Answer:
The answer is C.
Explanation:
Just as almost every industry, American Food Industry also has lobbyists who work to influence the politicians and legislators and control the legislations in a way that is profitable for the industry.
Among the given options, A and D are true about the food industry and their lobbyists' influence, they do influence favorable legislature for the industry.
B is also true because telling people to eat less is not profitable for the food industry.
Option C, promoting consumption of fresh fruits and vegetables is not a true statement regarding the food industry and their lobbyists.
I hope this answer helps.
Assume Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 25% weight in equity, 10% in preferred stock, and 65% in debt. The cost of equity capital is 13%, the cost of preferred stock is 9%, and the pretax cost of debt is 8%. What is the weighted average cost of capital for Ford if its marginal tax rate is 40%
Answer:
The WACC is 7.27%.
Explanation:
Debt is a tax-allowable expense. The use of Debt in capital structure reduces Taxable Profit and hence the Tax Paid to Revenue Authorities. In this case, the Lenders ask for 8% of return. The company will surely pay them 8% of amount borrowed. But the same Interest Expense will be deducted to calculate Taxable Profit and hence will provide a Tax Shield. This tax shield must be removed from the Cost of Debt. So, it is to remember that the cost of debt in WACC is always the cost of debt after tax and the formula for it is;
Cost of Debt After Tax = Cost of Debt Before Tax * (1 - Tax Rate)
The above explained point is the only trick in this question, rest you have to simply make putting in the WACC formula which is;
WACC = (Cost of Equity * Weightage of Equity) + (Cost of Preferred Stock * Weightage of Preffered) + (Cost of Debt After Tax * Weightage of Debt)
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Explain how a firm decides how many workers to hire. If the wage was constant at $25 per day, howmany workers should be hired? Explain how you got your answer.
Answer:
This is based on the micro-economics concept,
MRP=MRC
The principle states that in order to maximize profit a firm should employ the quantity of a resource at which its marginal revenue product (MRP) is equal to its marginal resource cost (MRC)
MRC is the wage rate in pure competition and in this case.
As each worker will bring in at least as much revenue as their wages cost. If the wage was $25, you would hire 4 workers. The MRC is 25 and MRP is 30, thus if a 5th worker would be hired, the amount paid would exceed the MRC, or what is coming in, thus you cannot increase to a fifth worker.
Final answer:
A firm hires workers up to the point where the wage equals the marginal revenue product. With a constant wage of $25, workers are hired until their MRP is $25. Situations like minimum wage laws or non-wage job characteristics can affect hiring decisions and wages paid.
Explanation:
A firm decides how many workers to hire based on the principle of profit maximization, which occurs up to the point where the market wage equals the marginal revenue product of labor. If the wage was constant at $25 per day, the firm should hire workers up to the point their marginal revenue product (MRP) is equal to $25, ensuring that any additional worker would not contribute to profits since their MRP would be less than their wage. This decision also assumes that the firm is operating in a competitive market.
In situations where wages are not constant, such as described in Exercise 12.2, the firm needs to consider the increasing cost of adding each worker, due to the equal wage policy, which impacts the optimal number of workers to employ. On the other hand, if a minimum wage is introduced, as in the case of a $48 per day minimum wage scenario, it can lead to a shift in the quantity of labor demanded by the firm due to changes in the labor cost and subsequently affect the wage paid to the workers.
An example provided indicates that a job's non-wage characteristics, such as flexibility, also affect the implicit wage rate. When the government imposes an artificial wage rate higher than the equilibrium, it can lead to an excess of labor supply over demand, exemplified by an increase in workers seeking jobs to 120,000 and a decrease in the quantity demanded to 80,000, causing unemployment.
A project costs $91,000 today and is expected to generate cash flows of $11,000 per year for the next 20years. The firm has a cost of capital of 8 percent. Should this project be accepted, and why?
A. Yes, the project should be accepted since it has a NPV = $15,391.23.
B. Yes, the project should be accepted since it has a NPV = $13,610.89.
C. Yes, the project should be accepted since it has a NPV = $16,999.62.
D. None of these answers is correct.
Answer:
C. Yes, the project should be accepted since it has a NPV = $16,999.62.
Explanation:
Net present value is the sum of present value of all future cash inflows and outflows of a project using discounting method by a required rate of return. It measure the net value of the project's cash flows in present value term.
