A venture capital firm is considering investing in a company. Assume the discount rate is 20%.

a. The first four years, the VC firm would be paying into the company. The payments from the VC firm would equal $5 million a year (starting at the end of the year).
b. In return, the VC firm expects that it would receive payments equal to $10 million for the following four years (end of year 5 to the end of year 8).

Should the VC firm invest in this company?

O Yes
O No

Answers

Answer 1

Answer:

No

Explanation:

Year end       Cash Flows ($)   PVF @20%        Present Value($)

1                            (5)                     .8333                   (4.1665)

2                           (5)                      .6944                  (3.472)

3                           (5)                      .5787                  (2.893)

4                           (5)                      .4823                  (2.4115)

5                           10                      .4019                    4.019

6                           10                      .3349                   3.349

7                           10                       .2791                   2.791

8                           10                       .2326                  2.326

                                   Net Present Value (NPV)=  (0.458)

Here, PVF stands for present value discounting factor at 20% rate and cash flows in bracket depict cash outflows.

Since, the net present value is negative, the venture capital firm should not invest in this company

Answer 2
Final answer:

To determine if the Venture Capital firm should invest, calculate the net present value (NPV) of the cash flows using the discount rate of 20%. If the NPV is positive, invest; if it's negative, don't invest.

Explanation:

To determine whether the VC firm should invest in the company, we need to calculate the net present value (NPV) of the cash flows.

For the first four years, the VC firm is paying $5 million per year.

We can calculate the present value of these payments using the discount rate of 20%, and subtract this amount from the initial investment.

Then, for the next four years, the VC firm expects to receive $10 million per year.

We calculate the present value of these payments and add it to the remaining investment. If the NPV is positive, the VC firm should invest in the company; if it's negative, they should not invest.

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Related Questions

The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a ________ or _______________.

Answers

Answer:

Cost advantage or product differentiation

Explanation:

The two ways to create competitive advantage is by:

1. Cost advantage: when are firm's cost of production is lower that other competitors, they will be able to sell goods at lower prices and still make profit. Other firms in the industry with higher costs will not be able to compete with the low price, as bringing their own prices down will result in loss.

2. Product differentiation: is when the products offered by a company is different from others in the market in such a way that it attracts more customers.

Final answer:

The purpose of value chain analysis is to find business operations where a company can add customer value and establish a competitive advantage through cost reduction or providing unique offerings. A prime example is Apple Inc.'s value chain.

Explanation:

The goal of value chain analysis is to discern business activities where an organization can add value for its customers and secure a competitive edge. This is accomplished either by reducing costs or by providing something unique that exceeds their direct and indirect costs. For instance, Apple Inc.'s value chain is exceptionally strong in the technology sector. They not only cut down costs by sourcing components from around the world but also provide a unique user experience, thus creating a strong competitive advantage.

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To help in music class I will remember the phrase ‘every good boy does fine,’ since the first letter in each word is the note on the line in this scale," Douglas thinks. This is best described as an example of _______ knowledge.


A) person
B) strategy
C) achievement
D) task

Answers

Answer:

B

Explanation:

Strategy knowledge is a knowledge that shows one's capability to memorize a skill or what to do to achieve a goal.

Bostian, Inc. has total assets of $660,000. Its total debt outstanding is $185,000. The Board of Directors has directed the CFO to move towards a debt-to-assets ratio of 55%. How much debt must the company add or subtract to achieve the target debt ratio?

Answers

Answer:

Company must add $178,000 more debt to achieve the target debt ratio

Explanation:

Debt to asset ratio = (Total outstanding liabilty / Total Assets) x 100

Current Debt to asset ratio = (185,000 / 660,000) x 100 = 28%

Target debt to asset ratio = 55%

According to given condition

55% = Total outstanding debt / 660,000

Total outstanding debt = 660,000 x 55%

Total outstanding debt = $363,000

Additional debt for taget debt to assets ratio = $363,000 - 185,000

Additional debt for taget debt to assets ratio = $178,000

Under the Fair Credit Reporting Act of 1970 (FCRA), consumers can stop financial institutions from sharing their credit report or credit applications with affiliates. True False

Answers

Answer:

True

Explanation:

The Fair Credit Reporting Act of 1970 (FCRA) was enacted as a legislation by the U.S. Federal Government to ensure accuracy, fairness, and privacy of consumer information which consumer reporting agencies have in their files. The aim is to ensure that inaccurate information are not intentionally and/or negligently included in the credit report of consumer reporting agencies.

Although, initially when FRCA was passed in 1970, customers does not have the option of preventing sharing of information about them. However, when FCRA was amended in 1996, it allows companies to share among their affiliates different data collected on their customers subject to the provision that customers are allowed to prevent the sharing of the information.

Therefore, under the Fair Credit Reporting Act of 1970 (FCRA), consumers can stop financial institutions from sharing their credit report or credit applications with affiliates.

