put option is $.04 per unit. The exercise price is $1.60. The break-even point is ____ for the buyer of the put, and ____ for the seller of the put. (Assume zero transaction costs and that the buyer and seller of the put option are speculators." g
Answer:
$1.56, $1.56
Explanation:
Break-even point on a Put option is the Net of premium cost. Your exercise price is $1.60, it includes the premium price paid to the seller. The break-even point for the will be $1.56 ( $1.60 - $0.04 ) and for the seller it will also be $1.56 because there is no transaction cost is involved and the premium received is an income for him.
Final answer:
The break-even point is $1.56 for both the buyer and the seller of a pound put option with a premium of $.04 and an exercise price of $1.60. This point is reached by subtracting the premium from the exercise price. Speculative trading carries risks and potential rewards, depending on market movements.
Explanation:
The break-even point for the buyer of a pound put option with a premium of $.04 per unit and an exercise price of $1.60 is $1.56. This is because the buyer of the put will pay the premium and needs the market price to be low enough to cover the cost of the premium when they exercise the option. To calculate the break-even point for the buyer, you subtract the premium from the exercise price ($1.60 - $.04 = $1.56).
For the seller of the put option, the break-even point is also $1.56 because this is where the seller does not gain or lose money from the premium received after considering the potential obligation to buy the underlying asset at the exercise price if the buyer exercises the option.
It is important to remember that in options trading, speculators can make a profit if their predictions about the market movement are correct, but there are no guarantees, and they can also suffer losses if the market does not move as anticipated.
If TOMS decided to enter the tea business and they purchased part of a foreign tea company to join with them to found TOMS Teas, this would be an example of __________
If TOMS decided to enter the tea business and they purchased part of a foreign tea company to join with them to found TOMS Teas, this would be an example of __________.
a. direct foreign investment
b. contract manufacturing
c. a joint venture
Answer:
This would be an example of a joint venture.
Explanation:
A joint venture (JV) is a corporate agreement in which two or more organisations agree to share money to carry out a specific mission. This role can be a new project or a new enterprise.
Each of the partners shall be liable in a joint venture (JV) for benefit, loss and related costs. The corporation is therefore its own organisation, independent from other corporate interests of the members.
These are alliances, which can carry on some formal system in a conversational context.
The common usage of JVs is to join a global industry partner with such a local company.
This is an example of a joint venture, where TOMS and a foreign tea company are pooling resources to create and distribute TOMS Teas.
Explanation:If the shoe company TOMS decided to enter the tea business and purchased part of a foreign tea company to join with them to launch TOMS Teas, this would be an example of a joint venture. A joint venture is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project. In this case, the specific task would be creating and distributing TOMS Teas. This concept is common in international business and allows for risk sharing, access to local market knowledge, and shared resources and technology.
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Exercise 22-19 Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2020. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere. Beginning cash balance $30,900 Required minimum cash balance 25,750 Payment of income taxes (2nd quarter) 4,120 Professional salaries: 1st quarter 144,200 2nd quarter 144,200 Interest from investments (2nd quarter) 7,210 Overhead costs: 1st quarter 79,310 2nd quarter 103,000 Selling and administrative costs, including $2,060 depreciation: 1st quarter 51,500 2nd quarter 72,100 Purchase of equipment (2nd quarter) 51,500 Sale of equipment (1st quarter) 12,360 Collections from clients: 1st quarter 242,050 2nd quarter 391,400 Interest payments (2nd quarter) 206 Prepare a cash budget for each of the first two quarters of 2020.
Answer:
[tex]\left[\begin{array}{ccc}&Q1&Q2\\beginning&30,900&25,750\\receipts&254,410&398,610\\disbursement&-272,950&-372,806\\interest&0&-206\\subtotal&12,360&50,892.3\\minimun&25,750&25,750\\Financing&&\\beginning&0&13,390\\payment/loan&13,390&-13,390\\ending&13,390&0\\&&\\ending cash&25750&37502.3\\\end{array}\right][/tex]
Explanation:
Q1
proceeds from disposal of equipment 12360
sales 242050
outlay:
salaries 144200
overhead cost 79310
S&A cost 51500
depreciation (2060)
Q2
interest revenue from investment 7210
sales 391400
outlay:
salaries 144200
overhead cost 103000
S&A cost 72100
depreciation (2060)
purchase of equipment 51500
interest payment 206
To prepare the cash budget for the first two quarters of 2020, calculate the cash inflows and outflows for each period. The cash inflows include collections from clients and sale of equipment. The cash outflows include professional salaries, overhead costs, selling and administrative costs, income tax payment, and purchase of equipment.
