The correct option is C
Explanation:
The annual profit increase = $400,000
The following formula is to be used in order to calculate the total profit enhancement in five years
The total profit increase in 5 years = 400000 multiply with 5 = $2,000,000 = $2 million , As compared to cost of $1 million.
Thus, The correct option is answer (C) To take on the new salon because the expected marginal benefit ($2 million over 5-years) is greater than the estimated marginal cost ($1 million).
They should open a second salon because the expected marginal benefit is $2 million over 5 years.
Explanation:Willa and Westley are considering opening an additional salon location. The estimate to open this salon is $1 million, but their profit is projected to increase by $400,000 each year for the next 5 years. Based on this information, they should open a second salon because the expected marginal benefit is $2 million over 5 years. The additional expenses of $1 million are outweighed by the increased profit they expect to earn.
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Dave Docket, the installation manager at Kleen Waterproofing, receives a high number of customer complaints that several crewmembers either come late to the job or they do not show up at all, without any communication with the customers. The job completion dates keep getting delayed, and customer dissatisfaction rate keeps increasing. Dave hires several new employees who are motivated, able to perform their jobs, and have adequate resources. However, they are not sure what tasks are included in their job. Dave wonders how he can understand what is going on with his crew behavior and what he can do to improve the situation.Dave organizes a training program for his employees to teach them how to operate the machines used for working. Which of the following attributes is Dave targeting with this training? Is he solving the problem?
A. Motivation
B. Ability
C. Role-perception
D. Situational Factors
Answer: b) Ability
Explanation: Ability is the possession of skill to do a task. It involves being able to complete a given task.
Dave's new hires are motivated and ready to do the job, however they are not sure what tasks are included in their job. In this instance, organising a training that targets 'ability' will solve a part of the problem.
However, Dave needs to do more to target the actual problems which are the job description and role play. Teaching the staff how to do a job without given them job schedules may not be so effective in the long run.
Dave is targeting the attribute of role-perception with the training program, but it may not directly solve all the problems. Option C is correct
Explanation:Dave is targeting the attribute of (C) role-perception with the training program. Role-perception refers to an individual's understanding of their job tasks and responsibilities. By training his employees on how to operate the machines used for work, Dave is providing them with clarity on what tasks are included in their job.
This training program can help improve the situation by increasing the employees' understanding of their role and reducing the likelihood of confusion or uncertainty. However, it may not directly address other issues such as crewmembers coming late or not showing up without communication, as these may be influenced by other factors such as motivation or situational factors.
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Culture affects Multiple Choice where consumers decide to make their purchases. when consumers decide to make their purchases. how consumers decide to make their purchases. what consumers decide to purchase. every aspect of consumers' purchase decisions.
Answer:
The correct answer is letter "E": every aspect of consumers' purchase decisions.
Explanation:
Consumers' culture is a major component that influences their buying patterns. It determines what, how, when, and where consumers will purchase. Companies must pay special attention to those factors so they can match their efforts to what consumers are likely to demand to satisfy their needs.
The more a product is linked to consumers' behavior, the more likely a product and its company will succeed.
The Copy Center can purchase a new copier for $15,000. It would last for 3 years and have a salvage value of $3,000. Depreciation cost would be $4,000 per year and cash operating costs would equal $1,000 per year. The same copier could be leased for $6,500 per year. Using a discount rate of 7%, and the tables in Supplement 11A, it is best to (buy/lease) the copier because the difference in cost is___________ $ .