Initial Cost = $91,000
Cash flow per yea = P = $11,000
Number of years = n = 20 years
Cost of capital = 8%
PV of annuity = P [ ( 1 - ( 1 + r )^-n ) / r ]
PV of annuity = $11,000 [ ( 1 - ( 1 + 0.08 )^-20 ) / 0.08 ]
PV of annuity = $11,000 [ ( 1 - ( 1.08 )^-20 ) / 0.08 ]
PV of annuity = $108,000
Net Present value = ( $91,000 ) + $107,999.62 = $16,999.62
Final answer:
The project should be accepted since it has an NPV = $15,391.23.
Explanation:
To determine whether the project should be accepted, we need to calculate the net present value (NPV) of the project. The NPV is calculated by finding the present value of each cash flow and subtracting the initial cost of the project. In this case, the initial cost is $91,000 and the cash flows are $11,000 per year for 20 years. Using a discount rate of 8%, the NPV is:
NPV = -$91,000 + ($11,000 / 1.08)1 + ($11,000 / 1.08)2 + ... + ($11,000 / 1.08)20
After calculating the NPV, we find that it is approximately $15,391.23. Therefore, the correct answer is:
A. Yes, the project should be accepted since it has an NPV = $15,391.23.
The break-even point is the sales level at which a company_______________.a. incurs a loss. b. contribution margin equals fixed costs. c. has a profit equal to fixed costs.d. contribution margin equals variable costs.e. has a profit of $0.
Answer:
b. contribution margin equals fixed costs
e. has a profit of $0.
Explanation:
The break even point is the point in which the firm has no profit and no loss situation. When it meets we called as break even point.
So, the break even point is the point at which the profit is zero plus the contribution margin equals to the fixed cost i.e means
Contribution margin = Fixed cost
Sales - variable cost = Fixed cost
If both are equal so it seems the profit is zero
The break-even point is the sales level at which a company's profit is $0, as it is the point where total revenue equals total expenses.
Explanation:The break-even point is the sales level at which a company has a profit of $0. At the break-even point, the total revenue generated from sales is exactly equal to the total expenses, which include both fixed and variable costs. This critical financial concept is used to determine when a business will be able to cover all its expenses and start to generate profit.
According to the given references, the break-even point can be assessed through an understanding of cost behaviors. When a company's market price is higher than the break-even point, the firm is earning profits as the price is greater than the average cost. When the price is exactly at the break-even point, the firm makes no profit because it is only covering its total costs—hence, the profit is $0. If the price is below this point but above the shutdown point, the firm is making losses but may continue to operate to cover its variable costs.
The break-even point is the sales level at which a company has a profit of $0. at the break-even point, a company's contribution margin (price minus variable cost) equals fixed costs. This means that all of the revenue generated from sales is used to cover the fixed costs, resulting in zero profit. It is an important concept in business and financial management as it helps companies determine how much sales they need to cover their costs and start making a profit.
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Suppose that you were born in 1999. Also, suppose that your mother received a $100 baby shower gift at your birth. How much would it cost to buy a similar amount of goods and services in 2017, given that the CPI was 166.6 in 1999 and 245.1 in 2017?
Answer:
= $147.12
Explanation:
First, we determine the amount received by Mother in 199 9= $100
Based on this,
The Consumer Price Index in 1999 = 166.6
The Consumer Price Index in 2017 = 245.1
We then calculate the amount it would cost in 2017 to buy similar goods bought by mother in 1999
= Value in 2017 = Amount received in 1999 x (2017 CPI / 1999 CPI)
= $100 x (245.1/166.6)
= $100 x 1.471
= $147.12
This means that the baby shower gift received at $100 in 1999 will cost $147.12 to buy in 2017.
If the Communication Department and the Sociology Department are battling over which department gets to hire additional graduate assistants, they are experiencing which of the following levels of conflict?a. interpersonalb. intrapersonalc. intergroupd. interorganizationalstatus
Answer:
A. interpersonal conflict
Explanation:
The interpersonal conflicts which in order parlance called the social conflicts are conflicts that occurs between people which
are involved in the project or between different groups of interest.
The interpersonal conflict may also be seen as the process through which a person or a department frustrates another from obtaining the wanted or desired result.
Answer:
Intergroup.
Explanation:
This is a conflict between two differing groups within an organization, in this case between two different departments within an organization. Both departments competing about who gets additional graduate assistants.
The management of business operations conducted in more than one country is called: a. global management. b. international management. c. outsourcing management. d. planning management. e. domestic management.
Answer:
The correct answer is letter "B": international management.
Explanation:
International management is the private and governmental transactions that involve two or more countries. It implies sales, investment, and transportation. International management involves talking about international commerce or trades.
But international management goes beyond that since it also takes into consideration the cultural traditions of the countries engaged in international relationships and the set of skills required to handle those businesses.
