Answer: 2 years
Explanation:
The payback period is the amount of time that is needed for the required cash inflow of a project to offset the initial cash outflow that the business offsets. The payback period is when the initial outlay of an investment is recovered. There are two different methods used to calculate payback period. We have the average method and the subtraction method.
In the above question, the payback period is solved as follows:
Labour cost decreases by 10% for each unit.
Therefore,
= $10 × 10%
= $10 × 0.1
= $1 per unit.
In order to recover $2000, the business needs to sell the following;
= 2000/1
= 2000units.
If Eric sells 1000 units per year of Emu, it will take:
2000/1000= 2years
In conclusion, the payback period of the investment is 2 years.
An increase in government spending of $200 million financed by a new tax of $200 million in an economy with a marginal propensity to consume of .90 could result in an increase in nominal GDP (assuming a closed economy with no leakages) of up to how much? (a) $0; (b) $2,000 million; (c) $180 million; (d) $200 million.
Answer:
(d) $200 million.
Explanation:
For computing the increase in nominal GDP first we have to determine the net tax which is equal to
= 0.90 ×$200 million
= $180 million
So, the net increase in government spending is
= $200 million - $180 million
= $20 million
And, we know that
Multiplier = 1 ÷ (1 - MPC)
= 1 ÷ (1 - 0.9)
= 1 ÷ 0.1
= 10
So, the increase in nominal GDP is
= $20 million × 10
= $200 million
Oriole Corp. is a fast-growing company whose management expects it to grow at a rate of 24 percent over the next two years and then to slow to a growth rate of 18 percent for the following three years. If the last dividend paid by the company was $2.15.
1.What is the dividend for the 1st year?
2.What is the dividend for the 2nd year?
3.What is the dividend for the 3rd year?
4.What is the dividend for the 4th year?
5.What is the dividend for the 5th year?
6.Compute the present value of these dividends if the required rate of return is 14 percent.
Answer:
1.What is the dividend for the 1st year?
$2.67
2.What is the dividend for the 2nd year?
$3.31
3.What is the dividend for the 3rd year?
$3.90
4.What is the dividend for the 4th year?
$4.60
5.What is the dividend for the 5th year?
$5.43
6.Compute the present value of these dividends if the required rate of return is 14 percent.
1. $2.34
2. $2.54
3. $2.63
4. $2.73
5. $2.82
Explanation:
Last Dividend paid = $2.15
Growth rate:
First two years = 24%
Following three years = 18%
FV of Dividend = PV ( 1 + g )^n
1.
Dividend for the 1st year = $2.15 x ( 1 + 24% )^1 = $2.15 x ( 1 + 0.24 )^1 = $2.15 x ( 1.24 )^1 = $2.67
2.
Dividend for the 2nd year = $2.15 x ( 1 + 24% )^2 = $2.15 x ( 1 + 0.24 )^2 = $2.15 x ( 1.24 )^2 = $3.31
3.
Dividend for the 3rd year = $3.31 x ( 1 + 18% )^1 = $3.31 x ( 1 + 0.18 )^1 = $3.31 x ( 1.18 )^1 = $3.90
4.
Dividend for the 4th year = $3.31 x ( 1 + 18% )^2 = $3.31 x ( 1 + 0.18 )^2 = $3.31 x ( 1.18 )^2 = $4.60
5.
Dividend for the 5th year = $3.31 x ( 1 + 18% )^3 = $3.31 x ( 1 + 0.18 )^3 = $3.31 x ( 1.18 )^3 = $5.43
6.The present value of these dividends
Present value of dividends can be calculated by following formula:
PV = FV / ( 1 + r )^n
FV = Dividend for the year
r = rate of return = 14%
n = number of years
1. PV = $2.98 / ( 1 + 0.14 )^1 = $2.98 / ( 1.14 )^1 = $2.98 / 1.14 = $2.34
2. PV = $3.31 / ( 1 + 0.14 )^2 = $3.31 / ( 1.14 )^2 = $3.31 / 1.2996 = $2.54
3. PV = $3.90 / ( 1 + 0.14 )^3 = $3.90 / ( 1.14 )^3 = $3.90 / 1.481544 = $2.63
4. PV = $4.60 / ( 1 + 0.14 )^4 = $4.60 / ( 1.14 )^4 = $4.60 / 1.68896 = $2.73
5. PV = $5.43 / ( 1 + 0.14 )^5 = $5.43 / ( 1.14 )^5 = $5.43 / 1.925416 = $2.82
You are the general manager of a full-service FBO. Your company sells a customer a new aircraft, with a bank financing the purchase via a written security agreement on the aircraft, filed with the FAA Aircraft Registry and the International Registry. Later, the customer has your shop install an expensive upgraded avionics suite including the latest "glass cockpit" multifunction displays (MFD) integrating flight, navigation, engine and sensor data.
Does your shop have the right to require the aircraft owner to pay the bill for this upgrade in full before you return the aircraft? Explain.
If, when your shop has completed the upgrade but before the customer has paid the bill and while the FBO still has possession of the aircraft, the aircraft owner files for bankruptcy, who will be paid first from the proceeds of the bankruptcy sale of the aircraft: the FBO or the bank? Explain.