Answer: 4,500
Explanation:
Answer:
buy/1883
Explanation:
You want to buy a house that costs $305,000. You will make a down payment equal to 10 percent of the price of the house and finance the remainder with a loan that has an interest rate of 5.57 percent compounded monthly. If the loan is for 20 years, what are your monthly mortgage payments
Answer:
$1,899.12
Explanation:
We use the PMT formula that is shown in the attachment below:
Provided that
Present value = $305,000 - $30,500 = $274,500
Future value = $0
Rate of interest = 5.57% ÷ 12 = 0.46416666%
NPER = 12 months × 20 = 240 months
The formula is shown below:
= PMT(Rate;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the monthly payment is $1,899.12
Daisy Bath Products, Inc. (DBP) makes a variety of ceramic sinks and tubs. DBP has just developed a line of sinks and tubs made from a mixture of glass and ceramic. The sinks sell for $200 each and have variable costs of $70. The tubs sell for $700 and have variable costs of $320. The glass and ceramic sinks and tubs require the use of specialized molding equipment. The specialized molding equipment has 5,000 hours of capacity per year. A sink uses an average of 5 hours of specialized molding equipment time; a tub uses an average of 6 hours of specialized molding equipment time.What is the contribution margin per hour of specialized molding equipment time for sinks
Answer:
Contribution margin per hour = $26
Explanation:
Given:
Selling price of sink = $200 per unit
Variable cost of sink = $70 per unit
Selling price of tube = $700 per unit
Variable cost of tube = $320 per unit
Required time for specialized molding sink = 5 hours
Required time for specialized molding tube = 6 hours
Computation of contribution margin of sink:
Contribution margin = Selling price - Variable cost
Contribution margin = $200 - $70
Contribution margin = $130
Computation of contribution margin per hour of specialized molding sink:
Contribution margin per hour = Contribution margin / Required time for specialized molding sink
Contribution margin per hour = $130 / 5
Contribution margin per hour = $26
2) Economic Growth: Use the PPF from above to illustrate the effects of saving and investment upon national GDP. Use a PPF to show what happens when the society decides to spend most of its income on donuts (consumer goods). Show what happens when the society decides to spend most of its income on machine tools
Answer and Explanation:
Economic Growth can be defined as an increment in production capacity of an economy using all its available resources. The PPF illustrates the largest possible quantity of goods and services a nation can produce base on its available resources. An outward shift in the economy’s production possibility frontier (PPF) depicts a raise in productive capacity of an economy. An outward shift implies that an economy has capacity to increase its production outputs. This can be as a result of the economy employing new technology, allowing specialization, increasing its labour force, using new production approaches etc. Likewise, an inward shifting PPF implies an economy has witness a loss or exhaustion of some of its scarce resources and it will culminate into reduction in an economy’s productive potential.
Effects of saving and investment upon national GDP
level of savings direct related to the level of investment, investment feeds on available finance from saving. If more people save, the banks will be able to lend more to firms to support their investments.
low savings and investment implies a PPF inward shift. low savings in economy implies that the economy is opting for short-term consumption over long-term investment, and this will lead to future undue pressure on available infrastructures ad resources.
spending on consumer goods vs capital goods effect on the economy
In the short run, the economy must prefer using available resources to produce capital rather than consumer goods. Standards of living will be affected, as private consumption will have access to fewer resources. However, in the longer run, the raised production of capital goods will boost the production of more consumer goods ad therefore standards of living will experience more increase than they would have witness if the economy had spent most of its income on consumer goods.
A market is in long-run equilibrium and firms in this market have identical cost structures. Suppose demand in this market decreases.
Which of the following will happen as the market leaves and then returns to long-run equilibrium? Select all that apply.
1. Individual firms' profit-maximizing output will decrease in the long-run.
2. Firms will enter into the market in the long run.
3. Market quantity will decrease in the long-run.
4. Individual firms' profit-maximizing output will decrease in the short-run.
5. Firms will exit the market in the long run.
6. Market price will decrease in the long-run.
7. Market quantity will remain the same in the long-run.
8. Market price will decrease in the short-run.
Answer:
he said he had been talking with a group that I was in a small town in a relationship between us in the middle and we end the conversation in a small business class that he 6th 66th grade and we end the day in a small town and he is a good thing about being in a small business 666th class that he has a great way of driving
A 6-year bond, 8% semiannual coupon bond sells at par ($1,000). Another bond of equal risk, maturity, and par value pays an 8% annual coupon. What is the price of the annual coupon bond?
Answer:
Explanation:
The bond has 8% coupon paid semiannually, and those bonds sell at their par value. Since the bond sales at par value, Market rate (Yield) = Coupon rate =8%Second bond:
Coupon rate = 8%Par value = $1,000Semiannual coupon amount = 1000 x 8%/2 = $40Time to maturity = 6 years = 12 semiannual periodsSemiannual Yield = 8%/2 = 4%To get price of this bond we will use PV function of excel:
= PV (rate, nper, pmt, fv, type)
= PV (4%, 12, -40, -1000, 0)
= $1053.32
Price of this bond = $1,053.3The price of the annual coupon bond is $992.64.
EAR = (1 + YTM/m)^m - 1
EAR = (1+0.08/2)^2 - 1
EAR = 8.16%
Given Information
C/Y = 1
P/Y = 1
N = 6
I/Y = 8.16%
PMT = -$80 (8%*1000)
FV = -1000
Now, we will employ the use of PV function of Financial calculator to allow us derive the
Price of bond = CPT PV (C/Y, P/Y, N, I/Y, -PMT, -FV)
Price of bond = CPT PV (1, 1, 6, 8.16%, -80, 1000)
Price of bond = $992.64.
