Answer: Disruptive technology
Explanation: The Smartphone industry is experiencing disruptive innovation which is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.
Answer:
Letter c is correct. Natural limit.
Explanation:
On this question, we can argue that the smartphone industry is reaching the natural limit by launching new smartphones more frequently and with technological differences in each newer version that is becoming less and less distinguishable.
This is because companies such as Apple and Samsung use the smarthphones launch strategy with few changes in functionality and design, but with the aim of increasing the price and attracting consumers who always want to purchase the most updated version of the device, but with the market slowdown, and with the paradigm shift of a portion of consumers, who are taking longer to change cell phones, the company like Apple is betting on a change in strategy, which will expand the cycle of major changes of its smartphone two to three years, to develop improvements and new features that are in fact attractive to the consumer.
On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Answer:
The question says ; Determine the total interest expense for Year 1, using the interest method.
Explanation:
Total interest expense = Issue price x Market rate x TimeIssue price = $37,282,062market rate = 8%Time = December 31 - June 30 which is approximately 6monthsPlugging the values in the equation ;
= 37282062 x 8% x 6/12 = $1491282.48Total interest expense = $1491282.48
You hold a diversified portfolio consisting of a $10,000 investment in each of 15 different common stocks (i.e., your total investment is $150,000). The portfolio beta is equal to 1.2 . You have decided to sell one of your stocks which has a beta equal to 1.4 for $10,000. You plan to use the proceeds to purchase another stock which has a beta equal to 1.3 . What will be the beta of the new portfolio? Show your answer to 2 decimal places.
Answer:
1.19
Explanation:
The beta of a portfolio can be simply determined by a weighted average of each individual investment's beta. Thus, the portfolio beta after selling $10,000 of a stock with beta equal to 1.4 is:
[tex]B_1 = \frac{150,000*1.2-10,000*1.4}{140,000}\\B_1 =1.185714[/tex]
The beta of a new portfolio after purchasing $10,000 worth of a new stock with beta equal to 1.3 is:
[tex]B_2 =\frac{1.185714*140,000+1.3*10,000}{150,000}\\B_2=1.1933[/tex]
The beta of the new portfolio is 1.19.
Naomi would like to reorder the worksheets in a workbook. What is the easiest method of doing this?
Answer and Explanation:
In Microsoft Office Excel, changing the order of the worksheets in a workbook only takes to left-click on the page the user wants to move, hold the left click and drag it to the position of the workbook desired. The user can also right-click on the worksheet and select "Move or copy" from the window dialog displayed then select where the worksheet should be placed.
Answer:
A) drag and drop
Explanation:
To rearrange the order of the sheets in a workbook, simply click on the workbook, hold, and drag it to its desired location.
Depreciation represents The consumption of capital in the production process. A loss of productive capability as a result of the inefficient use of resources. Wasted capital. Gross investment plus net investment.
Answer:
The consumption of capital in the production process.
Explanation:
Depreciation can be defined as the decrease of the recorded cost of a fixed asset in a systematic way until the value of the asset becomes zero or negligible.
Depreciation is referred to as 'consumption of physical capital'. It is the difference that exists between gross investment and net investment.
Examples of fixed assets include: buildings, furniture, office equipment, machinery. A land is the only oddity. A land cannot be depreciated as the value of land appreciates with time.
Final answer:
Depreciation is the loss of value in capital goods due to wear and tear or obsolescence. It's measured as the cost of production and subtracted from gross investment to determine net investment, impacting the overall capital stock of an economy. Depreciation also represents a significant percentage of Gross Domestic Income.
Explanation:
Depreciation is an important concept in economics and accounting that refers to the wear and tear or obsolescence of capital goods like machinery and buildings during the production process. As capital is utilized, it gradually loses value due to factors such as physical deterioration and technological advancements. This reduction in value is calculated as depreciation and is reported by entities such as the Commerce Department as the "consumption of fixed capital".
The concept of gross and net investment relates directly to depreciation. Gross investment represents the total amount invested in new capital, while net investment is obtained by subtracting depreciation from gross investment. Positive net investment indicates that the capital stock of an economy is growing, while negative net investment signals a decline in the capital stock.
Depreciation is not just a measure of the decline in value; it also represents the cost of production, as it is part of the price for goods and services. Thus, it contributes to the income generated in the production process. In macroeconomic terms, depreciation helps to understand the lifespan of various capital goods, and it accounted for about 13% of Gross Domestic Income (GDI) in 2008.
In an attempt to improve the product, a company that manufactures screwdrivers discusses the modification of each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. This creativity technique is called ________.
A) attribute listing
B) mind mapping
C) morphological analysis
D) lateral analysis
E) reverse analysis
Answer:
The correct answer is letter "C": morphological analysis.
Explanation:
Morphological analysis is a mathematical approach consisting of solving problems using all variables possible which are to be combined and analyzed. When it comes to business, morphological analysis is helpful to outline several possible outcomes given a product so after combining those variables the best result can be selected. Often, more than one result is chosen to increase the diversity of products from where consumers can select.
In an attempt to improve the product, a company that manufactures screwdrivers discusses the modification of each attribute, such as replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. This creativity technique is called attribute listing.
