Answer:
Explanation:
Interest Factors
Periods 6% 7% 8% 9% 10% 11 %
1 1.0600 1.0700 1.0800 1.0900 1.1000 1.1100
2 1.1236 1.1449 1.1664 1.1881 1.2100 1.2321
3 1.1910 1.2250 1.2597 1.2950 1.3310 1.3676
4 1.2625 1.3108 1.3605 1.4116 1.4641 1.5181
1)
Future value paying simple interest = Principal + [( principal * interest) * investment period]
Future value paying simple interest = $2,000 + [ ( $2,000 * 9%) * 3]
Future value paying simple interest = $2,000 + 540
Future value paying simple interest = $2,540
2)
Future value paying compound interest = Present value * ( 1 + interest)n
Future value paying compound interest = $2,000 * ( 1 + 0.09)3
Future value paying compound interest = $2,000 * 1.295029
Future value paying compound interest = $2,590.058
3)
Difference = $2,590.058 - 2,540
Difference = $50.058
Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May:Indicate the effect of each transaction on the following accounting equation elements (Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows:(1) Asset (Cash) increases by $18,000; Common Stock increases by $18,000. Element Item Direction1. Received cash in exchange for common stock, $18,000. Asset Cash Increases Common Stock Increases2. Paid advertising expense, $4,850. 3. Purchased supplies on account, $2,100. 4. Billed customers for delivery services on account, $14,700. 5. Received cash from customers on account, $8,200.
Answer and Explanation:
The indication and effect of each transaction are as follows
Particulars Element Item Direction
1. Received cash in exchange
for common stock, $18,000. Asset Cash Increases
Common Stock Increases
It increased both assets and the common stock
2. Paid advertising expense,
$4,850. Expense Advertising Expense Increases
Asset Cash Decreases
It increased the expenses and reduced the assets
3. Purchased supplies on account,
$2,100. Asset Supplies Increases
Liability Accounts Payable Increases
It increased the assets and also increased the liabilities
4. Billed customers for delivery
services on account, $14,700. Asset Accounts Receivable Increases
Revenue Delivery Service Fees Increases
It increased the assets and the revenue is also increased
5. Received cash from
customers on account, $8,200. Asset Cash Increases
Asset Accounts Receivable Decreases
It increased the assets in cash but it reduced the assets i.e account receivable
Answer: I took this class, these are the answers
Explanation:
The indication and effect of each transaction are as follows
Particulars Element Item Direction
1. Received cash in exchange
for common stock, $18,000. Asset Cash Increases
Common Stock Increases
It increased both assets and the common stock
2. Paid advertising expense,
$4,850. Expense Advertising Expense Increases
Asset Cash Decreases
It increased the expenses and reduced the assets
3. Purchased supplies on account,
$2,100. Asset Supplies Increases
Liability Accounts Payable Increases
It increased the assets and also increased the liabilities
4. Billed customers for delivery
services on account, $14,700. Asset Accounts Receivable Increases
Revenue Delivery Service Fees Increases
It increased the assets and the revenue is also increased
5. Received cash from
customers on account, $8,200. Asset Cash Increases
Asset Accounts Receivable Decreases
It increased the assets in cash but it reduced the assets i.e account receivable
Acme Products manufactures and markets a product called Grow Tall. Acme claims in its advertising that Grow Tall will make its users grow a minimum of six inches taller than their current height. The Federal Trade Commission (FTC) will likely find that the ad is
Answer: a. deceptive, and the FTC may issue a cease-and-desist order.
Explanation:
A product that can increase human height by 6 inches sounds highly improbable and so is deceptive to people.
The Federal Trade Commission in it's role as a protector of Consumers from.unfair and deceitful practices in Commerce can act against Acme to stop them from deceiving the consumer.
One of the ways that the FTC can do this is by issuing a Cease and Desist order to Acme and if they fail to do so, can then take them to Court.
Lopez Corporation incurred the following costs while manufacturing its product.Materials used in product $120,000 Advertising expense $45,000Depreciation on plant 60,000 Property taxes on plant 14,000Property taxes on store 7,500 Delivery expense 21,000Labor costs of assembly- 110,000 Sales commissions 35,000line workersFactory supplies used 23,000 Salaries paid to sales clerks 50,000Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.Compute:____ Cost of goods manufactured $Compute cost of goods sold.
