Answer:
Millennials
Explanation:
People (workers) who were born after the year 1980 are considered "Millennials" or part of the "Millennial Generation." They comprise 25% of the total workforce these days. It is said that the percentage will increase to 75% by 2025. It is common for Millennials and Gen Xers to manage the Baby Boomers. Most of these veterans (Baby Boomers) go back working for they don't have enough money after retiring. So, this causes a hierarchy that looks overturn. This causes some tension in the workplace.
So, this explains the answer.
The U.S. imposes substantial taxes on cigarettes but not on loose tobacco. When the tax on cigarettes went into effect, the demand for home cigarette rolling machines most likely:_________
Answer:
Explanation:
The U.S. imposes substantial taxes on cigarettes but not on loose tobacco. When the tax on cigarettes went into effect, the demand for home cigarette rolling machines most likely increased, causing the price of cigarette rolling machines to rise and the quantity of machines purchased to rise.
Answer:
The demand for home cigarette rolling macines will most likely increase
Explanation:
First, the imposition of substanal taxes on cigarettes means that the cost of consuming a cigarette will increase substantially as well. This means the consumers of cigarette will begin to look for cheaper alternatives to buying already manufactured cigarettes
The most obvious alternative is to get a home cigarette rolling machine and since the demands for the home cigarettes will go up it means the price of the cigarette rolling machines will also rise. Furthermore, the quantity of the machines purchased will rise as well.
The reason for this reaction is that Tobacco and Cigarette roling machines are complementary goods, while The Cigarette rolling machines and cigarettes are substitute goods. As the price of the cigarettes go up, the demand for cigarette rolling machines increase, due to the low cost of getting loose tobacco.
7. You are going to open a business making custom cabinets. You can sell each cabinet for $80. It takes a cabinetmaker approximately 45 minutes to make one cabinet. Each cabinetmaker works an 8-hour day earning $18 per hour. Each cabinet uses $25 in raw materials. You usually produce cabinets 20 days a month and can employ two cabinetmakers. You estimate that your fixed costs are $5,000 per month. a. What is your contribution margin
Answer:
Contribution Margin is 51.875%
Explanation:
Contribution Margin = Contribution/Selling Price × 100
Contribution
Contribution = Selling Price/ unit - Variable Costs/ Unit
Selling Price $80.00
Less Variable Costs
Raw Materials ($25.00)
Direct Labour (45mins/60mins×$18) ($13.50)
Contribution ($41.50)
Contribution Margin
$41.50/$80.00×100=51.875%
Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $95,000. The annual cash inflows for the next three years will be: Year Cash Flow
1 $ 48,000
2 46,000
3 41,000
Answer:
internal rate of return is 20.463%
Explanation:
given data
Year Cash Flow
1 $48,000
2 $46,000
3 $41,000
equipment cost = $95,000
to find out
Determine the internal rate of return
solution
we consider here internal rate of return is x
so we can say present value of inflows = present value of outflows
equate here
$95000 = [tex]\frac{48000}{(x)} +\frac{46000}{(x)^2} +\frac{41000}{(x)^3}[/tex]
solve it we get
x = 20.463 %
so internal rate of return is 20.463%
Final answer:
To analyze the investment in manufacturing equipment, calculate the Net Present Value (NPV) using discounting and cash inflow values which gives 20.44%
Explanation:
Home Security Systems is analyzing the purchase of manufacturing equipment. To evaluate the investment, we can calculate the Net Present Value (NPV) of the cash inflows over the next three years. To do this, we discount each cash inflow using an appropriate discount rate to account for the time value of money. We then subtract the initial cost of $95,000 from the present value of all cash inflows to determine the NPV.
Year Cash Flow
1 $48,000
2 $46,000
3 $41,000
Equipment cost = $95,000
Thus,
95,000 = 48000/x + 46000/x + 41000/x
= 20.44
Required: a. Adams Company's production cycle starts in Department A. The following information is available for July: Work i process, July 1 (60% complete) Started in July Work in process, July 31 (30% complete) Units 73,000 350,000 42,000 Materials are added at the beginning of the process in Department A. Using the weighted-average method, what are the equivalent units of production for materials and conversion costs for the month of July, respectively?
O 423.000: 393.600
O 381,000, 350,000
O 350000, 362.600
O 423.000, 381000
O None of the above
Answer:
Explanation:
For materials:
Units transferred out 381,000*
Add:
Materials 42,000*100% = 42,000
Equivalent units 423,000
*Units transferred out = Units stated+Beg inv-End inv = 350,000+73,000-42,000 = 381,000
For conversion costs:
Units transferred out 381,000*
Add:
Conversion cost 42,000*30% = 12,600
Equivalent units 393,600
Correct answer is 423,000; 393,600
Using the weighted-average method, the equivalent units of production for materials and conversion costs for the month of July are 148,800 units each.
Explanation:The equivalent units of production for materials and conversion costs can be calculated using the weighted-average method. To do this, we need to consider the units that were started and completed during the period, as well as the units that are still in process at the end of the period.
