Answer:
1./
INITIAL INVESTMENT
= $1600000
ANNUAL NET CASH FLOW
= NET INCOME + DEPERICATION
= $250000 + [($1600000 - $350000) / 8]
= $250000 + $156250
= $406250
SALVAGE VALUE
= $350000
NPV
= -$1600000 + $406250 * PVIFA 10%, 8 PERIODS + $350000 * PVIF 10% *PERIOD
= -$1600000 + $406250 * 5.3349 + $350000 * 0.4665
= -$1600000 + 2167303.13 + $163275
= $730578.13
2./
AS THE NPV IS GREATER THAN 0 OR POSITIVE THE IRR IS GREATER THAN 10%
3./
INITIAL INVESTMENT
= $1600000
ANNUAL NET CASH FLOW
= NET INCOME + DEPERICATION
= $250000 + [($1600000 - $350000) / 8]
= $250000 + $156250
= $406250
SALVAGE VALUE
= $350000
NPV
= -$1600000 + $406250 * PVIFA 20%, 8 PERIODS + $350000 * PVIF 20% *PERIOD
= -$1600000 + $406250 * 3.8372 + $350000 * 0.2326
= -$1600000 + $1558862.5 + $81410
= $40272.5
4./
AS THE NPV IS GREATER THAN 0 OR POSITIVE THE IRR IS GREATER THAN 20%
Explanation:
The net present value (NPV) of the project is approximately $102,275.15. The internal rate of return (IRR) cannot be determined without making calculations. To calculate the NPV using a 15% discount rate, the same steps are followed but with a 15% discount rate instead of 10%.
Explanation:To calculate the net present value (NPV) of the project, we need to discount the future net income and salvage value using the cost of capital. The NPV is the sum of the present values of each cash flow. In this case, the initial investment of $1,700,000 is not discounted because it occurs in the present. The annual net income of $190,000 is discounted for 8 years using a 10% discount rate. The salvage value of $250,000 is discounted back to the present using the same 10% discount rate.
The NPV can be calculated as follows:
NPV = -Initial Investment + Present Value of Net Income + Present Value of Salvage Value
NPV = -$1,700,000 + ($190,000 / 1.10^1) + ($190,000 / 1.10^2) + ... + ($190,000 / 1.10^8) + ($250,000 / 1.10^8)
By calculating this expression, we find that the project's NPV is approximately $102,275.15.
To determine whether the internal rate of return (IRR) is more or less than 10%, we compare the IRR to the cost of capital. If the IRR is greater than the cost of capital, the project is considered favorable. In this case, the IRR is not given, so we cannot determine whether it is more or less than 10% without making calculations.
If we want to calculate the NPV using a 15% discount rate, we follow the same steps as before but use a 15% discount rate instead of 10%. However, without any specific cash flows or further information, it is not possible to calculate the exact NPV using a 15% discount rate. We can only provide an estimation based on the given information.
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Canfield Construction applies overhead to its projects at a rate of $65 per direct labor hour. Laborers are paid an average rate of $30 per hour. The Jefferson Apartments project was charged a total of $1,200,000 in direct materials and $450,000 in direct labor costs.
a. Overhead applied to the Jefferson Apartments project amounted to:
b. The journal entry to transfer the completed Jefferson Apartments project to Canfield's finished goods inventory would include:
c. The journal entry made by Canfield to record the sale of the Jefferson Apartments project to King Development Company for $5,250,000 would include:
Answer:
(a) $975,000
(b) $2,625,000
(c) $2,625,000
Explanation:
(a) Direct labor hours:
= Direct labor costs ÷ Average rate of labor per hour
= $450,000 ÷ $30 per hour
= 15,000 hours
Overhead applied to the Jefferson Apartments project:
= Direct labor hours × rate per direct labor hour
= 15,000 hours × $65 per direct labor hour
= $975,000
(b) Finished goods inventory:
= Direct materials + Direct labor costs + Overhead applied
= $1,200,000 + $450,000 + $975,000
= $2,625,000
Hence, the finished goods inventory account debited by the amount $2,625,000.
(c) Cost of goods sold is debited by the amount of $2,625,000.
Seashore Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Seashore Home has collected $1,460 from cash-paying customers. Seashore Home’s remaining customers owe the business $1,810. Seashore Home recorded $1,460 of service revenue for the year.
If Seashore Home had recorded their service revenue using the other method, how much service revenue would they have recorded for the year?
Answer:
The service revenue for the year under accrual basis is $3270.
Explanation:
The Seashore Home currently uses the cash basis system to record sales which require Seashore to record only the sales that have been paid for. The other method to record transactions is using the accrual basis. The accrual basis requires an entity to record revenues and expenses in the period in which they occured and are relevant to. Thus under accrual basis, sales made in a year, whether cash or credit, will be recorded as sales for that year.