Explanation:To prepare the cash budget for each of the first two quarters of 2020, we need to calculate the cash inflows and outflows for each period. For the first quarter, the cash inflows include collections from clients of $242,050 and the sale of equipment for $12,360. The cash outflows include professional salaries of $144,200, overhead costs of $79,310, selling and administrative costs of $51,500, and income tax payment of $0. The ending cash balance for the first quarter would be calculated by adding the beginning cash balance of $30,900 to the cash inflows and subtracting the cash outflows.
For the second quarter, the cash inflows include collections from clients of $391,400 and interest from investments of $7,210. The cash outflows include professional salaries of $144,200, overhead costs of $103,000, selling and administrative costs of $72,100, income tax payment of $4,120, and purchase of equipment for $51,500. The ending cash balance for the second quarter would be calculated by adding the beginning cash balance of $30,900 to the cash inflows and subtracting the cash outflows.
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Expected return and standard deviation:
a. Johnson & Johnson (JNJ) is trading at 123.64 (5/12/2017 close). JNJ is a large health care conglomerate. It has done well over the last couple of years and you think it will continue to do well. After careful analysis you conclude that in one year the price will be (90, 105, 125, 155, 175) with associated probabilities of (0.1, 0.2, 0.4, 0.2, 0.1). Looking at the company’s past record you project that JNJ will pay a dividend of 3.40 (four quarterly dividends of 0.85).
(i) What is the expected return of JNJ stock?
(ii) Calculate the standard deviation of the return of JNJ stock (remember that you are using probabilities to do this, not historical data).
b. In the second sheet of the Excel file PS4 you will find historical data for IBM and CVX returns. (i) Calculate the sample expected return and sample standard deviation for both. (ii) What is the standard error of the sample average in each case? What is the +/- 2 standard error confidence interval of the sample average?
Answer:
Expected Return:
Expected Price in one year
= (90x 0.10)+ (105x 0.20)+ (125x 0.40)+ (155x 0.20)+ (175x 0.10)
= 128.5 Expected dividends in one year
= 3.40
Expected Return = 123.64 Expected Return=[ (Expected Price + Expected Dividends)] / Current Price= >[ (128.50 + 3.40)–123.64]/123.64= 0.066806859 or 6.68%
Standard Deviation: To measure the volatility, the estimated return must be determined with each price point.
Expected return = = [(Expected Price + Expected dividends) – Current Price] / Current Price
Current Price Expected Price Dividend Expected Return
123.64 90 3.4 -24.46%
123.64 105 3.4 -12.33%
123.64 125 3.4 3.85%
123.64 155 3.4 28.11%
123.64 175 3.4 44.29%
Variance = [(-0.2446 – 0.0668)^2 x 0.10] + [(-0.1233 – 0.0668)^2 x 0.20] + [(0.0385 – 0.0668)^2 x 0.40] + [(0.2811 – 0.0668)^2 x 0.20] + [(0.4429 – 0.0668)^2 x 0.10] = 0.040574089
Standard Deviation = (0.040574089)1/2 = 0.20143011 or 20.14%
Explanation:
What is Mary’s relationship to the heavenly beings standing above her (God the Father on the right; the dove, symbolizing the Holy Spirit, in the center; and Jesus on the left) as well as to the miners at work in the mountain? What is the significance of the crown above her head and her outstretched arms?
Answer:
In the painting of the coronation of Mary, Mary is being crowned by Jesus and God.
Explanation:
In the painting, "The Coronation of the Virgin", Mary, is being crowned by Jesus, the Son and God, the Father. The relationship that Mary had with Jesus, the Son was that she gave birth to Him. Mary was the mother of Jesus and a worshiper of God, the Father. The Holy Spirit is the part of the Trinity.
According to the scriptures of the Bible, Mary conceived Jesus, the Son of God through the Holy Spirit and gave birth to Jesus, the savior of the world.
The significance of the crown is that she is being crowned for being a faithful servant to God by obeying God. The outstretched arms represents that she is welcoming the family.
Mary’s relationship to the heavenly beings was that she was willed an exceptional role in the work of eternal salvation.
