Answer: The correct answer is "a) Identifies for managers the essential information for making a decision".
Explanation: Economic theory is a valuable tool for business decision making because it identifies for manager the essential information for making a decision since through certain assumptions about essential aspects, it allows managers to test and differentiate the possible results according to the relevant information that it provides to make a decision.
Economic theory is a valuable tool for business decision making as it identifies essential information, creates a complex model of the business firm, and aids decision-makers in finding solutions.
Explanation:Economic theory is a valuable tool for business decision making because it identifies for managers the essential information for making a decision. By using economic theories, managers can analyze data, understand market trends, and evaluate costs and benefits to make informed decisions. Additionally, economic theory creates a realistic, complex model of the business firm. It takes into account various factors such as production, pricing, competition, and consumer behavior, providing managers with a comprehensive understanding of their business environment. However, it is important to note that economic theory does not provide an easy solution to complex business problems. It helps decision-makers understand the factors influencing their decisions, but they still need to apply critical thinking and consider multiple perspectives to find solutions.
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On May 1, 2016, Varga Tech Services signed a $6,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2016, to April 30, 2017, with Shaffer paying the entire $6,000 on May 1, 2016.
How much revenue should Varga recognize in 2016? (Do not round intermediate calculation.)
Answer:
Varga should recognize $4,000 as revenue in 2016.
Explanation:
As the cash received in advance is recorded as unearned revenue which is a liability for the Varga Tech Services because they did not provide the services yet. On December 31, Eight months have passed and services for these month has been provided. So the revenue of 8 month months of 2016 will be recognized and recorded at year end.
Serive Contract = $6,000 for 12 months
Revenue Recognized in 2016 = $6,000 x 8/12 = $4,000
Sellers typically ask a higher price for an item than buyers are willing to pay. This is called a(n) Group of answer choices Compensatory model Noncompensatory model Endowment effect Elimination by aspect model Lexicographical model
Answer:
Endowment effect
Explanation:
Endowment effect is the effect which is defined as the when the ownership rises or increases the value of the product or the item.
For example, when it is asked to set a price for an item to be exchanged, the sellers usually ask for a much higher price for the product, than the buyers are willing to pay. This effect is called as the endowment effect because the ownership increase the value linked with the product or item.
The Copy Center can purchase a new copier for $15,000. It would last for 3 years and have a salvage value of $3,000. Depreciation cost would be $4,000 per year and cash operating costs would equal $1,000 per year. The same copier could be leased for $6,500 per year. Using a discount rate of 7%, and the tables in Supplement 11A, it is best to (buy/lease) the copier because the difference in cost is___________ $ .
Answer: 4,500
Explanation:
Answer:
buy/1883
Explanation:
The initial equilibrium price in the market for Web pages is $200 per page and 1 created in a month. Many new Web design firms now enter the market. As a result, leftward and the price falls.
A) the supply curve of Web pages shifts l
B) the supply of Web pages increases and the price falls,
C) the supply of web pages increase and the price falls, which then increases the demand for Web pages and the demand curve shifts rightward.
D) the demand for Web pages increases and the price rises.
E) the demand for Web pages increases and the price falls.
Answer:
B) the supply of Web pages increases and the price falls.
Explanation:
The equillibrum price is where demand intersects supply, that is the price at which consumer is willing to buy is the same as the price seller is willing to sell.
If there was only 1 web page created per month at $200, and now more web design firms enter the market. The supply of web pages will increase from 1, as all the companies will want to present their product.
This results in excess supply and will cause price to fall as is illustrated in the attached diagram. As seen the equillibrum price reduces from P1 to P2.
Answer:
The supply of web pages increase and the price falls, which then increases the demand for web pages and the demand curve shifts rightward ( C )
Explanation:
If the equilibrium price of a web page is $200 when fewer web design firms are producing the web pages. the number of web pages will increase when more web design firms enter the market.
As more design firms go into producing more web pages the supply of web pages will be increase and this will lead to lower equilibrium price for the web pages in the market. based on this market factors the demand will increase because buyers would buy more when prices of goods and services fall. the increase in demand will be represented with the demand curve shifting to the right.
Pro Corp., a U.S.-based MNC, uses purchasing power parity to forecast the value of the Thai baht (THB), which has a current exchange rate of $o.o22. Inflation in the United States is expected to be scenario, Pro Corp. would forecast the value of the baht at the end of the year to be:
a. $0.023.
b. $0.021
c. $0.020.
d. None of the above
Answer:
Option "B" is the correct answer to the following statement.