Following accrual basis, the Service revenue for Seashore will be:
Service revenue = 1460 + 1810 = $3270
An owner of a local salon realized that by decreasing the prices that she charges for haircuts, her revenue has increased. This implies that a. The demand for her haircuts is elastic b. The demand for her haircuts is unitary elastic c. The demand for her haircuts is inelastic d. The demand for her haircuts is perfectly inelastic
Answer:
The correct answer is letter "A": The demand for her haircuts is elastic.
Explanation:
Elasticity is a feature of certain goods and services that affect their quantity demanded after a change in prices. The price elasticity of demand is calculated by dividing the percentage of change in quantity demanded by the percentage of change in price. Results equal to or greater than one (1) imply the demand for that product is elastic while results lower than 1 means the demand is inelastic.
Thus, if a salon owner realizes her revenue increased after decreasing the haircut prices, it implies the demand for haircuts is elastic.
How should emotional appeal in fund-raising messages be used? A. Using a mild appeal to convince people and avoid offending them B. Using sensory details to help people connect to a cause C. Using wordiness which is crucial in making a document appealing D. Creating emotional appeal by a generic group instead of specifics E. Using a long-winded style because it evokes interest in a reader
Answer:
The correct answer is letter "B": Using sensory details to help people connect to a cause.
Explanation:
Sensory details are used in writing to attract readers' attention. Those details involve the use of the senses: sight, sound, touch, smell, and taste. Sensory details help information, whether written or spoken, to push the audience to interact with what us being prompted.
In case the objective of using sensory details for a fund-raising message, the writer, for instance, could talk about the need of collecting monetary resources to clean the river that crosses the bridge that connects the suburbs with the city because of its unpleasant bad smelling. The next time the reader goes through the bridge, the individual will likely pay attention to the smelling of the bridge to confirm what the author said, which will possibly lead him or her to contribute with the cleaning cause.
On May 15, Maynard Co. borrowed cash from Texas Bank by issuing a 90-day note with a face amount of $45,600. Assume a 360-day year. Required: a. Determine the proceeds of the note, assuming the note carries an interest rate of 8%. $ b. Determine the proceeds of the note, assuming the note is discounted at 8%.
Answer:
a. $45,600
b. $45,296
Explanation:
The computation is shown below:
a. The proceed of the note is always equal to the face amount i.e $45,600
b. After considering the discounted rate, the proceed of the note is
= ($45,600) - ($45,600 × 8% × 30 days ÷ 360 days)
= $45,600 - $304
= $45,296
After considering the discount rate and the issuing days, the proceed of the note could come
Final answer:
For case a, the interest is calculated and added to the principal, giving proceeds of $46,512. For case b, when the note is discounted at 8%, the discount amount is subtracted from the principal, resulting in proceeds of $44,688.
Explanation:
When Maynard Co. borrows $45,600 at an 8% interest rate for 90 days on a 360-day year basis, the interest can be calculated using the formula Interest = Principal imes Rate imes Time. To calculate the proceeds for case a, with the note carrying the interest rate of 8%, the steps are as follows:
Calculate the interest: $45,600 imes 8% imes (90/360) = $912.Add the interest to the principal to determine the maturity value: $45,600 + $912 = $46,512.The proceeds of the note are equal to the maturity value: $46,512.For case b, assuming the note is discounted at 8%, we follow a slightly different process:
Calculate the discount: $45,600 imes 8% imes (90/360) = $912.Subtract the discount from the principal to determine the proceeds of the note: $45,600 - $912 = $44,688.Now that you have studied the active and passive voice, what do you think when someone in government or business says, "Mistakes were made"? Is it unethical to use the passive voice to avoid specifics? (
Answer:
The sentence is unethical if there is a clear responsability on the mistakes. If the mistakes were made, and no one can be truly held accountable for that, then, the sentence is not unethical.
Explanation:
For example, if the government is corrupt, and officials actively commit embezzlement, the phrase "mistakes were made" is unethical because it is diverting the personal responsability of the corrupt officials.
But if for example, there is a volcano eruption, and the goverment tries its best to avoid casualties, but because of some involuntary mistakes some people still die, the phrase is not unethical because the mistakes were not voluntary and the consequences of those were not intended.
The passive voice in English often omits the perpetrator of an action, which can lead to perceptions of avoiding responsibility. Whether it is unethical depends on the context and intention behind its use, as it's just a grammatical construction. In some cases, it might be used to soften the impact or shift focus to solutions.
Explanation:In English, the use of passive voice such as 'mistakes were made' often omits the doer of the action from the sentence. This can sometimes be seen as avoiding personal responsibility, especially if it's used in government or business scenarios. However, calling it unethical would be a matter of personal judgement because the passive voice itself is just a grammatical construction.
For instance, if a politician uses the passive voice to omit who actually caused a problem ('mistakes were made' versus 'I made mistakes'), it could possibly be seen as an attempt to sidestep personal accountability.
On the other hand, businesses may use the passive voice to soften the blow of a difficult situation or to maintain a focus on solutions rather than forensically analyzing blame. So, whether the use of passive voice is unethical would depend on the context and intention behind its use.