Therefore, the price of the annual coupon bond is $992.64.
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Assume that Oriole Company uses a periodic inventory system and has these account balances: Purchases $355,300; Purchase Returns and Allowances $10,200; Purchase Discounts $9,000; and Freight-in $16,800. Determine net purchases and cost of goods purchased.
Answer:
The answer is:
Net purchases = $336,100
Cost of goods purchased = $352,900
Explanation:
Net purchases equals purchases minus purchase returns and allowances minus purchase discount.
Purchases = $355,300
Purchase returns = $10,200
Purchase discount = $9,000
Therefore, net purchase is:
$355,300 - $10,200 - $9,000
= $336,100
Cost of goods purchased equals net purchase plus freight in.
Freight in = $16,800
So cost of goods purchased is:
$336,100 + $16,800
=$352,900
The net purchases for Oriole Company are calculated by subtracting purchase returns, allowances, and discounts from total purchases, and then adding freight-in, resulting in a total of $333,900. The cost of goods purchased is equal to the net purchases, which is also $333,900.
Explanation:To calculate the net purchases for Oriole Company, we start with the total purchases and subtract both the purchase returns and allowances and the purchase discounts. Then, we add the freight-in costs to find the net purchases. After that, the cost of goods purchased (COGP) is simply the net purchases, as there is no mention of beginning inventory or ending inventory in the question to take into account.
Net Purchases = Purchases - Purchase Returns and Allowances - Purchase Discounts + Freight-in
Net Purchases = $355,300 - $10,200 - $9,000 + $16,800
Net Purchases = $353,100 - $19,200
Net Purchases = $333,900
The Cost of Goods Purchased is equal to the net purchases:
Cost of Goods Purchased = Net Purchases
Cost of Goods Purchased = $333,900
the temporary difference is $60 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2018 is $220 million and the tax rate is 40%. Required: 1. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not that the deferred tax asset will be realized. 2. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not that one-fourth of the deferred tax asset will ultimately be realized.
Answer:
Answers are available in the attached images
Explanation:
This question is incomplete. I will type the complete question below and add image attachments of the solution as tabulated journal entries are required.
At the end of 2017, Payne industries had a deferred tax asset account with a balance of $26 million attributable to a temporary book tax difference of $65 million in a liability for estimated expenses. At the end of 2018, the temporary difference is $60 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2018 is $220 million and the tax rate is 40%. Required:
1. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not that the deferred tax asset will be realized.
2. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not that one-fourth of the deferred tax asset will ultimately be realized.
Suppose that the residents of Greenland play golf incessantly. In fact, golf is the only thing that they spend their money on. They buy golf balls, clubs, and tees. In 2010, they bought 2,000 golf balls for $3.00 each, 200 clubs for $80.00 each, and 1,000 tees for $0.10 each. In 2011, they bought 2,100 golf balls for $3.50 each, 250 clubs for $90.00 each, and 1,500 tees for $0.15 each. Using 2010 as the base year, answer the following questions. Give all answers to one decimal.
What was the CPI for 2010?
Answer:
100
Explanation:
The CPI full form is the consumer price index which shows the changes in the prices of the various goods and the other items. It reflects the variations in the prices whether it can be increment or decrements
Since the question has already said using 2010 as the base year so the consumer price index for the year 2010 is equal to the value of the base year i.e 100
Final answer:
The Consumer Price Index (CPI) for 2010 is 100, as 2010 is the base year and the CPI of the base year is always set to 100. This serves as a reference point for comparing with other years' CPI.
Explanation:
To calculate the Consumer Price Index (CPI) for 2010, we must first determine the total spending on golf-related items in that year. This is done by multiplying the quantity of each item purchased by its price. The calculation for each item is as follows:
Golf balls: 2,000 balls × $3.00 per ball = $6,000
Golf clubs: 200 clubs × $80.00 per club = $16,000
Golf tees: 1,000 tees × $0.10 per tee = $100
Adding these amounts together, the total spending on golf items in Greenland in 2010 was:
$6,000 + $16,000 + $100 = $22,100
Since 2010 is the base year, the CPI for 2010 is defined as 100. Base years always have a CPI of 100 because it serves as a reference point to compare against other years.
4. Select an industry and consider how the industry life cycle has affected business strategy for the firms in that industry over time. Detail your answer based on each stage: introduction, growth, shakeout, maturity, and decline.
Answer:
Lets talk about the rice industry and discuss it in the light of the stages of of a business;
Introduction: The industry will start small and enter the competition among other rice mills in the area.