Explanation:
Given:
Exchange rate of 1 Baht= $0.022
Expected inflation in united states (Assume) = 3% = 0.03
Expected inflation in Thailand (Assume) = 10% = 0.10
Computation:
After 1 year rate of 1 Baht in Dollar
The price in US = 1 × (1+0.03) = $1.03
The price in Thailand = 1 × (1+0.10) = 1.10 baht
1 baht = 1.03×0.022÷1.1 = $0.0206
Therefore, 1 baht = $0.21 (approx)
Bradley's Copiers sells and repairs photocopy machines. The manager needs weekly forecasts of service calls so that he can schedule service personnel. Use the actual demand in the first period for the forecast for the first week so error measurement begins in the second week. The manager uses exponential smoothing with alpha = 0.5. Forecast the number of calls for week 6, which is next week. Week Actual Service Calls 1 26 2 32 3 40 4 27 5 30
Answer:
Explanation:
exponential smoothing alpha = 0.5
formula = Previous demand x Alpha + previous forecast x (1 - alpha)
26 32 40 27 30
26 26 29 34.5 30.75
week 2 forecast
26x0.5 + 26x0.5 = 26.
week 3 forecast
32x0.5 + 26x0.5 = 29
use the same procedure for week 4 and week 5
week 6
30x0.5 + 30.75x0.5 = 30.375
Demand Forecast for week 6 = 30.38
g cost structure is degined on the relative proportion of fixed and variable cost in an organization if the company increase the proportion of variable costs relative to fixed costs
True/False
Answer:
True
Explanation:
Cost structure involves all the expenses that a company will incur while operating business model, which it is typically composed of fixed and variable costs. Fixed costs are static with increases or decreases in units of production capacity, while variable costs are dependent. Cost structure is the relative proportion of fixed and variable costs within a company.
2. Suppose you currently have $3,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 2% interest compounded annually. How much will you have when the CD matures
Answer:
The value of the CD would probably be $3183.62 in three years as shown below.
Explanation:
The formula applicable here is future value ,which means the value of the investment in 3 years at 2% compound interest rate.
The formula is given as:
FV=PV*(1+r)^n
FV is the unknown here
PV is the present value of the amount to be invested which is $3000
r is the rate of return on investment at 2%
n is the time horizon of the investment which is 3 years
FV=$3000*(1+0.02)^3
FV=$3183.62
In other words, by investing in the certificate of deposit, the investor would likely have $3183.62 in three years' time.
The rate on certificate of deposit is usually low because it is one the safest investment vehicle ,hence offers a lower rate of return,that shows clearly the positive relationship between risk and return on investment
Final answer:
Investing $3,000 in a 3-year CD with a 2% annual compound interest rate will result in a total of $3,183.60 when the CD matures.
Explanation:
If you invest $3,000 in a 3-year certificate of deposit (CD) that pays 2% interest compounded annually, you can calculate the final amount using the formula for compound interest: A = P(1 + r/n)^(nt). In this formula, A is the amount of money accumulated after n years, including interest. P is the principal amount (the initial amount of money), r is the annual interest rate (in decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
In your case, P = $3,000, r = 0.02 (2% expressed as a decimal), n = 1 (since the interest is compounded annually), and t = 3 years. So, your calculation would be A = $3,000(1 + 0.02/1)^(1×3).
Let's do the math: A = $3,000(1 + 0.02)^3 = $3,000(1.02)^3 = $3,000 × 1.0612. When you calculate this, you get A = $3,183.60.
Therefore, when the CD matures after 3 years, you will have $3,183.60.
Between 1994 and 2006, Fort Myers home prices have increased Faster than the rate of inflation. Using your knowledge of markets, in 25 words or more explain why.
Answer: The market for homes will be higher when there is increase in the amount of homes being built. In addition, the location of a house determines the cost of the house. For instance, a house located in an urban environment will cost more than the one located in a rural area. Irrespective of having the same components or features, the price will always vary.
Explanation:
Fort Myers is a commercial centre of Lee County, Florida. It is a major tourist destination in Florida. It is a metro city with job markets and a nice quality of live. Between 1994 and 2006, the prices of Fort Myers homes increased more than the rate of inflation. This is due to the quality of life and location of Fort Myers. An increase in the number of houses built increaseD the market for homes. This raised the price of houses higher than the inflation rate.
Final answer:
The rise in Fort Myers home prices between 1994 and 2006 was due to the housing bubble, characterized by speculation, rising homeownership rates, and unsustainable mortgage practices.
Explanation:
Between 1994 and 2006, Fort Myers home prices increased faster than inflation due to several factors. During the early 2000s, there was widespread enthusiasm and speculation in the housing market, which led to what is known as the "housing bubble." At that time, home ownership rates were rising, and housing was considered a safe financial investment, which helped to drive up the market. Furthermore, mortgage values tripled, making housing more accessible even though this accessibility was often driven by unsustainable mortgage practices.