Answer:
Cost of goods manufactured is $323,500
Cost of goods sold is $337,900
Explanation:
Given:
Materials used in product = $120,000
Advertising expense = $45,000
Depreciation on plant = $60,000
Property taxes on plant = $14,000
Property taxes on store = $7,500
Delivery expense = $21,000
Labor costs of assembly-line workers = $110,000
Sales commissions = $35,000
Factory supplies used = $23,000
Salaries paid to sales clerks = $50,000
Work in process inventory was $12,000 at January 1 and $15,500 at December 31.
Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.
(a) Cost of goods manufactured = Materials used in product + Depreciation on plant + Labor costs of assembly-line workers + Property taxes on plant + Factory supplies used + Beginning work in process - ending work in process
= $120,000 + $60,000 + $110,000 + $14,000 + $23,000 + $12,000 - $15,500
= $323,500
(b) Cost of goods sold = Cost of goods manufactured + opening finished goods inventory - Closing finished goods inventory
= $323,500 + $60,000 - $45,600
= $337,900
Based on the given information,
The cost of goods manufactured is $323,500
cost of goods sold $337,900
Calculations are as follows
(a) Cost of goods manufactured =Depreciation on plant + Materials used in product +Property taxes on plant + Labor costs of assembly-line workers + Factory supplies used + Beginning work in process - ending work in process
= $120,000 + $60,000 + $110,000 + $14,000 + $23,000 + $12,000 - $15,500
= $323,500
(b) Cost of goods sold = Cost of goods manufactured + opening finished goods inventory - Closing finished goods inventory
= $323,500 + $60,000 - $45,600
= $337,900
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Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100.000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021. 0.76 points March 1 Issues 60,000 additional shares of $1 par value common stock for $57 per share. May 10 Purchases 5,500 shares of treasury stock for $60 per share. June 1 Declares a cash dividend of $1.75 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,750 shares of treasury stock purchased on May 10 for $65 per share Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $100,000; Additional Paid-in Capital, $5,000,000; and Retained Earnings, $2,500,000. Net income for the year ended December 31, 2021, is $650,000.
Required: Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Power Drive Corporation
Stockholders' Equity Section
December 31, 2021
Paid in capital:
Common Stock $1 par $160,000
(160,000 shares authorized, 157,250
shares outstanding)
Additional paid in capital, $8,360,000
in excess of par value
Additional paid in capital, $13,750
from Treasury Stock
Total paid in capital $8,533,750
Retained earnings $2,879,625
Sub-total $11,413,375
Treasury Stock ($165,000)
Total Stockholders' Equity $11,248,375
Explanation:
beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $100,000 + $60,000Additional Paid-in Capital, $5,000,000 + $3,360,000 + $13,750Retained Earnings, $2,500,000 + $650,000 - $270,375 treasury stock $330,000 - $165,000Net income for the year ended December 31, 2021, is $650,000.
March 1 Issues 60,000 additional shares of $1 par value common stock for $57 per share.
Dr Cash 3,420,000
Cr Common stock 60,000
Cr Additional paid in capital 3,360,000
May 10 Purchases 5,500 shares of treasury stock for $60 per share.
Dr Treasury stock 330,000
Cr Cash 330,000
June 1 Declares a cash dividend of $1.75 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)
Dr Retained earnings 270,375
Cr Dividends payable 270,375
July 1 Pays the cash dividend declared on June 1.
Dr Dividends payable 270,375
Cr Cash 270,375
October 21 Resells 2,750 shares of treasury stock purchased on May 10 for $65 per share
Dr Cash 178,750
Cr Treasury stock 165,000
Cr Additional paid in capital 13,750
Tedd E. Bear has an annual salary of $48,000 with no other loans outstanding. Using the 25% guideline from class and with a 20% down payment, how expensive of a home can Tedd purchase using a 4%, 30 year mortgage
Answer:
The total loan value would be of $261,825
Explanation:
In order to calculate how expensive of a home can Tedd purchase using a 4%, 30 year mortgage we would have to calculate first the amount of annual payments as follows:
amount of annual payments = $48,000*0.25 = $12,000
PMT = 12,000/12 = 1000
FV = 0
rate = 4%/12
N = 30*12
Hence, use FV function in Excel amount after down payment = $209,461.24
this represents 80% of the loan , so total loan value = $209,461.24/0.8 = $261,825
The total loan value would be of $261,825
The total loan amount is $261,825.