A firm agreed to pay its workers $2525 an hour in 2016 and $4141 an hour in 2017. The price level for these years was 241 in 2016 and 245 in 2017. Calculate the real wage rate in each year (to the nearest cent). What is the real wage increase received by these workers in 2017?
Answer:
(a) 10.4%; 16.73%
(b) 6.33%
Explanation:
Given that,
Wages paid to the workers in 2016 = $25 per hour
Price level in 2016 = 241
Wages paid to the workers in 2017 = $41 per hour
Price level in 2017 = 245
Real wage rate in 2016:
= (Nominal wages ÷ Price level) × 100
= ($25 ÷ 241) × 100
= 0.104 × 100
= 10.4%
Real wage rate in 2017:
= (Nominal wages ÷ Price level) × 100
= ($41 ÷ 245) × 100
= 0.1673 × 100
= 16.73%
Therefore, the real wage increase received by these workers in 2017 is calculated as follows:
= Real wage rate in 2017 - Real wage rate in 2016
= 16.73% - 10.4%
= 6.33%
Hence, these workers do get a raise between the two years.
The rational-ignorance effect refers to the a. lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. b. fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. c. lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. d. problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues.
Answer:A. The lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election.
Explanation: Rational ignorance is a term used to describe the intentional decline or refusal by a person or group of persons to gain certain knowledge,mainly after considering the cost and benefits attached to gaining that knowledge.
When people choose not to learn a particular trade,subject etc after comparing the costs to the potential gains.
RATIONAL IGNORANCE IS ALSO CONCERNED WITH THE DECISION OF VOTERS WHEN MAKING CHOICE OF NOT PARTAKING IN AN ELECTION BECAUSE THEY BELIEVE THAT THEIR VOTES DO NOT COUNT OR HAVE EFFECTS ON THE FINAL OUTCOMES ETC.
Final answer:
The rational-ignorance effect explains low voter turnout due to the belief that one's vote has minimal impact on election outcomes, leading to a lack of incentive to become informed or participate.
Explanation:
The rational-ignorance effect refers to the lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. This theory explains why voter turnout is often low, as individuals calculate that the cost of becoming informed and voting exceeds the likely benefit, especially since a single vote rarely decides an election. Consequently, many voters choose to remain uninformed and do not vote, believing it will not significantly impact their lives or change the election's result.
Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a simple interest rate of 1 percent. Wally would have paid interest of $2,400 this year if the interest rate on the loan had been set at the prevailing federal interest rate.
a. Wally used the funds as a down payment on a speedboat and repaid the $20,000 loan (including $200 of interest) at year-end. Does this loan result in any income to either party, and if so, how much?
b. Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year?
Explanation:
a) The Company shall have an income of $200 as interest Revenues and $2200 as imputed revenues(i.e. difference between actual income and market value of interest on loans.
Nevertheless the corporation shall also have the right to compensation incurred by the federal tax law at $2200 for wally and shall not be eligible for deduction under Federal Taxation Law.
b) Amount of gross income does Wally recognize if Pay More forgave the loan and interest on December 31:
Loan Amount $ 20000
Interest Foregone $ 200
Imputed Interest $ 2200
Total Amount $22400
Categorize each of the following as a type of savings or investment in the economic sense. a. You buy 100 shares of Apple Computer stock: . b. You place part of your income in a mutual fund: . c. A delivery service buys 1,000 new trucks: . d. You put $1,000 in a certificate of deposit, by giving money to the bank in exchange for a set amount of return: .
Answer: All the options given are investments.
Explanation:
Savings is the money left with an economic agent after consumption has been deducted from ones income. Investment is the return that is expected when an item or asset is purchased by an individual or firm.
For option A, when someone buys shares, the person is expecting a return from the shares bought. It is an investment. Foe option B, a mutual fund is an investment that is made up of bond and other securities. When one places part of his or her income in a mutual fund, the person expects a return. For option C, buying delivery trucks for a business is an investment as the trucks are expected to generate more funds for the business. Also option D is an investment as putting funds in a certificate of deposit brings financial return.
The total utility from consuming five donuts is 9, 19, 30, 38, and 45 utils, respectively. Marginal utility begins to diminish after consuming the ____ don
Answer:
third
Explanation:
The utility for consuming the first donut is 9 utils.
The utility for consuming the second donut is the difference from the total utility for the first two and just the first donut.
[tex]U_2 = 19-9 = 10\ utils[/tex]
The utility for consuming the third donut is the difference from the total utility for the first three and just the first two donuts.