In this case, we can calculate the equivalent units of production for materials by adding the units from the beginning work in process inventory (60% complete) to the units started during July and multiplying it by the percentage of completion for the units in ending work in process inventory (30% complete). Similarly, we can calculate the equivalent units of production for conversion costs using the same method.
Using these calculations:
Equivalent units for materials = (Units in beginning work in process) + (Units started during July) × (Percentage of completion for units in ending work in process)
Equivalent units for conversion costs = (Units in beginning work in process) + (Units started during July) × (Percentage of completion for units in ending work in process)
Using the given information:
Units in beginning work in process: 73,000 units (60% complete)
Units started during July: 350,000 units
Units in ending work in process: 42,000 units (30% complete)
Equivalent units for materials = (73,000 × 0.6) + 350,000 × 0.3 = 43,800 + 105,000 = 148,800
Equivalent units for conversion costs = (73,000 × 0.6) + 350,000 × 0.3 = 43,800 + 105,000 = 148,800
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Assume that you have taken over management of a small concession stand on a local beach for the summer. Your main product is iced water, popular on hot days. You've been selling 400 cups per day at 50 cents each. The cups cost 5 cents each. One of your customers suggests that you cut the price to 40 cents to make more money. For the customer to be correct, how much must your sales increase?
Answer:
For the customer to be correct, I must increase my sales by 115, from 400 cups to 515 cups.
Explanation:
Considering that the cost of each cup of iced water has a cost of 5 cents, and that its sale price is 50 cents, we can say that each cup has a net profit of 45 cents. At the same time, at that price about 400 cups are sold per day, that is, a profit of $ 180 per day.
If the consumer were ignored regarding lowering the price of each cup to $ 0.40, a benefit of $ 0.35 would be obtained for each sale. Therefore, to maintain the same profit money, 515 should be sold instead of 400 cups per day (180 / 0.35 = 514.2), which would report about $ 180.25 in profit.
"In 2014, real GDP per person in Bangladesh was" a. about 3 times as high as it was in the U.S. in 1870. b. about twice as high as it was in the U.S. in 1870. c. about the same as it was in the U.S. in 1870. d. less than it was in the U.S. in 1870.
Answer:
d. less than it was in the U.S. in 1870.
Explanation:
Gross domestic product per capita is a countrie's output that considers the number of people in the country. It is found by dividing the GDP by total population. This is a good measure of a countrie's standard of living and how the countrie's wealth impacts individual citizens.
GDP per capita for Bangladesh in 2014 was $1,163.04, while for the United States in 1870 it was $2,445.
Ratio of United States GDP to Bangladesh GDP= 2,445/1,163.04= 2.1
The United States GDP per capita in 1870 was about 2 times as high as that of Bangladesh in 2014.
The accountant for Sysco Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $ 819,000 Net income for the year 230,000 Cash dividends declared for the year 42,000 Retained earnings balance at the end of the year 1,007,000 Cash dividends payable at the beginning of the year 10,000 Cash dividends payable at the end of the year 11,000 What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?a. $42,000.b. $42.000c. $43,000d. $63.000.e. $1,000f. $41000
Answer:
Correct option is F,$41,000
Explanation:
The cash dividends paid in the year is the sum of the cash dividends payable at the beginning of the year and cash dividends declared in the year less cash dividends payable at the end of the year.
The cash dividends paid in the year is summarized thus:
Cash dividends payable at the beginning of the year $10,000
Cash dividends declared in the year $42,000
Cash dividends payable at the end of the year ($11,000)
cash dividends paid in the year $41000
This cash dividends paid would appear under the financing activities section of the cash flow statement as an outflow.
One of the competitive dimensions that form the competitive position of a company when planning their strategies is making the best trade-off. True or False True False
Answer:
True.
Explanation:
Competitive dimensions are strategies that businesses use to achieve competitive advantage in the industry. For example if a company makes quick service delivery a tool to differentiate its services from others.
Competitive dimensions include low cost, flexibility, delivery, and quality.
When a company makes the best trade off it chooses the best option that will better drive it's success in the industry.
Answer: False
Explanation: A competitive strategy is a long-term plan of action that businesses create and adhere to in order to achieve a competitive advantage over their competitors after examining and reviewing their strengths and weaknesses and comparing them to their competitors. It is aimed at creating defensive position in an industry and generating a superior revenue, profits, returns on investment, customers etc. Competitive dimensions that there are include: Cost of Price, Quality, Delivery Speed, Delivery Reliability, Coping with Changes in Demand, Flexibility and New Product Introduction Speed.
The Don't Tread on Me Tire Company had retained earnings at December 31, 2015 of $217,000. During 2016, the company had revenues of $417,000 and expenses of $358,500, and the company declared and paid dividends of $12,700. Retained earnings on the balance sheet as of December 31, 2016 will be_____________.
a. $275,500.
b. $45,800.
c. $262,800.
d. $321,300
Given:
Beginning retained earnings = $217,000
Revenues = $417,000
Expenses = $358,500
Dividends = $12,700
To find:
Ending retained earnings
Solution:
To calculate the ending retained earnings first we have to calculate the net income of the company. The formula to calculate the net income is as follows,
[tex]\bold{\text{Net income = Revenues - Expenses}}[/tex]
On plugging in the values in the above formula we get,
[tex]\Rightarrow \$417,000 - \$358,500 = \$58,500[/tex]
The formula to calculate the ending retained earnings is as follows,
[tex]\bold{\text{Ending retained earnings = Beginning retained earnings + Net income - Dividends}}[/tex]
[tex]\Rightarrow \$217,000 + \$58,500 - \$12,700 = \$262,800[/tex]
Therefore, the retained earnings on the balance sheet as of December 31, 2016 will be $262,800 that is option c.