Instead, in initial discussions over the price of the upgrade, the customer indicated that she wanted to buy the avionics package from the FBO and have your shop install it, but she wanted to pay the price of the equipment and installation in three equal monthly payments, instead of one lump sum. She has been a good customer, and the proposal is acceptable to you. How can you release the aircraft to her upon completion of the work while protecting the FBO’s security interest in the aircraft to assure payment?
After completing the transaction described in 3, above, your shop installs the avionics package and returns the aircraft to its owner. Before paying the bill, she files for bankruptcy. Now who will be paid first from the proceeds of the bankruptcy sale of the aircraft: the FBO or the bank? Explain.
Answer:
Answer explained below
Explanation:
1) Yes, as the initial consideration was only for the aircraft. Since this upgrade is additional work performed by the company, the client should be billed.
2) As the consideration for the aircraft is yet to be paid and FBO is still in possession of the aircraft, the ownership has not passed into the hands of the customer yet. Thus, even though he may file for bankruptcy, it doesn't impact anything.
3) A written agreement should be entered into with the customer and the bank which states that the disbursements from the bank should be made in 3 equal monthly instalments to the FBO, post release of the aircraft to the customer. Any delay in these will be construed as default by the bank with the necessary legal implications involved for claiming the requisite amount by the FBO from the bank.
4) In this case, the ownership of the aircraft has passed to the customer prior to it defaulting. Thus, the bank will be paid first from the proceeds of the bankruptcy sale of the aircraft.
Baldwin Company had the following balances and transactions during 2019: Beginning Merchandise Inventory as of January 1, 2019 125 units at $82 March 10 Sold 80 units June 10 Purchased 250 units at $86 October 30 Sold 205 units What would be reported as Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the first-in, first-out inventory costing method are used?
Answer:
Cost of Goods Sold on the income statement for the year ending December 31, 2019 is $ 24,010
Explanation:
First in First Out is an Inventory management system that is build on the idea of selling first the Inventory that came earlier or acquired first.
Perpetual Inventory System Records cost of sale of inventory with each sale
Sale of Inventory was made on March 10,2019 and October 30,2019. It is important to keep track of the cost of sale of inventory on these dates and then find the total which will be presented as cost of sales in the financial Statement
Cost of Goods Sold
March 10,2019 : 80 units × $82 6,560
October 30,2019 : 45 units × $ 82 3,690
160 units × $ 86 13,760
Total Cost of Goods Sold 24,010
The average cell phone bill is $78 with a standard deviation of $10. What is the minimum percentage of cell phone bills that will be between $54 and $102.
Answer:
The answer is 100%
Explanation:
we are given the mean which is $78 which is the average value of the data therefore this tells us most values are collectively around this bill and we also know the standard deviation of the cellphone bill which is $10 now we check the possibilities of x which is the cellphone bill being around these values so if x>$78+$10 , where x>$88 as we know the standard deviation is the measure of dispersion of data from the mean then we will see if x<$68 also then we'll find the probability where $68>x>$88 therefore if we sum these whole probabilities they will give us 1 which means it is certain but not impossible to find values that are $102>x>$54 which we see by the above numbers that approximately 1 is the probability which is 100%.
At least 95% of cell phone bills will be between $54 and $102, as this range is more than two standard deviations but less than three standard deviations from the mean, in accordance with the empirical rule.
To determine the minimum percentage of cell phone bills that will be between $54 and $102, we can apply the empirical rule (also known as the 68-95-99.7 rule). This is a statistical rule which states that for a normal distribution, nearly all of the data will fall within three standard deviations of the mean.
The average cell phone bill is $78 with a standard deviation of $10. So, one standard deviation from the mean is $68 to $88, two standard deviations is $58 to $98, and three standard deviations is $48 to $108.
Since $54 to $102 encompasses more than two but less than three standard deviations from the mean, we can say that at least 95% but less than 99.7% of cell phone bills will fall in this range. Therefore, the minimum percentage of cell phone bills between $54 and $102 would be 95%.
Which of the following fringe benefits is taxable to the employee receiving the benefit? a. A small discount on toys granted to the salesperson for a toy store b. Incidental use of the company's copier by an office worker c. A subscription to a tax journal provided by the employer to a corporation's tax accountant d. A 15 percent discount on investment real estate granted to the employee of a real estate developer e. All of the above are tax-free
Answer: E. All of the above are tax -free.
Explanation:
Fringe Benefits are the added compensations provided by an employer of labor to serve as motivation for employees. Fringe Benefits can be taxable or not. Tax -
Free fringe benefits are those removed from the employee's income. Some of them are; Achievement Awards, Athletic Facilities, De Minimis Benefits, Employee discounts, No -additional - cost services, Working condition benefit, etc.
In the list of options provided,
1. A small discount on toys granted for a salesperson for a toy store falls under employee discount which is a tax - free.
2. Incidental use of the company's copier by an office worker is a No -
additional - cost service which is equally tax - free.
3. A subscription to a tax journal provided by the employer to a corporation's tax accountant is needed for his job to progress effectively. It is a working condition benefit which is tax - free.