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Identify a cost driver that may be used to assign each cost pool to each line of snowmobiles. Budgeted Costs Cost Driver Machine setup, indirect materials select a cost driver Inspections select a cost driver Tests select a cost driver Insurance, plant select a cost driver Engineering design select a cost driver Depreciation, machinery select a cost driver Machine setup, indirect labor select a cost driver Property taxes select a cost driver Oil, heating select a cost driver Electricity, plant lighting select a cost driver Engineering prototypes select a cost driver Depreciation, plant select a cost driver Electricity, machinery select a cost driver Machine maintenance wages select a cost driver
Explanation:
The identification of the cost driver is presented below:
This identification is required so that the indirect cost can be allocated according to the each cost pool
Machine setup, indirect materials = Number of setups
Inspections = Number of inspections
Test = Number of test
Insurance, plant = Machine hours or square feet
Engineering design = Engineering Hours
Depreciation, machinery = Machine hours
Machine setup, indirect labor = Number of setups
Property taxes = Machine hours or square feet
Oil, heating = Machine hours or square feet
Electricity, plant lighting = Machine hours or square feet
Engineering prototypes = Engineering Hours
Depreciation, plant = Machine hours or square feet
Electricity, machinery = Machine hours
Machine maintenance wages = Number of machines or machine hours
The choice of the most appropriate cost driver should align with the specific factors influencing each cost pool and the characteristics of the snowmobile lines essential to select cost drivers that provide a reasonable basis for allocating costs accurately to each product line.
To assign each cost pool to each line of snowmobiles, it's essential to select appropriate cost drivers that reflect the factors driving the incurrence of each cost pool.
Here are some suggested cost drivers for the listed cost pools:
1. **Machine Setup**: The number of machine setup hours or setups can be a suitable cost driver.
Each snowmobile line may require a different number of setups or hours, depending on the complexity of the production process.
2. **Inspections**: The number of inspections or inspection hours can be a relevant cost driver.
Different snowmobile lines may require varying levels of inspection based on their design and quality standards.
3. **Tests**: The number of tests performed or test hours can serve as the cost driver.
Snowmobile lines with more complex features may undergo more testing, impacting costs.
4. **Insurance, Plant**: Total square footage or the value of assets in the plant can be a reasonable cost driver.
Different snowmobile lines may occupy different areas or use plant assets differently.
5. **Engineering Design**: The number of design hours or the number of design iterations could be used as a cost driver.
More complex snowmobile lines may require more extensive design efforts.
6. **Depreciation, Machinery**: Machine hours or the value of machinery can be a suitable cost driver.
Some snowmobile lines may heavily rely on specific machinery, impacting depreciation costs.
7. **Machine Setup, Indirect Labor**: Similar to machine setup, the number of setup hours or setups can be used, but this time focusing on the labor aspect of setup.
8. **Property Taxes**: Total square footage or the assessed value of the property can be a relevant cost driver.
Different snowmobile lines may occupy different areas within the facility.
9. **Oil, Heating**: Heating degree days (a measure of heating requirements) or energy consumption can be a cost driver, as snowmobile lines with different production processes may have varying heating needs.
10. **Electricity, Plant Lighting**: The total square footage of the plant area requiring lighting can be a cost driver, as different snowmobile lines may occupy different spaces.
11. **Engineering Prototypes**: The number of prototypes or prototype design hours can serve as a cost driver, especially for snowmobile lines that require extensive prototyping.
12. **Depreciation, Plant**: Similar to machinery, the value of plant assets or total square footage can be used as a cost driver for plant depreciation.
13. **Electricity, Machinery**: The total hours of machinery operation or the energy consumption by machinery can be a cost driver, particularly for lines that heavily use machinery.
14. **Machine Maintenance Wages**: The number of machine maintenance hours or the number of maintenance activities can be a relevant cost driver.
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Ivanhoe Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases $3000 of products (cost $1500). Assuming that based on prior experience, estimated returns are 10%. The journal entry to record the expected sales return and cost of goods sold includes a_____________.a.credit to Refund Liability for $200.
b.credit to Returned Inventory for $100.
c.credit to Estimated Inventory Returns for $100.
d. debit to Estimated Inventory Returns for $100.
The journal entry to record the expected sales return and cost of goods sold includes a_____________
a.credit to Refund Liability for $200.
Explanation:
Ivanhoe Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases $3000 of products (cost $1500). Assuming that based on prior experience, estimated returns are 10%. The journal entry to record the expected sales return and cost of goods sold includes a_____________a.credit to Refund Liability for $200.The refund liability shows the amount of consideration that means the company does not expect to be entitled because it will be refunded to customers.The liability should be represented for the amount of revenue expected to be refunded.Also the returns and refunds are disadvantageous for business for a product.
Coleman Company owns a machine that produces a component for the products the company makes and sells. The company uses 1,800 units of this component in production each year. The costs of making one unit of this component are Direct material $ 7 Variable manufacturing overhead 6 Direct labor 4 Fixed manufacturing overhead 5 The fixed overhead costs are unavoidable, and the unit cost is based on the present annual usage of 1,800 units of the component. An outside supplier has offered to sell Coleman this component for $18 per unit and can supply all the units it needs.