The creativity technique described in the question is called attribute listing. This technique involves brainstorming by listing all the various attributes of a product and then considering how each attribute can be improved or modified.
For example, in the context of manufacturing screwdrivers, the company could list attributes such as the handle material, screw head types, and additional functionalities like torque power.
By evaluating and changing each attribute, they aim to enhance the overall product.
Gugenheim, Inc., has a bond outstanding with a coupon rate of 6.4 percent and annual payments. The yield to maturity is 7.6 percent and the bond matures in 20 years. What is the market price if the bond has a par value of $2,000?
Answer:
Price of the bond is $1,757
Explanation:
Coupon payment = 2000 x 6.4% = $128 annually
Number of periods = n = 20 years
Yield to maturity = 7.6% annually
Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond = $128 x [ ( 1 - ( 1 + 7.6% )^-20 ) / 7.6% ] + [ 2,000 / ( 1 + 7.6% )^20 ]
Price of the Bond = $128 x [ ( 1 - ( 1.076 )^-20 ) / 0.076 ] + [ 2,000 / ( 1.076 )^20 ]
Price of the Bond = $1295.03 + $462.15
Price of the Bond = $1,757.18
To calculate bond's market price, plug in the coupon rate, yield to maturity rate, number of periods (years till maturity), and the face value into the bond value formula. The outcome will give you the market price of the bond. The market price of the bond may be different from its face value depending on the prevailing interest rates and the creditworthiness of the issuing company.
Explanation:The subject of this question pertains to the financial topic of bond pricing. Gugenheim, Inc., a fictional company, has a bond with a 6.4 percent annual coupon rate and a yield to maturity rate of 7.6 percent. The bond is set to mature in 20 years and has a par value, also known as face value, of $2,000.
To calculate the current market price of the bond, we have to take into account the bond's face value, coupon rate, maturity rate, and yield to maturity. The coupon payments would be $128 per year (6.4% of $2000) for the next 20 years and the return of the face value at the end of maturity. The yield to maturity, which is the rate of return anticipated on a bond if it is held until maturity, is 7.6%.
Calculations:The formula for the value of a bond is C (1-(1 / (1+ r) ^n) / r) + FV / (1 + r) ^n, where C is coupon payment, r is yield to maturity, n is the number of periods, and FV is face value.
Applying the given numbers:
PV = $128 [1-(1/(1 + 0.076)^20) / 0.076] + $2000 / (1 + 0.076)^20
Therefore, the market price or present value of this bond would be the computed price from the above formula, concluding our explanation on bond pricing.
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81. In a lottery, there are 250 prizes of $5, 50 prizes of $25, and ten prizes of $100. Assuming that 10,000 tickets are to be issued and sold, what is a fair price to charge to break even
Answer:
the price of the ticket should be $0.35/ticket
Explanation:
since each ticket in a lottery are equally likely to be chosen, we define the random variable P= gains from the lottery .Then the expected gain is :
E(P) = probability of getting the $5 prize * $5/ticket + probability of getting the $25 prize * $25/ticket + probability of getting the $100 prize * $100/ticket = 250/10000 * $5/ticket + 50/10000 * $25/ticket + 10/10000 * $100/ticket = $0.35/ticket
then if all lottery tickets have the same prize ( the lottery tickets are not segmented according to the prizes, where more expensive ticket is associated with the highest prize), then in order to break even the cost of the ticket should be the same that the revenue we get from it , thus
Cost of the ticket = revenue of the ticket = $0.35/ticket
The fair price to charge to break even is 0.35.
The calculation is as follows:5 250 ÷ 10,000 = 0.0125 0.125
25 50 ÷ 10,000 = 0.005 0.125
100 10 ÷ 10,000 = 0.001 0.1
Price 0.35
Therefore we can conclude that The fair price to charge to break even is 0.35.
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During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to the disposal of the assets, the accounts reflected the following:Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight line)Machine A $21,000 $3,000 8 years $15,750 (7 years)Machine B 50,000 4,000 10 years 36,800 (8years)MachineC 85,000 5,000 15 years 64,000 (12 years)The machines were disposed of during the current year in the following ways:a. Machine A: Sold on January 1 for $5,000 cash.b. Machine B: Sold on December 31 for $10,500; received cash, $2,500, and an $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost.Prepare journal entries for the above transactions.
Answer:
See attached picture for detailed answer.
Explanation:
See attached picture.
Journal Entries for recording the Merkley Company's transactions are as follows:
January 1:
Debit Sales/Disposal of Assets $5,250
Debit Accumulated Depreciation $15,750
Credit Equipment (Machine A) $21,000
To transfer the assets and accumulated depreciation to Sales/Disposal Account.
Debit Cash $5,000
Credit Sales/Disposal of Assets $5,000
To record the cash receipts from the disposal.
December 31:
Debit Sales/Disposal of Assets $13,200
Debit Accumulated Depreciation $36,800
Credit Equipment (Machine B) $50,000
To transfer the assets and accumulated depreciation to Sales/Disposal Account.
Debit Cash $2,500
Debit Notes Receivable $8,000
Credit Sales/Disposal of Assets $10,500
To record the cash receipts and notes receivable from the disposal.