4. A 15% discount on investment real estate granted to the employee of a real estate developer is also an employee discount which is tax - free.
Answer:
E. All of the above are tax free
Explanation:
Fringe benefits are forms of compensation you provide to employees outside of a stated wage or salary. Common examples of fringe benefits include medical and dental insurance, use of a company car, housing allowance, educational assistance, vacation pay, sick pay, meals and employee discounts.
All the fringe benefits listed in the question above are not taxable.
Hence the best answer is E. All of the above are tax free
First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually.
If you made a $65,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Difference in accounts ______
At 6.90 percent interest, how long does it take to double your money? (Round your answer to 2 decimal places. (e.g., 32.16))
Length of time _____ years
At 6.90 percent interest, how long does it take to quadruple it? (Round your answer to 2 decimal places. (e.g., 32.16))
Length of time _______ years
Answer:
Earns $13650 more;
To double: 14.49years at simple interest or 10.39years at compound rate.43.48years at simple interest or 20.78years at compound rate
To quadruple:
Explanation:
Using simple interest calculation:
I=PRT/100
I=Interest
P=Principal
R=Interest Rate
T=Time
Therefore I=65000*0.08*8
I=41600
Using compound interest calculation;
A=P(1+R)^T
A=Amount
A=65000(1+0.08)^8
A=65000*1.85
A=120250
I=120250-65000
I=55250
The compound interest rate earns more by (55250-41600) =$13,650
To double the interest using simple interest calculation;
65000=65000*0.069*T
T=65000/4485
T=14.49years
To double the interest using compound rate calculation:
130000=65000(1+0.069)^T
(1+0.069)^T=130000/65000
1.069^T=2
T=In(2)/In(0.069)
T=10.39years
To quadruple your money using simple rate calculation:
195000=65000*0.069*T
T=195000/4485
T=43.48Years
To quadruple your money using compound rate calculation;
260000=65000(1+0.069)^T
1.069^T=4
T=In(4)/In(1.069)
T=20.78years
Final answer:
After 8 years, the difference in earnings between the banks is $13,708.50, with Second City Bank yielding more due to compound interest. It takes approximately 10.43 years to double the money and about 20.87 years to quadruple it at a 6.90% interest rate.
Explanation:
The difference in the amount earned from First City Bank and Second City Bank after 8 years can be calculated as follows:
For First City Bank with simple interest at 8%: $65,000 \times (1 + (0.08 \times 8)) = $65,000 \times (1 + 0.64) = $65,000 \times 1.64 = $106,600.For Second City Bank with interest compounded annually at 8%: $65,000 \times (1 + 0.08)\^8 = $65,000 \times 1.08\^8 = $65,000 \times 1.8509 = $120,308.50.The difference is $120,308.50 - $106,600 = $13,708.50.
To calculate the length of time to double your money with an interest rate of 6.90%, you can use the Rule of 72 by dividing 72 by the interest rate: 72 / 6.90 = approximately 10.43 years.
To determine the time to quadruple your money, you need to double the time it takes to double the money since quadrupling is two doublings. This means it will take approximately 20.87 years.
A firm is noticing that 10% of its freelance contacts are not being completed on time. They suspect this is because there are no consequences for lateness for the freelancers, but it costs the firm money. The firm decides to implement a penalty for lateness, and guidelines for dealing with contract violations. The firm is:(A) increasing opportunism.(B) focusing on values and beliefs rather than laws and regulations.(C) expanding the range of acceptable actions that firms can take.(D) attempting to reduce transaction costs through institutional frameworks.
Answer:(D) attempting to reduce transaction costs through institutional frameworks.
Explanation: Institutional frameworks are a system of formal rules, guidelines and regulations put in place by organizations in order to effectively regulate the activities or actions of individuals within or outside the Organisation.
It can also involve the sets of informal rules which includes customs,norms and traditional actions put in place to enhance or improve the efficiency of Organisation, which can include the reduction of Costs,increase in overall output and revenue etc.
Prof. Finance will have $1,500,000 saved up by retirement at age 65. The retired professor expects to live 25 more years after retiring. How large of an annual annuity withdrawal can Prof. Finance make at the beginning of each year under this scenario from an account paying 6% compounded annually?
Answer:
He can makes an annual annuity withdrawal of $ 110,698
Explanation:
Prof. Finance has a PV of 1,500,000, which is the ammount after his retirement at age 65 so PV= 1,500,000
6% in this case is the rate of interest so r=6%
number of withdrawals = 25
PMT= $110,698
Prof. Finance can make an annual annuity withdrawal of approximately $143,853.77 at the beginning of each year.
Explanation:To find the annual annuity withdrawal that Prof. Finance can make, we will use the formula for the present value of an annuity. The formula is:
PV = PMT * [(1 - (1 + r)^-n) / r]
Where PV is the present value, PMT is the withdrawal amount, r is the interest rate, and n is the number of years. Plugging in the values, we can calculate the withdrawal amount:
PV = $1,500,000, r = 6%, n = 25 years
PMT = $1,500,000 * (0.06 / (1 - (1 + 0.06)^-25))
PMT ≈ $143,853.77
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Two years ago, you created GoForLess, a new app that shows people the cheapest way to travel by bus, train, or air between two cities. Turns out that your app was a big success, and now you’ve made enough money to hire some additional employees. You’re trying to figure out what your new employees should do. What kinds of jobs should they have? How should they work together? How should they work with you? How can you give your employees enough freedom to be innovative, while maintaining enough control over their work to be sure that GoForLess will stay true to its overall goals?