[tex]U_3 = 30-19 =11\ utils[/tex]
The utility for consuming the fourth donut is the difference from the total utility for the first four and just the first three donuts.
[tex]U_4 = 38-30 =8\ utils[/tex]
Since the utility for the 4th donut is less than the utility for the 3rd donut, utility begins to diminish after consuming the third donut.
The strength of a think local, act local multidomestic strategy is that
a. the plants located in different countries can be operated independently of one another, thus promoting greater achievement of scale economies.
b. it avoids host-country ownership requirements, and import quotas.
c. it matches a company's competitive approach to prevailing market and competitive conditions in each country market.
d. it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.
e. each of a company's country strategies is almost totally different from and unrelated to its strategies in other countries.
Answer:
C. it matches a company's competitive approach to prevailing market and competitive conditions in each country market.
Explanation:
Think local, act local multidomestic strategy enables companies or firm that uses this approach to aim at meeting the requirements of the local markets worldwide by a way of customizing and tailoring their products and services extensively to meet respective country's local market and customer standards.
Think-local, act-local, or multidomestic, strategy is best suited for industries and companies that wants to diversify their product offerings and competitive approaches from one country to another so as to accommodate different buyer preferences and market conditions.
It is the strategy that best matches a company's competitive approach in a prevailing market and it allows for companies and firms that use the approach to be able to be in competitive conditions in each country market that the organization is located.
The main strength of a think local, act local multidomestic strategy is its ability to adapt to each country's market and competitive conditions, enhancing local relevance and responsiveness, as seen in South Korea's industrial evolution.
Explanation:The strength of a think local, act local multidomestic strategy is that it matches a company's competitive approach to prevailing market and competitive conditions in each country market. This type of strategy allows for the custom tailoring of products and services to specific markets, taking into account local tastes, cultural differences, and unique market conditions. Such a strategy does not just foster an environment conducive to achieving economies of scale, but it also allows companies to respond quickly and effectively to local market changes and competition, similar to South Korea's strategic focus and evolution in industries like electronics and automobile manufacturing. Moreover, it recognizes the importance of both international trade and dynamic comparative advantage, which combined can lead to a situation where, despite trade-offs like opportunity costs, a country or company can excel in particular industries and increase overall economic efficiency.
A stock will provide a rate of return of either −18% or 26%. If both possibilities are equally likely, calculate the stock's expected return and standard deviation. (Do not round intermediate calculations. Enter your answers as a whole percent.)
Answer:
The expected return is 4% and the standard deviation is 22%.
Explanation:
Since both outcomes are equally likely, the expected value is the mean of both possible outcomes:
[tex]E(X) = \frac{-0.18+0.26}{2}=0.04 = 4\%[/tex]
The standard deviation for this stock is:
[tex]S = \sqrt{0.5*(-0.18-E(X))^2+0.5*(0.26-E(X))^2}\\S = \sqrt{0.5*(-0.18-0.04))^2+0.5*(0.26-0.04)^2}\\S= 0.22 =22\%[/tex]
The expected return is 4% and the standard deviation is 22%.
Based on the information given the stock's expected return is 4% and standard deviation is 22%.
a. Stock's expected return
Stock's expected return=0.5(-18%) + 0.5(26%)
Stock's expected return =-9%+13%
Stock's expected return =4%
b. Standard deviation
First step is to calculate the variance
Variance =[0.5(-18%-4%)²] + [0.5(26%-4%)²]
Variance=[0.5(-22)²]+[0.5(22%)²]
Variance=242%+242%
Variance= 484%
Second step is to calculate the standard deviation
Standard Deviation =√484%
Standard Deviation = 22%
Inconclusion the stock's expected return is 4% and standard deviation is 22%.
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Laundry reported assets of $ 1 comma 100 and equity of $ 630. What is Stub's debt ratio? (Round your answer to the nearest whole number.) A. 43% B. 57% C. 75% D. Not enough information is provided
Answer:
37% (not given in the option
Explanation:
The debt ratio is a financial measures that shows the leverage of the organization. It is a ratio of total debt to total assets, expressed as a percentage. This measures makes known how much of the company's assets is owned in debt.
From the accounting equation
Assets = debts + equity
$1,000 = debts + $630
Debt = $1,000 - $630
= $370
Stub's debt ratio
= $370/$1000
= 0.37
= 37%
The following information is available for completed Job No. 402: Direct materials, $120,000; direct labor, $180,000; manufacturing overhead applied, $90,000; units produced, 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job is:
Answer:
Cost of finished goods on hand = $78,000
Explanation:
Job costing is appropriate where goods or contracts are done to meet customers specific and unique requirements. Each customer's job is different from the other.