This period saw a significant change in home values with the average U.S. home price rising over 10% per year. No serious analyst believed this rate of growth was sustainable. The homeownership rate also increased, reaching a high of over 69% between 2004 and 2005. This rise in home values ultimately led to a market correction, which, when housing prices fell in 2007 and 2008, contributed to a severe recession.
Analysts attribute the steep rise in home prices to a combination of low-interest rates, lax lending standards, and a belief that housing prices would continue to rise indefinitely. The increase in housing prices during the bubble period was clearly out of step with historical trends and was also much faster than the rate of inflation.
Exercise 5-17 (Algorithmic) (LO. 4, 8) Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $114,000 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $114,000 dividend because the tax rate on dividends is lower than the tax rate on compensation. Answer the following questions to determine whether Rover is correct in believing that a dividend is the better choice. a. Regarding taxes, which would benefit Aleshia the most? The $114,000 dividend because after taxes she would have $ from the dividend and $ 86,640 from the bonus. b. Regarding taxes, which would benefit Rover Corporation the most? The $114,000 bonus because it would save Rover $ 23,940 in taxes. c. Considering the two parties together, which alternative would provide the most overall tax savings? The $114,000 bonus because when the overall effect to both the corporatio
Answer:
The correct answer that a dividend is a better choice is . a. Regarding taxes, which would benefit Aleshia the most? The $114,000 dividend because after taxes she would have $ from the dividend and $ 86,640 from the bonus.
Explanation:
A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders.
A tax (from the Latin taxo) is a compulsory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law.
You are considering a new product launch. The project will cost $1,006,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 360 units per year; price per unit will be $19,800, variable cost per unit will be $16,300, and fixed costs will be $334,000 per year. The required return on the project is 14 percent, and the relevant tax rate is 40 percent.
Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within ±10 percent.
Required:
(a)What are the best and worst case values for each of the projections? (Do not round intermediate calculations. Round your answers to the nearest whole number (e.g., 32)
Scenario Unit sales Variable costs Fixed costs
Base 360 $16,300 $334,000
Best
Worst
(b) What are the best- and worst-case OCFs and NPVs with these projections? (Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)
OCF NPV
Best-case $ $
Worst-case $ $
(c) What is the base-case OCF and NPV? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
OCFbase $
NPVbase $
(d) What is the OCF and NPV with fixed costs of $344,000 per year? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
OCF $
NPV $
(e) What is the sensitivity of the NPV to changes in fixed costs? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places (e.g., 32.16).)
Answer:
A) In Best Case: revenues rise by 10% while costs decline by 10%. In the worst case, profits are declining by 10%, while costs are rising by 10%.
Scenario Unit sales Variable costs Fixed costs
Base 360 $16,300 $334,000
Best 396 $14,670 $300,600
Worst 324 $17,930 $367,400
b), c) Using the tax shield approach, the OCF and NPV for the base case estimate is:
OCF(base) = [($19,800 – 16,300)(360) – 334,000](0.60) + 0.40(1,006,000/4)
OCF(base)= $656,200
NPV(base) = –$1,006,000 + $656,200(PVIFA14%,4)
NPV(base) = $905,978.01
OCF(worst) = [($19,800 – 17,930)(324) – 367,400](0.60) + 0.40(1,006,000/4)
OCF(worst)= $243,688
NPV(worst) = –$1,006,000 + $243,688(PVIFA14%,4)
NPV(worst) = $ (295,963.28)
OCF(best) = [($19,800 – 14,670)(396) – 300,600](0.60) + 0.40(1,006,000/4)
OCF(best)= $1,139,128
NPV(best) = –$1,006,000 + $1,139,128(PVIFA14%,4)
NPV(best) = $2,313,091.27
d) OCF and NPV with Fixed Costs 344,000
OCF(base) = [($19,800 – 16,300)(360) – 344,000](0.60) + 0.40(1,006,000/4)
OCF(base)= $650,200
NPV(base) = –$1,006,000 + $650,200(PVIFA14%,4)
NPV(base) = $888,295.74
e) (Change in NPV in Case d wrt Case c)/Change in FC,
(888,295.74 - 905,978.01)/(10,000) = -1.75
Ford Motor Company has issued 8% convertible debentures, convertible at a 25:1 ratio. Currently the debenture is trading at 110. The stock is trading at 38. What is the conversion price of the stock?