You start by thinking about specialization. To what extent do your new employees need to have broad job responsibilities versus narrow job responsibilities? You know that to build a good app, you need to have people who have infrastructure automation, community building, programming, copywriting, data visualization, user experience, business, innovation, analysis, design, testing, and domain knowledge skills.
Look at the following two organizational designs and indicate which one you would choose.
A. I want my employees to have broad job responsibilities. I’ll hire a small group of employees next year that have multiple skills, and ask them to work on anything that will help the company meet its goals.
B. I want my employees to have very narrow job responsibilities. I’ll hire more people with specific experience next year, and each person will form the basis for future departments in my company.
Five years go by, and now you’ve hired 30 additional employees. Recently, you’ve noticed that some of your employees seem less happy than they were earlier. You hear complaints that people are bored and tired of doing the same thing all the time.
Which approach would you choose to solve problems most commonly associated with highly specialized work?
A. I would centralize my company.
B. I would decentralize my company.
Initially, specialized roles can help GoForLess function more efficiently. However, to address employee dissatisfaction, the company should then consider decentralizing their structure, allowing employees to have a wider range of responsibilities and promoting innovation while staying true to the company's goals.
Explanation:The organizational strategy you choose for your growing business depends largely on your company's needs and the skills of your employees. Given the information provided, it might be beneficial to first choose option B: hiring employees with specific experiences and skills to fulfill certain roles such as infrastructure automation, programming, copywriting, data visualization, and so on. This will contribute to the efficient functioning of your company.
However, after five years, boredom and monotony seem to have settled among your employees, a common issue in highly specialized jobs. To address this, you might want to choose option B again and decentralize your company. This could help by giving employees more autonomy and a wider scope of responsibilities that will not only challenge them but also make their jobs more interesting. They will still maintain their specific roles, but will have the freedom and space to navigate more in their department or across various tasks.
These changes can promote innovation while keeping the company aligned with its initial goals. However, it is essential to maintain clear communication and ensure that everyone understands the company's mission and objectives to not divert from the software's original purpose.
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For a start-up like GoForLess, hiring specialized employees who can form future departments would be beneficial. If employees seem displeased by the repetition of specialized roles, the company can consider decentralization for increased job variety and worker empowerment, while still aligning innovation with the foundation goals of the app.
Explanation:When deciding on organizational designs, you should consider option B. Given the range of skills needed (infrastructure automation, community building, programming, etc.), you would benefit from a workforce specialized in specific areas. Over time, these individuals can form the basis for future departments, supporting the growth and evolving needs of GoForLess. As a leader, you can stay involved and guide the overarching goals and strategic direction.
However, if you notice signs of boredom or dissatisfaction among employees, attributed to the repetitive nature of highly specialized roles, the best approach would typically be to decentralize your company (option B). Decentralization tends to empower employees, give them more variety in tasks, promote creativity, and reduce monotony. Nevertheless, you would need to ensure that 'innovation' is still aligned with the app's fundamental goals, set clear objectives, and establish a healthy feedback culture.
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Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Operating Expenses Variable Operating Costs $.75 per unit sold Fixed Operating Costs $475,000 Other Info: Units produced in 2016 42,000 Units sold in 2016 40,500 Whistle Works sells each whistle for $12. It's been determined that each unit costs $7.25 to manufacture. How much is total budgeted operating expenses for the year ended 2016?
Answer:
Budgeted Operating expense= $505,375
Explanation:
Giving the following information:
Operating Expenses Variable Operating Costs $.75 per unit sold
Fixed Operating Costs $475,000
Other Info: Units sold in 2016 40,500
To determine the budgeted operating expense, we need to use the following formula:
Operating expense= total fixed operating expense + total variable operating expense
Operating expense= 475,000 + 0.75*40,500= $505,375
The total budgeted operating expenses for Whistle Works in 2016 is $505,375.
Explanation:The total budgeted operating expenses for the year ended 2016 can be calculated by multiplying the variable operating costs by the units sold and adding the fixed operating costs.
Variable operating costs per unit sold is $0.75, so for 40,500 units sold, the total variable operating costs would be 40,500 x $0.75 = $30,375.
Fixed operating costs are $475,000.
To calculate the total budgeted operating expenses, we add the variable operating costs and fixed operating costs: $30,375 + $475,000 = $505,375.
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Charge a $5 penalty if an attempt is made to withdraw more money than available in the account.Here the account string is "S" or "C". "S" is for savings account. "C" is for checking account. For the deposit or withdraw, it indicates which account is affected. For a transfer it indicates the account from which the money is taken; the money is automatically transferred to the other account.