In the Catholic faith, Mary was assumed into heaven and stayed with Jesus who was her divine son. She was referred to as a queen due to her divine motherhood of Jesus Christ.
As Christ is the king of the world, it is believed that Mary is the queen over the Earth because she played a pivotal role in the divine redemption as she is the mother of the savior.
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Lin Corporation has a single product whose selling price is $120 per unit and whose variable expense is $80 per unit. The company’s monthly fixed expense is $50,000. Required: 1. Calculate the unit sales needed to attain a target profit of $10,000. 2. Calculate the dollar sales needed to attain a target profit of $15,000.
Answer:
1) Break-even point= 1,500 units
2) Break-even point (dollars)= $195,000
Explanation:
Giving the following information:
The selling price is $120 per unit and variable expense is $80 per unit. The company’s monthly fixed expense is $50,000.
1) To calculate the break-even point in units, we need to use the following formula:
Break-even point= (fixed costs + desired profit)/ contribution margin
Break-even point= (50,000 + 10,000)/ (120 - 80)
Break-even point= 1,500 units
2) Now, we need to calculate the break-even point in dollars:
Break-even point (dollars)= (fixed costs + desired profit)/ contribution margin ratio
Break-even point (dollars)= 65,000/ (40/120)= $195,000
To attain a target profit of $10,000, Lin Corporation needs to sell 250 units. To attain a target profit of $15,000, Lin Corporation needs to make $45,000 in sales.
Explanation:To calculate the unit sales needed to attain a target profit of $10,000, we need to consider the contribution margin per unit. The contribution margin per unit is calculated by subtracting the variable expense per unit from the selling price per unit. In this case, the contribution margin per unit is $120 - $80 = $40. To attain a target profit of $10,000, we divide the target profit by the contribution margin per unit: $10,000 / $40 = 250 units.
To calculate the dollar sales needed to attain a target profit of $15,000, we can use the same approach. The contribution margin ratio is calculated as the contribution margin per unit divided by the selling price per unit. In this case, the contribution margin ratio is $40 / $120 = 1/3. To attain a target profit of $15,000, we divide the target profit by the contribution margin ratio: $15,000 / (1/3) = $45,000.
The majority of customers who stop patronizing a particular store do so because:
a. Its prices are too high
b. Its quality is too low
c. An indifferent employee treated them poorly
d. It failed to advertise enough
Answer: C An indifferent employee treated them poorly
Explanation:
One can clearly see that for the store to have retained patronage shows that the store do not need advertisement neither is price a factor. A firm (store) competitive advantage is in customer's perception of its products and services. If they are viewed to be good, they will get patronage. If customers are treated poorly, they will most likely switch to the next available outlet. A classical case of "customer is king".
In social network analysis __________ stress(es) the importance of ties connecting heterogeneous people—helping to ensure a wide range of diversity in information and perspective. Closure Redundancy Bridging relationships Social supports
Answer:
Bridging relationships
Explanation:
Social networking analysis refers to analyzing the interaction between different social groups, people and individuals of an organization.
Such an analysis establishes linkage between diverse people who differ in their attitudes, beliefs and demeanor.
Such an analysis is aimed at gaining an understanding of a group and it's dynamics, it's key members and deciphering the nature of their association.
Bridging relationships refers to bridging or reducing the gap between a group and laying emphasis upon the relations via which diverse people are interconnected and information is shared between them.
A manufacturer estimates that its product can be produced at a total cost of C(x) = 50,000 + 100x + x3 dollars. If the manufacturer's total revenue from the sale of x units is R(x) = 3400x dollars, determine the level of production x that will maximize the profit. (Round your answer to the nearest whole number.)
Answer:
The level of production x that will maximize the profit is: 22,966
Explanation:
C(x) = 50,000 + 100x + x³
R(x) = 3400x
P(x) = R(x) - C(x)
= 3400x - [50,000 + 100x + x³]
= 3400x - 50,000 - 100x - x³
= 3300x - 50,000 - x³ .................... (A)
P'(x) = 3300(1) - 0 - 3x²
= 3300 - 3x²
At a critical point, P'(x) = 0
∴ 0 = 3300 - 3x²
3x² = 3300
x² = 1100
x = ± [tex]\sqrt{1100}[/tex]
P"(x) = -6x
P([tex]\sqrt{1100}[/tex]) = -6 ([tex]\sqrt{1100}[/tex]) < 0
by second derivative, 'P' max at x = [tex]\sqrt{1100}[/tex] = 33.17 (rounds)
since x = [tex]\sqrt{1100}[/tex] ,
recall that P(x) = 3300x - 50,000 - x³ from equation (A)
Therefore, Maximum Profit
P([tex]\sqrt{1100}[/tex]) = 3300[tex]\sqrt{1100}[/tex] - 50000 - [tex]\sqrt{1100} ^{3}[/tex]
= 3300(33.17) - 50,000 - 33.17³
= 109461 -50,000 - 36495.26
= 22,965.74
Maximum profit is 22,966 to the nearest whole number
To find the level of production x that maximizes profit, calculate the profit function by subtracting total cost (C(x)) from total revenue (R(x)). Then, find the value of x that makes marginal revenue equal to marginal cost. This requires knowledge of calculus to differentiate the profit function.