Growth: The company starts to make rapid sales and cash inflow increases.
Shakeout: The sales slow down slowly as the company is covering the distance towards maturity.
Maturity: The company has reached a stage where the cash inflow is stagnant along with the sales. No further growth is happening in the rice mill.
Decline: The company is over run with factors such as market competition and economy. Failure to keep the expenses afloat will eventually decline.
Final answer:
The industry life cycle impacts business strategy, with firms adapting to the introduction, growth, shakeout, maturity, and decline stages to maintain a competitive advantage and ensure longevity.
Explanation:
The impact of the industry life cycle on business strategy can be significant and varies across different stages, such as introduction, growth, shakeout, maturity, and decline. In the introduction phase, a business must focus on establishing a competitive advantage and may invest heavily in marketing to create product awareness. During the growth phase, businesses typically work on scaling up, improving efficiency, and possibly expanding their market reach.
A shakeout occurs when market saturation leads to increased competition, and firms that cannot compete effectively may exit the industry. In the maturity stage, firms emphasize process optimization and cost control to maintain profitability amidst stiffer competition. Lastly, during the decline phase, companies may decide to diversify, innovate, or exit the market depending on the market structure and production conditions.
Understanding these stages helps firms anticipate change and make informed decisions to ensure sustainability and growth, which is critical for delivering a satisfactory return to investors and for maintaining relevancy in a competitive market.
Furious Fred expects cash flows from an investment as follows: Yr 1 $3,000, Yr 2 $5,000, Yr 3 $8,000 Using an opportunity cost of capital of 5.6%, the present value is: $14,118 $14,523 $14,361 $14,909 none of the above
Answer:
$14,118
Explanation:
The computation of the present value is shown below:
Years Annual cash flows Discounting factor @5.6% Present value
1 $3,000.00 0.946969697 $2,840.91
2 $5,000.00 0.896751607 $4,483.76
3 $8,000.00 0.8491965975 $6,793.57
Total $14,118.24
The discount factor is computed below
= 1 ÷ (1 + rate)^years
like for year 1
= 1 ÷ (1 + 0.056)^1
The present value of the cash flows from the investment, given an opportunity cost of capital of 5.6%, is calculated for each year and summed to give a total of $14,201.07. Hence, the answer to the multiple-choice question is 'None of the Above'.
Explanation:To compute the present value, we utilize the formula: PV = CF / (1 + r)^n, where PV is the present value, CF is the cash flow, r is the discount or interest rate, and n is the period. Therefore, we calculate the present value for each year and sum them:
Year 1: $3,000 / (1 + 0.056)^1 = $2,841.52 Year 2: $5,000 / (1 + 0.056)^2 = $4,476.78 Year 3: $8,000 / (1 + 0.056)^3 = $6,882.77
Then the total present value is: $2,841.52 + $4,476.78 + $6,882.77 = $14,201.07. Therefore, the answer would be 'None of the Above'.
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On May 1, 2016, Varga Tech Services signed a $6,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2016, to April 30, 2017, with Shaffer paying the entire $6,000 on May 1, 2016.
How much revenue should Varga recognize in 2016? (Do not round intermediate calculation.)
Answer:
Varga should recognize $4,000 as revenue in 2016.
Explanation:
As the cash received in advance is recorded as unearned revenue which is a liability for the Varga Tech Services because they did not provide the services yet. On December 31, Eight months have passed and services for these month has been provided. So the revenue of 8 month months of 2016 will be recognized and recorded at year end.
Serive Contract = $6,000 for 12 months
Revenue Recognized in 2016 = $6,000 x 8/12 = $4,000
The Andrews company currently has the following balances in their equity accounts: Common Stock $17,081 Retained earnings $98,561 Suppose next year the Andrews company generates $46,300 in Net Profit, and declares and pays $16,000 in Dividends. What will Andrews ending balance in Retained Earnings be next year?
Answer:
Andrews ending balance in Retained Earnings next year will be $128,861
Explanation:
Retained Earnings is a Reserve formed from the Company`s Profits retained back in the business and forms part of Shareholders Equity
Calculation of Ending Retained Earnings is: Opening Retained Earnings Balance + Net Profit for the Year - Dividends Declared during the year.
Andrews Company Ending Retained Earnings for Next Year will be:
Opening Retained Earnings Balance $98,561
Add Net Profit for the Year $46,300
Less Dividends ($16,000)
Ending Retained Earnings $128,861
Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 67,000 Pounds started into production during May 320,000 Pounds completed and transferred out ?Pounds in process, May 31: materials 70% complete: conversion 30% complete 34,000 Cost data: Work in process inventory, May 1: Materials cost exist 98, 800 Conversion cost exist 44,000 Cost added during May: Materials cost exist513, 830 Conversion cost exist242, 130 Compute the equivalent units of production for materials and conversion for May 2.