25
38
44
40
Answer:
Conversion price of the stock = 40
so correct option is (d) 40
Explanation:
given data
convertible ratio = 25:1
convertible debentures = 8%
stock is trading = 38
debenture trading = 110
solution
we get here Conversion price of the stock that is express as
Conversion price of the stock = Par value of the bond ÷ Conversion ratio ............1
Conversion price is price paid per equity share to acquire it through conversion
and Conversion ratio is 25 shares per bond if converted
put here value and we get
Conversion price of the stock = [tex]\frac{1000}{25}[/tex]
Conversion price of the stock = 40
so correct option is (d) 40
Anthony votes in favor of a bill which would prevent people above a certain level of income from being able to purchase subsidized housing. Which philosophy of ethics is applies here?
(A) Kantianism
(B) Virtue Ethics
(C) Social Justice Theory
(D) Utilitarianism
Answer:
Letter C is correct. Social Justice Theory.
Explanation:
The most suitable alternative for this issue is letter c, Theory of Social Justice.
This theory refers to an ethical and political philosophy that states that there is justice beyond those recognized by the economic law of supply and demand, civil and criminal law, and the social and moral rules and structures of society. According to this theory, social justice refers to relationships that must be fair to all groups in society, that is, all people must have equal access to health, well-being, justice, opportunities, etc., regardless of their conditions. political, economic or other.
Social justice theory can punish or favor individuals regardless of their characteristics, choices or actions.
In the above question, we can say that social justice is adequate, because in economic terms, it is able to grant opportunities, redistribution of wealth and income to groups considered oppressed by certain oppressors.
Final answer:
Anthony's vote aligns with Social Justice Theory, which seeks a fair allocation of resources in society and particularly relates to Rawls's theory involving the veil of ignorance.
Explanation:
Anthony's vote aligns with the philosophy of Social Justice Theory, which focuses on the equitable distribution of opportunities, resources, and rights within a community. This theory is concerned with creating a society where there is a fair allocation of community assets, making sure that individuals in higher income brackets do not reduce the availability of subsidized housing meant for those in greater need.
The concept of social justice invokes the “veil of ignorance” in Rawls's theory. It is a method of designing a just society by making decisions without knowledge of one's position within the society, ensuring fair and unbiased policies. Lastly, while utilitarian principles, such as those discussed in the theory of Utilitarianism, are important in many aspects of social policy and ethics, the specifics of the housing bill discussed do not directly pertain to this philosophy which aims to maximize the overall happiness or welfare of the society.
A manager at Strateline Manufacturing must choose between two shipping alternatives: two-day freight and five-day freight. Using five-day freight would cost $135 less than using two-day freight. The primary consideration is holding cost, which is $10 per unit a year. Two thousand items are to be shipped.Which alternative would you recommend? Expalin
Answer:
2 day freight
Explanation:
Given:
Number of units = 2,000
Primary holding cost = $10 per unit a year
Computation of Extra 3 days (five-day freight - two-day freight) holding cost:
Holding cost for 3 days = Number of units × Primary holding cost × (Number of days / 365)
= 2,000 × $10 × (3/365)
= $20,000 × (3/365)
= $164.39
Holding cost for 3 day of extra freight is $164.39.
This cost is higher than saving cost so, 2 days freight will be chosen.
The alternative that would be recommended is the 2-days freight.
The first thing to do is to calculate the holding cost. This will be:
= 2000 × 10
= 20000
Then, the holding cost for three days extra freight will be:
= 20000 × (3/655)
= 164.38
Therefore, this is more than $135 and it's not advisable.
Therefore, it's advisable to go for 2-days freight.
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Variable Costing: Compare and contrast variable costing with absorption costing, highlighting the differences between operating income. Discuss the use of variable costing for decision making in a manufacturing company and a service company.
Answer:
Differences among Absorption and Variable Costing:
In Absorption costing item cost is higher than the cost determined under factor costing. Variable costing changes just direct cost (material, work, overhead) into cost of an item though Absorption Costing Charges all the assembling costs into cost of item. In factor costing benefit of Closing Inventory is lower than an incentive under Absorption Costing. In factor costing fixed assembling costs are considered as occasional expenses and charged from the Gross Profit though in Absorption it has taken in item cost just as shutting Inventory. In factor costing fixed assembling costs are not charged to Inventory.Contrasts in overall gain happens because of distinction in treatment of fixed overhead under over two costing draws near.