Explanation:To determine the level of production x that will maximize the profit, we first need to calculate the profit function which is the total revenue (R(x)) minus the total cost (C(x)). In this case, the Profit function P(x) is equal to R(x) - C(x) = 3400x - (50,000 + 100x + x3).
Then, to find the level of output that maximizes profit, you would typically differentiate this profit function, set the derivative equal to zero, and then solve for x. This involves calculus, which might not be within the scope of your current studies.
Without using calculus, it is hard to pinpoint the exact value of x that maximizes the profit. However, it is possible to say that the profit-maximizing level of output will occur when marginal revenue (the additional revenue from selling one more unit) equals marginal cost (the additional cost of producing one more unit), which is a fundamental principle in economics. So, you would try to find an x such that the increase in 3400x from increasing x by 1 is equal to the increase in (50,000 + 100x + x3) from increasing x by 1.
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A supply chain refers to: A. The internal sequence of operations consisting of purchasing, fabrication, assembly, and distribution B. The route from the producer upstream through the distributors to the customer C. The design and management of processes across organizational boundaries to meet the real needs of the end customer D. The chain of activities that includes market research, design, production and distribution
Answer:
B. The route from the producer upstream through the distributors to the customer.
Explanation: Supply chain is a set of linked Activities that are interconnected the links the producers,to the distributors and suppliers to the end users.or customers. The management of this chain of activities is regarded as SUPPLY CHAIN MANAGEMENT (SCM).
Supply chain can also be referred to as the route from the producer upstream through the distributors to the customer, SUPPLY CHAIN MANAGEMENT IS ONE OF THE MOST ESSENTIAL ACTIVITIES REQUIRED IN THE ENTIRE MANUFACTURING, DISTRIBUTION AND MARKETING PROCESSES AS IT ENSURES THE AVAILABILITY OF RESOURCES, AND FINISHED GOODS THROUGH EFFECTIVE AND EFFICIENT DISTRIBUTION TO THE CUSTOMERS.
Free trade Multiple Choice encourages growth by promoting the rapid spread of new inventions and innovations. encourages growth by effectively eliminating all patent and copyright barriers to growth. discourages growth by increasing competitive pressures on domestic firms. discourages growth compared to situations where the government strongly controls foreign trade.
Answer:
Encourages growth by promoting the rapid spread of new inventions and innovations.
Explanation:
A free trade agreement is a pact that is made between two or more nations to lower barriers to imports and exports among them. Under a free trade policy, goods and services can be purchased and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to prevent their exchange.
Free trade accelerates economic growth, enhanced efficiency, increased innovation, and the higher fairness that comes with a rule-based system.
Lasiter Corp. reported net credit sales of $2,000,000 and cost of goods sold of $1,400,000 for 2014. On January 1, 2014, accounts receivable was $250,000. Amounts owed by customers increased by $20,000 during 2014. Rounding to two decimal places, what is Lassiter's accounts receivable turnover rate for 2014
Answer:
The correct answer is 7.69.
Explanation:
According to the scenario, the given data are as follows:
Net credit sales = $2,000,000
Cost of goods sold = $1,400,000
Account receivable = $250,000
During year Account receivable = $250,000 + $20,000 = $270,000
So, we can calculate the accounts receivable turnover rate by using following formula:
Turnover rate = Net credit sales ÷ Average account receivable
Where Average account receivable = ($250,000 + $270,000) ÷ 2
= $260,000
So, by putting the value we get,
Turnover rate = $2,000,000 ÷ $260,000
= 7.69
Hence, the accounts receivable turnover rate is 7.69.