Should Coleman make or buy the component?
Answer:
Difference=$1,800
This shows if Coleman buys, the net income will decrease by $1,800. So Coleman should make components.
Explanation:
Given Data:
Direct material=$7
Variable manufacturing overhead=$6
Direct labor=$4
Fixed manufacturing overhead=$5
Required:
Should Coleman make or buy the component?
Solution:
Total Variable cost=Direct material+Variable manufacturing overhead+Direct labor
Total Variable cost=$7+$6+$4
Total Variable cost=$17
Cost From making=Units*Total Variable cost
Cost From making=1800*$17
Cost From making=$30,600
Supplier Price=$18
Cost From Buying=1800*$18
Cost From Buying=$32,400
Difference=Cost From Buying-Cost From making
Difference=$32,400-$30,600
Difference=$1,800
This shows if Coleman buys, the net income will decrease by $1,800. So Coleman should make components.
Glavine Corporation incurred the following costs while manufacturing its product. Materials used in product $125,000 Depreciation on plant 60,000 Property taxes on store 7,500 Labor costs of assembly-line workers 110,000 Factory supplies used 23,000 Advertising expense 45,000 Property taxes on plant 19,000 Delivery expense 21,000 Sales commissions 35,000 Salaries paid to sales clerks 50,000 Work-in-process inventory was $27,000 at January 1 and $15,500 at December 31. Finished goods inventory was $65,000 at January 1 and $50,600 at December 31.(a) Compute cost of goods manufactured.
(b) Compute cost of goods sold.
Answer:
Part (a) Compute cost of goods manufactured.
Direct Materials 125,000
Direct Labor 110,000
Prime Cost 235,000
Add Manufacturing Overhead Expenses:
Depreciation on Plant 60,000
Factory Supplies 23,000
Property Taxes on Plant 19,000
Total Manufacturing Costs 337,000
Add Opening Work In Process Inventory 27,000
Less Closing Work In Process Inventory (15,500)
Cost of goods manufactured 348,500
Part (b) Compute cost of goods sold.
Opening Stock of Finished Goods Inventory 65,000
Add Cost of Goods Manufactured 348,500
Less Closing Stock Of Finished Goods Inventory (50,600)
Cost of goods sold 362,900
Explanation:
Part (a) Compute cost of goods manufactured.
Cost of goods manufactured = Direct Materials + Direct Labor + Manufacturing Overheads
IGNORE NON-MANUFACTURING OVERHEADS FOR THIS PART OF CALCULATION !
Part (b) Compute cost of goods sold.
Cost of Goods Sod = Opening Stock of Finished Goods + Cost of Goods Manufactured - Closing Stock of Finished Goods
Answer:
Cost of Goods Sold $ 362,500
Explanation:
Glavine Corporation
Cost Of Goods Sold Statement
Materials used $125,000
Labor costs of assembly-line workers 110,000
Factory Overhead $ 102,000
Factory supplies used 23,000
Depreciation on plant 60,000
Property taxes on plant 19,000
Total Manufacturing Costs $ 337,000
Add Work-in-process inventory was $27,000 at January 1
Cost of Goods Available for Manufacture $ 364,000
Less Work-in-process inventory $15,500 at December 31.
Cost of Goods Manufactured $ 348,500
Add Finished goods inventory was $65,000 at January 1
Cost of Goods Available for Sale $ 413,500
Less Finished goods inventory $50,600 at December 31
Cost of Goods Sold $ 362,500
These all expenses are related to Sales and included in the income statement. They are not related to the manufacturing of the product.
Advertising expense 45,000
Property taxes on store 7,500 ****
It is considered to be the Sales Store
Delivery expense 21,000
Sales commissions 35,000
Salaries paid to sales clerks 50,000
Exchange rate forecasting is: Group of answer choices important because exchange rates influence all aspects of business. important because markets depend on solid information. unimportant because exchange rate forecasting does not have a theoretical model. No answer text provided.
Answer: Exchange rate forecasting is important because exchange rate influence all aspects of business.
Explanation:
Exchange rate forecast is a method that is used to predict exchange rates by collecting all the relevant factors that may affect a currency. Exchange rate forecasting is vital because exchange rates influence all aspects of business.
The exchange rate plays a vital role for firms that import raw materials and export goods. A depreciation i.e a devaluation of the currency will make exports cheaper and therefore exporting firms will benefit. Every firm is interconnected in one way or the other, therefore exchange rate is vital.
An auto manufacturer starts an advertising campaign that stresses the benefits of purchasing a new car every five years so that consumers who are driving an older car will start to want to purchase an automobile. This is an example of a company appealing to what phase of the consumer decision-making process?
Answer:
In the present case, the advertising of the automobile company seeks to affect the first phase of the decision-making process of consumers, that is, it seeks to create in consumers the need to consume: in the case, it seeks to create the need to buy a new car.