Answer:
C++ code is explained below
Explanation:
class Account {
double balance;
double add(double sum) {
balance += sum;
return sum;
}
double withdraw(double sum) {
if (sum > balance) {
balance -= 5;
return -5; // this will come in handy in Prob. 6
} else {
balance -= sum;
return balance; // Notice: always >= 0 (never < 0)
}
}
double inquire() { return balance; }
Account() { balance = 0; }
Account(double sum) { balance = sum; }
double interest (double rate) {
return rate * balance;
}
}
_______________________________
class Bank {
Account checking;
Account savings;
void deposit(double amount, String account) {
if (account.equals("C")) checking.add(amount);
else // my default
savings.add(amount);
}
void withdraw(double amount, String account) {
if (account.equals("C")) checking.withdraw(amount);
else // my default
savings.withdraw(amount);
}
void transfer (double amount, String account) {
if (account.equals("C"))
if (checking.withdraw(amount) >= 0)
savings.add(amount);
else checking.add(5); // somewhat fault-tolerant
else // default
if (savings.withdraw(amount) >= 0)
checking.add(amount);
else savings.add(5); // no penalty for transfers
}
void printBalances() {
System.out.println(
"Checking: " + checking.inquire() +
"\nSavings: " + savings.inquire()
);
}
}
A joint goal is one in which Question 3 options: A) all parties work together to achieve some output that will be shared. B) all parties share the result equally. C) the parties work toward a common end but benefit differently. D) individuals with different personal goals agree to combine them in a collective effort. E) All of the above are characteristics of a common goal.
Answer:
D) individuals with different personal goals agree to combine them in a collective effort.
Explanation:
A joint goal is one where different people come together and pool their resources to achieve a particular goal or objective. The collective effort is mutually beneficial to parties involved.
The advantage of working in groups toward a joint goal is that differing expertise is introduced and this makes the goal more achievable than when individuals attempt it alone.
This leads to formation of a team.
A joint goal is an objective shared by multiple parties who may work together and compromise to achieve shared outcomes. The shared outcomes might benefit participants differently, and parties may have to navigate collective dilemmas and variations in personal motivations.
Explanation:A joint goal refers to an objective that multiple parties work towards, often within a group or organization. When discussing the characteristics of a joint goal, option E) 'All of the above are characteristics of a common goal' seems to be the most comprehensive answer. However, the provided reference information does not allow for a clear-cut answer as it suggests that situations can range widely - from participants having a general agreement on goals but differing on details to participants having motivations contrary to group goals, which can create collective dilemmas.
In practical applications, such as international policy on climate change or industry-wide corporate associations, a joint goal often includes elements where parties work together towards a goal, may benefit differently, and sometimes have to compromise to reach mutual objectives. Participants in a joint goal may share in the outcomes, but not necessarily equally, as their contributions and stakes might differ.
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Assume that an adjusting entry was made on November 30, 2018 for earned, but unpaid employee salaries of $260 which represented 2 days of salaries earned for November 29-30.
On December 5, the employees are paid for five days. Record the journal entry on December 5 assuming that reversing entries ARE NOT used by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.
Note: Enter debits before credits.
Date General Journal Debit Credit
12/05 Salaries expense
Salaries payable 260
Final answer:
The journal entry to record the payment of employee salaries on December 5 includes debiting Salaries Expense for the total five-day salary plus the previous unpaid $260, crediting Salaries Payable for $260, and crediting Cash for the remainder of the total five-day salary.
Explanation:
When employees are paid, the company must account for the salaries that were previously earned but not yet paid. Since reversing entries are not used, we only need to recognize the amount of salary expense since the last payroll date. On November 30, an adjusting entry was made for earned, but unpaid employee salaries of $260 for November 29-30. By December 5, the employees have earned five more days of salaries. Assuming a consistent daily pay rate, we calculate the total five-day salary and add it to the $260 of unpaid salaries from the adjusting entry to reach the total salaries expense. The journal entry on December 5 would debit Salaries Expense for the amount of five days of salaries plus the previously earned $260 and credit Salaries Payable for $260 and Cash for the remainder to record the payment.
The journal entry on December 5 would look as follows:
Salaries Expense ................ [Total five-day salary + $260]
Salaries Payable ................ $260
Cash ..................................... [Total five-day salary]
Without the exact daily rate, we cannot provide the precise dollar amounts for the five-day salary and cash credited. However, this structure demonstrates how to account for the payment of salaries accrued at the end of the previous period and the additional salaries earned in the current period.
Philippe wants to make sure of the success of his new doggy day care, PAWS, by employing the steps in the basic planning process. To initiate the process, what kinds of activities should we expect Philippe to be performing?
Answer:
Full Business Considerations
Efficient Facilities
A Cost-Effective Advertisement
He must Define his Services
He must outline his Service Prices
Carry out interviews for New Clients
With all of these steps being adhered to, Philippe's business will indeed be great!
Metropolitan Water Utility is planning to upgrade its SCADA system for controlling well pumps,booster pumps, and disinfection equipment so that everything can be controlled from one site. Thefirst phase will reduce labor and travel costs by an estimated $31,000 per year. The second phase will reduce costs by an estimated $20,000 per year. If phase I will occur in years 1 through 3 and phase II in years 4 through 8,
what is
(a) the present worth of the savings, and
(b) the equivalent annual worth for years 1 through 8 of the savings? Use an interest rate of 8% per year.