I wish you the best.

Palco Co., which has a taxable payroll of $900,000, is subject to FUTA tax of 6.2% and a state contribution rate of 5.4%. However, because of stable employment experience, the company’s state rate has been reduced to 2%. What is the total amount of federal and state unemployment tax for Palco Co.?

a. $104,400
b. $73,800
c. $36,000
d. $25,200

Answers

C. $36,000 I believe so

Final answer:

The total amount of federal and state unemployment tax for Palco Co., with a taxable payroll of $900,000, is $25,200 after considering the reduced FUTA and state tax rates due to stable employment.

Explanation:

The total amount of federal and state unemployment tax for Palco Co. can be calculated by adding the FUTA tax and the reduced state tax. Palco Co. has a taxable payroll of $900,000. The FUTA tax rate is 6.2%, but companies can receive a credit of up to 5.4% for paying state unemployment taxes on time, which effectively reduces the FUTA tax rate to 0.8% ($900,000 x 0.8% = $7,200). Since Palco Co.'s state rate has been reduced to 2% due to stable employment, their state unemployment tax is 2% of $900,000, or $18,000. Adding both federal and state taxes gives us $7,200 + $18,000 = $25,200 as the total amount Palco Co. will pay for federal and state unemployment taxes.

A company pays its employees $9,100 every two weeks ($650/day). The current two- week pay period ends on December 26, 2018, and employees are paid $9,100. The next two-week pay period ends on January 9, 2019, and employees will be paid $9,100. Record the adjusting entry on December 31, 2018. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view general journal Journal Entry Worksheet 1. Record the adjusting entry on December 31, 2018. 2. General Journal Debit Credit Date December 31 2018 Enter debits before credits

Answers

Explanation:

The adjusting entry is shown below:

On December 31,2018

Salaries and wages expense A/c Dr $3,250

          To Salaries and wages payable A/c $3,250

(Being the salaries and wages expense is recorded)

The computation is shown below:

= Per day wages × number of days

= $650 ×  5 days

= $3,250

The accrued salaries and wages are recorded for $3,250

In some social dilemmas, when one member of a group may make a contribution to the general welfare of his or her group that makes other members feel that their contribution is unnecessary, it is called the Select one: a. easy-rider mechanism. b. sidecar mechanism. c. transit-rider syndrome. d. free-rider mechanism.

Answers

Answer:

The correct answer is letter "D": free-rider mechanism.

Explanation:

The free-rider mechanism refers to someone being able to get for less or even for free what others pay more for. The problem comes when individuals are unwilling to pay their fair share for something that most others pay for. This is more prevalent when talking about public goods.

What are the environmental and firm-specific drivers that are driving Alpaca Luxe to explore international markets?

Answers

Answer:

The economy downturn.

Explanation:

An economic crisis is a factor that can lead companies to seek the internationalization of their activities, in order to find new opportunities in new markets.

One factor that influenced this point is the appreciation of the Dollar in underdeveloped economies, which is configured as a commercial policy to encourage the internationalization of American companies. With a strong currency, companies are able with less resources to settle in other locations with cheaper labor, government incentives and less bureaucratization to implement companies in these countries.

The remaining balance on an amortized loan is paid down evenly over the life of the loan. For example, if you borrow $20,000 today on a 60-month amortized loan then your remaining balance reduces by 20,000/60.
O True
O False

Answers

Answer:

O True

Explanation:

Amortization is the gradual reduction in a value or balance of anything over a specified period. Evenly over life amortization of loan is the distribution of outstanding amount over remaining life / period. in this example $20,000 is amortized over 60 months which is 20,000 / 60 = $333.33 per month. So the statement is True.

The statement is False. The remaining balance on an amortized loan is not paid down evenly over the life of the loan.

An amortized loan is structured so that the borrower makes regular, equal payments over the life of the loan. However, the composition of each payment changes over time. Early in the loan term, a larger portion of each payment goes towards interest, and a smaller portion goes towards the principal. As the loan progresses, the portion of each payment that goes towards the principal increases, while the portion that goes towards interest decreases.

Amortization schedules show this shift in payment composition over time.For example, in the first month of a $20,000 loan with a fixed rate, a significant part of the payment will be interest.Only a small portion will reduce the principal.By the end of the loan term, most of the payment will be reducing the principal, and very little will be going towards interest.

Thus, the loan balance is not reduced evenly (e.g., 20,000/60 per month for a 60-month loan) but varies with each payment due to the changing interest and principal components.

When assessing the reliability of a measure, one might be interested in knowing how scores on the measure at one time relate to scores on the same measure at another time. This refers to:

A. correlation coefficient.

B.test-retest reliability.

C. retest validity.

D. test utility.

Answers

Answer:

B.test-retest reliability

Explanation:

Test-retest reliability is used when measuring the the consistency or relationship between the scores of two tests of the same variable, taken at different times.