In this way, the company aims to create a situation that motivates the consumption of the product it is selling, through certain marketing strategies, to maximize its sales, and therefore its profits.
An accumulated depreciation account is offset against total assets on the balance sheet. increases on the debit side. is a contra-liability account. has a normal credit balance.
Answer:
normal credit balance
Explanation:
The accumulated depreciation is the sum of all the depreciation that has been allotted to an asset over the period of use. Depreciation is the systematic allocation of expense to an asset.
To account for it,
Debit depreciation
Credit Accumulated depreciation.
As such, accumulated depreciation which is netted off the cost of an asset to get the asset's net book value is a normal credit balance.
You’re trying to save to buy a new $215,000 Ferrari. You have $36,000 today that can be invested at your bank. The bank pays 4.3 percent annual interest on its accounts. How long will it be before you have enough to buy the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years
Answer:
42.45 years
Explanation:
Discounting is the means by which the today's value of an amount in the future is computed. Compounding is the process by which the future value of a present amount is determined. In other words, the present value of $1 tomorrow is determined by discounting while the future value of $1 tomorrow is determined by compounding.
Where
Fv = Pv(1 + r)^n
Fv is the future value
Pv is the present value
r is rate
n is time
215000 = 36000(1 + 0.043)^n
215/36 = 1.043^n
Taking the log of both sides
log (215/36) = log 1.043^n
n = log (215/36) / log 1.043
n = 42.45 years
It will take 42.45 years to have enough to buy the car
A German firm is attempting to determine the euro/pound exchange rate and has the following exchange rate information: USD/pound = $1.5509/£ and the USD/euro rate = $1.2194/€. Therefore, the euro/pound rate must be:
Answer:
Exchange rate is €1.272 per £
Explanation:
Exchange rate is defined as the amount of one currency that can be changed for another currency. This is a very important consideration in international trade where strength of a countrie's currency determines how much of the other currency will be bought.
We are given that $1.5509= £1
So $1 will be (1*1)/1.5509= £0.6448
Also $1.2194= €1
So $1 is (1*1)/1.2194= €0.82
Therefore
€0.82= £0.6448
x= £1
Cross-multiply
x= 0.82/0.6448
x= €1.272 per £
Final answer:
The euro/pound exchange rate can be determined by converting the given exchange rates from USD to euro and pound. The euro/pound rate is €0.7879/£.
Explanation:
The euro/pound exchange rate can be calculated using the given exchange rate information.
To find the euro/pound rate, we need to convert both the USD/euro and USD/pound rates to euro/pound. Given USD/pound = $1.5509/£ and USD/euro = $1.2194/€, the euro/pound rate is calculated as $1.2194/€ ÷ $1.5509/£ = €0.7879/£.
Ivanhoe Co. had sales revenue of $549,500 in 2017. Other items recorded during the year were: Cost of goods sold $325,600 Salaries and wages expense 120,500 Income tax expense 29,130 Increase in value of company reputation 17,330 Other operating expenses 11,970 Unrealized gain on value of patents 23,730 Prepare a single-step income statement for Ivanhoe for 2017. Ivanhoe has 106,900 shares of stock outstanding. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Answer:
Sales Revenue 549,500
Less Cost of goods sold (325,600)
Gross Profit 221,900
Less Expenses
Salaries and wages expense (120,500)
Other operating expenses (11,970)
Income tax expense (29,130) (161600)
Net Income 60300
Explanation:
A single-step income statement
Does not give distinction to Operating Incomes and expenses and Non-operating Income and expenses. All expenses are deducted in the same category.
Unrealized gain on value of patents
Patents are Intangible Assets. The gain in Patents Is Adjasted in Income statement subject to previous revaluations if Fair Value Model was elected by Ivnhoe Co for its subsequent measurement of Intangible assets
Increase in value of company reputation
Company Reputation is a special Intangible Asset called Goodwill. The gain in Goodwill. Goodwill is Internally generated. Not Recognised in Ivanhoe Co unless if it is purchased.
On January 1, 2012, Corvallis Carnivals borrows $20,000 to purchase a delivery truck by agreeing to a 7%, four-year loan with the bank. Payments of $478.92 are due at the end of each month, with the first installment due on January 31, 2012. Record the issuance of the note payable and the first monthly payment.
Explanation:
The journal entries are as follows
On January 1, 2012
Cash $20,000
To Note payable $20,000
(Being the issuance of the note payable is recorded)
On January 31, 2012
Interest expense $116.67
Note payable $362.25
To Cash $478.92
(Being the first monthly payment is recorded)
The interest expense is as follows
= Borrowed amount × monthly interest rate
= $20,000 × 0.5833%
= $116.67
Suppose Yamahonda, a Japanese-owned motorcycle manufacturer, builds a production plant in Alabama. This is an example of foreign ___ investment in the United States. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply.
A.Imposing restrictions on foreign ownership of domestic capital.
B.Pursuing inward-oriented policies.