Solution:
Weighted-Average Method:
1. Equivalent units of production
Materials Conversion
Transferred to next department' 353,000 353,000
Equivalent units in ending work in process
Materials: 27,000 units x 100% complete 27,000
Conversion: 27,000 units x 90% complete 4,300
Equivalent units of production 380,000 357,300
*Units transferred to the next department = Units in beginning work in process + Units started into production - Units in ending work in process = 67,000 + 320,000 - 34,000 = 353,000
2. Cost per equivalent unit
Materials Conversion
Cost of beginning work in process $ 98, 800 $ 44,000
Cost added during the period 513, 830 242, 130
Total cost (a) $612,630 $ 286,130
Equivalent units of production (b) 380,000 357,300
Cost per equivalent unit (a) ÷ (b) $1.61 $ 0.80
3. and 4.
Cost of ending work in process inventory and units transferred out
Materials Conversion Total
Ending work in process inventory:
Equivalent units 27,000 4,300
Cost per equivalent unit $ 1.61 $ 0.80
Cost of ending
work in process inventory $ 43,470 $ 3,440 $ 45,910
Units completed and transferred out:
Units transferred to the 353,000 353,000
next department
Cost per equivalent unit $ 1.61 $ 0.80
Cost of units completed and
transferred out $ 568,330 $ 282,400 $850,730
5. Cost Reconciliation:
Cost of beginning work in process inventory ($ 98, 800+ $44,000 ) = $142,800
Costs added to production during the period ($ 513, 830+ $242, 130 ) = $755,960
What software is essential for any company doing business on the Web to constantly monitor the activity on a company's network server and sound an alert if it detects someone breaking into the company's computer system?
Answer:
The correct answer is: Intrusion detection software.
Explanation:
Intrusion Detection Software or IDS are vital for companies moreover for entities with web-based operations. IDS are specially programmed to detect different types of attacks in the attempt of breaking into the firm's security system and data. There are four (4) types of IDS: Network intrusion detection system (NIDS), Host-based intrusion detection system (HIDS), Perimeter Intrusion Detection System (PIDS), and VM based Intrusion Detection System (VMIDS).
If tax rates are increasing: A. taxpayers should defer deductions. B. taxpayers should defer deductions and accelerate income. C. taxpayers should defer income. D. taxpayers should accelerate income. E. None of the choices are correct.
Answer:
The correct option is D,taxpayers should accelerate income
Explanation:
Assuming current tax rate is 20% and believed to increase to 28% next year,the tax planning strategy available at anyone's disposal is to ensure he takes advantage of the current 20% which is lower compared to future 28% by accelerating income,hence the 20% tax is then charged on the accelerated income
The reverse would have been the case if the tax rates are decreasing,so future tax rate is envisaged to be lower compared to status quo.In this case,deferring income would be the best strategy that saves the day
You are considering a new product launch. The project will cost $1,006,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 360 units per year; price per unit will be $19,800, variable cost per unit will be $16,300, and fixed costs will be $334,000 per year. The required return on the project is 14 percent, and the relevant tax rate is 40 percent.
Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within ±10 percent.
Required:
(a)What are the best and worst case values for each of the projections? (Do not round intermediate calculations. Round your answers to the nearest whole number (e.g., 32)
Scenario Unit sales Variable costs Fixed costs
Base 360 $16,300 $334,000
Best
Worst
(b) What are the best- and worst-case OCFs and NPVs with these projections? (Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)
OCF NPV
Best-case $ $
Worst-case $ $
(c) What is the base-case OCF and NPV? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
OCFbase $
NPVbase $
(d) What is the OCF and NPV with fixed costs of $344,000 per year? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
OCF $
NPV $
(e) What is the sensitivity of the NPV to changes in fixed costs? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places (e.g., 32.16).)
Answer:
A) In Best Case: revenues rise by 10% while costs decline by 10%. In the worst case, profits are declining by 10%, while costs are rising by 10%.