January 1:
Debit Sales/Disposal of Assets $21,000
Debit Accumulated Depreciation $64,000
Credit Equipment (Machine C) $85,000
To transfer the assets and accumulated depreciation to Sales/Disposal Account.
Data Analysis:
Asset Original Cost Residual Value Estimated Life Accumulated
Depreciation
(straight line)
Machine A $21,000 $3,000 8 years $15,750 (7 years)
Machine B 50,000 4,000 10 years 36,800 (8 years)
Machine C 85,000 5,000 15 years 64,000 (12 years)
Machine A on January 1:
Sales of Assets = $5,000 (cash)
Book value = $5,250 ($21,000 - $15,750)
Loss on sale = $250 ($5,250 - $5,000)
Sales/Disposal of Assets $5,250 Accumulated Depreciation $15,750 Equipment (Machine A) $21,000
Cash $5,000 Sales/Disposal of Assets $5,000
Machine B on December 31:
Sales of Assets = $10,500 (Cash $2,500 Notes Receivable $8,000)
Book value = $13,200 ($50,000 - $36,800)
Loss on sale = $2,700 ($13,200 - $10,500)
Sales/Disposal of Assets $13,200 Accumulated Depreciation $36,800 Equipment (Machine A) $50,000
Cash $2,500 Notes Receivable $8,000 Sales/Disposal of Assets $10,500
Machine C on January 1:
Sales of Assets = $0
Book value = $21,000 ($85,000 - $64,000)
Loss on sale = $21,000 ($21,000 - $0)
Sales/Disposal of Assets $21,000 Accumulated Depreciation $64,000 Equipment (Machine A) $85,000
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Voltar Company manufactures and sells a telephone answering machine. The company's contribution format income statement for the most recent year is given below:
Total Per unit Pct. of sales (Ratios)
Sales $1,200,000 $60 100%
Less: variable expenses 900,000 45 ?%
Contribution margin 300,000 15 ?%
Less: fixed expenses 240,000
Net operating income $60,000
(a) What is the Contribution Margin (CM) Ratio (or percent of sales)?
(b) Calculate break-even point both in total units and total sales dollars.
Answer:
A. Contribution Margin Ratio = 25%
B. Break even point (In dollars) = $960,000
Break even point (in units) = 16,000
Explanation:
The computation of Contribution Margin Ratio and break-even point both in total units and total sales dollars is given below:-
A. Contribution Margin Ratio = Contribution ÷ Sales × 100
= $300,000 ÷ 1200,000 × 100
= 25%
B. Break even point (In dollars) = Fixed cost ÷ Contribution margin ratio
= $240,000 ÷ 25%
= $960,000
Break even point (in units) = Break even point ÷ price per unit
= $960,000 ÷ $60
= 16,000 Units
Final answer:
The Contribution Margin (CM) Ratio for Voltar Company is 25%. The break-even point is 16,000 units or $960,000 in sales dollars, essential for understanding financial planning and strategy.
Explanation:
Answering the question provided by the student about Voltar Company's telephone answering machine, we first address part (a) which asks for the Contribution Margin (CM) Ratio. The CM ratio is calculated by dividing the contribution margin by total sales. In this case, the contribution margin is $300,000, and total sales are $1,200,000, making the CM ratio 25% (300,000 / 1,200,000).
For part (b), finding the break-even point involves calculating both the number of units and the total sales dollars needed to cover all expenses. The break-even point in units is found by dividing the total fixed expenses by the contribution margin per unit, which in this case would be $240,000 / $15 = 16,000 units. To find the break-even point in sales dollars, multiply the break-even units by the sale price per unit, resulting in 16,000 units * $60 = $960,000.
These calculations help businesses understand how many units they need to sell to cover their costs and start generating profit, a crucial aspect of financial planning and strategy. The CM ratio and break-even analysis are fundamental concepts in business operations.
West Corp. issued 20-year bonds two years ago at a coupon rate of 8.6 percent. The bonds make semiannual payments. If these bonds currently sell for 107 percent of par value, what is the YTM
23.6
Explanation:
it become right answer
Production-constrained decision. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Contribution margin of product. A. unanswered Interference with other production.B. unanswered Contribution margin per unit of limited resource.C. unanswered Selling price of supplier.D. unanswered Sales revenue at split-off point.
Answer:
D. unanswered Sales revenue at split-off point.
Explanation:
Product contribution margin is the economic term used to describe a situation where a product sold generates revenue large enough to pay for all its production and distribution costs and expenses and still generate a profit for the company. In other words, this term refers to the money that is left over from the revenue generated from the sale of the product, after all of your production expenses have been paid. Sales revenue not being answered at the point of separation.
Answer:
nope
Explanation:
nope
In March 2007March 2007, the U.S. unemployment rate was 4.44.4 percent. In August 2008 August 2008, the unemployment rate was 6.16.1 percent. Predict what happened to unemployment between March 2007March 2007 and August 2008 August 2008, if the labor force was constan
Answer:
A Recession happened.
Explanation:
When the market sees a recession we see an increase in the unemployment rate due to cyclical unemployment whenever there in a business cycle even though the labor force was constant but in a recession companies face a lot of costs which become higher than their revenue so for example when there is a recession the cost of producing 1 more unit is actually higher than the revenue a firm gets from producing that 1 unit because marginal cost increases at a decreasing rate so they have to lay off people at a firm on that unit of production to maximize revenues.