C.Increasing taxes on income from savings.
D.Protecting property rights and enforce contracts.
Answer:1) Foreign direct
Question 2.
B. Pursuing inward-oriented policies
C. increasing taxes on income from savings
D.Protecting property rights and enforce contracts.
Explanation:Foreign direct investment is a type of investment which is carried out by another country in another country. The foreign country either it invest directly or through corporations or other companies from its country into another country.
The goal of increasing productivity and growth in developing countries IS CONSISTENT WITH THE PURSUING INWARD-ORIENTED POLICIES, increasing TAXES ON INCOME FROM SAVINGS and PROTECTING PROPERTY RIGHTS AND ENFORCE CONTRACTS.
Yamahonda's establishment of a production plant in Alabama is an example of foreign direct investment. For developing countries aiming to boost productivity and growth, certain policies like protecting property rights and enforcing contracts are vital. Conversely, imposing restrictions on foreign capital, adopting inward-oriented policies, and raising taxes on savings could hinder economic development.
Explanation:When Yamahonda, a Japanese-owned motorcycle manufacturer, decides to build a production plant in Alabama, this is an example of foreign direct investment in the United States. This kind of investment is crucial for economic growth and development, not just in developed countries like the US but also in developing nations seeking to increase their productivity and growth.
Regarding policies consistent with the goal of increasing productivity and growth in developing countries, not all strategies are equally effective. For example, protecting property rights and enforcing contracts (option D) is fundamental to encouraging investment and ensuring a stable economic environment. This measure helps in creating a conducive environment for both local and foreign investments, which is essential for economic growth.
On the contrary, imposing restrictions on foreign ownership of domestic capital (option A), pursuing inward-oriented policies (option B), and increasing taxes on income from savings (option C) could potentially stifle economic growth. These policies can deter foreign investment, limit access to global markets, and discourage savings and investment, respectively.
On January 1, 2021, Gless Textiles issued $28 million of 7%, 10-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Gless’s no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 20% of the issue as an investment. Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. 2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line method. 3. On July 1, 2026, when Gless’s common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method).
The detailed answer provides the specific journal entries that Gless and Century would make for the issuance of bonds, semi-annual interest payment, and conversion of bonds into common stock.
Explanation:Journal Entries for Issuance, Interest Payment, and ConversionThe following are the responses to your requirements:
For the issuance of the bonds by Gless, the journal entry would be:https://brainly.com/question/31782926
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here are the journal entries for the given transactions:
1. **Issuance of Convertible Bonds by Gless and Purchase of Bond Investment by Century:**
Gless Textiles:
```
Dr Cash $28,280,000 ($28 million * 101%)
Cr Bonds Payable $28,000,000
Cr Premium on Bonds Payable $280,000 (difference between cash received and face value)
```
Century Services (20% of $28 million):
```
Dr Investment in Bonds $5,656,000 (20% * $28 million * 101%)
Cr Cash $5,656,000
```
2. **Interest Payment on June 30, 2025:**
Gless Textiles:
```
Dr Interest Expense $980,000 ($28 million * 7% * 6/12)
Cr Cash $980,000
```
Century Services (20% of interest received):
```
Dr Cash $196,000 (20% * $980,000)
Cr Interest Revenue $196,000
```
3. **Conversion of Bonds on July 1, 2026:**
First, calculate the book value of the bonds to determine the entry:
Book Value per Bond = (Face Value + Premium) / Number of Bonds = ($1,000 + $280) / 1 = $1,280 per bond
Century Services:
```
Dr Bonds Payable $1,120,000 (20% * 40 * $1,280)
Cr Common Stock $800,000 (20% * 40 * $33)
Cr Paid-In Capital in Excess of Par $320,000 (difference between book value and amount credited to common stock)
```
Gless Textiles (eliminating the bonds):
```
Dr Bonds Payable $28,000,000
Cr Common Stock $20,000,000 (40 * $500,000)
Cr Paid-In Capital in Excess of Par $8,000,000 (difference between book value and amount credited to common stock)
```
These journal entries reflect the issuance of the bonds, interest payment, and conversion of bonds for Gless Textiles and Century Services as per the given information.
An apparel company is trying to decide which global strategy to implement as it expands. A low cost structure with a differentiated product specific to each of its geographic markets is important to the company. The top leadership also expects to use many of the company's resources across a global network. Based on these preferences, which strategy should the company practice?
Answer:
b. Transnational strategy
Explanation:
According to a different source, these are the options that come with this question:
a. International strategy
b. Transnational strategy
c. Localization strategy
d. Globalization standardization strategy
A transnational strategy would be one that is placed somewhere between a domestic and a global strategy. In these cases, companies still strive for efficiency and uniformity, but they are also responsive to local tastes, and are willing to change accordingly. In this example, this firm wants to have a global strategy that is suitable to different geographic markets with specific products. Therefore, the transnational strategy is the best one for it to adopt.