Answer:
net wortht -143,280.85
equivalent annual cost $ 24,932.98
Explanation:
We sovle for the present value of each annuity:
The first three years:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 31,000.00
time 3
rate 0.08
[tex]31000 \times \frac{1-(1+0.08)^{-3} }{0.08} = PV\\[/tex]
PV $79,890.0066
Then the second phase annuity:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 20,000.00
time 5
rate 0.08
[tex]20000 \times \frac{1-(1+0.08)^{-5} }{0.08} = PV\\[/tex]
PV $79,854.2007
NOw, we discount this as it is three years into the future
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity $79,854.2007
time 3.00
rate 0.08000
[tex]\frac{79854.2007415617}{(1 + 0.08)^{3} } = PV[/tex]
PV 63,390.8391
Total net worth:
79,890.0066 - 63,390.8391 = -143,280.85
The EAC will be the annuity which makes the Present work
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV 143,280.85
rate 0.08
time 8
[tex]143280.85 \div \frac{1-(1+0.08)^{-8} }{0.08} = C\\[/tex]
C $ 24,932.983
2. You want to form a portfolio of stock A and stock B. Stock A has a beta of .85 and stock B has a beta of 1.6. If you invest $6,000 in stock A and $4,000 in stock B, what is the portfolio beta
Answer:
Given: Investment in Stock A = $6000 and in Stock B = $4000
Particulars weights beta
Stock A 60 percent 0.85
Stock B 40 percent 1.6
The following is the calculation of the portfolio beta
Portfolio Beta = (0.6 multiply with 0.85) + (0.4 multiply with 1.6)
Solving the equation:
= 0.51 + 0.64
Thus, after solving we get, 1.15
Thus, the portfolio beta = 1.15
Based on the portfolio beta being a weighted average of individual betas, the portfolio beta here is 1.15.
As mentioned, the portfolio beta is a weighted average of the betas of the individual stocks.
It is therefore calculated as:
= (Weight of stock A x Beta of stock A) + (Weight of stock B x Beta of stock B)
Solving gives:
= ( 6,000 / (6,000 + 4,000) x 0.85) + (4,000 / (6,000 + 4,000) x 1.6)
= 0.51 + 0.64
= 1.15
In conclusion, the portfolio beta is 1.15.
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On January 1, 2020, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Gottlieb Corporation $100 par value common stock after December 31, 2021. On January 1, 2022, $400,000 of debentures are converted into common stock, which is then selling at $110. An additional $400,000 of debentures are converted on March 31, 2022. The market price of the common stock is then $115. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight-line basis. Make the necessary journal entries for: (a) December 31, 2021. (c) March 31, 2022. (b) January 1, 2022. (d) June 30, 2022
Answer:
(a) December 31, 2021.
Bond Interest Expense 156,000
Premium on Bonds Payable 4,000
($80,000 X 1/20)
Cash ($4,000,000 X 8% X 6/12) 160,000
(b) January 1, 2022
Bonds Payable 400,000
Premium on Bonds Payable 6,400
Common Stock 320,000
[8 X $100 X ($400,000/$1,000)]
Paid-in Capital in Excess of Par 86,400
Total premium
($4,000,000 X .02) $80,000
Premium amortized
($80,000 X 2/10) 16,000
Balance $64,000
Bonds converted
($400,000 ÷ $4,000,000) 10%
Related premium
($64,000 X 10%) 6,400
(c) March 31, 2022
Bond Interest Expense 7,800
Premium on Bonds Payable 200
($6,400 ÷ 8 years) X 3/12
Bond Interest Payable 8,000
($400,000 X 8% X 3/12)
Bonds Payable 400,000
Premium on Bonds Payable 6,200
Common Stock 320,000
Paid-in Capital in Excess of Par 86,200
Premium as of January 1, 2022
for $400,000 of bonds $6,400
$6,400 ÷ 8 years remaining
x 3/12 (200)
Premium as of March 31, 2022
for $400,000 of bonds $6,200
(d) June 30, 2022
Bond Interest Expense 124,800
Premium on Bonds Payable 3,200
Bond Interest Payable 8,000
($400,000 X 8% X 1/4)***
Cash 136,000*
[Premium to be amortized:
($80,000 X 80%) X 1/20 = $3,200, or
$51,200** ÷ 16 (remaining interest and
amortization periods) = $3,200]
***Total to be paid: ($3,200,000 X 8% ÷ 2) + $8,000 = $136,000
***Original premium $80,000
2020 amortization (8,000)
2021 amortization (8,000)
Jan. 1, 2022 write-off (6,400)
Mar. 31, 2022 amortization (200)
Mar. 31, 2022 write-off (6,200)
$51,200
***Assumes interest accrued on March 31. If not, debit Bond Interest
Expense for $132,800.
The accounting process for convertible debentures issued by Gottlieb Corporation involves creating balanced journal entries that reflect the issuance and conversion of these debentures. The entries consider accrued interest, bond premium amortization, and conversion of debentures into stock.