Scenario Unit sales Variable costs Fixed costs
Base 360 $16,300 $334,000
Best 396 $14,670 $300,600
Worst 324 $17,930 $367,400
b), c) Using the tax shield approach, the OCF and NPV for the base case estimate is:
OCF(base) = [($19,800 – 16,300)(360) – 334,000](0.60) + 0.40(1,006,000/4)
OCF(base)= $656,200
NPV(base) = –$1,006,000 + $656,200(PVIFA14%,4)
NPV(base) = $905,978.01
OCF(worst) = [($19,800 – 17,930)(324) – 367,400](0.60) + 0.40(1,006,000/4)
OCF(worst)= $243,688
NPV(worst) = –$1,006,000 + $243,688(PVIFA14%,4)
NPV(worst) = $ (295,963.28)
OCF(best) = [($19,800 – 14,670)(396) – 300,600](0.60) + 0.40(1,006,000/4)
OCF(best)= $1,139,128
NPV(best) = –$1,006,000 + $1,139,128(PVIFA14%,4)
NPV(best) = $2,313,091.27
d) OCF and NPV with Fixed Costs 344,000
OCF(base) = [($19,800 – 16,300)(360) – 344,000](0.60) + 0.40(1,006,000/4)
OCF(base)= $650,200
NPV(base) = –$1,006,000 + $650,200(PVIFA14%,4)
NPV(base) = $888,295.74
e) (Change in NPV in Case d wrt Case c)/Change in FC,
(888,295.74 - 905,978.01)/(10,000) = -1.75
The beginning balance in the Lopez, Capital account of a company was $ 13 comma 000. The revenues and expenses were $ 220 comma 000 and $ 150 comma 000, respectively. During the year, Lopez took withdrawals of $ 5 comma 000. There were no new capital contributions during the year. The ending balance in Lopez, Capital was $ 83 comma 000.
a. True.
b. False.
Answer:
a. True
Explanation:
The capital account of a soul proprietor is similar to the equity account of a company. It shows how much the business owes the owner.
This includes the amount invested and net income over the years posted as part of the retained earnings.
Net income is the difference between the total revenue and total expenses.
Net income = $220,000 - $150,000
= $70,000
Net balance in capital account = $13,000 + $70,000
= $83,000
Between 1994 and 2006, Fort Myers home prices have increased Faster than the rate of inflation. Using your knowledge of markets, in 25 words or more explain why.
Answer: The market for homes will be higher when there is increase in the amount of homes being built. In addition, the location of a house determines the cost of the house. For instance, a house located in an urban environment will cost more than the one located in a rural area. Irrespective of having the same components or features, the price will always vary.
Explanation:
Fort Myers is a commercial centre of Lee County, Florida. It is a major tourist destination in Florida. It is a metro city with job markets and a nice quality of live. Between 1994 and 2006, the prices of Fort Myers homes increased more than the rate of inflation. This is due to the quality of life and location of Fort Myers. An increase in the number of houses built increaseD the market for homes. This raised the price of houses higher than the inflation rate.
Final answer:
The rise in Fort Myers home prices between 1994 and 2006 was due to the housing bubble, characterized by speculation, rising homeownership rates, and unsustainable mortgage practices.
Explanation:
Between 1994 and 2006, Fort Myers home prices increased faster than inflation due to several factors. During the early 2000s, there was widespread enthusiasm and speculation in the housing market, which led to what is known as the "housing bubble." At that time, home ownership rates were rising, and housing was considered a safe financial investment, which helped to drive up the market. Furthermore, mortgage values tripled, making housing more accessible even though this accessibility was often driven by unsustainable mortgage practices.
This period saw a significant change in home values with the average U.S. home price rising over 10% per year. No serious analyst believed this rate of growth was sustainable. The homeownership rate also increased, reaching a high of over 69% between 2004 and 2005. This rise in home values ultimately led to a market correction, which, when housing prices fell in 2007 and 2008, contributed to a severe recession.
Analysts attribute the steep rise in home prices to a combination of low-interest rates, lax lending standards, and a belief that housing prices would continue to rise indefinitely. The increase in housing prices during the bubble period was clearly out of step with historical trends and was also much faster than the rate of inflation.
Nazim wants to include bonds in his investment portfolio, but he wants the option to sell the bond to the issuer at a specified price on a certain date before the maturity of the bond. Which of the following bond redemption features should he pick?
O Putable bond
O Convertible bond
Answer:
Putable Bond
Explanation:
This is an embedded put option that enables the bondholder to demand for the payment of the principal sum from the issuer. It is effectively an option given to bond holders to put the bond back to the issuer once during the lifetime of the bond or on multiple dates.
g cost structure is degined on the relative proportion of fixed and variable cost in an organization if the company increase the proportion of variable costs relative to fixed costs
True/False
Answer:
True
Explanation:
Cost structure involves all the expenses that a company will incur while operating business model, which it is typically composed of fixed and variable costs. Fixed costs are static with increases or decreases in units of production capacity, while variable costs are dependent. Cost structure is the relative proportion of fixed and variable costs within a company.