Preferences of variable costing in dynamic:-
Under factor costing commitment edge Income Statement give significant data (s) to the Managers. It is valuable in inward dynamic and increasingly compelling in cost-volume-benefit (CVP) examination. It empowers to distinguish CM Ratio, BEP in units and dollar, target benefit focuses and in affectability examination. It aware and helps the administration in taking choice identified with increment the creation for increment in benefits, use of overabundance limit or to meet stockpile of extra requests. It likewise prompts in purchase or decide.16. A price floor represents: a. a maximum price that can be legally charged for a product or service. b. a minimum price that can be legally charged for a good or service. c. a lottery imposed upon producers by the government, d. a first come, first serve mechanism for controlling prices.
Answer:
b. minimum price that can be legally charged for a product or service
Explanation:
A price floor represents a minimum price that can be legally charged for a product or service. A price floor is the lowest legal price that can be paid in markets for goods and services, labor, or financial capital. There are many goods which have price floors imposed by the government; for example agriculture good. In an organizations, unions may also impose price floors which could be the minimum rates for the staff etc.
On June 5, Jo's Market sold $1,000 of goods on credit with terms of 2/10,n/30. The required journal entry to record Jo's Market customer's payment on July 6 would be:
Answer: debit cash $1000; credit accounts receivable $1000
Explanation:
Answer: Debit cash $980; debit sales discounts $20; and credit accounts receivable $1000
Explanation:
One evening while watching TV, your stomach growls. You see an ad for Subway. You walk to the Subway shop and buy a sandwich, which tastes great. In terms of behavioral learning, your hunger is a __________.
a.reinforcement
b.cue
c.response
d.prompt
e.drive
Answer:
The correct answer is letter "E": drive.
Explanation:
Following the ideas of Sigmund Freud (1856-1939), the father of Psychoanalysis, a drive is a motivation caused by the pressure of satisfying an urgent need. Some use the term "need" to describe the situation above but there is a differentiation made with "drive" describing the latter as the psychological manifestation and the first as the state of not having something vital.
Debbie keeps a close eye on her company’s internal and external environment to discover possible opportunities for new products and to discern possible threats from the competition. In which activity is Debbie engaged?
Answer:
The activity Debbie is engaged in is Environmental scanning.
Explanation:
The method of collecting data about the peripheral marketing environment to identify and understand marketing trends is known as environmental scanning. This process involves continuous monitoring of the organization to detect the occurrences of opportunities and threats caused by the internal and external environment.
Environmental scanning identifies and prevents the organization from threats so that her present and future plans doesn't get terminated.
Thus, the activity Debbie is engaged in is Environmental scanning.
Answer: Environmental scanning
Explanation: Debbie is engaged in environmental scanning which is defined as a process of collecting data and information about external and internal events that impacts organization's environments. These factors help determine the decisions a business makes; the future direction of the business and they include: competition, economics, technology, legal issues, and social/demographic factors, market research studies etc.
Candy Canes Inc. spends $100,000 to buy sugar and peppermint in April. It produces its candy and sells it to distributors in May for $150,000, but it does not receive payment until June. For each month, find the firm’s sales, net income, and net cash flow.
Answer:
April,
Sales is zero Net income is zeroNet cash flow is an outflow of $100,000 (used in the purchase of raw materials)May,
Sales is $150,000Net income is $500,00Net cash flow is zeroAnd in June;
Sales is zero Net income is zeroNet cash flow is an inflow of $150,000 (amount received from customers)Explanation:
In April, the company purchased raw materials (Sugar and Peppermint) for $100,000. The entries posted are debit to Inventories and Credit to Cash account (both amounting to $100,000 each).
As such in April,
Sales is zero Net income is zeroNet cash flow is an outflow of $100,000 (used in the purchase of raw materials)It produces its candy and sells it to distributors in May for $150,000, but it does not receive payment until June.
When the sale is made in May, the entries required is Debit accounts receivables $150,000 and Credit Sales revenue $150,000. Also, Debit cost of goods sold $100,000 and Credit Inventories $100,000.
Net income is the difference between sales and cost of sales.
As such in May,
Sales is $150,000Net income is $500,00Net cash flow is zeroFor June,
Payment for goods sold in May were received, entries posted are debit to cash account and a credit to accounts receivables (both balance sheet accounts), hence;
Sales is zero Net income is zeroNet cash flow is an inflow of $150,000 (amount received from customers)Candy Canes Inc. incurred expenses in April with no sales, resulting in zero for all values. In May, they made sales but received no money, resulting in positive net income but negative cash flow. In June, they received the payment, resulting in positive cash flow but no change in net income.
Explanation:In April, Candy Canes Inc.'s sales, net income, and net cash flow are all zero because no sales were made, though the company did spend $100,000 on sugar and peppermint.
In May, the firm's sales amounted to $150,000. The net income was $50,000 (which is $150,000 in sales subtracting the $100,000 in expenses). However, the net cash flow was -$100,000 because payment was not received in May, and the company spent $100,000 in April.