It involves comparing the score on the first test taken earlier, with the score on a second test taken later.

The measure is considered to be reliable if there is no significant difference between the two test scores.

The relationship between financial leverage and profitability   Pelican​ Paper, Inc., and Timberland​ Forest, Inc., are rivals in the manufacture of craft papers. Some financial statement values for each company follow LOADING... . Use them in a ratio analysis that compares the​ firms' financial leverage and profitability. a. Calculate the following debt and coverage ratios for the two companies. Discuss their financial risk and ability to cover the costs in relation to each other. ​(1) Debt ratio ​(2) Times interest earned ratio b. Calculate the following profitability ratios for the two companies. Discuss their profitability relative to each other. ​(1) Operating profit margin ​(2) Net profit margin ​(3) Return on total assets ​(4) Return on common equity c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican​ Paper? What are the risks that​ Timberland's investors undertake when they choose to purchase its stock instead of​ Pelican's?

Answers

Final answer:

The debt and coverage ratios, as well as the profitability ratios, were calculated and compared between Pelican Paper, Inc. and Timberland Forest, Inc. Timberland Forest has a higher debt ratio and times interest earned ratio, indicating higher financial risk but also a greater ability to cover interest costs. Timberland Forest also has higher profitability, as evidenced by its higher operating profit margin, net profit margin, return on total assets, and return on common equity.

Explanation:

Debt ratio: The debt ratio is calculated by dividing total debt by total assets. For Pelican Paper, Inc., the debt ratio is 50% (500,000/1,000,000), while for Timberland Forest, Inc., the debt ratio is 70% (3,500,000/5,000,000). This means that Timberland Forest has a higher debt ratio, indicating higher financial risk.

Times interest earned ratio: The times interest earned ratio is calculated by dividing earnings before interest and taxes (EBIT) by interest expense. For Pelican Paper, Inc., the times interest earned ratio is 5 (50,000/10,000), while for Timberland Forest, Inc., the times interest earned ratio is 6 (600,000/100,000). This means that Timberland Forest has a higher times interest earned ratio, indicating a greater ability to cover interest costs.

Operating profit margin: The operating profit margin is calculated by dividing operating income by net sales. For Pelican Paper, Inc., the operating profit margin is 15% (150,000/1,000,000), while for Timberland Forest, Inc., the operating profit margin is 18% (900,000/5,000,000). This means that Timberland Forest has a higher operating profit margin, indicating greater profitability.

Net profit margin: The net profit margin is calculated by dividing net income by net sales. For Pelican Paper, Inc., the net profit margin is 10% (100,000/1,000,000), while for Timberland Forest, Inc., the net profit margin is 14% (700,000/5,000,000). This means that Timberland Forest has a higher net profit margin, further indicating greater profitability.

Return on total assets: The return on total assets is calculated by dividing net income by total assets. For Pelican Paper, Inc., the return on total assets is 10% (100,000/1,000,000), while for Timberland Forest, Inc., the return on total assets is 14% (700,000/5,000,000). This means that Timberland Forest has a higher return on total assets, indicating better utilization of assets to generate profits.

Return on common equity: The return on common equity is calculated by dividing net income attributable to common equity by common equity. For Pelican Paper, Inc., the return on common equity is 20% (100,000/500,000), while for Timberland Forest, Inc., the return on common equity is 35% (700,000/2,000,000). This means that Timberland Forest has a higher return on common equity, demonstrating higher profitability for its common shareholders.

Timberland Forest's larger debt has made it more profitable than Pelican Paper because higher financial leverage can amplify returns when a company is performing well. However, there are risks that Timberland's investors undertake when purchasing its stock instead of Pelican's, such as the possibility of higher financial risk due to the higher debt ratio and the potential for higher interest costs.

Describe an industry or firm that you think might be able to weather an economic downturn and explain why.

Answers

Answer:

Recession

Recession is a market situation where there is a significant decline in the economy lasting for a longer time, and it is caused due to negative growth in economy. In this situation, the economy faces many hurdles such as increase in price and decrease of earning which creates more unemployment and other destruction problems.  

Industries that can even grow during recession: Health care and FMCG companies  

Explanation: The health care and fast moving consumer goods do business extremely well as people cannot live without satisfying their necessities such as food supplements and hair care products.  

People tend to become sick, and to recover from sickness, they need to use medicines. Henceforth, the industries such as healthcare and insurance function well even in the recession times.

A column in the New York Times noted that during the housing boom that ended in 2006: open double quote"Global banks had loaded up on these supposedly safe securities, and were at risk of becoming insolvent when their true value became known. Some banks blew up; others were bailed out.

Source: Neil Irwin, open double quote"What 'The Big Short' Gets Right, and Wrong, About the Housing Bubble, close double quote" New York Times ,December 22, 2015.

Which of the following are the securities the columnist is referring to?

A.

Mortgage-backed securities.