The calculation is as follows:Amount of annual payments = 25% of $48,000 = $12,000
PMT = 12,000 ÷ 12 = $1,000
FV = $0
Rate = 4% ÷ 12 = 0.333%
N = 30 × 12 = 360
Here we have to apply the FV function in the excel.
So,
Amount after downpayment = 209,461.24
The above amount represents 80% of the loan
Now
Total loan value is
= $209,461.24 ÷ 0.8
= $261,825
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Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,180 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $31,800
Answer:
The answer is $810
Explanation:
Solution
Child and dependent care credit is certain percentage of qualifying care expenses based on the adjusted gross income. The maximum qualifying amount of daycare expenses is $3,000 per qualifying person.
Now from this example, Jocelyn had paid $4,180 to take care of her son and so,the qualifying amount of care expenses will be $3,000.
Since GI for the year is $31,800, the child and dependent care credit will be 27% of the qualifying care expenses that is,. $3,000 * 27% = $810
Ataxia Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 4 years with no salvage value at the end of the 4 years. Ataxia's internal rate of return on this equipment is 5%. Ataxia's discount rate is also 5%. The payback period on this equipment is closest to (Ignore income taxes.):
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factorfs) using the tables provided.
a. 4 years
b. 3.55 years
c. 2.00 years
d. 4.65 years
Answer:
b. 3.55 years
Explanation:
The payback period is basically the amount of time an investor needs to recover his/her initial investment.
lets assume initial investment = $1,000
when you calculate IRR, the present value of the cash flows = initial investment
the present value of an annuity for 4 years and 5% is 3.5460
$1,000 = yearly cash flow x 3.546
yearly cash flow = $1,000 / 3.546 = $282
payback period = $1,000 / 282 = 3.546 years ≈ 3.55 years
Sauber's washer-dryer is available in four stylish finishes: stainless steel, pearl white, gunite gray, and obsidian. Although the cycle time is 20% longer than average, the machine runs quietly and offers 10 wash, 5 spin, and 8 dry options. A programmable timer allows users to program a wash up to 23 hours in advance. The manufacturer's suggested retail price is $1499, which is more expensive than U.S. brands' washer-dryer combinations, which average around $1000. Choose the two variables that would be most predictive of purchase intent for the All-in-One washer-dryer.
a. household size: how many people?
b. dwelling type: apartment, condo, or house.
c. religious orientation: beliefs and worship.
Answer:
a and b
Explanation:
Religious orientation has nothing to do with how much money to spend or what machine to use
Homestead Jeans Co. has an annual plant capacity of 67,000 units, and current production is 45,700 units. Monthly fixed costs are $54,400, and variable costs are $30 per unit. The present selling price is $40 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 19,600 units of the product at $33 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co.
Required:
a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Dawkins order. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
b. Briefly explain the reason why accepting this additional business will increase operating income.
c. What is the minimum price per unit that would produce a positive contribution margin?
a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Dawkins order. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
Answer:
Homestead Jeans Co.
a) Differential Analysis dated November 12
Options Reject (Alternative 1) Special Order Accept (Alternative 2)
Units sold 45,700 19,600 65,300
Revenue $1,828,000 $646,800 $2,474,800
Variable Cost -1,371,000 -588,000 -1959,000
Contribution $457,000 $58,800 $515,800
Fixed Costs 652,800 $0 652,800
Net Income/(Loss) -$195,800 $58,800 -$137,000
b) Accepting this order will reduce operating loss from $195,800 to $137,000, making a difference of $58,800. The reason is that the special order will make a contribution towards offsetting the fixed cost with a sum of $58,800.
c) Minimum price per unit to produce positive contribution margin:
The contribution margin per unit = Selling price minus variable cost per unit = $40 - $30 = $10 per unit.
To produce positive contribution margin, selling price must be more than variable cost. Selling price will be at least $31.
Therefore, the minimum price per unit to produce positive contribution is $31.
Explanation:
a) In differential analysis, only relevant costs are considered. Fixed costs are regarded as sunk and therefore irrelevant in making any differential decision.
b) The revenue is a function of selling price and quantity sold. While the variable costs equal units sold multiplied by the unit variable cost.
The operations manager of a mail order house purchases double (D) and twin (T) beds for resale. Each double bed costs $500 and requires 100 cubic feet of storage space. Each twin bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each double bed is $300 and for each twin bed is $150. The manager's goal is to maximize profits.