Butchart Gardens is a very large garden in Victoria, British Columbia, renowned for its beautiful plants. It is so large that it could hold many times more visitors than currently visit it. The garden charges an admission fee of $30. At this price, 1,000 people visit the garden each day. If admission were free, 2,000 people would visit each day.
Are visits to Butchart Gardens excludable or nonexcludable? Are they rival in consumption or nonrival? What type of good is it?
Answer:
In this case,visit to the Butchart Garden is an excludable and non-rivalrous good and is an example of a Club Good.Explanation:
First,since the Burchart Gardens charges an admission fee of $30 for each visitor,anyone who has not paid the fee cannot or will not be able to have access inside the garden.Therefore,it is currently not a free service for all the visitors.In this sense,a visit to the Butchart Garden is excludable.It can be assumed that any visitor who wishes to come inside the garden and have a visit will have to mandatorily pay the admission fee.
Secondly,as Butchart Garden is a public area and anyone who pays the admission fee can officially gain access to the garden,enjoyment of the natural and aesthetic beauty of the garden by any one visitor does not reduce the simultaneous enjoyment of any other visitor who has paid the admission fee and hence,gained access to the garden.In economic language,if we consider the garden visit as a particular commodity,then the consumption of the commodity by any one visitor or consumer does not reduce the simultaneous consumption of any other visitor/s or consumer/s,provided that they have all paid the admission fee to gain access to the commodity or garden in this case.Therefore,visits to the Butchart Garden can be considered as non-rivalrous.
Now,since the visit to the Butchart garden is both excludable and non-rivalrous in nature,it can be considered as an example of a Club Good.
Final answer:
Visits to Butchart Gardens are excludable and nonrival in consumption, making them a club good.
Explanation:
Visits to Butchart Gardens are excludable because they can be prevented from those who have not paid the admission fee. Since the garden charges a fee and can limit access based on whether an individual has paid, it fits the criteria of an excludable good.
Furthermore, visits are nonrival in consumption, at least until the point at which additional visitors would begin to diminish the experience for others. Given the scenario described, that point is not reached, as the garden can hold many more visitors than it currently does.
Therefore, Butchart Gardens represents a club good, which is excludable but nonrival in consumption up to a certain capacity.
Nabb & Fry Co. reports net income of $25,000. Interest allowances are Nabb $5,000 and Fry $4,000, salary allowances are Nabb $14,000 and Fry $10,000, the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)
Final answer:
The net income of $25,000 is not sufficient to cover the combined allowances for Nabb and Fry, totaling $33,000. Therefore, each partner receives their respective allowances with Nabb receiving $19,000 and Fry receiving $14,000, with no remainder to distribute.
Explanation:
The problem involves distributing net income in a partnership according to agreed allowances and sharing the remainder equally.
Calculate total allowances for both partners: Nabb (Interest $5,000 + Salary $14,000 = $19,000); Fry (Interest $4,000 + Salary $10,000 = $14,000).Sum total allowances: $19,000 + $14,000 = $33,000.Subtract total allowances from net income: $25,000 - $33,000 results in a negative amount which indicates there's no remainder to distribute, and the net income is not sufficient to cover total allowances.Therefore, the distribution of income is as follows:
Nabb: $19,000 (Nabb's total allowances as the net income doesn't cover more than allowances)Fry: $14,000 (Fry's total allowances as the net income doesn't cover more than allowances)Since the net income is not enough to cover all allowances, there are no additional amounts to distribute equally between Nabb and Fry.
You are responding to an RFP from a medium-sized company in another state. The RFP explains that the company wants to begin manufacturing wooden toys for children and brand them as "Trustworthy, Safe, and Made in the USA." The company is searching for an organization that can help it develop a five year strategic plan. Write a solicited proposal that details why your company should help it develop its plan.
Answer:
Overview
According to the RFP received, it is comprehended that the client wants to establish a business of manufacturing wooden toys for children. The key differentiator or unique selling point (USP) of the toys would be strong branding and marketing of the product. This will create a three value axis of Trust, Safety, and Identity.
The client is searching for strategic partner to establish the business to deliver and implement the strategic vision for the next five years. The following are the basic five essentials associated with strategic business plan:
• Mission statement
• Vision
• Strategic critical factors
• Objectives and strategic goals to be achieved.
• Implementation strategies
Approach:
Today, the toy market is overcrowded with many types of toys, each having a unique value proposition and targeting specific age brackets in children. Marketers treat children as a separate demographic segment. Hence, conduct detailed research on this segment to identify classifying the patterns buying behavior.
The especially planned framework would create our business plans for hyper competitive marketplaces. The approach to create the plan is shown below:
• Defining the scope of the product: It includes target marketing, selling channels and targeting demographics of children.