In June, there were no new sales or expenditure, but because Candy Canes Inc. received payment for the May sales, its net cash flow was $150,000, while the net income remained zero.
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Furious Fred expects cash flows from an investment as follows: Yr 1 $3,000, Yr 2 $5,000, Yr 3 $8,000 Using an opportunity cost of capital of 5.6%, the present value is: $14,118 $14,523 $14,361 $14,909 none of the above
Answer:
$14,118
Explanation:
The computation of the present value is shown below:
Years Annual cash flows Discounting factor @5.6% Present value
1 $3,000.00 0.946969697 $2,840.91
2 $5,000.00 0.896751607 $4,483.76
3 $8,000.00 0.8491965975 $6,793.57
Total $14,118.24
The discount factor is computed below
= 1 ÷ (1 + rate)^years
like for year 1
= 1 ÷ (1 + 0.056)^1
The present value of the cash flows from the investment, given an opportunity cost of capital of 5.6%, is calculated for each year and summed to give a total of $14,201.07. Hence, the answer to the multiple-choice question is 'None of the Above'.
Explanation:To compute the present value, we utilize the formula: PV = CF / (1 + r)^n, where PV is the present value, CF is the cash flow, r is the discount or interest rate, and n is the period. Therefore, we calculate the present value for each year and sum them:
Year 1: $3,000 / (1 + 0.056)^1 = $2,841.52 Year 2: $5,000 / (1 + 0.056)^2 = $4,476.78 Year 3: $8,000 / (1 + 0.056)^3 = $6,882.77
Then the total present value is: $2,841.52 + $4,476.78 + $6,882.77 = $14,201.07. Therefore, the answer would be 'None of the Above'.
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You are planning for your retirement and want to have $1,500,000 by the time you retire 45 years from today. You also want to have $250,000 in 20 years to help fund your children's college education. What annual end of the year deposit would you have to make for 45 years into an account paying 8% compounded annually to meet your future goals?
A. 4,528
B. $3,881
C. $6,906
D. $8,311
Answer:
The correct option is D. $8,311
Explanation:
The steps to reach the deposit ammount of $8,311 are the following:
1) Calculate Future Value of cash flow= 250,000×(1+0.08)∧25=1,712,118.80
2) Calculate the total ammunt to be accumulated by the end of year 45
=1,712,118.80+1,500,000=3,212,118,80
3) Finally you have to calculate the annual deposit to achieve the 3,212,118,80 in 45 years
FV= 3,212,118,80
r=8%
n=45
3,212,118.80= P( (1+0.08)∧45-1 )
0.08
= 8,311. Annual end of the year deposit
Indifference curve analysis Select one: A. presumes only that the consumer can say one combination of two goods yields more or less utility than some other combination. B. is in conflict with the idea of a downsloping demand curve. C. presumes, unlike utility analysis, that satisfaction is numerically measurable. D. presumes, as does utility analysis, that satisfaction is numerically measurable
Answer:
A. presumes only that the consumer can say one combination of two goods yields more or less utility than some other combination
Explanation:
An indifference curve is a curve is a graph that shows the combination of two goods that have been given a consumer equilibrium. Along utility and thus they make a consumer difference and are said to be a heuristic device that is used in the contemporary microeconomics to demonstrates the your preferences and the limitations of a budget.DellceCon is considering selling its delicious ice-cream cones using stands along Hot Beach, which is 5 miles long. According to its estimates, there are 1,000 sunbathers evenly spread along the beach and the each sunbather will buy one ice-cream cone per day pro- vided that the price plus any transportation (disutility) cost does not exceed $5. Each sunbather incurs a transportation (disutility) cost of leaving the comfort of their chair and umbrealla to get a cone and return to their spot of 25 cents per 0.25 mile. Each cone costs $0.50 to make and DeliceCon incurs a cost of $40 per day to run one of its stands. We would like to know how many stands DellceCon should operate and the price per cone that it should charge at each stand to maximize its profit.
Answer:
The price per charged should be $2.5
Explanation:
Disutility cost per 0.25 mile is 25 cents. Therefore, the cost per mile is 4x25 cents = $1
The disutility for the entire 5 miles is $5. This implies that 1 stand can easily satisfy the
condition of the disutility not being more than $5.
Thus, the seller should operate 1 stand.
Now, the total transportation cost can be minimized if the stand is set up in the middle of
the beach. In that case, the sunbathers at the farthest two ends would face a cost of $2.5
(2.5 miles x $1)
This means that in order to satisfy the disutility condition, the total of the price charged,
and disutility incurred should be less than $5.