B.

Commercial paper.

C.

Tax-deferred annuities.

D.

Government bonds.

What caused the value of these securities to decline?

A.

Lower interest rates.

B.

Recession.

C.

Declining property values.

D.

Inflation.

Answers

Answer:

A.

C.

Explanation:

A.  Mortgage-backed securities.

C.  Declining property values.

The housing bubble caused the values of mortgaged properties to go down during the financial crisis of 2007-08. the banks thought ther were investing in safe securities since the loans were mortgaged against properties.

Using an MACRS depreciation schedule having a class life of 5 yr, (a) Compute the cash flows. (b) At an effective interest rate of 20%, determine the net present value. (c) Is the investor’s rate of return less than or greater than 20%? Explain. (d) Compute the investor’s rate of return.

Answers

Answer:

Straight-Line

Depreciation   MACRS

Depreciati

Year 1   $ 10,000       $ 20,000  

Year 2     20,000         32,000  

Year 3     20,000         19,200  

Year 4     20,000         11,520  

Year 5     20,000         11,520  

Year 6     10,000         5,760  

Totals   $ 100,000       $ 100,000  

         

Compute the net present value of the investment if MACRS depreciation is used. Use 10% as the discount rate.

Net income after tax  depreciation   Net Cas flow

(1)                                                   (2)           (3)=(1)+(2)

$ 100,000

                                                $100,000

$32,240.00    $20,000.00       $52,240.00

$24,800.00    $32,000.00   $56,800.00

$32,736.00    $19,200.00   $51,936.00

$37,497.00    $11,520.00   $49,017.60

$37,497.00    $11,520.00   $49,017.60

$41,068.00    $5,760.00        $49,017.60

Compute the net present value:

Year  Net cas flow  PVF@20%         Present Value

  (1)    (2)                    (3)=(1)x(2)

0   $100,000.00  1     $100,000

1   $52,240.00  0.909    $47,486.16

2   $56,800.00  0.826    46,916.80

3   $51,936.00  0.751    $39,003.94

4   $49,017.60  0.683    $33,479.02

5   $49,017.60  0.621    $30,439.33

6   $46,828.80  0.564    $26,411.44

                NPV            $123,739.29

Explanation:

Managing groups and delegating responsibility are ____ skills.

A: communication

B:human relations

C: organization, management, and leadership

D: research and planning

Answers

Final answer:

Managing groups and delegating responsibility are organization, management, and leadership skills. Communication and human relations are also essential components of managing groups.

Explanation:

Managing groups and delegating responsibility are organization, management, and leadership skills. These skills involve effectively coordinating and overseeing group activities, assigning tasks to individuals, and ensuring the smooth functioning of the team. Communication and human relations are also essential components of managing groups, as they facilitate effective collaboration, understanding, and motivation among team members.

Martha works as a project manager at a bank. Due to certain changes in external factors, Martha needs to make a few alterations in the tactical goals of her project. In such a scenario, which of the following will best help Martha cope with the change?

(A) Negotiation
(B) Motivation
(C) Project environment knowledge
(D) Soft skills

Answers

Final answer:

Martha, as a project manager at a bank, can best cope with changes in external factors by utilizing project environment knowledge, which helps her understand the context and align the tactical goals of the project accordingly.

Explanation:

Martha works as a project manager at a bank and needs to alter the tactical goals of her project due to changes in external factors. Among the provided options, Project environment knowledge will best help Martha cope with the change. This knowledge will enable her to understand the external factors influencing the project's environment and to adjust the tactical goals accordingly. While negotiation, motivation, and soft skills are important, they are secondary to understanding the context in which the changes are occurring. This knowledge aids in making informed decisions that ensure the project aligns with the new circumstances, facilitating its successful completion.

For instance, in the business environment, a change in regulatory requirements by financial authorities could necessitate adjustments in project goals. With her project environment knowledge, Martha could reassess and realign the project goals to comply with the new regulations while keeping the project on track to achieve its strategic objectives. Her understanding of the project's environmental context enables her to be responsive and strategic in her approach to managing external changes.

Project environment knowledge is crucial for Martha to cope with changes effectively by understanding project dynamics and making informed decisions.

In a scenario where external factors necessitate alterations to the tactical goals of her project, having a strong understanding of the project environment is crucial for Martha to cope with the change effectively. Project environment knowledge involves understanding various factors such as stakeholders, resources, constraints, and market conditions that influence the project's dynamics. With a deep understanding of the project environment, Martha can anticipate potential challenges, identify opportunities, and make informed decisions about adjusting tactical goals to align with the changing circumstances. This knowledge enables her to navigate complexities, mitigate risks, and leverage available resources efficiently. While negotiation, motivation, and soft skills are important, project environment knowledge serves as the foundation for effective adaptation and decision-making in dynamic situations.