Explanation:The subject of this question is the accounting process for convertible debentures, specifically those issued by Gottlieb Corporation on January 1, 2020. Journal entries are required to reflect the output of these convertible debentures at specified dates. To understand how this type of record is created, we must understand the two major phases involved: the issuance of the convertible debentures and the conversion of the debentures into corporate stock.
Here are the necessary journal entries:
On December 31, 2021, record the accrued interest and bond premium amortization.Interest expense debited (4,000,000 * 4%) = $160,000Payable credited = $160,000Premium on Bonds Payable debited (4,000,000 * 2% / 10 years / 2) = $4,000Interest expense credited = $4,000On January 1, 2022, record the conversion of $400,000 of debentures into stock.Bonds payable debited = $400,000Common Stock credited (400,000 / 1000 * 100) = $320,000Premium on Bonds Payable credited = $8,000Paid-in Capital in Excess of Par credited = $72,000On March 31, 2022, repeat the process for another $400,000 of debentures.On June 30, 2022, record the accrued interest and bond premium amortization again.In each of these steps, the debits and credits must balance, reflecting the fundamental principle of double-entry bookkeeping.
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If interest rate parity holds and the annual German nominal interest rate is 3 percent and the U.S. annual nominal rate is 5 percent and real interest rates are 2 percent in both countries, then inflation in Germany is about _______________ than in the United States.
Answer: 2% lower
Explanation:
In June 1985, Joseph Marcantuone and Robert Gieson purchased property located in East Orange, New Jersey. At the time of purchase, the property was partly occupied and leased to Carriage Trade Cleaners, a dry cleaning establishment. A number of dry cleaners continuously operated on this site since 1930. Marcantuone and Gieson owned and operated a grocery store on another section of the property. They have never personally owned or operated a dry cleaning establishment on the property. JRM, LLC, and Sang Hak Shin were tenants on the property and the last operators of the dry cleaning establishment that utilized the hazardous substance tetrachloroethylene, or perchloroethylene (PCE), during the time Marcantuone and Gieson owned the property. The city of East Orange acquired the property through condemnation for the purpose of building a school on the property. But, the PCE was discovered on the property and out of the $629,407 given to Marcantuone and Gieson as compensation for the taking, the city held back $182,035.20 for the cost of the PCE clean-up. It cost the city a total of $212,000 to complete the clean-up of the property. Classify JRM, LLC, and Sang Hak Shin. a. Lessees b. Lenders c. Owners d. Users
Answer:
a. Lessees
Explanation:
JRM, LLC, and Sang Hak Shin are Lessees.
There are two kinds of leases a) Operating and b) Capital.
Operating leases are short term leases in which the lessor (asset owner) retains the risks and rewards of ownership.
Capital leases are long term leases by which the lessor transfers substantially all risks and rewards of ownership to lessee.
The above given example is of an operating lease in which the owners Marcantuone and Gieson were given payment less compensation for the cleanup . In this the risks and rewards were retained by the owner.
H2O Plumbing has been working on a residential subdivision project for Paradise Builders. H2O agreed to do all plumbing work on each of the houses for a fee of $5200 per house. H2O has reviewed the market and decided that most plumbers are getting between $5500 and $6000 for houses of comparable size. H2O has done the initial work on all of the houses and has told Paradise it will stop work unless the price is increased to $5500 per house. Paradise is on a tight schedule with its construction lender and with home buyers and succumbs to the demand. Later, when the houses are constructed, Paradise refuses to pay any more than $5200 per house. Explain H2O's rights to them.
Final answer:
H2O Plumbing has the right to demand the increased price of $5500 per house that was agreed upon in their revised agreement with Paradise Builders.
Explanation:
In this scenario, H2O Plumbing initially agreed to do all plumbing work on each house in a residential subdivision project for a fee of $5200 per house.
However, after reviewing the market and finding out that most plumbers are getting between $5500 and $6000 for houses of comparable size, H2O informed Paradise Builders that they will stop work unless the price is increased to $5500 per house.
Paradise, due to their tight schedule and pressure from their construction lender and home buyers, agrees to the demand.
However, when the houses are constructed, Paradise refuses to pay any more than $5200 per house.
4.37.-On January 1st, Frank bought a used car for $72,000 and agreed to pay it as follows: ¼ down payment; the balance to be paid in 36 equal monthly payments; the first payment due February 1; an annual interest rate of 9%, compounded monthly.
Answer:
$1,664.099
Explanation:
The amount that should be recognised by the Frank in respect of monthly payments to be made in respect of used car shall be determined using present value of annuity formula as follows:
Total amount to be paid= $72,000*3/4=$54,000
Total amount to be paid=Present value of annuity=R+R[(1-(1+i)^-n)/i]
Where
R=Equal monthly payment to be made=?
i=Interest rate compounded monthly=9/12=0.75%
n=number of payments involved=36
Present value of annuity= $54,000
$54,000=R+R[(1-(1+0.75%)^-36)/0.75%]
$54,000=R+R(31.45)
$54,000=R*32.45
R=$1,664.099=equal monthly payment
The Boston House increases its dividend each year. The next annual dividend is expected to be $2.25 a share. Future dividends will increase by 5.0 percent annually. What is the current value of this stock if the discount rate is 13 percent?