• Understand the market: the main 5 elements in this stage are competition in the market, existing suppliers, and purchasing power of buyers, substitute products, and entrance barrier.
• Positioning of brand: It includes segmentation, identification of potential market, targeting, positioning, communicating, and positioning.
• Manufacturing and distribution of products: it includes the acquisition of raw material, machinery, developing distribution channel, and supply chain management.
• Finance calculation and Human Resource: it includes calculation of revenue, profits, Return on investment, taxation, and other various measures.
Timeline:
According to RFP details, it is estimated time duration to create a business strategy is 8 months. The timeline is shown below:
• Defining the scope – 1 month
• Understand the market – 3 months
• Positioning of brand – 2 months
• Manufacturing and distribution of products – 1 month
• Finance calculation and Human Resource – 1 month
Introduction of business:
Our agency has been serving companies to succeed over years. We have functioned with multiple companies having wide range of experience in this sector. We have functioned with extensive clients and helped them to achieve a reliable growth rate. We are fully engaged with the client and facilitate them to develop designing of the business plan.
The experience and promise towards the success of our partners helped us grow. We have positioned as a medium-size business counseling firms. We help our clients to have clear goals. We help to grow the understandings and approach towards the business.
sells authentic Amish quilts on her website. Suppose Susy expects to sell 2 comma 000 quilts during the coming year. Her average sales price per quilt is $ 400, and her average cost per quilt is $ 300. Her fixed expenses total $ 100 comma 000. Compute her margin of safety a. in units (quilts). b. in sales dollars. c. as a percentage of expected sales.
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Expected sales= 2,000 units
Selling price= $400
Unitary variable cost= $300
Fixed costs= $100,000.
First, we need to calculate the break-even point both in units and dollars:
Break-even point= fixed costs/ contribution margin
Break-even point= 100,000/ (400 - 300)= 1,000 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 100,000/ (100/400)= $4,000,000
Now, we can calculate the margin of safety in units, dollars and as a percentage:
Margin of safety (units)= (current sales level - break-even point)
Margin of safety (units)= 2,000 - 1,000= 1,000 units
Margin of safety (dollars)= 8,000,000 - 4,000,000= $4,000,000
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 4,000,000/8,000,000= 0.5= 50%
The following selected account balances are provided for Delray Mfg. Sales $ 1,165,000 Raw materials inventory, beginning 35,000 Work in process inventory, beginning 58,500 Finished goods inventory, beginning 65,600 Raw materials purchases 184,800 Direct labor 249,000 Factory supplies used (indirect materials) 16,000 Indirect labor 48,000 Repairs—Factory equipment 5,250 Rent cost of factory building 52,000 Advertising expense 95,000 General and administrative expenses 130,000 Raw materials inventory, ending 40,100 Work in process inventory, ending 46,400 Finished goods inventory, ending 72,700 Prepare its schedule of cost of goods manufactured for the current year ended December 31.
Answer:
Cost of goods manufactured = $562,050
Explanation:
Delray Manufacturing
Schedule of cost of goods manufactured
For the current year ended December 31
Beginning Raw materials inventory $35,000
Add: Raw materials purchases $184,800
Raw materials available for sale $219,800
Less: Ending Raw materials inventory $(40,100)
Direct materials used = $179,700
Direct labor $249,000
Primary cost $428,700
Add: Factory Overhead
Factory supplies used $16,000
Indirect labor 48,000
Repairs—Factory equipment 5,250
Rent cost of factory building 52,000
Total factory overhead cost $121,250
Total manufacturing cost $549,950
Add: Beginning work-in-process $58,500
Less: Ending work-in-process $(46,400)
Cost of goods manufactured $562,050
What stage of inventory includes goods that are ready to be sold to consumers?
The ________stage of inventory includes goods that are ready to be sold to consumers.
Answer:
Finished goods
Explanation:
There are four stages of inventory
1. Raw materials – materials and components scheduled for use in making a product.
2. Work in process, WIP – materials and components that have began their transformation to finished goods.
3. Finished goods – goods ready for sale to customers.
4. Goods for resale – returned goods that are salable.
So, we see here that the inventory stage that deals with goods ready for sale is FINISHED GOODS.
Answer:
Finished goods
Explanation:
During its first year of operations, Silverman Company paid $19,000 for direct materials and $10,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,500 while general, selling, and administrative expenses totaled $5,000. The company produced 6,500 units and sold 4,000 units at a price of $8.50 a unit.What is the amount of finished goods inventory on the balance sheet at year-end?
Answer:
$15000
Explanation:
DM + DL + Overhead = Total manufacturing cost
where, DM = Direct Material and DL = Direct Labor
(19000 + 10500 + 9500)/ 6500 = 6
The cost of goods manufactured can be calculated by adding direct labor costs @ $10500, direct material costs @ $19000 and overhead costs @ $9500 and dividing it by 6500, we get $6.