13. Josiah would like to set up an account to provide for some retirement funding. He plans to retire in 30 years and can invest in an account paying 7%. Because he plans to do some traveling during the first ten years of his retirement, he would like to have enough money to begin withdrawing $5,000 per year at the beginning of each year. The first withdrawal would occur at the beginning of the 31st year. At retirement he would also like to move the funds to a safer account that might pay only 5%. How much must he now deposit in his 7% account to accomplish his dream?
Answer:
$6568.36
Explanation:
Money he wishes to have in future is $50 000 as he wishes to withdraw $5000 at the beginning on each year for the first ten years
$5000*10= $50000
Present value = FV/ (1+r)^n
50000/(1+0.07)^30
=$6568.36
Therefore he must invest 6568.36
MySpace is a social network that is targeted primarily to people under the age of 25 years old. In 2005, when MySpace was the leading social network, News Corp, owner of The Wall Street Journal and Fox News, bought the firm for $580 million. Since then, its membership has declined precipitously due to changing consumer preferences. As a result, News Corp. sold MySpace to a group of investors for a paltry $38 million in mid-2011. This is an example of how __________ forces impact the marketing environment. A. economic B. competitive C. social D. technological E. regulatory A B C D E
Answer:
Social
Explanation:
In this secanrio social forces affected MySpace performance and they were eventually sold at $38 million from an initial value of $580 million.
Social factors affect consumer behaviour, through influence of a person or group on another through culture social class, reference groups and family.
My Space targeted only people below 25 years, so this means they cannot interact with people in other age groups. They lost appeal for MySpace as a result.
Bob and Tom are two criminals who have been arrested for burglary. The police put Tom and Bob in separate cells. They offer to let Bob go free if he confesses to the crime and testifies against Tom. Bob is also told that he will serve a 15-year sentence if he remains silent while Tom confesses. If he confesses and Tom also confesses, they will each serve a 10-year sentence. Separately, the police make the same offer to Tom. Assume that if Bob and Tom both remain silent, the police only have enough evidence to convict them of a lesser crime and they will serve 3-year sentences.
a. Use this information to write a payoff matrix for Bob and Tom.
b. Does Bob have a dominant strategy? If so, what is it?
c. Does Tom have a dominant strategy? If so, what is it?
d. What sentences do Bob and Tom serve? How might they have avoided this outcome?
Answer:
A. Check the attached image for the payoff matrix
B. Confess
C. Confess
D. 3 years. They could have avoided this by confessing.
Explanation:
The above question is known as the prisoner's dilemma. It is a form of game theory. It analyses the best option for a player in a game without regard for what the other player does.
The dominant strategy is the best decision for the player without considering what the other player does or without cooperation between the players. The dominant strategy for each of the prisoners is to confess because if one confesses and the other doesn't, the one that confesses goes free. If both prisoners confesses, they get 10 years each. These is a better option than not confessing and getting either 3 years or 15 years of prison sentence.
Because both players don't confess, hence they get 3 years in prison. They could have avoided the sentence by confessing.
I hope my answer helps you
The problem depicts a classic example of the 'prisoner's dilemma' in game theory. Both Bob and Tom's dominant strategy is to confess to reduce their potential sentence, however, if they cooperated and remained silent, they would both face a significantly lesser sentence of 3 years each. The risk, however, lies in trusting each other to remain silent.
Explanation:This problem is a classic example of the prisoner's dilemma in game theory. The payoff matrix for Bob (B) and Tom (T) would look like this:
If B and T both confess (C), then both receive a 10-year sentence.If B confesses (C) and T remains silent (S), then B goes free and T receives a 15-year sentence.If B remains silent (S) and T confesses (C), then B receives a 15-year sentence and T goes free.If B and T both remain silent (S), then both receive a 3-year sentence.To answer the questions:
Bob's dominant strategy is to confess as it either ensures his freedom or reduces his sentence to 10 years rather than face a 15-year sentence if Tom confesses.Tom's dominant strategy also mirrors Bob's - it is better for him to confess.If they were to act on their dominant strategy of confessing, they would both receive a 10-year sentence each. However, this outcome could have been avoided if trust existed between Bob and Tom. Since both would have faced significantly less prison time of 3 years each by remaining silent, it would have been a better overall choice for them cooperation-wise. Yet, the risk taken in trusting the other person to also remain silent is what creates this paradox.Learn more about Prisoner's Dilemma here:https://brainly.com/question/33721898
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