Therefore, $2.5 + Price < $5. This means that Price $2.5
In order to maximize the profits, he would charge the maximum possible price.
Thus, the price per charged should be $2.5
Tracy consumes dress shoes (D) and casual Crocs (C). Her marginal utility from consuming casual Crocs is MU Subscript Upper CMUCequals=20DC and her marginal utility from consuming dress shoes is MU Subscript Upper DMUDequals=10Upper C squaredC2. Her annual shoe allowance is $450450, which she spends on only dress shoes and Crocs. If she pays $5050 for a pair of dress shoes and $2525 for a pair of Crocs, what is her optimal consumption bundle?
Answer:
The optimal bundle is 6 pairs of dress shoes and 3 pairs of Crocs.
Explanation:
From the question,
Allowance (M) = $450; Price of dress shoes, Pd = $50; Price of crocs, Pc = $50
Note: MRS-price ratio, MUC- marginal utility from consuming casual Crocs ,MUD- marginal utility from consuming dress shoes
Optimal bundle is determined where MRS = Price ratio
MRS = MUC/MUD = 20DC/10C2 = 2D/C
Price ratio = Pd/Pc = 50/50 = 1
So, 2D/C = 1
Therefore, C = 2D
Budget constraint: M = Pd*D + Pc*C
So, 50D + 50*(2D) = 450
50D + 100D = 150D = 450
So, D = 450/150 = 3
C = 2D = 2*3 = 6
To maximize her utility, Tracy should buy twice as many pairs of casual Crocs as dress shoes. This is found by equalizing the marginal utility per dollar spent on each type of shoe and considering her budget constraint of $450.
Explanation:In economics, consumers aim to maximize their utility given their budget constraints. The optimal consumption bundle is achieved when the marginal utility per dollar spent on each good is equal. Therefore, to find Tracy's optimal consumption bundle, we need to set the marginal utility per dollar spent on dress shoes equal to the marginal utility per dollar spent on casual Crocs.
The marginal utility per dollar spent on dress shoes is MU Subscript Upper D/Price of D = 10Upper C squaredC2/$50. The marginal utility per dollar spent on casual Crocs is MU Subscript Upper C/Price of C = 20DC/$25. Setting these equal to each other, we get (10C2/$50) = (20DC/$25). Simplifying, we find that Tracy should buy twice as many pairs of Crocs as dress shoes to maximize her utility.
However, we also need to take into account her budget constraint of $450. Let D be the number of pairs of dress shoes and C be the number of pairs of casual Crocs. So, we have the equation $50D + $25C = $450. Substituting D = C/2 into this equation, we can solve for the optimal number of dress shoes and Crocs for Tracy.
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Culture affects Multiple Choice where consumers decide to make their purchases. when consumers decide to make their purchases. how consumers decide to make their purchases. what consumers decide to purchase. every aspect of consumers' purchase decisions.
Answer:
The correct answer is letter "E": every aspect of consumers' purchase decisions.
Explanation:
Consumers' culture is a major component that influences their buying patterns. It determines what, how, when, and where consumers will purchase. Companies must pay special attention to those factors so they can match their efforts to what consumers are likely to demand to satisfy their needs.
The more a product is linked to consumers' behavior, the more likely a product and its company will succeed.
Assume that Oriole Company uses a periodic inventory system and has these account balances: Purchases $355,300; Purchase Returns and Allowances $10,200; Purchase Discounts $9,000; and Freight-in $16,800. Determine net purchases and cost of goods purchased.
Answer:
The answer is:
Net purchases = $336,100
Cost of goods purchased = $352,900
Explanation:
Net purchases equals purchases minus purchase returns and allowances minus purchase discount.
Purchases = $355,300
Purchase returns = $10,200
Purchase discount = $9,000
Therefore, net purchase is:
$355,300 - $10,200 - $9,000
= $336,100
Cost of goods purchased equals net purchase plus freight in.
Freight in = $16,800
So cost of goods purchased is:
$336,100 + $16,800
=$352,900
The net purchases for Oriole Company are calculated by subtracting purchase returns, allowances, and discounts from total purchases, and then adding freight-in, resulting in a total of $333,900. The cost of goods purchased is equal to the net purchases, which is also $333,900.
Explanation:To calculate the net purchases for Oriole Company, we start with the total purchases and subtract both the purchase returns and allowances and the purchase discounts. Then, we add the freight-in costs to find the net purchases. After that, the cost of goods purchased (COGP) is simply the net purchases, as there is no mention of beginning inventory or ending inventory in the question to take into account.