Assume Oliver wants to earn a return of 10.50% and is offered the opportunity to purchase a $1,000 par value bond that pays a 8.75% coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the bond’s intrinsic value:
Intrinsic ValueIntrinsic Value = A/(1+C)^1+A/(1+C)^2+A/(1+C)^3+A/(1+C)^4+A/(1+C)^5+A/(1+C)^6+B/(1+C)^6
Based on this equation and the data, it is _______ (unreasonable/reasonable) to expect that Oliver’s potential bond investment is currently exhibiting an intrinsic value less than $1,000.
Now, consider the situation in which Oliver wants to earn a return of 11.75%, but the bond being considered for purchase offers a coupon rate of 8.75%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond’s intrinsic value to the nearest whole dollar, then its intrinsic value of _______ (rounded to the nearest whole dollar) is _______ (equal to/greater than/less than) its par value, so that the bond is ______ (trading at premium/par/discount).
Answer and Explanation:
1.
A is semi annual coupon=43.75
B is par or face value=1000
C is semi annual required return=5.25%
2.
Reasonable because coupon rate is less than ytm
3.
=(8.75%*1000)/11.75%*(1-1/(1+11.75%/2)^6)+1000/(1+11.75%/2)^6=925.95
4.
Less than
5.
Discount
For variable A
coupon rate = 8.75%
semiannually = [tex]\frac{8.75}{2}[/tex] = 4.375%
Semiannual coupon rate = 4.375% * 1000
= $43.75
For variable B
Bond par value = 1000
For variable C
Coupon rate = 10.5% annually
Semiannually = [tex]\frac{10.5}{2} =5.25[/tex]%
She wants a rate of 11.75% annually
Semiannually = [tex]\frac{11.75}{2} = 5.875%[/tex]
The time to maturity = 3 years
Semi annual period rate to maturity = 5.25
[tex]\frac{43.75}{1.05875} +\frac{43.75}{1.05875^2} +\frac{43.75}{1.05875^3} +\frac{43.75}{1.05875^4} +\frac{43.75}{1.05875^5} +\frac{43.75}{1.05875^6} +\frac{1000}{1.05875^6}[/tex]
= 41.32+39.029+36.8634.82+32.88+31.07+709.9
= 925.948
From the data and the calculation above we can see that the intrinsic value is $925.9 which is less than the par value of $1000.
This is reasonable given that the coupon rate is lower. Rounding up the intrinsic value we see that it is lower than the par value. Therefore this is a discount.
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Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $72,000 each month. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. (Do not round intermediate calculations. Round "CM ratio" to the nearest whole percentage (i.e., 0.234 should be entered as "23") and other answers to the nearest whole number.)
Answer:
1. New CM RATIO = 0.4
2. BEP (unit sales) = 21,000 units
BEP (in dollars) = $630,000
Explanation:
The original data table is attached.
1. CM Ratio:
The contribution margin is what is left after all variable expenses is subtracted from sales.
The CM Ratio is that amount divided by sales. So we can say:
CM Ratio = (Sales - Var Expenses)/Sales
From the table, we see sales as 585,000 and variable expenses as 409,500
This is original data, but we are given that $3 variable expense per unit is LESS. So, we take that into account and find new variable expense.
Since 19,500 units accounts to variable expense of 409,500:
Var Exp Per Unit = 409,500/19,500 = 21
Now, $3 less per unit, so Var Exp Per Unit (NEW) = 21 - 3 = 18
So, total Var Exp (NEW) = 19,500 units * 18 per unit = 351,00
New CM RATIO = (585000 - 351000)/585000 = 0.4
2. BEP (units) and BEP (dollars)
The Break-Even Point has formula:
BEP (units) = Total fixed cost/ CM Per Unit
Fixed Cost previously was 180,000. Now, 72,000 increased because of automation. Hence,
Fixed Cost (NEW) = 180000 + 72000 = 252,000
Also:
CM Per Unit is Sale Price Per Unit - Var Cost Per Unit
We know Sale Price is $30 and NEW VAR COST PER UNIT is 18
So, CM Per Unit = 30 - 18 = 12
BEP (units) = 252,000/12 = 21,000 units
BEP (in dollars) = Total Fixed Cost/CM Ratio = 252000/0.4 = $630,000
Eckelberger Products Inc. makes high-speed recorders with high-speed scanning. The small company has been growing at an average rate of 70% per year for the past 4 years. The CEO asked you to convert the past growth rate into a daily rate for its annual report. If the past growth rate was an effective rate, what was the effective growth rate daily
Answer:
The effective growth rate daily is 0.1455%
Explanation:
The effective growth rate daily can be computed using the below daily growth rate formula:
effective daily rate=(1+annual rate)^1/365-1
annual growth rate as given in the question is 70%
effective daily growth rate=(1+0.70)^(1/365)-1
effective daily growth rate =1.001454833 -1
effective daily growth rate=0.001455
effective daily growth rate=0.145483327 %
effective daily growth rate =0.1455% approximately
The fact that the business is growing at this rate on daily basis is good indicator of business success which must be leveraged upon in the future in order to take the business even to greater heights.