To determine cost per unit cost job, we use the formula :
= (D.material cost + Direct labour cost + Overhead)/ No of units
We can work out the cost per unit for Job No; 402 as follows:
Step 1
Calculate the closing inventory
Closing inventory = Opening inventory + Production - Sales
= 0 + 5000 - 4000 = 1000
Step 2
Calculate the the cost per unit
= $(120,000 + 180,000 + 90,000)/ 5000 units
= $78 per unit
Step 3
Value the closing inventory
= unit cost × inventory units
= $78 × 1,000
= $78,000
Cost of finished goods on hand = $78,000
Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2, 2012, for $30,000, with terms 2/10, n/30. On February 10, the company pays on account for the inventory. Record the inventory purchase on February 2 and the payment on February 10.
Answer:
Dr. Cr.
February 2, 2012
Inventory $30,000
Account Payable $30,000
February 10, 2012
Account Payable $30,000
Discount received $600
Cash $29,400
Explanation:
Term 2/10, n/30 means there is a cash settlement discount of 2% is available if the payment is made within 10 days after the purchase of goods. Net credit period is 30 days. Purchases were made on February 2 and Payment was made on February 10 within the discount period, so Shankar Company is entitled to claim the discount of 2%. Cash will be paid net of discount.
Discount = $30,000 x 2% = $600
Cash Payment = $30,000 - $600 = $29,400
Explanation of recording inventory transactions using the perpetual system.
Inventory Purchase on February 2:
Treehouse Company purchased inventory on account on February 2, 2012, for $30,000 with terms 2/10, n/30.
Payment on February 10:
The company made the payment for the inventory on February 10, settling the account.
On October 1, 2018, Renfro Company purchased to hold to maturity, 4,000, $1,000, 9% bonds for $3,960,000 which includes $60,000 accrued interest. The bonds, which mature on February 1, 2027, pay interest semiannually on February 1 and August 1. Renfro uses the straight-line method of amortization. The bonds should be reported in the December 31, 2018 balance sheet at a carrying value of
Answer:
Carrying Value=$3,903,000
Explanation:
First we will calculate the face value:
Face value=4000*$1000
Face value=$4,000,000
Purchase Price= Bond Purchased price- Accrued Interest
Purchase Price=$3,960,000-$60,000
Purchase Price=$3,900,000
Total months=100 months
Straight line Discount amortization= (Face Value-Purchase Price)/Total Months
Straight line Discount amortization=($4,000,000-$3,900,000)/100
Straight line Discount amortization=$1,000
Discount Amortization=Straight line Discount amortization*Discount months
Discount Amortization=$1,000*3
Discount Amortization=$3,000.
Carrying Value=Purchase Price+Discount Amortization
Carrying Value=$3,900,000+$3,000
Carrying Value=$3,903,000
An advantage of magazine advertising is that:
A. it is less expensive than other promotional tools such as word-of-mouth and flyers.
B. there is a short lead time for placing ads, allowing companies to make last-minute decisions.
C. the ads can target a specific market segment, making them more effective.
D. it is flexible and can be personalized for individual consumers.
Answer:
A suitable advantage of magazine advertisement is option C.
Explanation:
The magazine may be meant only for men or only for women or for both. Thus a suitable magazine maybe selected to make an appeal to a particular section of the community.
By using magazines as a medium for advertising, an appeal can be made to a large body of persons with similar tastes or covering a large area.
In the 21st century, promoting in print or in computerized magazines may appear to be silly. TV arrives at millions additional customers. Publicizing on your site costs not exactly on television. Furthermore, aren't magazines collapsing left and right?
In actuality, the magazine business, even in printed copy, is progressing nicely. New magazines are continually showing up, and various them succeed and flourish. Purchasing promotion space may not be modest, however it tends to be compelling.
Slender Focal point of Interests
Satellite television has some specialty stations, however magazines take practicing to the following level. Promoting in a magazine that takes into account a specialty crowd of devotees or experts focuses on that crowd absolutely.
Stogie Enthusiast provides food solely to stogie smoking perusers. Author's Review perusers are keen on whatever helps their composing professions. Crossties is the authoritative manual for the railroad crosstie industry. In the event that a magazine serves your fantasy segment, it could be a match made in heaven.
Answer:
The correct answer is letter "C": the ads can target a specific market segment, making them more effective.
Explanation:
Magazine advertising is a form of promoting goods and services through magazines, journals, and newspapers. The target population, in this case, will be people who read physical mediums of information on a regular basis who tend to be middle-aged adults. It is believed this is more effective but with the spread of social media and different online-based news feeds, marketing advertising is losing its appeal.