If Cute Camel’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)

Answers

A. The Expected Stock price next year  would be: = $ 24.50.

B. Market to book ratio = 10.63 times.  

C. Yes, a company's shares can exhibit a negative P/E ratio.

D. The correct statement is: Low P/E ratio could mean that the company has a great deal of uncertainty in its future earnings.

Expected Stock price next year  would be: 17.3780 x $1.41 = $ 24.50.

Market to book ratio =  ($ 52.08 x 8,000,000 ) / $ 39,200,000

= 10.63 times.  

Current EPS = $ 9,000,000 / 5,500,000

= $ 1.64 per share

Current PE ratio = Current Stock Price / Current EPS

= $ 28.50 / 1.64

= 17.3780

Expected net income for next year = $ 9,000,000 x 1.25

= $ 11,250,000

Expected EPS next year = $ 11,250,000 / 8,000,000

= $ 1.41 per share

The stock also known as shares or equity, symbolizes a company's ownership.  A shareholder possess shares in a corporation, which indicates you have a financial stake in the firm's assets and earnings. It is a  type of investment to get share in a company's ownership and potential earnings.

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The complete question might be:

Consider the case of Cute Camel Woodoraft Company:

A Cute Camel Woodcraft Company just reported earnings after tax (also called net income) of $9,000,000, and a current stock price of $28.50 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,500,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,000,000). If Cute Camel's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Note: Round any EPS calculations to two decimal places, and round any P/E ratio calculation to four decimal places.)

a. $24.50 per share b. $28.50 per share c.  $18.38 per share d. $30.63 per share

B. One year later, Cute Camel's shares are trading at $52.08 per share, and the company reports the value of its total common equity as $39,200,000. Given this information, Cute Camel's market-to-book (MB) ratio is:_____---

C. Can a company's shares exhibit a negative P/E ratio?

a. Yes b. No

D. Which of the following statements is true about market value ratios?

a.  High P/E ratios could mean that the company has a great deal of uncertainty in its future earnings

b. Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings

Final answer:

If Cute Camel's forecast is correct and the P/E ratio doesn't change, the management expects the stock price to be $37.50 one year from now.

Explanation:

The management of Cute Camel expects the stock price one year from now by multiplying the current P/E ratio with the expected earnings. The formula to calculate the stock price is: Stock Price = P/E Ratio × Earnings per Share. Since the question states that the P/E ratio will not change, we can use the current P/E ratio to calculate the stock price.

Let's say the current P/E ratio of Cute Camel is 15 and the expected earnings per share are $2.50. To calculate the stock price, we multiply the P/E ratio by the earnings per share: Stock Price = 15 × $2.50 = $37.50.

Therefore, if Cute Camel's forecast is correct and the P/E ratio remains unchanged, the management expects the stock price to be $37.50 one year from now.

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You are graduating from college at the end of this semester and have decided to invest ​$4 comma 500 at the end of each year into a Roth IRA​ (a retirement investment account that grows tax free and is not taxed when it is​ liquidated) for the next 30 years. If you earn 6 percent compounded annually on your investment of ​$4 comma 500 at the end of each​ year, how much will you have when you retire in 30 ​years? How much will you have if you wait 10 years before beginning to save and only make 20 payments into your retirement​ account?

Answers

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

You decided to invest ​$4,500 at the end of each year earning 6 percent compounded annually.

We need to use the following formula to calculate the final value of the investment:

FV= PV*(1+i)^n

A) n= 30 years

FV= 4,500*(1+0.06)^30= $25,845.71

B) The investment is made for 20 years.

FV= 4,500*1.06^20= $14,432.11

Final answer:

The future value of the investment after contributing $4,500 annually at an interest rate of 6% compounded annually for 30 years is $391,284.69. If you wait 10 years before starting to save and only make 20 payments, the future value of the investment would be $131,199.17.

Explanation:

To calculate the future value of the investment, we can use the formula for the future value of an ordinary annuity:

FV = PMT x ((1 + r)^n - 1) / r

Using this formula, we can calculate the future value of the investment to be $391,284.69 after 30 years of contributing $4,500 annually at an interest rate of 6% compounded annually.

If you wait 10 years before starting to save and only make 20 payments, you can calculate the future value using the same formula:

FV = PMT x ((1 + r)^n - 1) / r

Using this formula, the future value of the investment would be $131,199.17 after 20 years of contributing $4,500 annually at an interest rate of 6% compounded annually.

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On which financial statements would you look to find the total costs of merchandise that remains and the total that has been sold? Select one: A. Statement of cash flows and balance sheet B. Balance sheet and income statement C. Balance sheet and statement of cash flows D. Statement of stockholders' equity and balance sheet

Answers

Answer:

The answer is B. Balance sheet and income statement

Explanation:

Merchandise is an inventory. It is bought and sold.

We can get the total cost of merchandise that were sold and remained in income statement.