However,the validity of the annual rate of 70% is also very important,whatever parameters used in arriving at 70% needs to be rechecked in order to be on the safe side.
To convert the past growth rate into a daily rate, we divide the average annual growth rate by the number of days in a year. The effective daily growth rate is approximately 0.51%.
Explanation:To convert the past growth rate into a daily rate, we need to divide the average annual growth rate by the number of days in a year.
First, we need to calculate the effective annual growth rate. Since the company has been growing at an average rate of 70% per year for the past 4 years, we can use the compound interest formula:
Effective rate = (1 + Growth rate) ^ Number of years - 1
Using the formula, we can find the effective annual growth rate:
Effective rate = (1 + 0.70) ^ 4 - 1 = 2.8704 - 1 = 1.8704
Next, we divide the effective annual growth rate by the number of days in a year (365) to find the effective daily growth rate:
Effective daily growth rate = 1.8704 / 365 = 0.0051166 (approximately 0.51%)
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Massa Machine Tool expects total sales of $60,000. The price per unit is $10. The firm estimates an ordering cost of $25 per order, with an inventory cost of $0.70 per unit. What is the optimum order size?
Answer:
The optimal order size is 654.
Explanation:
As we know that: EOQ = Squareroot (2DS/H)
where :
S= ordering cost = $25 per order
H = Holding cost per unit = 0.70 per unit
D= Annual demand,sales = 60000/10 = 6000 units
Solution:
= Squareroot ( 2 * 6000 * 25 ) / 0.70
= Squareroot (300000/0.70)
= Squareroot (428571)
EOQ = 654
Final answer:
The optimum order size is 6000 units.
Explanation:
To determine the optimum order size, we need to consider the total cost and the quantity of units. The formula for total cost is (ordering cost + inventory cost), and the formula for quantity of units is (total sales / price per unit).
In this case, the ordering cost is given as $25 per order, and the inventory cost is $0.70 per unit. The total sales are $60,000, and the price per unit is $10.
Using the formulas, we can calculate the optimum order size:
Calculate the quantity of units: 60000 / 10 = 6000 unitsCalculate the ordering cost: 25Calculate the inventory cost: 0.7Calculate the total cost: (25 + 0.7) * 6000 = 15300Therefore, the optimum order size is 6000 units.
You have just leased a car that has monthly payments of $385 for the next 5 years with the first payment due today. If the APR is 7.32 percent compounded monthly, what is the value of the payments today?
Answer:
Total Value =5563.131709
Explanation:
using the annuity formula to find out the present value of lease rentals
p=R*(1-(1+i)^-n)/i
Total rental monthly =5*60 = 60
I=7.32% monthly
R=385$ monthly
Since we have:
Value of the first is same i.e $385
Value of remaining 59 payments as follows
P=385*(1-(1+7.32%)^-59)/7.32%
P=385*(1-0.015482491 )/7.32%
P=385* 0.984517509 /7.32%
P=385*13.44969275
P=5178.131709
Value of 59 rental = 5178.131709
Add: Value of 1st rental = 385
Total Value =5563.131709
In its income statement for the year ended December 31, 2022, Blossom Company reported the following condensed data.
Salaries and wages expenses $567,300
Loss on disposal of plant assets $101,870
Cost of goods sold 1,204,140
Sales revenue 2,696,200
Interest expense 86,620
Income tax expense 30,500
Interest revenue 79,300
Sales discounts 195,200
Depreciation expense 378,200
Utilities expense 134,200
Prepare a multiple-step income statement. (List other revenues before other expenses.)
Answer:
Explanation:
Sales revenue = 2696200
less: sales discount = (195200)
Net sales 2501,000
Less: Cost of goods sold = (1204,140)
Gross profit 1296860
Less: Operating expense
salaries & wages expense 567300
Utilities expense 134200
Depreciation expense 378200
=(1079700)
Profit before interest and taxes 217160
Less: Interest expense = (86620)
130540
Less: tax expense =(30500)
Profit after interest and taxes 100040
jj
To prepare a multiple-step income statement, categorize revenue and expenses and calculate the gross profit, operating income, and net income.
Explanation:To prepare a multiple-step income statement for Blossom Company, we need to categorize the revenue and expense items into different sections. First, we calculate the gross profit by subtracting the cost of goods sold from the sales revenue. Then, we subtract the operating expenses such as salaries and wages expenses, depreciation expense, and utilities expense from the gross profit. Next, we add the interest revenue and subtract the interest expense to calculate the operating income. Finally, we subtract the income tax expense and any other non-operating expenses, such as the loss on disposal of plant assets, to arrive at the net income.
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A restaurant is considering adding fresh brook trout to itsmenu. Customers would have the choice of catching theirown trout from a simulated mountain stream or simply ask-ing the waiter to net the trout for them. Operating thestream would require $11,925 in fixed costs per year.Variable costs are estimated to be $6.80 per trout. The firmwants to break even if 900 trout dinners are sold per year.
What should be the price of the new item?