Required:
What is not a feasible solution?
Answer:
Please see below for answer
Explanation:
It would not be feasible to invest the entire $75,000 amount on making double beds. Although the profit margin for the double beds is twice that of twin beds, it also requires more storage space and the market demand for double beds may not be as high as the twin beds. Hence, making double beds and ignoring twin beds completely might not make as much profit due to not being sold to begin with.
How are the project management processes that surround Scrum similar to and different to how the project management processes surround a project life cycle like SDLC (Waterfall)? Describe how the hybrid approach would make sense or not make sense for either your organization or an organization that you are familiar with.
Answer: The answers are provided below
Explanation:
There are several similarities between the project management processes which surround scrum to the traditional project management processes which surrounds a project life cycle such as Waterfall. When one looks at each iteration as a project, one will see that Scrum planning meeting will be identical to planning meeting of the traditional project.
The daily standups in scrum will resemble the monitoring and the controlling of traditional waterfall with the exception that in scrum, its team monitors itself. A sprint would be the execution stage while the sprint review will be like project closure lessons that are learned. Sprint can be seen as small waterfall model project.
However, the main difference is in the scrum's team mindset versus the team of the traditional project management. Also, the process of work defining as being completed is different for the teams. Lastly, the method used by the scrum team in its approaches to work, team collaboration, responsibility acceptance, tasks definition and accountability are different from the traditional project management team.
A hybrid approach will be sensible in a large organization which has pockets of power. This is true for large retails that have old legacy systems in which frequent deployments aren't possible.
This is true for systems in which, testing can't be automated due to the fact that automated testing is a vital part for success for large scrum projects. In such organizations, it is sensible to use scrum for the teams which are able to move to scrum and waterfall can be used for other parts of the organization.
g Transfer payments are a. included in GDP because they represent income to individuals. b. included in GDP because they eventually will be spent on consumption. c. not included in GDP because they are not payments for currently produced goods or services. d. not included in GDP because taxes will have to be raised to pay for them.
Answer: c. not included in GDP because they are not payments for currently produced goods or services.
Explanation: Transfer payments are usually not included in the GDP because they do not represent payments made for recently produced goods or services.
The Gross Domestic Product (GDP) is the monetary value attached to all finished goods and services produced within a country during a time period.
Skilled versus unskilled labor markets Consider the labor markets for unskilled workers and skilled workers in the United States. Suppose you read the following newspaper headline: "The U.S. Department of Education Issues Report on Increased Productivity Effects of a College Education, but College Enrollment Remains Constant." The previous scenario primarily affects the labor market for ______ workers.
Answer: Skilled Workers.
Explanation:
Skilled workers refers to those with the skills and abilities required to work in their various tasks. Often these skills are gained from tertiary level institutions such as Universities, Colleges or Technical Schools.
When the report speaks of how having a college education leads to increased productivity, it is targeting skilled workers who as the definition states, have probably gone to College or Universities and the like.
This report will increase the labour market for skilled college education holders as companies might want to hire them more to gain from the reported increased productivity.
Swiss Group reports net income of $26,000 for 2017. At the beginning of 2017, Swiss Group had $184,000 in assets. By the end of 2017, assets had grown to $234,000. What is Swiss Group's 2017 return on assets?
Answer:
12.44%
Explanation:
The computation of the return on assets is shown below:
As we know that
Return on asset = Net income ÷ Average of total asset
= ($26,000) ÷ ($184,000 + $234,000) ÷ 2
= ($26,000) ÷ ($209,000)
= 12.44%
We simply applied the above formula so that the return on assets could be determined
Therefore we considered all the information given in the question
Answer:
12.44
Explanation:
The term _____ can be best defined as a feeling of intrinsic motivation, in which workers perceive their work to have meaning and perceive themselves to be competent, having an impact, and capable of self-determination. a. reciprocity b. empowerment c. utility d. autonomy e. delegation
Answer:
D
Explanation:
The self determination theory is a theory of motivation that examines extrinsic and intrinsic motivation.
The theory states that humans have innate needs. If this needs are satisfied, humans would grow and function optimally. They include :
1. Autonomy - the desire to be in charge of one's life. It is the feeling of intrinsic motivation, in which workers perceive their work to have meaning and perceive themselves to be competent, having an impact, and capable of self-determination
2. Relatedness - the desire to relate and interact with other people.
3. Competence. This is the desire to achieve mastery.
Autonomy is when
Answer:
b. empowerment.