A & D Window Cleaning performed $450 of services but has not yet billed customers for the month. If A & D fails to record the adjusting entry, what is the impact on the financial statements? A. balance sheet: assets understated; equity overstated income statement: expense understated B. balance sheet: liabilities overstated; equity understated income statement: revenues understated C. balance sheet: assets overstated, equity understated income statement: expenses understated D. balance sheet: assets understated, equity understated income statement: revenues understated
Answer:
D. balance sheet: assets understated, equity understated income statement: revenues understated
Explanation:
The adjusting entry is as follows:
Account receivable A/c Dr XXXXX
To Service revenue A/c XXXXX
(Being the service performed is recorded)
Since this above journal entry is not recorded that reflect the assets understated on the income statement due to which the equity, as well as the revenues, are also understated in the balance sheet and the income statement respectively
Cassius Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units) $ 210,000 Variable expenses 136,500 Contribution margin 73,500 Fixed expenses 67,200 Net operating income $ 6,300 The number of units that must be sold to achieve a target profit of $31,500 is closest to______________.
Answer:
9,400 units
Explanation:
The breakeven point is the number of units that must be sold for the company to make neither a loss nor a profit. A target profit is the net of the sales less the sum of the fixed and variable expenses. The contribution margin is the difference between the sales and variable cost.
Sales per unit = $210,000/7000 = $30
Variable cost per unit = $136,500/7000 = $19.50
Let the number of units to be sold to achieve the profit target be x
30x - 19.5x - 67200 = 31500
10.5x = 98700
x = 98700/10.5
x = 9,400 units
Does the production function:q=100L−20/kexhibit increasing, decreasing, or constant returns to scale?
Answer:
the production function q exhibits decreasing returns to scale
Explanation:
to see if the function exhibits decreasing , increasing or constant returns of scale , let increase the input of the function
q=100L−20/k
then for N times units of Labor L and Capital K
qn =100(N*L)−20/(N*k) = N*[100*L - 20/(N²*K)]
since 20/(N²*K) < 20/K for N>1
qn =100(N*L)−20/(N*k) = N*[100*L - 20/(N²*K)] < N*[100*L - 20/(K)] = N*q (constant returns of scale )
thus qn < constant returns of scale
therefore q exhibits decreasing returns to scale
The $1,000 face value ABC bond has a coupon rate of 6%, with interest paid semi-annually, and matures in 5 years. If the bond is priced to yield 8%, what is the bond's value today
Answer:
Coupon = (0.06 multiply with 1000) / 2 = 30
Rate = 8% divide by 2 = 4%
The Number of periods = 5 multiply with 2 = 10
Bonds value = 918.89
Keys to use in a financial calculator:
Face Value = 1000
I/Y = 4
PMT = 30
N = 10
CPT PV
Thus, the value of bond = $918.89
Final answer:
To calculate the current bond value, we must find the present value of the semi-annual interest payments and the face value, then sum them up. The present value, using a market yield of 8%, suggests that the bond's value today is approximately $918.89.
Explanation:
To calculate the current value of a bond, we must discount future cash flows (interest payments and the face value repayment at maturity) to their present value using the yield as the discount rate. For an ABC bond with a 6% coupon rate, $1,000 face value, that pays interest semi-annually and matures in 5 years, with a market yield of 8%, the present value must be determined.
First, calculate the semi-annual interest payment: $1,000 × 6% × 0.5 = $30. There are 10 semi-annual periods in 5 years. Now, we discount each semi-annual payment and the face value at the market yield compounded semi-annually.
Present Value of Interest Payments = $30 × [(1 - (1 + 4%)-10) / 4%] = $30 × 8.1109 = $243.327
Present Value of Face Value = $1,000 × (1 + 4%)-10 = $1,000 × 0.6756 = $675.56
Adding both present values, we have: $243.327 + $675.56 = $918.887. Thus, the bond's value today is approximately $918.89.
Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result, you decide to take a look for yourself and to place a value on the company's stock. Here's what you find: This year, Oasis paid its stockholders an annual dividend of $3.66 a share, but because of its high rate of growth in earnings, its dividends are expected to grow at the rate of 12% a year for the next 4 years and then to level out at 8 % a year. So far, you've learned that the stock has a beta of 1.64, the risk-free rate of return is 6%, and the expected return on the market is 11%. Using the CAPM to find the required rate of return, put a value on this stock.
Answer: 14.2
Explanation:
CAPM 0.142 or 0.06 x (0.11-0.05)
Answer:
The stock has an expected return of 14.2%.
Explanation:
Capital Asset Pricing Model (CAPM) is what describes the relationship between the expected return and risk of investing in a security. It shows that the expected return on a security is equal to the risk-free return plus a risk premium, which is based on the beta of that security (Corporate Finance Institute, 2015). It is calculated as follows:
Expected Return = Risk free rate + [Beta * (Market rate – risk free rate)]
Re = Rf + [Beta * (Rm - Rf)]
For Oasis, the required rate of return is
Re = 0.06 + [1.64* (0.11 – 0.06)]
= 0.142
= 14.2%
The expected rate of 14.2% is higher than the market rate of 11% and higher than the risk free rate of 6%. The recommendation to buy is supported since it brings the higher return compared to a risk-free investment and the higher than the market rate.