Answer:
Current value of stock = $28.125
Explanation:
Given:
Annual dividend = $2.25
Growth rate = 5% = 5 / 100 = 0.05
Discount rate = 13% = 13 / 100 = 0.13
Current value of stock = ?
Computation of current value of stock:
Current value of stock = Annual dividend / (Discount rate - Growth rate)
Current value of stock = $2.25 / (0.13 - 0.05)
Current value of stock = $2.25 / (0.08)
Current value of stock = $28.125
Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. Sellers will pay all of the tax. unchecked Buyers will pay all of the tax. unanswered The price of Humbugs will rise to $60. unanswered The price of Humbugs will rise by less than $10. unanswered The quantity of Humbugs demanded will not change.
Answer:
The correct options are as follows
Buyers will pay all of the tax.
The price of Humbugs will rise to $60.
The quantity of Humbugs demanded will not change.
Explanation:
As the question is not complete, the complete question is found online and is attached herewith.
The options given are as follows
Sellers will pay all of the tax.
Buyers will pay all of the tax.
The price of Humbugs will rise to $60.
The price of Humbugs will rise by less than $10.
The quantity of Humbugs demanded will not change.
Now option 1 is not correct as the buyer has to pay the tax not the seller.
option 2 is correct
option 3 is correct
option 4 is not correct as the initial price is $50 and the new price is to be more than $60 thus the rise is more than $10.
option 5 is correct as the demand of the hamburger will remain the same.
Answer: Buyers will pay all of the tax.
The price of Humbugs will rise to $60.
The quantity of Humbugs demanded will not change.
Explanation:
Hu
West Company estimates that overhead costs for the next year will be $3,600,000 for indirect labor and $820,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 130,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?
Answer:
$ 34
Explanation:
Overhead cost $3,600,000
Factory utilities $820,000
Machine hours $130,000
Overhead cost + Factory utilities/ Machine hours
($3,600,000 + $820,000) = $4,420,000
$4,420,000 /130,000 = $34
direct labor hours per hour= $34
The company overhead rate is $34
In the short run, A. at least one of the firm's inputs is fixed, while in the long run, the firm is able to vary all its inputs, adopt new technology, and change the size of its physical plant. B. all of the firm's inputs are fixed, while in the long run, the firm is able to vary all its inputs, adopt new technology, and change the size of its physical plant. C. all of the firm's inputs are variable, while in the long run, the firm is able to vary all its inputs as well as adopt new technology and change the size of its physical plant. D. at least one of the firm's inputs is fixed, while in the long run, the firm is either able to vary all its inputs, adopt new technology, or change the size of its physical plant. E. at least one of the firm's inputs is fixed, while in the long run, at least one of the firm's inputs is variable.
Answer: A
Explanation:
The short run is a notion that within a certain period of time, one or more input is fixed while the remaining inputs are variable. It shows that the way an economy behaves depends on the duration of time it has to acknowledge the changes. There is a key principle regarding the short and long run that states that firms face both variable and fixed costs in the short run while in the long run, all inputs are variable.
In the short run, contracts, leases, and wage agreements hinders the ability of a firm to adjust its production or wages in order to maintain its profit rate. There are no fixed costs in the long run.
If Olaf earns $100,000 and pays $20,000 in taxes and George earns $200,000 and pays $48,000 in taxes, what type of tax system does this situation represent?
This situation represents progressive type of tax system.
Explanation:
A progressive tax is laid on the people based on their ability to pay. A lower tax rate is charged for the individual with low income compared to the person with higher income. The tax rate is fixed based on the income of the person. The high income earners are charged tax with higher percentage.
In the above scenario, the income of Olaf is $100,000. So he pays $20,000 as tax. George earns $200,000, so he pays $48,000 as tax. George pays tax higher than Olaf, as he earns higher than Olaf.
A stock has a spot price of $55. Its May options are about to expire. One of its puts is worth $5 and one of its calls is worth $10. The exercise price of the put must be ______________ and the exercise price of the call must be ________________.
Answer:
$60, $45
Explanation:
A workbook contains a list of houses and the months that they were sold in Florida. You are interested in determining the average price of sold houses in June in Ft. Lauderdale. What function is best suited for this calculation?
(A) AVERAGEIF(B) AVERAGEIFS (C) SUMIF (D) MAXIFS
Answer:
The correct answer is letter "B": AVERAGEIFS.
Explanation:
In Microsoft Office Excel, AVERAGEIFS is a function that helps to determine the average of cells that follow different criteria. AVERAGEIFS is one of many functions under the "Statistic" category. The criteria for AVERAGEIFS can be words or range of numbers which allows more diverse analysis compared to other average functions.
Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.
The GDP deflator for this year is calculated by dividing the _______ using _______ by the _______ using _______ and multiplying by 100. However, the CPI reflects only the prices of all goods and services _______.
Answer:
Explanation:
The GDP deflator for this year is calculated by dividing the value of all goods and services produced in the economy this year using this year's price by the value of all goods and services in the economy this year using base price year's and multiplying by 100. However, the CPI reflects only the prices of all goods and services bought by the consumers.