Explanation:
This is explained to be a great act of giving someone power, this is in the form of more freedom and also rights to be productive. This gives the said person a natural flay; if seen in a business place or at place of work, it gives the worker or workers a sense of collaboration, making them share values, pull resources together and happily achieve goals that sharpen their psychs and make the company take great steps to greater heights as this empowerment is not only for the company, because it makes the said workers determined and also self competent in their working activities.
Interest During Construction Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $1 million specifically for the project by issuing a 10%, 5-year, $1 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year. In Year 1, Dexter incurred costs as follows: January 1 $280,000 March 1 600,000 June 30 1,000,000 November 1 480,000 Calculate Dexter's capitalized interest on the student condominium complex for Year 1. Capitalized interest
Answer:
$140,500
Explanation:
first we must calculate the weighted average accumulated expenditures:
incurred costs as follows:
January 1: $280,000 x 12/12 = $280,000
March 1: $600,000 x 10/12 = $500,000
June 30: $1,000,000 x 6/12 = $500,000
November 1: $480,000 x 2/12 = $80,000
total = $1,360,000
now we must calculate the weighted average interest rate on the non construction debt:
12% x $3 million = $360,000
10% x $1.8 million = $180,000
total = $540,000 / ($3,000,000 + $1,800,000) = 11.25%
capitalized interest:
$1,000,000 x 10% (specific construction debt) = $100,000
$360,000 x 11.25% (non construction debt) = $40,500
total $140,500
Support agents at Universal Containers research solutions to customer issues by asking various subject matter experts (SMEs) at the company.Which three features will allow Support Agents to quickly document the details of these meetings? (Choose three.)
A. Case Feed
B. Workflow Email Alerts
C. Case Group
D. Case Comments
E. Events
Answer:
A,C,D
Explanation:
Remember, we are told the issue concerns "support agents" working for a company–Universal Containers. Thus, they will be using Salesforce inorder to document their findings.
i. Case feed is one useful feature that quickly allows the support agents to edit, store and change the status of cases where necessary.
Ii. Case group is another useful feature to group cases that the support agents consider as been interrelated.
iii. Case comments feature allows them to read through case by case comment from the participants in the research, allowing proper insight into minds of the customers.
Hewitt and Patel are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $30,000 and $20,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $38,000. a. What is the amount of a gain or loss on realization
Answer:
$12,000
Explanation:
The amount of a gain or loss on realization is the difference between the sum of capital balances of partners and cash balance after settling all liabilities.
Total capital balances = $30,000 + $20,000 = $50,000
Total loss = Cash balance - Total capital balances = $38,000 - $50,000 = $12,000 loss.
Therefore, the amount of loss on realization is $12,000.
A company started the year with the following: Assets $121,000; Liabilities $41,500; Common Stock $71,500; Retained Earnings $8,000. During the year, the company earned revenue of $6,400, all of which was received in cash, and incurred expenses of $3,700, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $2,400 to owners. Assume no other activities occurred during the year. The amount of liabilities at the end of the year is
Answer:
$45,200
Explanation:
According to the scenario, the computation of the given data are as follows:
Liabilities = $41,500
Expense incurred during year = $3,700
So, we can calculate the total amount of liabilities by using the following formula:
Liabilities at the end of the year = Liabilities + Expense incurred
Liabilities at the end of the year = $41,500 + $3,700
= $45,200
Alpaca Corporation had revenues of $250,000 in its first year of operations. The company has not collected on $18,900 of its sales and still owes $27,000 on $96,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $12,700 in salaries. Owners invested $14,000 in the business and $14,000 was borrowed on a five-year note. The company paid $3,800 in interest that was the amount owed for the year, and paid $7,800 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%. (Assume taxes are paid in the same year). Compute the cash balance at the end of the first year for Alpaca Corporation.