Answer:
Selling price = $20.05
Explanation:
The break even point is the level of activity where the total cost of is exactly equal to the total revenue. At this point, the business makes no profit and no loss, because the total contribution is also equal to the total fixed costs.
Contribution is the excess of sales revenue over variable cost
Total contribution = (S.p - VC per unit) × unit sold
So we can determine the selling price per unit by equating the total contribution to the the total fixed cost as follows:
Step 1
Determine the total contribution
= ( S.P - 6.80) × 900
Step 2
Equate the total contribution to the total fixed cost and solve for S.P
(S.P - 6.80) × 900 = 11,925. Lets substitute S.P with x
(X-6.80) × 900 = 11,925
900X -6,120 = 11,925
900X = 11,925 + 6,120
900X = 18045
X = 18,045/900
X = $20.05
Selling price = $20.05
In order to encourage employee ownership of the company’s $1 par common shares, Washington Distribution permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 15% discount. During March, employees purchased 50,000 shares at a time when the market price of the shares on the New York Stock Exchange was $12 per share. Required: Prepare the appropriate journal entry to record the March purchases of shares under the employee share purchase plan.
Answer:
The appropriate journal entry to record the March purchases of shares under the employee share purchase plan are as follows:
Debit: Cash ($12 × 85%) × $50,000 = $510,000
Debit: Compensation Expense ($12 × 8%) × $50,000 = $90,000
Credit: Common Stock = $50,000
Paid in Capital – Excess of Par ($50,000 × $11) = $550,000
Retained Earnings at the beginning and ending of the accounting period was $850 and $1,800, respectively. If revenues were $3,300 and dividends paid to stockholders were $750, expenses for the period must have been:
A. $1,650.
B. $1,000.
C. $ 650.
D. $1,450.
Answer:
$1,600 (Not given in the options)
Explanation:
Retained earnings is the accumulated balance of an entity's net income over the years. Change between the opening retained earnings and the closing retained earnings of an entity is due to the net income/loss for the period and amount of dividend declared and paid during the period.
Opening retained earnings + net income - dividend = closing retained earnings
850 + net income - 750 = 1800 (all amounts are in $)
net income = 1800 + 750 - 850
= $1700
Net income is the difference between revenue and expenses.
Hence the expenses for the period
= $3,300 - $1,700
= $1,600
Olivia deposited $800 at her local credit union in a savings account at the rate of 6.2% paid as simple interest. She will earn interest once a year for the next 7 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Olivia in 7 years?
Answer:
$1,147.20.
Explanation:
The total amount accrued for principal plus interest in the calculation simple interest
= principal * (1+ rate * number of years)
= $800 *(1+ 6.2% * 7)
= $1,147.20.
4. Consider the following information for a closed economy. Y = $12 trillion, C = $8 trillion, G = $2 trillion, Spublic = $-0.5 trillion and T = $2 trillion. 1. What is private savings for this economy? 2. What is investment spending for this economy? 3. What are the transfer payments for this economy? 4. Is there a government budget deficit or surplus for this economy? PreviousNext
Answer:
a. Private savings= $2.5 trillion
b. Investment = $2 trillion
c. Transfer payment = $0.5 trillion
d. The economy has a budget deficit of $0.5 trillion.
Explanation:
Y = $12 trillion
C = $8 trillion
G = $2 trillion
Spublic = $-0.5 trillion
T = $2 trillion
(a) Private Savings =Y + TR -C - T., where Y is GDP, TR is Transfer Payment, C is consumption expenditure and T are taxes.
Private savings = 12 + 0.5 - 8 -2
Private savings = $2.5 trillion.
(b) Investment= Y - C - G
= 12 - 8 - 2
Investment= $2 trillion.
(c) Solve for Transfer payment(TR) by rearranging public saving: T-G-TR = S(public).
TR = T - G - S(public)
= 2 - 2 - (-.5)
= 0.5 trillion
The transfer payment is 0.5 trillion dollar.
(d) To know whether there's budget surplus or not, we find the budget balance = T - G - TR
= 2 - 2 - 0.5
= -0.5 trillion.
This shows that there's a budget deficit of 0.5 trillion dollar.
Candice is a jewelry shop owner, specializing in beaded necklaces. For each of the following inputs, classify each item as a variable input or a fixed input in the long run.
i. Shipping
ii. Chairs
iii. Upper Managment salary
iv. Beads
v. Hourly Labour
vi. Computers
vii. 2 years Lease on office and rental space
This evaluation categorizes shipping, beads, and hourly labor as variable inputs, while chairs, upper management salary, computers, and 2 year lease on office and rental space are classified as fixed inputs in a jewelry shop's production.
Explanation:In the context of business and economics, variable inputs are those that can be adjusted or changed based on the production needs, while fixed inputs are those that remain constant regardless of the production level. In the long run, all factors of production are variable. However, for the exercise, we consider a certain level of fixedness.