Now, 4000 units has been sold so 2500 units are in ending inventory. The total amount in ending inventor is "
2500*6 = 15000
Answer:
The inventory value in the balance sheet is $ 15,000
Explanation:
Computation of per unit cost of production
Direct materials $ 19,000
Direct Labor $ 10,500
Production facilities related cost $ 9,500
Total cost of production $ 39,000
Units produced 6,500 units
Pr]oduction cost per unit $ 6 per unit
Units sold 4,000 units
Units in hand ( 6,500 produced - 4,000 sold) 2,500 units
Inventory value 2,500 units on hand * $ 6 per unit $ 15,000
You are planning your retirement in 10 years. You currently have $200,000 in a bond account and $400,000 in a stock account. The stock account will earn an 11.5% return and the bond account will earn a 7.5% return. When you retire, you plan to withdraw an 2 equal amount for each of the next 25 years at the end of each year and have nothing left. Additionally, when you retire you will transfer your money to an account that earns 6.75%. How much can you withdraw each year
Answer:
$134,235
Explanation:
The future value (FV) of each when you retire in 10 years:
FV of Bond = $200,000 *(1+7.5%)^10 = $412,206
FV of Stock = $400,000 *(1+11.5%)^10 = $1,187,979
After 10 years, the total amount you have is $1,600,185 (= $412,206 + $1,187,979)
The we use formula PMT in excel to calculate the amount you can withdraw in 25 years:
=PMT(6.75%,25,-1600185) = $134,235
Please see excel attached for the calculation.
Identify how planned investment will change in each scenario. Please choose from the given below options.
1. Airwings, a commercial airline manufacturer, becomes optimistic about economic conditions after seeing reports of strong growth in consumer spending. Due to Airwings, planned investment _________.
2. The Federal Reserve announces an end to accommodative monetary policy, and is now implementing policy tools that will increase the real interest rate. Due to the Fed, planned investment __________.
3. In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate. Due to the Congress, planned investment __________.
Options:
O Increase
O Decrease
O will stay the same
Answer:
1. Airwings, a commercial airline manufacturer, becomes optimistic about economic conditions after seeing reports of strong growth in consumer spending. Due to Airwings, planned investment will increase.
2. The Federal Reserve announces an end to accommodative monetary policy, and is now implementing policy tools that will increase the real interest rate. Due to the Fed, planned investment will decrease.
3. In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate. Due to the Congress, planned investment will decrease.
Explanation:
1) Due to Airwings, planned investment will increase.
Since the business has a promising future, it will start capacity expansion to cater to consumer demand.
2) Due to the Fed, planned investment will decrease.
A higher real interest rate suggests that borrowing cost is higher for the firms and so that they will lessen the investment in response to that.
3) Due to the Congress, planned investment will decrease.
A lower tax implies that higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and the government with a tax on profit. However, if the rate of the tax itself has been increased then in that case corporate will see higher tax as a dampener in sentiments and they might curtail investment plans.
The planned investment of Airwings, the Federal Reserve, and Congress are likely to increase, decrease, and decrease respectively due to their respective economic and policy contexts.
Explanation:In each scenario, planned investment could change depending on the economic and policy situations. For option 1, Airwings is optimistic about future economic conditions due to strong growth in consumer spending. Because this optimism will likely lead to increased production and expansion, their planned investment will likely increase.
In the second scenario, the Federal Reserve is ending its accommodative monetary policy and increasing the real interest rate. Higher interest rates make borrowing for investment more expensive, so planned investment is likely to decrease.
Finally, in the third case, Congress is planning to increase the corporate income tax rate. This increase will decrease net corporate profits available for reinvestment, leading to a likely decrease in planned investment.
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Iz, Lauren, Odd, and Ralph started a T‑shirt company. They can produce any number of T‑shirts at a cost of $ 2 per T‑shirt, both marginal and average. They are the only producers of T‑shirts. As monopolists, they charge $ 20 per T‑shirt and obtain total profits of $ 10,000 . Now assume there are creative differences and they split the company in two. Lauren and Ralph join together and compete against Iz and Odd. If they compete on quantity, each company would produce 50 T‑shirts and charge $ 12 a T‑shirt. For technical reasons, assume that the quantity demanded is greater than zero for all prices greater than $0. If, however, Ralph and Lauren compete directly against Iz and Odd in prices, the market price for T‑shirts will be
Ralph and Lauren compete directly against Iz and Odd in prices, the market price for T‑shirts will be $2.
Explanation:
Market price falls to marginal cost when the firms compete against each other. Thus, in this case, the market price for the T-shirt will be $2.As, the price is equal to marginal cost as per the given information, the firms profit will lead to 0. there will be no economic profit.The given type of differentiation is known to be as the product differentiation.The basic reason to put the iguana on the t-shirts is to enhance the profitability.Even Better Products has come out with an even better product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of 0.03. Its earnings this year will be $2 per share. Investors expect a 12% rate of return on the stock.
Answer:
Price $17
PE ratio 8.5 times
Explanation:
As per given data
ROE = 20%,
Plowback ratio = b= 0.03,
EPS = $2,
k= 12%
As plowback referr to the retentrion value, deducting its effect from EPS
Dividend= EPS × ( 1 − b ) = $2 × ( 1 −0.03 )= $1.94
Growth = ROE x b = 20% x 0.03 = 0.006 = 0.6%
Using Dividendvaluation method we will calculate the price.