Answer:
$84,360.00
Explanation:
The cash balance at the end of the year is simply total cash receipts minus total cash payments which is further analyzed below:
Cash receipt from sales=total sales-accounts receivable=$250,000-$18,900=$ 231,100.00
Cash paid for merchandise purchase=purchases-accounts payable=$96,000-$27,000=$69,000
Salaries paid $12,700
Cash from owners is $14,000
cash from borrowing is $14,000
interest paid is $3800
insurance paid is $7,800
Tax paid=(sales-purchases-salaries paid-insurance cost(one year)-interest paid)*tax rate
insurance for one year=$7800*1/2=$3,900
tax paid=($250,000-$96,000-$12,700-$3,800-$3,900)*40%=$53440
Cash balance=$231,100-$69,000-$12,700+$14,000-$14,000-$3800-$7800-$53440=$84,360.00
If the equilibrium interest rate in the money market is 5%, then at an interest rate of 2% sellers of interest-bearing financial assets _____ interest rates to find willing buyers. Sales of financial assets do not depend on the rate offered. must offer higher can offer 2% can offer lower
Answer: must offer higher
Explanation:
The financial world of investment is inter-correlated and products can sometimes be substitutes for one another. What this means is that if one financial product is not offering enough return on investment or is risky or for any other reason shakes their confidence in it, then investors tend to run to financial products that are perceived as better.
This is why when interest rates are stable and stocks are volatile, stock markets tend to lose value and bond markets sometimes gain value as investors leave the stock market and come to the bond market.
In the scenario described, the interest rate in the money market is 5%. If interest bearing financial assets are only at 2%, investors will leave/ not invest in those interest bearing bonds because the rate is lower. The sellers of such assets will therefore have to make them more attractive by increasing the the interest rates to find willing buyers.
Todd can afford to pay $375 per month for the next 7 years in order to purchase a new car. The interest rate is 6.5 percent compounded monthly. What is the most he can afford to pay for a new car today
Answer:
The most he can afford to pay = $25,260.07
Explanation:
The most he can afford to pay is the present value of the $375 per month discounted at the interest rate of return of 6.5% p.a
PV = A× (1- (1+r)^(-n))/r
PV = ?, A- 375, r- 6.5/12= 0.541% n= 12×7 = 84
PV = 375× (1- (1.00541)^(-84) )/0.00541= 25260.071
The most he can afford to pay = $25,260.07
Note: the monthly interest rate needed to be computed by dividing 6.5% by 12 and the number of months in 7 years is 7 × 12 = 84
g Suppose that more British decide to vacation in the U.S. and that the British purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases, a. the first action by itself raises U.S. net exports, the second action by itself raises U.S. net capital outflow. b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow. c. the first action by itself lowers U.S. net exports, the second action by itself raises U.S. net capital outflow. d. the first action by itself lowers U.S. net exports, the second action by itself lowers U.S. net capital outflow.
Answer:
b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow.
Explanation:
Net exports are equal to the difference between the value of a nation's total export of goods, services and the value of all the goods and services it imports.
U.S. net export raises as more British decide to vacation in the U.S. and U.S. net capital outflow reduces as the British purchase more U.S. Treasury bonds.
So, option b is correct.
A basic finding of labor economics is that workers who have more experience in the labor force are paid more than workers who have less experience (holding constant the amount of formal education). True or False: This might be the case because more experience decreases the value of the marginal product of labor. True False Some studies have also found that experience at the same job (called job tenure) has an extra positive influence on wages. Job tenure is valuable because people gain that is useful to the firm.
Answer:
A. TRUE
B1. TRUE
B2. Job Specific Knowledge
Explanation:
1. TRUE because more experience will definitely means more on-the-job training because the employee has gain different experience from either same field or different field which will inturn help to increase the worker's value of the marginal product of labor which is why workers who have more experience in the labor force are tend to be paid more than workers who have less experience or no experience.
B1. TRUE because experience gain at the same job will definitely lead to an extra positive influence on wages.
B2. Job tenure is valuable because people will tend to be able to gain JOB SPECIFIC KNOWLEDGE that is useful to the firm.
JOB SPECIFIC KNOWLEDGE: can be defined as the way in which workers or an employee shows his or her abilities, skills and strengths in order to excel in that specific job which is why employers of labour will often include the skill that is required for the employee to be able to perform the job in their job posting.
Answer:
Explanation:
The correct answer to the first question is false, not true. Trust me
Krisp Systems decides to move production to a developing country where they are free to pump pollutants into the atmosphere without legal restriction. By doing this, the company is contributing to:_______
a. corporate social responsibility.
b. corruption.
c. cultural relativism.
d. the global tragedy of the commons.
e. sustainability
Answer: the global tragedy of the commons
Explanation:
The tragedy of the commons is a term that is used to refer to a situation whereby resources that are held in common by everyone but owned by no one and is therefore overused by individuals which results in degradation.