Shipping - Variable Input (as it changes with the number of goods sold)Chairs - Fixed Input (since the number of chairs would likely remain constant regardless of production) Upper Management salary - Fixed Input (Salaries for permanent staff are usually considered fixed unless they work overtime or their salary is performance-based)Beads - Variable Input (as the quantity needed would vary with the number of necklaces being made)Hourly Labour - Variable Input (as it alters based on the hours of work needed)Computers - Fixed Input (as they are a one-time purchase and would not change with production)2 years Lease on office and rental space - Fixed Input (since it's a constant cost over its term, irrespective of production)Learn more about Fixed and Variable Inputs here:https://brainly.com/question/32601953
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Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J, Mitchell's MRS is 2. At bundle J, if Mitchell increases consumption of Y by 1 unit, how many units of X must he give up in order to satisfy his budget constraint
Answer:
1 unit of X must be sacrifised to gain a unit of Y, with satisfying Budget Constraint .
Explanation:
Budget Line shows the product combinations that a consumer can buy with given prices & money income (spending all) . Equation : P1X1 + P2X2 = M
Price ratio slope of the budget line i.e = P1/P2 : shows the amount of a good needed to be sacrifised to gain a unit of the other good , given prices & income.
So, Price Ratio : PX / PY = 2 / 2 = 1 in this case; implies 1 unit of Good X is needed to be sacrifised to gain a unit of good Y with given prices & income.
Final answer:
Mitchell must give up 2 units of X to consume an additional unit of Y, due to the equal prices of goods X and Y ($2 each) and his Marginal Rate of Substitution (MRS) being 2 at bundle J. This satisfies his budget constraint without altering his total spending.
Explanation:
In the context of consumer choice theory, when a consumer like Mitchell faces a budget constraint, he must decide how to allocate his income across different goods to maximize his utility. Given that Mitchell's money income is $150, the price of good X is $2, and the price of good Y is also $2, Mitchell initially chooses to buy 50 units of X and 25 units of Y, forming bundle J.
At bundle J, Mitchell's Marginal Rate of Substitution (MRS) is given as 2. This means that Mitchell is willing to give up 2 units of X for every additional unit of Y he consumes in order to maintain the same level of utility. To satisfy the budget constraint, the consumer must adjust consumption when the price or budget changes. If Mitchell wants to increase his consumption of Y by 1 unit without changing his spending, he must calculate how many units of X to forgo.
Given that the price of X and Y are the same, which is $2, and the MRS is 2, Mitchell must give up 2 units of X to gain 1 additional unit of Y to remain on his budget line. Therefore, the budget constraint and the MRS together determine that Mitchell will consume 2 fewer units of X. This allows Mitchell to reallocate the resources spent on X to purchase an additional unit of Y.
Consider a $2,700 deposit earning 6 percent interest per year for 9 years. How much total interest is earned on the original deposit (excluding interest earned on interest)?
Answer:
Total interest earned on the original deposit=$403.593
Explanation:
Total Interest earned after 6 years using compound Interest:
[tex]FV=PV(1+i)^n[/tex]
Where:
PV is the deposit amount
i is the interest Rate
[tex]FV=\$2,700(1+0.06)^9[/tex]
FV=$4561.593
Total Interest earned after 6 years=FV-PV
Total Interest earned after 6 years=$4561.593-$2,700
Total Interest earned after 6 years=$1861.593
Total Interest earned after 6 years using single Interest:
Total Interest=$2,700*0.06*9
Total Interest =$1458
Total interest earned on the original deposit=Total Interest earned after 6 years-Total Interest
Total interest earned on the original deposit=$1861.593-$1458
Total interest earned on the original deposit=$403.593
Bailey has $8,000 to invest. She has a 24% marginal tax rate and is planning to reinvest her dividends and leave the investment in place for three years. If she can invest the money in taxable securities that earn qualified dividends with a 6% rate of return before tax, how much will she have at the end of the third year?
Considering her 24% marginal tax rate, Bailey's effective return rate will be 4.56%. Using the formula for compound interest, she will have approximately $9328.68 at the end of three years if she starts with a capital of $8000.
Explanation:To start, we need to calculate the after-tax rate of return. Bailey's investments earn a 6% return but since they are taxable, the effective rate is reduced by her marginal tax rate of 24%. The after-tax rate of return is 6% * (1-0.24) = 4.56%.
Then, we calculate the total amount Bailey will have at the end of three years given her initial capital of $8000. This is calculated using the formula for compound interest which is A = P * (1 + r)^n where A is the amount of money accumulated after n years, including interest, P is the principal amount ($8000 in this case), r is the annual interest rate in decimal form (4.56% or 0.0456), and n is the number of years the money is invested or borrowed for (3 in this case).
So, by substituting the given values into the equation, we get A = $8000 * (1 + 0.0456)^3. Calculating this, Bailey will have approximately $9328.68 at the end of three years.
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Gregory Trout has just received a memo explaining that because of his department's success with the newly developed Trout, Inc., that his request for three new employees has been approved. Gregory now faces the challenge of working with the areas of human resource management in recruiting, selecting, training and maintaining effective employees.
In recruiting and selecting employees for the new positions, Gregory will apply which human resourcemanagement goal?
a.Implementing strategies
b.Managing talent
c.Maintaining an effective workforce
d.Finding the right people
e.Controlling strategies
Answer:
Right choice: d.
Explanation:
As the George's area of expertise had effectively fulfilled the requirements of the new evolved Trout , Inc. IT may happen that work will be expanded. This will require Goerge to build the workforce those are having ranges of abilities that coordinates the Trout, Inc. needs. Hence, while enlisting and selecting for the new position Georgy will apply HRM objective of finding the correct arrangement of individuals for the necessary undertaking.