Price = Dividend / (Rate of return - Growth rate )
Price = $1.94 / ( 12% - 0.6% ) = $17
P / E Ratio = Price / EPS = $17 / $2 = 8.5
Shane's Catering began with cash of $ 10 comma 000. Shane then bought supplies for $ 2 comma 700 on account. Separately, Shane paid $ 6 comma 500 for equipment. Answer these questions. a. How much in total assets does Shane have? b. How much in liabilities does Shane owe? a. How much in total assets does Shane have? Shane has $ 12300 in total assets.
Answer:
a. $12,700
b. $2,700
Explanation:
The $10,000 she began with is an asset to the company and is also the owners equity.
Equipment purchased reduces cash but gives rise to another asset (fixed assets) hence the assets value does not change. Supplies is purchased on account, resulting in the creation of an asset and a liability.
Hence total asset owned by Shane Catering
= $10,000 + $2,700
= $12,700
Total liabilities = $2,700
Shane's Catering has $19,200 in total assets and owes $2,700 in liabilities.
Explanation:Shane's Catering began with cash of $10,000. Shane then bought supplies for $2,700 on account. Separately, Shane paid $6,500 for equipment.
a. To calculate the total assets, we need to add up the cash, supplies, and equipment. So, Shane has a total of $10,000 + $2,700 + $6,500 = $19,200 in total assets.
b. Shane owes $2,700 in liabilities, which represents the amount owed for the supplies purchased on account. This is the only liability mentioned in the question.
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Firm A and Firm B have the same total assets, ROA and profit margin. However, Frim B has a higher debt ratio and interest expense then Firm A. Which of the following statements is correct? A.) Firm B must have a higher ROE than first A. B.) Firm B must have a higher capital intensity ratio then Firm A. C.) Firm B must have a higher fixed asset turnover than Firm A. D.) Firm B must have a lower ACP than Firm A.
Answer:
A.) Firm B must have a higher ROE than first A.
Explanation:
Debt ratio is defined as percentage of a company's assets that is made up of debt and so it is calculated as a ratio of debt to assets of a company.
Interest expense is the amount that is paid to service a loan.
This implies that company B has higher loan portfolio than Company A.
Considering the accounting formula
Equity= Asset- Debt
So an increase in debt will result in a decrease in equity.
Return on equity= Net income/Equity
It follows that as debt increases and equity reduces, the ROE will increase since a shrink in the ROE denominator (Equity) will lead to an increase in the ratio.
On May 1, 2017, Sandhill Co. purchased the copyright to Monty Corp. for $104400. It is estimated that the copyright will have a useful life of 4 years. The amount of amortization expense recognized for the year 2017 would be _____________.
Answer:
The amount of amortization expense recognized for the year 2017 would be =$174000.
Explanation:
Amortization expense for year 2017 = ($1044000 / 4 years) * 8 months/12 months
Amortization expense for year 2017 = ($261000*8 months/12 months)
Amortization expense for year 2017= $174000
A company is deciding between 2 foreign firms to provide its call center services. A factor-rating method is used. Factors are rated on a scale of 1-10, with 10 being the best score. Suppose a consultant recommended that Factor 2 be twice as important as Factor 1, while Factor 3 should be four times as important as Factor 1. Which firm is best now using a weighted method? (Round your weights to the nearest four decimal places.)
Answer:
Explanation:
A) All the weights are equal.
For Firm A, Weighted score = (10 + 7 + 4)/3 = 21/3 = 7
For Firm B, Weighted score = (5+8+6)/3 = 19/3 = 6.3333
Firm A is better preferred
B) Factor 2 being twice important and Factor 3 having four times importance as Factor 1.
For Firm A, Weighted score = (10 + 7*2 + 4*4)/7 =40/7 = 5.7143
For Firm B, Weighted score = (5+8*2+6*4)/7 = 45/7 = 6.4286
Firm B is better preferred
Based on the weights applied and the factors given per firm, the firm that is best would be Firm A.
Which firm would be best?Factor 1 will be x.
Factor 2 will be 2x
Factor 3 will be 3x.
Total weights are:
= x + 2x + 3x
= 6x
Factor A is therefore = 1/6
Factor B is = 2/6
Factor C is = 3/6
Firm A weighted score is:
= ( (10 x 1/6) + (8 x 2/6) + (9 x 3/6))
= 8.83
Firm B weighted score:
= ( (5 x 1/6) + (8 x 2/6) + (6 x 3/6))
= 6.5
Firm A is therefore better with 8.83.
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Carla Heinz is a portfolio manager for Deutsche Bank. She is considering two alternative investments of EUR10,000,000. Either she will invest in euro deposits or she will invest in Swiss francs (CHF) for 90 days. In the latter case, she knows that she must worry about transaction foreign exchange risk, so she has decided to fully hedge her investment. Suppose she has the following data:180-day CHF interest rate, 8% p.a., 180-day EUR interest rate, 10% p.a., spot rate EUR1.1960/CHF, 180-day forward rate, EUR1.2024/CHF. Which of these deposits provides the higher euro return in 180 days? If these were actually market prices, what would you expect to happen?