2. Suppose you currently have $3,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 2% interest compounded annually. How much will you have when the CD matures
Answer:
The value of the CD would probably be $3183.62 in three years as shown below.
Explanation:
The formula applicable here is future value ,which means the value of the investment in 3 years at 2% compound interest rate.
The formula is given as:
FV=PV*(1+r)^n
FV is the unknown here
PV is the present value of the amount to be invested which is $3000
r is the rate of return on investment at 2%
n is the time horizon of the investment which is 3 years
FV=$3000*(1+0.02)^3
FV=$3183.62
In other words, by investing in the certificate of deposit, the investor would likely have $3183.62 in three years' time.
The rate on certificate of deposit is usually low because it is one the safest investment vehicle ,hence offers a lower rate of return,that shows clearly the positive relationship between risk and return on investment
Final answer:
Investing $3,000 in a 3-year CD with a 2% annual compound interest rate will result in a total of $3,183.60 when the CD matures.
Explanation:
If you invest $3,000 in a 3-year certificate of deposit (CD) that pays 2% interest compounded annually, you can calculate the final amount using the formula for compound interest: A = P(1 + r/n)^(nt). In this formula, A is the amount of money accumulated after n years, including interest. P is the principal amount (the initial amount of money), r is the annual interest rate (in decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
In your case, P = $3,000, r = 0.02 (2% expressed as a decimal), n = 1 (since the interest is compounded annually), and t = 3 years. So, your calculation would be A = $3,000(1 + 0.02/1)^(1×3).
Let's do the math: A = $3,000(1 + 0.02)^3 = $3,000(1.02)^3 = $3,000 × 1.0612. When you calculate this, you get A = $3,183.60.
Therefore, when the CD matures after 3 years, you will have $3,183.60.
A manager at Strateline Manufacturing must choose between two shipping alternatives: two-day freight and five-day freight. Using five-day freight would cost $135 less than using two-day freight. The primary consideration is holding cost, which is $10 per unit a year. Two thousand items are to be shipped.Which alternative would you recommend? Expalin
Answer:
2 day freight
Explanation:
Given:
Number of units = 2,000
Primary holding cost = $10 per unit a year
Computation of Extra 3 days (five-day freight - two-day freight) holding cost:
Holding cost for 3 days = Number of units × Primary holding cost × (Number of days / 365)
= 2,000 × $10 × (3/365)
= $20,000 × (3/365)
= $164.39
Holding cost for 3 day of extra freight is $164.39.
This cost is higher than saving cost so, 2 days freight will be chosen.
The alternative that would be recommended is the 2-days freight.
The first thing to do is to calculate the holding cost. This will be:
= 2000 × 10
= 20000
Then, the holding cost for three days extra freight will be:
= 20000 × (3/655)
= 164.38
Therefore, this is more than $135 and it's not advisable.
Therefore, it's advisable to go for 2-days freight.
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One evening while watching TV, your stomach growls. You see an ad for Subway. You walk to the Subway shop and buy a sandwich, which tastes great. In terms of behavioral learning, your hunger is a __________.
a.reinforcement
b.cue
c.response
d.prompt
e.drive
Answer:
The correct answer is letter "E": drive.
Explanation:
Following the ideas of Sigmund Freud (1856-1939), the father of Psychoanalysis, a drive is a motivation caused by the pressure of satisfying an urgent need. Some use the term "need" to describe the situation above but there is a differentiation made with "drive" describing the latter as the psychological manifestation and the first as the state of not having something vital.
If you have an income of $18 to spend, and if commodity 1 costs $3 per unit and commodity 2
costs $9 per unit, then the equation for your budget line can be written as (Below, x 1 and x 2
are respectively the quantities of commodities 1 and 2.)
a. x1/3 + x2/9 = 18. b. (x1 + x2)/12 = 18. c. x1 + 3x2 = 6.
d. 4x1 + 10x2 = 19. e. 12(x1 + x2) = 18.
Answer:
c. x1 + 3x2 = 6
Explanation:
Budget Line is the combination of goods that consumer can buy with given prices & Income (spending all).
Equation: p1.x1 + p2.x2 = m
where p1 & p2 are respective prices ; q1 & q2 are respective quantities ; m is the money income.