What is a strategy map? A. A clear statement of the company's advantage in the competitive marketplace. B. Financial metrics for measuring and managing company performance. C. A comprehensive visual representation of the linkages among essential elements for the organization's strategy. D. A method of measuring employees' capabilities to predict improvements in process quality and cycle times.
A Strategy Map is (C)A comprehensive visual representation of the linkages among essential elements for the organization's strategy.
Explanation:
A strategy map is a diagram that displays the organizations strategy on a single page
A well-designed strategy map, helps an employee to understand the overall strategy of a company and they can also visualize their role fit in the company. it allows helps the employee to understand that how their jobs affect the company's overall strategic objectives.
Strategy maps describe how organisations create a niche for themselves by building on strategic themes such as 'growth' or 'productivity'. They provide a means for companies to 'communicate the story' of their strategy to employees and other corporate stakeholders, thereby increasing the engagement of both the employees and the stake holders in the strategic decision making process.
Delilah makes a written offer to Samson to sell her mountain bike for $1000. In her offer Delilah states, that ‘this offer will remain open for seven days’. Two days later Delilah tells Samson that she has changed her mind.Discuss whether under common law Samson can still accept the offer and hold Delilah to the sale of her mountain bike to him for $1000.
Answer:
As per the common law of offer and acceptance, once the offeror makes an offer which us accepted by another party (the offeree) a binding contract is created.
Yes, Samson can still accept the offer and hold Delilah to the sale of her mountain bike to him for $1000.
Explanation:
Answer:
is this a story of a question?
Explanation:
Economic theory is a valuable tool for business decision making because it:
a) Identifies for managers the essential information for making a decision
b) Assumes away the problem
c) Creates a realistic, complex model of the business firm
d) Provides an easy solution to complex business problems
Answer: The correct answer is "a) Identifies for managers the essential information for making a decision".
Explanation: Economic theory is a valuable tool for business decision making because it identifies for manager the essential information for making a decision since through certain assumptions about essential aspects, it allows managers to test and differentiate the possible results according to the relevant information that it provides to make a decision.
Economic theory is a valuable tool for business decision making as it identifies essential information, creates a complex model of the business firm, and aids decision-makers in finding solutions.
Explanation:Economic theory is a valuable tool for business decision making because it identifies for managers the essential information for making a decision. By using economic theories, managers can analyze data, understand market trends, and evaluate costs and benefits to make informed decisions. Additionally, economic theory creates a realistic, complex model of the business firm. It takes into account various factors such as production, pricing, competition, and consumer behavior, providing managers with a comprehensive understanding of their business environment. However, it is important to note that economic theory does not provide an easy solution to complex business problems. It helps decision-makers understand the factors influencing their decisions, but they still need to apply critical thinking and consider multiple perspectives to find solutions.
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Margin of Safety Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,650. Required: 1. Calculate the margin of safety in terms of the number of units. units 2. Calculate the margin of safety in terms of sales revenue. $
Answer:
Margin of safety - Units =3350
Margin of safety - Sales Revenue = $251250
Explanation:
Margin of Safety indicates how much sales may decrease before a loss can be made.
Margin of safety - Units
Margin of safety - Units = 5000-1650 =3350
Margin of Safety as a % = 3350/5000 ×100 = 67%
Margin of safety - Sales Revenue
Expected Sales = (5000 × $75) =$375000
Margin of Safety = $375000 × 67% = $251250
Problem 13-03A a-c (Video) The stockholders’ equity accounts of Novak Corporation on January 1, 2020, were as follows. Preferred Stock (8%, $52 par, 10,000 shares authorized) $ 442,000 Common Stock ($1 stated value, 1,950,000 shares authorized) 1,350,000 Paid-in Capital in Excess of Par—Preferred Stock 115,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,400,000 Retained Earnings 1,750,000 Treasury Stock (10,500 common shares) 52,500 During 2020, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 26,000 shares of common stock for $122,000. Apr. 14 Sold 5,700 shares of treasury stock—common for $32,700. Sept. 3 Issued 5,100 shares of common stock for a patent valued at $36,000. Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $6,000. Dec. 31 Determined that net income for the year was $485,000. No dividends were declared during the year.
Answer:
The question is not complete as the before information is missing:
Journalize the transactions and the closing entry for net income.
The journal showing the necessary entries in respect of share transactions that took place in the year as well as closing entry for net income are found in the attached spreadsheet.