Answer:
The euro return to investing directly in euros is 180 5% 10% 360 = × ÷ , so the euros available in 180 days is EUR10,000,000 × 1.05 = EUR10,500,000. Alternatively, the EUR10,000,000 can be converted into Swiss francs at the spot rate of EUR1.1960/CHF. The Swiss francs purchased would equal EUR10,000,000 / EUR1.1960/CHF = CHF8,361,204. This amount of Swiss francs can be invested to provide a 180 4% 8% 360 = × ÷ return over the next 180 days. Hence, interest plus principal on the Swiss francs is CHF8,361,204 × 1.04 = CHF8,695,652. If we sell this amount of Swiss francs forward for euros at the 180-day forward rate of EUR1.2024/CHF, we get a euro
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return of CHF8,695,652 ×EUR1.2024/CHF = EUR10,455,652. This is less than the return from investing directly in euros.If these were the actual market prices, you should expect investors to do covered interest arbitrages. Investors would borrow Swiss francs, which would tend to drive the CHF interest rate up; they would sell the Swiss francs for euros in the spot foreign exchange market, which would tend to lower the spot rate of EUR/CHF; they would deposit euros.
Explanation:
Final answer:
Upon calculating the returns, Carla Heinz would find that the euro deposit offers a higher return after 180 days than the Swiss francs deposit, even after fully hedging the currency risk. The euro deposit ends with EUR10,500,000 compared to EUR10,458,349.40 for the Swiss francs. Arbitrage would then lead to market adjustments in interest rates or exchange rates.
Explanation:
To decide which investment provides a higher euro return in 180 days between euro deposits and Swiss francs (CHF), Carla Heinz needs to calculate the amount she would earn from each after accounting for interest rates and any hedging actions necessary to mitigate foreign exchange risk.
For the euro deposit, with a 10% per annum interest rate, the simple interest for 180 days on EUR10,000,000 would be:
EUR10,000,000 x (10% / 2) = EUR500,000
The euro deposit investment would amount to EUR10,500,000 at the end of 180 days.
For the Swiss francs deposit, with an 8% per annum interest rate and calculating the returns after hedging:
First, the investment in CHF: EUR10,000,000 / EUR1.1960/CHF = CHF8,361,204.68
Simple interest for 180 days on the CHF deposit:
CHF8,361,204.68 x (8% / 2) = CHF334,448.19
Total in CHF at the end of 180 days: CHF8,695,652.87
Using the forward rate to convert back into euros:
CHF8,695,652.87 x EUR1.2024/CHF = EUR10,458,349.40
Comparing the two, Carla would have EUR10,500,000 from the euro deposit and EUR10,458,349.40 from the Swiss francs after hedging. Therefore, the euro deposit provides the higher return. If these were actual market prices, it would be expected that investors would move funds into euros until the arbitrage opportunity disappears, meaning the interest rates or exchange rates would adjust due to increased demand for euros and supply of CHF.
What is a pur autre vie life estate? It endures over the lifetime of the owner, then passes to an heir. It ends with the death of the life estate owner and may pass back to the original owners or their heirs or to a named third party. It ends with the death of the original grantor, then passes to a third party. It endures over the lifetime of a third person, after which
Answer:
It endures over the lifetime of a third person, after which the property passes from the tenant holder to the original grantor
Explanation:
"Pur autre vie" is a French phrase which refers to "for another's life". In such cases, the grantor passes on a property to a party, the duration of which is dependent on the life of a third person.
Upon the demise of such a third party, the estate in such a property gets reverted to the original grantor.
For example, A grants an estate in property to B, the duration of which is limited till the lifetime of C. In the event of C's death, the property reverts back to A i.e the original grantor.
Starr Co. had sales revenue of $540,000 in 2014. Other items recorded during the year were:
Cost of goods sold $330,000
Salaries and wages expense 120,000
Income tax expense 25,000
Increase in value of company reputation 15,000
Other operating expenses 10,000
Unrealized gain on value of patents 20,000
Prepare a single-step income statement for Starr for 2014. Starr has 100,000 shares of stock outstanding. (Round earnings per share to 2 decimal places, e.g. 1.48.)
The single-step income statement for Starr Co. for 2014 shows total revenues of $560,000 and total expenses of $485,000, yielding a net income of $75,000. The earnings per share are $0.75.
Explanation:In order to prepare a single-step income statement for Starr Co. for the year 2014, you need to tally the total revenues and the total expenses.
Revenues include Sales Revenue of $540,000 and an unrealized gain on value of patents for $20,000, giving total revenues of $560,000.
Expenses include Cost of Goods Sold ($330,000), Salaries and wages expense ($120,000), Income tax expense ($25,000), and Other operating expenses ($10,000), giving total expenses of $485,000.
By subtracting total expenses from total revenues, we arrive at a Net Income of $75,000.
Finally, to determine earnings per share, you divide the Net Income by the number of outstanding shares. So, $75,000 divided by 100,000 shares gives an Earnings Per Share(EPS) of $0.75.
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Pookie's Pinball Palace restores old Pinball machines. Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration. After having spent $300, Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration. Alternatively, he can sell the machine "as is" now for $1,000. What is his marginal benefit if he sells the machine "as is" now?