In income statement, this can be gotten from cost of sales(cost of goods sold). This tells us the total amount of goods that were sold and the closing/ending inventory tells us the total cost of merchandise remaining.

And in the balance sheet, we can get it under current asset. The balance of inventory tells us how much of merchandise remaining at a period.

Final answer:

The total costs of unsold merchandise is found on the balance sheet under inventory, while the total costs of merchandise sold are on the income statement under cost of goods sold (COGS). The correct financial statements to refer to are the balance sheet and the income statement. Option B is correct.

Explanation:

To find the total costs of merchandise that remains and the total that has been sold, you would look at the balance sheet and the income statement. The balance sheet provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time. The merchandise inventory, which represents the total costs of merchandise that remains unsold, is an asset and can be found on the balance sheet.

On the other hand, the income statement summarizes the company's revenues and expenses over a period, typically a year. The cost of goods sold (COGS), which includes the total costs of merchandise that has been sold during that period, appears on the income statement. Thus, the correct option from the provided selection is B: Balance sheet and income statement.

Suppose a monopoly can separate its customers into two groups. If the monopoly practices price discrimination, it will charge the lower price to the group with: the higher price elasticity of demand. the lower price elasticity of demand. the fewer close substitutes. The answer cannot be determined with the information given.

Answers

Answer:

the higher price elasticity of demand

Explanation:

A monopoly is when there is only one firm operating in an industry.

Price discrimination is when a producer sells the same good for different prices in different markets.

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Demand is elastic when a change in price has greater effect on the quantity demanded.

A monopoly would charge the lower price for customers with a higher elasticity of demand because if price is high consumers would reduce the quantity demanded and the revenue of the monopoly firm would fall.

I hope my answer helps you.

Answer:

The correct answer is letter "A": the higher price elasticity of demand.

Explanation:

Elasticity is a measure of the reaction of a variable to fluctuations in another variable. It can describe to what degree a product or service's supply or demand, varies with the price of the goods or consumer income. Elasticity is calculated by dividing the percentage change in quantity demanded with the percentage change in price.

Thus, while allocating prices, a company should provide a lower price to a sector with high elasticity because that part of the market is prone to make big demand changes if the price varies abruptly.

Selected transactions for Indigo Corporation during its first month in business are presented below.

Sept. 1 Issued common stock in exchange for $18,300 cash
received from investors.
5 Purchased equipment for $8,540, paying $2,870 in . cash
and the balance on the account.
8 Performed services on account for $20,000.
14 Paid salaries of $3,200.
25 Paid $3,030 cash on the balance owed for equipment.
30 Paid $830 cash dividend

Instructions:
(a) Prepare a tabular analysis of the September transactions.
The column headings should be:
Cash + Accounts Receivable + Equipment = Accounts Payable + Common Stock Revenues Expenses Dividends.
For transactions affecting stockholders' equity, provide explanations in the right margin.
(b) Journalize the transactions. Do not provide explanations
(c) Post the transactions to T-accounts.

Answers

Answer:

a. See attached file.

b. Debit Cash 18,300

Credit Common Stock 18,300

Debit Equipment $8,540

Credit cash $2,870

Credit Accounts payable $5,670

Debit Accounts receivable $20,000

Credit Revenue $20,000

Debit salaries expense $3,200

Credit cash $3,200

Debit accounts payable $3,030

Credit Cash $3,030

Debit Dividends $830

Credit cash $830

c.

Cash

Debit Credit

18,300 2,870

3,200

3,030

830

18,300 9,930

8,370 Ending balance

Equipment

Debit Credit

8,540

Accounts payable

Debit Credit

3,030 5,670

2,640 (ending balance)

Common Stock

Debit Credit

18,300

Revenue

Debit Credit

20,000

Expenses

Debit Credit

3,200

Dividends

Debit Credit

830

Explanation:

a.

1-Sep Issuance of common stock from investor will result to an inflow of cash through the cash invested, So have to recognize cash received and credit common stock

8-Sep Based on matching principle, revenue will be recognized on the date of transaction whether collected or not.

14-Sep Payment of expenses will result to deduction to cash and increase expense account.

30-Sep Dividends is a deduction to Retained earnings

In 1626, Dutchman Peter Minuit purchased Manhattan Island from a local Native American tribe. Historians estimate that the price he paid for the island was about $24 worth of goods, including beads, trinkets, cloth, kettles, and axe heads. Many people find it laughable that Manhattan Island would be sold for $24, but you need to consider the future value (FV) of that price in more current times. If the $24 purchase price could have been invested at a 5% annual interest rate, what is its value as of 2012 (386 years later)?