Explanation:
Note that in determining the par value of the 5700 shares of treasury stock issued on the 14th April, reference is made to total par value of $52500 as well as total number of shares of 10500
Abbott Landscaping purchased a tractor at a cost of $39,000 and sold it three years later for $19,800. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $2,500 residual value. Tractors are included in the Equipment account. 2. Assume the tractor was sold for $12,400 instead of $19,800. Record the sale.
Answer:
The journal entry is as follows:
Cash A/c Dr. $12,400
Accumulated Depreciation - Equipment A/c Dr. $21,900
Loss on sale of equipment A/c Dr. $4,700
To Equipment $39,000
(To record the sale)
Working notes:
Accumulated Depreciation - Equipment:
= [(Cost of tractor - Residual value) ÷ Service life] × No. of years
= [(39,000 - 2,500) ÷ 5] × 3
= $21,900
To record the sale of the tractor for $12,400, the following journal entry would be made:
[tex]\[ \text{Debit} \: Cash \: \$12,400 \][/tex]
[tex]\[ \text{Debit} \: Loss \: on \: Sale \: \$4,700 \][/tex]
[tex]\[ \text{Credit} \: Equipment \: \$39,000 \][/tex]
To record the sale of the tractor for $12,400, we need to account for the loss on the sale. Here's how to record the transaction:
1. Calculate the book value of the tractor:
[tex]\[ \text{Book value} = \text{Cost} - \text{Accumulated depreciation} \][/tex]
[tex]\[ \text{Book value} = \$39,000 - \text{Depreciation per year} \times \text{Number of years} \][/tex]
[tex]\[ \text{Book value} = \$39,000 - (\frac{\$39,000 - \$2,500}{5} \times 3) \][/tex]
[tex]\[ \text{Book value} = \$39,000 - (\frac{\$36,500}{5} \times 3) \][/tex]
[tex]\[ \text{Book value} = \$39,000 - (\$7,300 \times 3) \][/tex]
[tex]\[ \text{Book value} = \$39,000 - \$21,900 \][/tex]
[tex]\[ \text{Book value} = \$17,100 \][/tex]
2. Calculate the loss on the sale:
[tex]\[ \text{Loss on sale} = \text{Book value} - \text{Selling price} \][/tex]
[tex]\[ \text{Loss on sale} = \$17,100 - \$12,400 \][/tex]
[tex]\[ \text{Loss on sale} = \$4,700 \][/tex]
3. Record the sale:
[tex]\[ \text{Debit} \: Cash \: \$12,400 \][/tex]
[tex]\[ \text{Debit} \: Loss \: on \: sale \: \$4,700 \][/tex]
[tex]\[ \text{Credit} \: Equipment \: \$39,000 \][/tex]
This transaction reduces the Equipment account by its original cost and records the cash received and the loss on the sale.
An annuity with an infinite life is called a(n) ________. A. perpetuity B. deep discount C. primia D. option
Answer:
The correct answer is letter "A": perpetuity.
Explanation:
Annuities are regularly-provided income hired through insurance. Those payments can be provided within a short or long period of time until an undetermined date. That is the reason why annuities are also called perpetuities. Annuities are taxed at regular income tax rates.
two days at busch gardens willamsburg & 3 days at Universal Stuids Orlando cost $420, while 4 days at Busch gardens & 2 days at Universal cost $472. What is the cost per day at each park
Answer:
The cost of each park per day are:
Busch gardens: $80.45 per day
Universal Studios: $81.86 per day
Explanation:
To solve this, first, we have to use the ratio of days given to calculate the specific amounts for each park. this is calculated thus;
a. 2 days at Busch gardens and 3 days at Universal = $420
Cost ratio of Busch gardens to Universal = 2:3. meaning that out of the cost in 5 parts, Busch gardens takes 2 parts, while Universal takes 3 parts
Therefore actual prices are;
Busch gardens; 2/5 × 420 = $168 (2 days)
Universal studios; 3/5 × 420 = $252 (3 days)
The same calculation is done for the second statement
Busch gardens; 4/6 × 427 = $314.7 (4 days)
Universal studios; 2/6 × 472 = $157.3(2 days)
Next, let us add the total number of days and amount for each park;
Busch gardens; 2 days = $168; 4 days; $314.7
∴ 2 days + 4 days = 6 days = 168 + 314.7 = $482.7
Universal studios; 3 days = $252; 2 days = $157.3
∴ 3 days + 2 days = 5 days = 252 + 157.3 = $409.3
Finally to find the cost per day, let us divide the total cost by the total number of days;
Busch gardens;
6 days = $482.7
∴ 1 day = 482.7 ÷ 6 = $80.45
Universal studio;
5 days = $ 409.3
∴ 1 day = 409.3 ÷ 5 = $81.86.