The marginal benefit of Pookie selling the machine "as is" now is $1,000.
Explanation:To determine the marginal benefit if Pookie sells the machine "as is" now, we need to compare the amount he will receive by selling it immediately ($1,000) to the amount he expects to receive after finishing the restoration ($2,000).
By selling it now, Pookie will receive $1,000, whereas if he completes the restoration, he expects to receive $2,000.
Therefore, selling the machine "as is" now would result in a marginal benefit of $1,000.
An American Depositary Receipt (ADR) is a security issued by a U.S. bank and traded on a U.S. stock exchange that represents a specific number of shares of a foreign stock. For example, Nokia Corporation trades as an ADR under the symbol NOK on the NYSE. Each ADR represents one share of Nokia Corporation stock, which trades under the symbol NOK1V on the Helsinki stock exchange.
If the U.S. ADR for Nokia is trading for $ 7.18 per share, and Nokia stock is trading on the Helsinki exchange for euro 5.43 per share, use the Law of One Price to determine the current $/euro exchange rate. (Round to three decimal places.)
Answer:
Explanation:
Nokia is trading in US at $ 7.18 per share and at € 6.08 on Helsinki stock exchange.
Law of one price - Price of Nokia must be the same in both the countries. So current exchange rate is $7.18/€6.08 = $1.18/€
The Law of One Price states that the same good or asset should have the same price in different markets, after adjusting for transportation costs and other expenses.
Explanation:The Law of One Price states that the same good or asset should have the same price in different markets, after adjusting for transportation costs and other expenses. In this case, we can use the Law of One Price to determine the current $/euro exchange rate by comparing the price of Nokia stock in the U.S. market (ADR price) to its price in the Helsinki market.
To calculate the exchange rate, we divide the ADR price by the stock price in euros. So, $7.18 / €5.43 = 1.32. Therefore, the current $/euro exchange rate is approximately 1.32.
Sheridan Corp. is a fast-growing company whose management expects it to grow at a rate of 26 percent over the next two years and then to slow to a growth rate of 20 percent for the following three years. If the last dividend paid by the company was $2.15.
a. What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.)
b. What is the dividend for the 2nd year? (Round answer to 3 decimal places, e.g. 15.250.)
c. What is the dividend for the 3rd year? (Round answer to 3 decimal places, e.g. 15.250.)
d. What is the dividend for the 4th year? (Round answer to 3 decimal places, e.g. 15.250.)
e. What is the dividend for the 5th year? (Round answer to 3 decimal places, e.g. 15.250.)
f. Compute the present value of these dividends if the required rate of return is 14 percent. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)
Final answer:
a. The dividend for the 1st year is 2.7095. b. The dividend for the 2nd year is 3.41787. c. The dividend for the 3rd year is 4.101444. d. The dividend for the 4th year is 4.101444. e. The dividend for the 5th year is 4.101444. f. The present value of the dividends, with a required rate of return of 14 percent, is 14.09.
Explanation:
a. What is the dividend for the 1st year?
To calculate the dividend for the 1st year, we need to multiply the last dividend paid by the growth rate for the 1st year. The growth rate for the 1st year is 26%, so the dividend for the 1st year would be 2.15 * 1.26 = 2.7095.
b. What is the dividend for the 2nd year?
Similarly, to calculate the dividend for the 2nd year, we multiply the dividend for the 1st year by the growth rate for the 2nd year. The growth rate for the 2nd year is 26% as well, so the dividend for the 2nd year would be 2.7095 * 1.26 = 3.41787.
c. What is the dividend for the 3rd year?
For the 3rd year, we multiply the dividend for the 2nd year by the growth rate for the 3rd year, which is 20%. So the dividend for the 3rd year would be 3.41787 * 1.20 = 4.101444.
d. What is the dividend for the 4th year?
The dividend for the 4th year would be the same as the dividend for the 3rd year, as the growth rate for the 4th year is also 20%. So the dividend for the 4th year would be 4.101444.
e. What is the dividend for the 5th year?
Similarly, the dividend for the 5th year would be the same as the dividend for the 3rd and 4th years, as the growth rate for the 5th year is also 20%. So the dividend for the 5th year would be 4.101444.
f. Compute the present value of these dividends if the required rate of return is 14 percent.
To compute the present value of the dividends, we need to discount each future dividend to its present value. We can use the formula:
PV = D / (1 + r)t
Where:
PV = Present Value
D = Dividend
r = Required rate of return
t = Number of years
Using this formula, we can calculate the present value of each dividend and then sum them up to get the total present value. To calculate the present value for each dividend, we need to divide the dividend by (1 + r)t. For example, the present value of the dividend for the 1st year would be 2.7095 / (1 + 0.14)1 = 2.3696.
Repeating this calculation for each dividend and summing them up, we get the total present value. However, since the question specifies to round intermediate calculations and final answer to 2 decimal places, we'll round each present value to 2 decimal places and then sum them up. Using this method, the total present value of the dividends would be 2.37 + 3.82 + 3.15 + 2.60 + 2.15 = 14.09.