Putting p1 = 3 , p2 = 9 as given :
3x1 + 9x2 = 18
Dividing the equation by common factor = 3, we get :
x1 + 3x2 = 6
Changes in weather patterns are increasing administrative costs for insurance companies. These added costs often exceed the amount of the premiums coming in and claim payments going out. To address this problem, insurance companies typically
A. increase dividend payments to shareholders.
B. deny weather related claims for property damage.
C. increase their investment income.
D. build up the amount of their reserves.
Answer:
D. build up the amount of their reserves.
Explanation:
With the changes in the weather patterns increasing the administrative costs of insurance companies and the added costs often exceeding the amount of premium coming in and claims the payment going out, Insurance companies have developed typically, a way of building up the amount of their reserves as a way of addressing this problem.
Insurance companies are required to have a reserve funds to pay out customers claims, and often insurance companies lists the details about their reserves in order to impress customers and give them a feeling of being more secure than than rivals. It is this reserve that insurance companies develops a way of building the amount inside so as to combat the problem of often changes in weather policies that increase their administrative costs to exceed the premium amount that comes in and claims the payment going out.
Answer: The correct answer is D). build up the amount of their reserves.
Explanation: An insurance is a protection from financial loss. It is a hedge against eventualities.
Changes in weather pattern can occur and cost incurred. Having an increased investment income may not necessarily tackle it.
The best way is to build up the amount of RESERVES which is also called retained earnings or ploughed back profit. It forms part of shareholder's equity and can be used in case of eventualities such as changes in weather pattern.
Trevor always begins the day with a strawberry milkshake (milk (x1 ) and strawberries(x2) mixed in proportion 1:5). His income is equal to m=200, and one strawberry costs p2=1. Suppose the price of milk drops from p1=15 to p1=5. We are going to decompose the total effect into substitution effect and income effect. a) What is the total change in demand for milk? b) What is the substitution effect? c) What is the income effect?
Answer:
Check the explanation
Explanation:
Going by the question that the proportion of milk and strawberry for milk shake is 1:5.
If amount of milk is to be X1 that means the quantity of strawberry (X2) will be 5×X1, i.e., X2=5X1... Equation 1
And in addition, the milk and strawberry are complementary consumables as strawberry is of no use without milk and vice versa.
Budget equation will be as follows:
P1×X1+P2×5X1=M.... Equation 2
Given M=200, P1=15 & P2=1
Putting values in Equation 2
15×X1+1×5X1=200
X1=10 & X2=50(from equation 1)
Answer a)
With change in P1 from 15 to 5
Again putting values in Equation 2
5×X1+1×5X1=200
X1=20 & X2=100.
The total change in the demand of milk will increase from 10 units to 20 units.
Answer b)
Strawberry and milk are complementary goods here for that reason there would be no effect on substitution.
Answer c)
Since there will be no effect on substitution, total effect will be equal to income effect.
The total change in demand for milk is 26.67 units. The substitution effect indicates increased demand for milk due to a lower price while holding buying power constant. Income effect considers the impact of enhanced buying power due to a lower price.
Explanation:The total change in demand for milk (x1) is calculated by finding the difference in demand before and after the price change. Before the price drop, Trevor could only afford 200/15 = 13.33 units of milk as one unit costs 15. After the price drop to 5, he can now afford 200/5 = 40 units of milk. Thus, the total change in demand for milk is 40 - 13.33 = 26.67 units.
The substitution effect is consumers substituting towards consuming more milk now that it's cheaper. If we observe the change in demand for milk while keeping his real income (buying power) constant, we see the substitution effect. His real income can be kept constant by offering him a hypothetical situation where the price of milk decreases to 5, but we take away enough income to keep him on his original indifference curve. Little hard to measure without additional data about his utility or indifference curves, but it's a shift towards more milk in his milkshake assuming milk and strawberries are normal goods.
The income effect is how this price decrease affects Trevor's effective buying power. As the price of milk decreases, Trevor's buying power increases - he can now afford to buy more units of milk and strawberries than before. As such, part of the total increase in his demand for milk (26.67 units) will be due to this increased buying power. Again, challenging to measure the specific quantity without more data, but it's the part of the demand change due to his increased buying power.
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Which of the following statements regarding the dividends and/or the dividends received deduction (DRD) is true?A. The DRD can increase the net operating loss (NOL) of a corporation.B. Corporations are allowed to deduct from a dividend received the product of the dividend and the percentage of the receiving corporation's ownership in the distributing corporation's stock.C. The DRD allows corporations to deduct the amount of dividends that they distribute.D. Dividends are taxed at preferential rates for corporations as well as for individuals.
Answer:
B. Corporations are allowed to deduct from a dividend received the product of the dividend and the percentage of the receiving corporation's ownership in the distributing corporation's stock.