Answer:
$72 per day at Busch garden
$92 per day at universal
Explanation:
let a = cost per day at Busch garden
b = cost per day at Universal
The cost for 2 days at Busch garden and 3 days at universal is $420. The statement can be expressed as follows:
The sum can be expressed as
2a + 3b = 420........................(i)
The cost for 4 days at Busch garden and 2 days at universal is $472. It can be expressed as
4a + 2b = 472......................(ii)
The equation forms a simultaneous equation.
2a + 3b = 420........................(i)
4a + 2b = 472......................(ii)
from equation (i) make a subject of the formula
2a = 420 - 3b
divide both sides by 2
a = 420/2 - 3b/2
a = 210 - 3b/2
insert a in equation (ii)
4(210 - 3b/2) + 2b = 472
840 - 6b + 2b = 472
840 - 4b = 472
-4b = 472 - 840
-4b = -368
divide both sides by -4
b = -368/-4
b = 92
Insert b in equation (i)
2a + 3b = 420
2a + 3(92) = 420
2a + 276 = 420
2a = 420 - 276
2a = 144
divide both side by 2
a = 144/2
a = 72
The investment banking process When a firm needs to raise funds in the financial markets, it usually uses the services of an investment banker. Last year Nowitzki Inc. entered into an agreement with Duncan Partners, an investment bank. At the time of issue, Duncan Partners has agreed to purchase all offered shares from Nowitzki and then try to sell all shares in the primary market. What kind of arrangement is this? An underwritten agreement A best efforts arrangement In the event that an issuer elects to use an underwritten arrangement, who bears all the risk that the stock issue might be undersubscribed? In other words, who is at risk if the investment bank cannot sell all shares to investors at the time of issue? Because of the magnitude of the potential losses that may be incurred by an investment bank participating in the sale of a large underwritten security issue, it is customary for a group of banks to create an underwriting syndicate to reduce the risk exposure of each participating bank. The investment bank that organizes and leads the syndicate is called the .
Solution:
Answer 1: Shelf Registration
Shelf registration or shelf prospectus is a sort of open offer contribution where the backer can decide to offer and offer protections to the general population without a different outline for each demonstration of offering and without the issue of further outline. The issuer can sell the shares within a 2 year period, without seperate permission for each time they go public.
Answer 2: Floatation Costs
The cost inccured to raise the capital by the firm is known as floatation cost. This includes underwriting fees, legal fees and all other fees that the company needs to pay in its run up to raising capital from various sources.
Answer 3: Managing Underwriter
Managing underwriter is the primary or the lead underwriter of the syndicate. The firm takes a shot at benefit of a syndicate of guarantors to perform works as managing the registrant, sorting out street appears, and so forth.
Debits to the Manufacturing Overhead account record:
The actual amounts of overhead costs incurred during a period.
The amount of overhead applied to production during a period.
The amount of overhead incurred on a specific job.
All conversion costs of a period.
Which of the following costing systems would always use job cost sheets?
a. Job order costing.
b. Process costing.
c. Activity-based costing.
d. All three systems.
Answer: Option C : ACTIVITY-BASED COSTING
Explanation:
ACTIVITY-BASED COSTING is a type of costing that assigns indirect cost and overhead cost to related products and services. It shows the relationship between manufactured products and overhead tasks.
Other options like job order costing is only used when costs and production specification are not identical for product or customer but the direct cost of labour can be traced to the final product. Also
Process costing is deployed when a process is used to manufacture identical products and the direct material, direct labor, and manufacturing overhead cannot be easily or economically traced to a specific unit.
From the above it shows that the ACTIVITY-BASED COSTING is best used in this case from definition
The Rational Consumer — Work It Out: Question 4 of 4 The price of bagels increases to $4, but the price of coffee remains at $2 per cup. Which bundle is her optimal bundle assuming she still has $8 of income?
Answer:
1 bagels and 2 cups of coffee.
Explanation:
The price of bagels increased to $4 but the price of coffee stayed at $2 per cup. But her incomes still remains at $8.
let x = quantity of bagel
y = quantity of coffee (cups)
income cost = $8
8 = 4x + 2y
8 = 4(1) + 2(2)
it's equal to 8.
1 bagels and 2 cups of coffee.
Note that consumption bundle is a set of product a consumer choose to consume base on her taste and preference. It is also affected by the consumer's budget and this can be used to get the total utility. From the question consumption bundles that lies on his/her budget line are coffee and bagels.