Answers

Answer:

The value of the island as of 2012=$3,624,771,902

Explanation:

To determine the future value of the 1626 investment, use the expression below;

F.V=P.V(1+r)^n

where;

F.V=future value of investments

P.V=present value of the investment

r=annual interest rate

n=number of years

In our case;

F.V=unknown

P.V=$24

r=5%=5/100=0.05

n=386 years

Replacing;

F.V=24(1+0.05)^386

F.V=24(1.05)^386

F.V=$3,624,771,902

The value of the island as of 2012=$3,624,771,902

Final answer:

The value of $24 invested at a 5% annual interest rate over 386 years is approximately $3,569,590.55.

Explanation:

To find the future value of $24 invested at a 5% annual interest rate over 386 years, we can use the formula for compound interest:

Future Value (FV) = Present Value (PV) * (1 + interest rate)^number of periods

Given that PV = $24, interest rate = 5% = 0.05, and number of periods = 386, we can substitute these values into the formula:

FV = $24 * (1 + 0.05)³⁸⁶

Calculating this equation, we find that the value of $24 as of 2012 is approximately $3,569,590.55.

Cushenberry Corporation had the following transactions.1. Sold land (cost $11,360) for $14,200.2. Issued common stock at par for $18,900.3. Recorded depreciation on buildings for $15,730.4. Paid salaries of $8,080.5. Issued 1,170 shares of $1 par value common stock for equipment worth $8,420.6. Sold equipment (cost $10,300, accumulated depreciation $7,210) for $1,236.

Answers

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $14,200

          To Gain on land A/c $2,840

          To Land $11,360

(Being the land is sold)

2. Cash A/c Dr $18,900

            To Common stock A/c $18,900

(Being the common stock is issued for cash)

3. Depreciation Expense A/c Dr $15,730

             To Accumulated Depreciation - Buildings A/c $15,730

(Being depreciation expense is recorded)

4. Salaries expense A/c Dr $8,080

                 To Cash A/c $8,080

(Being the salaries expense is paid for cash)

5. Equipment A/c Dr $8,420

              To Common stock A/c $1,170

              To Additional paid-in capital in excess of par value A/c $7,250

(Being the equipment is purchased)

6. Cash A/c Dr $1,236

Accumulated depreciation - Equipment A/c Dr $7,210

Loss on sale of equipment A/c Dr $1,854

                   To Equipment A/c $10,300

(Being the equipment is sold)

The higher the customer participation, the more certainty a firm has with respect to quality performance. Question 5 options: TRUE FALSE

Answers

Answer:

False

Explanation:

Quality performance refers to an evaluation of performance of an organization, it's departments or products.

Quality performance can be assessed through different means such as by testing the quality of products, conducting sampling and surveys and obtaining customer feedback.

Customer participation in surveys does not add any certainty with respect to quality performance. It is customer feedback which reveals the quality of goods a firm makes and how satisfactory, customer's own experience has been.

A company is evaluating which of two alternatives should be used to produce a product that will sell for $35.00 per unit. The following cost information describes the two alternatives Process A Process BFixed Cost $500,000 $750,000Variable Cost per Unit $25.00 $23.00The break-even volume for Process A isa. 50,000 unitsb. 62,500 unitsc. 30,000 unitsd. 20,000 units

Answers

Answer:

a. 50,000 units

Explanation:

Breakeven point is the units  required to be sold for the total cost to be equivalent to the sales. As such, break even is the point where profit/loss is nil.

Given information about product A;

Fixed cost = $500,000

variable cost per unit = $25

Selling price per unit = $35

Breakeven in units = fixed cost/(selling price per unit - variable cost per unit)

= 500,000/(35 - 25)

= 50,000 units

Final answer:

The break-even volume for Process A, where the selling price is $35.00 per unit, the fixed cost is $500,000, and the variable cost per unit is $25.00, is 50,000 units. Option a is correct.

Explanation:

The question relates to break-even analysis, which is a concept in cost accounting used to determine the number of units a company must sell at a given price to cover all its costs. To find the break-even volume for Process A, you will need to calculate the point where total revenue equals total costs, which is when the profit is zero. Using the formula:

Break-even Volume = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

For Process A, the break-even volume calculation would be:

$500,000 / ($35 - $25) = 50,000 units

So the break-even volume for Process A is 50,000 units.

So, option a is correct.

Given the following information for a retailer, compute the cost of goods sold. Ending inventory. . . . . . . . . . . . . . . . . $5,500 Website maintenance. . . . . . . . . . . . . $7,200 Revenues. . . . . . . . . . . . . . . . . . . . . . . $65,000 Freight-in. . . . . . . . . . . . . . . . . . . . . . . $3,200 Import duties. . . . . . . . . . . . . . . . . . . . $1,600 Marketing expenses. . . . . . . . . . . . . $14,000 Delivery expenses. . . . . . . . . . . . . . . . $1,400 Purchases. . . . . . . . . . . . . . . . . . . $44,000 Beginning inventory. . . . . . . . . . . . . . . $4,200

Answers

Answer:

$47,500

Explanation:

Given that,

Ending inventory = $5,500

Website maintenance = $7,200

Revenues = $65,000

Freight-in = $3,200

Import duties = $1,600

Marketing expenses = $14,000

Delivery expenses = $1,400

Purchases = $44,000

Beginning inventory = $4,200

Cost of goods available for sale:

= Beginning inventory + Purchases + Freight-in + Import duties

= $4,200 + $44,000 + $3,200 + $1,600

= $53,000

Cost of goods sold:

= Cost of goods available for sale - Ending inventory

= $53,000 - $5,500

= $47,500

An ad in a newspaper reads: "AVAILABLE TODAY ONLY. FRIENDLY'S APPLIANCES. CLEARANCE SALE FOR ALL FLOOR ITEMS. 75% OFF RETAIL PRICES." Joan Ludwig arrived at Friendly's about one hour after it opened and there were no appliances left. ​ ​Which of the following is true? a. Friendly's has breached a contract and owes damages to Joan. b. There is no breach of contract. c. Joan has no rights of recovery because the contract was required to be in writing. d. There was no contract, but Joan can recover on the basis of quasi contract. e. none of the above

Answers

Answer:

Correct answer is b, there is no breach contract

Explanation:

There is no breach contract happened because what Friendly did is just a mere advertisement published in a news paper. What happened is that, Friendly notify the customers that they will be having a clearance sale for all the floor items that they had. Mere advertisement is not yet in the stage of contract to sell and the advertiser is not bound for any liability in case the product is not available at the time the customer decided to buy the product.

Fran is the project manager in her organization. She reports to a PMO (project management office) that takes control of the project and manages the project. Fran is a part of what type of PMO

Answers

Answer:

Directive PMO

Explanation:

A project management office(PMO) refers to creation of groups and departments within an organization so as to define standards and to ensure those standards are met.

In a directive form of project management office, it completely takes over projects and allots resources, and assigns project managers to projects.

In such a form of Project management office, the project managers are supposed to report to such directive offices.

In the given case, since Fran reports to such a PMO form which assumes control of the projects and manages the project, this is a directive form of project management.

Final answer:

Fran is part of a controlled PMO, which directly manages projects in an organization. This PMO type differs from others, such as supportive or controlling, in its degree of authority over projects. Effective project management involves comprehensive knowledge and skills across five process groups, as defined by PMI.

Explanation:

Based on the description provided, Fran operates within a controlled PMO, which is one type of Project Management Office (PMO) structure. In a controlled or directive PMO, the PMO maintains control over projects and manages them directly. This is in contrast to other types of PMOs such as supportive, where the PMO plays a consultative role, or controlling, where the PMO provides governance and enforces standards and processes without managing the projects themselves.

The Project Management Institute (PMI) defines project management as an endeavor that requires application of knowledge, skills, tools, and techniques across various activities to meet or exceed stakeholder needs and expectations. The PMBOK Guide, which is a well-known authoritative text, outlines the five process groups and nine knowledge areas integral for effective project management. These groups and areas collectively underpin the successful management of a project, ensuring all aspects are covered, including project integration management and project scope management.

For each of the following, compute the future value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): Present Value $2,328 Years 11 Interest Rate 13% Future Value - ?

Answers

Answer:

$8,929.88

Explanation:

The computation of the future value is shown below:

Future value = Present value × (1 + interest rate)^number of years

where,

Present value = $2,328

Rate = 13%

Number of years = 11

So, the future value

= $2,328× (1 + 0.13%)^11

= $2,328 × 3.8358611506

= $8,929.88

Simply we use the above formula to determine the future value

Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the averagevariable expense per cup is $0.36. The average fixed expense per month in $1,300. An average of 2,100 cups are sold each month. What is the Cm Ratio for Coffee Klatch a. 1.319 b. 0.758 c. 0.242 d. 4.139

Answers

Answer:

The Cm Ratio for Coffee Klatch is b. 0.758

Explanation:

The contribution margin ratio is calculated by using following formula:

Contribution margin ratio = (Sales - Total Variable cost)/Sales

The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.  An average of 2,100 cups are sold each month.

Total sales = $1.49 x 2,100 = $3,129

Total Variable cost = $0.36 x 2,100 = $756

Contribution margin ratio = ($3,129 - $756)/$3,129 = 0.758

Final answer:

The CM Ratio for Coffee Klatch is calculated by dividing the contribution margin per cup by the selling price per cup, resulting in a CM Ratio of 0.758.

Explanation:

The CM (Contribution Margin) Ratio is calculated by dividing the contribution margin by the selling price. To find Coffee Klatch’s CM Ratio, we first need to calculate the contribution margin per cup of coffee, which is the selling price ($1.49) minus the variable expense per cup ($0.36). The contribution margin per cup is therefore $1.49 - $0.36 = $1.13. Next, we calculate the CM Ratio by dividing the contribution margin per cup by the selling price per cup: $1.13 / $1.49 = 0.758, which makes option b (0.758) the correct answer.

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