Net Purchases = Purchases - Purchase Returns and Allowances - Purchase Discounts + Freight-in
Net Purchases = $355,300 - $10,200 - $9,000 + $16,800
Net Purchases = $353,100 - $19,200
Net Purchases = $333,900
The Cost of Goods Purchased is equal to the net purchases:
Cost of Goods Purchased = Net Purchases
Cost of Goods Purchased = $333,900
Bloom Company management predicts that it will incur fixed costs of $160,000 and earn pretax income of $164,000 in the next period. Its expected contribution margin ratio is 25%. Required: 1. Compute the amount of total dollar sales. 2. Compute the amount of total variable costs.
Answer:
1. $1,296,000
2. $972,000
Explanation:
Pretax income is the difference between the total sales and the total expenses. The total expense is made up of the fixed cost and variable cost. The variable cost is dependent on the level of activities. Contribution margin is the net of total sales and total variable cost. The ratio is the ratio of contribution margin to sales.
As such, contribution less fixed cost gives the pretax income.
Contribution margin = $164,000 + $160,000
= $324,000
25% = $324,000/total sales
Total sales = $1,296,000
Total variable costs = $1,296,000 - $324,000
= $972,000
Dan invested $100,000 to start a company and received 1,000,000 shares of Series A common stock. Since then, the company has been through three additional funding rounds of financing:
Round Price Per Share Number of Shares
Series B $0.75 500,000
Series C $1.25 300,000
Series D $3.50 200,000
Let X be the pre-money valuation for the Series D funding round, Y be the post-money valuation for the Series D funding round, and Z be the percentage of the firm that Dan owns after the last funding round.
Determine X, Y, and Z.
Answer:
X = $6,300,000
Y = $7,000,000
Z = 10%
Explanation:
NB: Investment = Price * Number of shares
For Series A:
Number of shares = 1,000,000
Price = Number of shares/Initial Investment
Price = 1,000,000/100,000 = 10
Investment = 1,000,000 * 10 = $10,000,000
For Series B
Price = $0.75
Number of shares = 500,000
Investment = 500,000 * 0.75 = $375,000
For Series C
Price = $1.25
Number of shares = 300,000
Investment = 300,000 * 1.25 = $375,000
For Series D
Price = $3.50
Number of shares = 200, 000
Investment = 3.50 * 200,000 = $700,000
Total shares = 1,000,000 + 500,000 + 300,000 + 200,000 = 2,000,000
Y = Post-money valuation for the series D funding round
Y = Series D investment * (total post investment share)/(Shares issued for series D)
Y = 700,000 * (2,000,000)/(200,000) = $7,000,000
Y = $7,000,000
X = Pre-money valuation for the series D
X = Post-money valuation - New Investment (Series D)
X = $7,000,000 - $700,000
X = $6,300,000
Z = Percentage of the firm that Dan owns after the last funding round
Z = (Number of shares of series D/ Total number of shares)*100%
Z = (200,000/2,000,000)*100%
Z = 10%
Suppose that the residents of Greenland play golf incessantly. In fact, golf is the only thing that they spend their money on. They buy golf balls, clubs, and tees. In 2010, they bought 2,000 golf balls for $3.00 each, 200 clubs for $80.00 each, and 1,000 tees for $0.10 each. In 2011, they bought 2,100 golf balls for $3.50 each, 250 clubs for $90.00 each, and 1,500 tees for $0.15 each. Using 2010 as the base year, answer the following questions. Give all answers to one decimal.
What was the CPI for 2010?
Answer:
100
Explanation:
The CPI full form is the consumer price index which shows the changes in the prices of the various goods and the other items. It reflects the variations in the prices whether it can be increment or decrements
Since the question has already said using 2010 as the base year so the consumer price index for the year 2010 is equal to the value of the base year i.e 100
Final answer:
The Consumer Price Index (CPI) for 2010 is 100, as 2010 is the base year and the CPI of the base year is always set to 100. This serves as a reference point for comparing with other years' CPI.
Explanation:
To calculate the Consumer Price Index (CPI) for 2010, we must first determine the total spending on golf-related items in that year. This is done by multiplying the quantity of each item purchased by its price. The calculation for each item is as follows:
Golf balls: 2,000 balls × $3.00 per ball = $6,000
Golf clubs: 200 clubs × $80.00 per club = $16,000
Golf tees: 1,000 tees × $0.10 per tee = $100
Adding these amounts together, the total spending on golf items in Greenland in 2010 was:
$6,000 + $16,000 + $100 = $22,100
Since 2010 is the base year, the CPI for 2010 is defined as 100. Base years always have a CPI of 100 because it serves as a reference point to compare against other years.