The stockholders’ equity section of Creighton Company’s balance sheet is shown as follows. CREIGHTON COMPANY As of December 31, 2018 Stockholders’ equity Preferred stock, $10 stated value, 7% cumulative, 300 shares authorized, 50 issued and outstanding $ 500 Common stock, $10 par value, 250 shares authorized, 100 issued and outstanding 1,000 Common stock, class B, $20 par value, 400 shares authorized, 150 issued and outstanding 3,000 Common stock, no par, 150 shares authorized, 100 issued and outstanding 2,200 Paid-in capital in excess of stated value—preferred 600 Paid-in capital in excess of par value—common 1,200 Paid-in capital in excess of par value—class B common 750 Retained earnings 7,000 Total stockholders’ equity $ 16,250 Required Assuming the preferred stock was originally issued for cash, determine the amount of cash that was collected when the stock was issued. Based on the class B common stock alone, determine the amount of the company’s legal capital. Based on the class B common stock alone, determine the minimum amount of assets that must be retained in the company as protection for creditors. Determine the number of shares of class B common stock that are available to sell as of December 31, 2018. Assuming Creighton purchases treasury stock consisting of 25 shares of its no par common stock on January 1, 2019, determine the amount of the no-par common stock that would be outstanding immediately after the purchase. Based on the stockholders’ equity section shown above, can you determine the market value of the preferred stock? rev: 03_06_2018_QC_CS-120790
Answer:
a. $1,100
b. $3,000
c. $3,750
d. 250 shares
e. 75 shares
f. Cannot be found because the expected rate of return is not given
Explanation:
a. Amount of cash collected when preferred stock was issued
Stated Value = $500
Paid in Capital in excess of Stated Value = $600
Cash Collected = $(500 + 600) = $1,100
b. Amount of company's legal capital based on class B common stock alone
Issued shares = 150
Par value = $20
Company's legal capital amount = 150 * 20 = $3,000
c. Minimum amount of assets that must be retained in the company as protection for creditors based on the class B common stock alone
Stated value of common stock = $3,000
Paid in capital in excess of par value = $750
Minimum retain amount = $(3000 + 750) = $3,750
d. Number of shares of class B common stock that are available to sell as of December 31, 2018
Authorized shares = 400
Issued and outstanding = 150
Shares available to sell = 400 - 150 = 250 shares
e. Amount of the no-par common stock that would be outstanding immediately after the purchase of treasury stock as assumed
Shares before purchase = 100
Shares purchased = 25
Outstanding no-par common stock = 100 - 25 = 75 shares
f. Market value of preferred stock
The expected rate of return is required to calculate the market value of preferred stock, but since this is not given in the question, the market value of preferred stock cannot be calculated.
Assuming the required rate of return is 12%
And the dividend rate of preferred stock is 7%
Stated Value or par value = $10
Dividend amount = $10 * 7% = $0.7
Hence the market value of preferred stock = Dividend / Required Rate of Return
= $0.7/0.12 = $5.83
a. Calculation of Preferred stock
Particulars Amount
Issued & outstanding (50*$10) $500
Add: Paid-in capital in excess $600
Total cash collected when stock is issued $1,100
b. The legal capital means the total stated capital for that class of shares.
The Issued & outstanding amount = 150*$20 par value
The Issued & outstanding amount = $3,000
c. The minimum amount of assets to be retained should be based on Class B common stock alone, that is, capital which is $3,000.
d. Number of shares that are available for sell
Particulars Unit
Total number of shares authorized to be issued 400
Less: Total no.of issued & outstanding 150
Number of shares that are available for sell 250
e. The number of no-par shares outstanding immediately after the re-purchase on Jan 1, 2019 is:
Particulars Unit
Number.of no-par common stock 100
Less: No.of no-par shares purchased for 25
treasury & issued but no more outstanding
No of no-par shares outst, after re-purchase 75
f. Calculation of the Market value of Preferred stock
Particulars Amount
Issued & outstanding (50*$10) 500
Add: Paid-in capital in excess 600
Total cash collected when the stock was issued $1,100
Number of shares issued & outstanding shares = 50
Market value at the time of issue = Total cash collected / Number of shares)
Market value at the time of issue = $1100/50
Market value at the time of issue = $22
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Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $303,500 after deducting Robert's $91,050 salary. In addition to his compensation, ABC pays Robert dividends of $212,450. a. What is Robert's qualified business income? $303,500 (This answer is correct) b. Would your answer to part (a) change if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $181,050? $________
Answer: $303,500
No
Explanation: Qualified business income QBI allows sole shareholders of eligible businesses (S corporations, sole proprietorship) such as Robert to lessen their tax burden by up to 20 percent. In this case, 20% of $303,500 can be deducted.
QBI will not change as reasonable compensation is not actual compensation, so this does not apply to QBI.
However, If his salary increases to $181,050, this would make Robert ineligible to qualify for the deduction as his income is more than the $157,500 threshold that makes a single taxpayer eligible for QBI.
This amount is $315,000 for a married couple filing a joint return.