The stock is undervalued, therefore buy.
10. If during 2009, the country of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2009 in Sildavida were
Answer:
$36 Billion
Explanation:
Given:
GDP = $65 billion
Interest payments = $15 billion
Imports = $13 billion
Profits = $7 billion
Exports = $15 billion
Rent = $7 billion
Wages = ?
Computation of Wages:
GDP from Income Method:
GDP = Interest payments + Wages + Rent + Profits
$65 billion = $15 billion + Wages + $7 billion + $7 billion
$65 billion = Wages + $29 billion
$65 billion - $29 billion = Wages
Wages = $36 Billion
1. Do you believe that auditors should be held liable for failing to discover fraud in situations such as ZZZZ Best, where top management goes to great lengths to fool the auditors? Explain. 2. Discuss the red flags that existed in the ZZZZ Best case and evaluate Ernst & Whinney’s efforts with respect to fraud risk assessment. Mintz, Steven. Ethical Obligations and Decision-Making in Accounting: Text and Cases (p. 322). McGraw-Hill Higher Education. Kindle Edition.
Answer:
1.No,the Auditors should not be held liable for failing to discover the fraud.
2.The red flags in ZZZZ Best case are Account receivables,Current liabilities and Notes payables.
Explanation:
1. The auditors responsibility is to state if the financial statement prepared shows a true and fair view,and to vet compliance to statutory guidelines.They may detect fraud in the course of their audit,they can recommend but are not responsible to put control measures in place to prevent such. The management are responsible for the preparation of the financial statement and safeguarding of asset, consequently, liable for the content therein.
2. The sales were made on cash basis before the period in question,a major change in policy as such should have been well measured
Brief Exercise 13-05 Pronghorn Inc.’s $11 par value common stock is actively traded at a market price of $14 per share. Pronghorn issues 5,900 shares to purchase land advertised for sale at $77,000. Journalize the issuance of the stock in acquiring the land
Explanation:
The journal entry for issuance of the stock for acquiring the land is shown below:
Land A/c Dr $82,600 (5,900 shares × $14 per share)
To Common stock A/c $64900 (5,900 shares × $11 per share)
To Additional paid-in capital in excess of par - Common stock A/c $17,700 (5,900 shares × $3 per share)
(Being the issuance of the stock for acquiring the land is recorded)
International investors pulled their funds out of Asia and moved them into mostly the United States. Using the large open economy model that we learned in class, analyze the impact of this policy on U.S. interest rates, real exchange rate, and trade balance.
Answer:
Policy impact will be positive
Explanation:
When investors pull out their funds from Asian, it will amount to scarcity of funds for developmental purposes. The contrary is the case when such funds are plunged into the US market. Its impact to the economy include:
1. Create more opportunity for development
2. Reduces the interest rate of lending in the society
3. Exchange rate value will decrease just because more of these funds will be used for business transactions
4. The prices of goods will be adjusted to balance the different caused by inflation
hich of the following sentences contain flabby expressions? Check all that apply. I worked on the MarkMaster campaign for the period of 35 hours last week. Help yourself to the cookies in the break room. Until our copier is replaced, please use the one on the third floor. In very few cases will he return text messages. In addition to the above, the client is of the opinion that, as a general rule, Comic Sans font is childish.
Answer:
An example of flabby expression among the sentences given in the question is the first second last and the last one or "I worked on the MarkMaster campaign for the period of 35 hours last week.""In very few cases will he return text messages" and "In addition to the above, the client is of the opinion that, as a general rule, Comic Sans font is childish."Explanation:
In general English language,a flabby expression can be characterized as the sentence or statement which contains rambling,redundant and unnecessary extra words which affects the clarity of the sentence or expression.These words make the sentence or expression unnecessarily complicated and long.In this instance,the first sentence uses an extra phrase "for the period" which could have been omitted and rewritten as only "I worked on the MarkMaster campaign for 35 hours last week."In the second last sentence given in the question,the phrase "In very few cases" can be replaced by the word "Rarely" thereby shortening the sentence.In the last sentence,the initial phrase "In addition to the above" can be replaced by "Aside from" or "Besides" and the phrase "as a general rule" can also be shortened as "generally".These are the examples of redundant or extra words that convey the original meaning of the sentences but only expands their length and complexity.
The sentences containing flabby expressions are:\
"I worked on the MarkMaster campaign for the period of 35 hours last week.""In very few cases will he return text messages.""In addition to the above, the client is of the opinion that, as a general rule, Comic Sans font is childish."These sentences contain unnecessary or redundant words or phrases that could be expressed more concisely.
Flabby expressions are phrases or sentences that are wordy, redundant, or unnecessarily verbose. They often use more words than necessary to convey an idea. In writing or communication, it's generally preferred to be concise and clear. Identifying and removing flabby expressions can improve clarity and efficiency of communication.