Krisp Systems moves production to a developing country where they can pump pollutants into the atmosphere without any legal restriction will lead to
global tragedy of the commons. Here, the global tragedy is that Krisp system will only work in their own interest and exploit the resources at the detriment of the people which will lead to pollution.
Answer:
d. the global tragedy of the commons.
Explanation:
The tragedy of the commons is a situation that arises as a result of the selfish interest of people who exploit the shared economic resources at the expense and detriment of other users of the resources in the environment. Activities which result in Tragedy of the commons would cause pollution of the environment, excessive consumption, as well as the depletion of resources. A way to curb this sort of exploitation is by the regulation of the activities of companies by the government. This would ensure that certain limits are not overstepped.
When Krisp Systems decides to bypass this regulation by moving to a developing country where they are free to pump pollutants into the atmosphere, they are in effect contributing to the tragedy of the commons.
The expense recognition principle indicates: Multiple Choice the ordering of current assets and current liabilities on the balance sheet. where expenses should be presented on the income statement. how expenses should be split between the income statement and the balance sheet. when costs are recognized as expenses on the income statement.
Answer:
when costs are recognized as expenses on the income statement.
Explanation:
The expense recognition principle is an accounting principle which is typically used on accrual basis accounts and it states that expenses incurred by an individual or business entity should be recognized and matched in the same period with respect to the revenues they are related to.
The expense recognition principle indicates when costs are recognized as expenses on the income statement.
For instance, company XYZ purchases a property worth $90,000 in June, it was then sold in July for $250,000. Based on the expense recognition principle, the $90,000 cost shouldn't be recognized by company XYZ as an expense until July, when the related revenue would be recognized also. Else, if recognized, its expenses would be overstated by $90,000 in June, and consequently understated to the tune of $250,000 in July.
Additionally, the expense recognition principle helps business owners to calculate their taxes and profits or losses properly.
Reliable Gearing currently is all-equity-financed. It has 17,000 shares of equity outstanding, selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $270,000 with the proceeds used to buy back stock. The high-debt plan would exchange $470,000 of debt for equity. The debt will pay an interest rate of 11%. The firm pays no taxes.
Required:
a. What will be the debt-to-equity ratio if it borrows $220,000?
b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000?
c. What will EPS be if it borrows $420,000?
Answer:
a. 0.15
b. $7.15 per share
c. $6.55
Explanation:
a. What will be the debt-to-equity ratio if it borrows $220,000?
Market value of equity = 17,000 * $100 = $1,700,000
Since the proceeds of a debt issue of $270,000 is used to buy back stock, we have:
Remaining market value of equity = $1,700,000 - $220,000 = $1,480,000
Therefore,
Debt-to-equity ratio = Debt / Remaining market value of equity = $220,000 / $1,480,000 = 0.15.
b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000?
Remaining number of shares = Remaining market value of equity / Market price per share = $1,480,000 / $100 = 14,800 shares
Interest on debt = $220,000 * 11% = $24,200
Tax = $0
Earning after interest and tax = EBIT - Interest on debt - Tax = $130,000 - $24,200 - $0 = $105,800
EPS = Earning after interest and tax / Remaining number of shares = $105,800 / 14,800 = $7.15 per share
c. What will EPS be if it borrows $420,000?
Remaining number of shares = ($1,700,000 - $420,000) / $100 = 12,800 shares
Interest on debt = $420,00 * 11% = $46,200
Tax = $0
Earning after interest and tax = EBIT - Interest on debt - Tax = $130,000 - $46,200 - $0 = $83,800
EPS = Earning after interest and tax / Remaining number of shares = $83,800 / 12,800 = $6.55 per share
Sink and Tap Inc. is looking at a 4-year project for making taps. Initial investment in equipment will be $754,000. Each unit will be sold for $230. Annual fixed costs, not including depreciation, will be $333,000. Variable costs per unit will be $102.40. The applicable discount rate is 12 percent, and the tax rate is 21 percent. Assume straight- line depreciation to zero and no market salvage value. Use goal seek (or any other method) to find the present value break-even point in units per year.
Select one:
a. 5340
b. 5930
c. 4848
d. 4680
e. 5200
Answer:
the present value break-even point in units per yea is 4680 units. the option (d) is correct
Explanation:
Solution
Given that:
The initial cash flow = $754,000
The project life is = four years
Thus,
Contribution = sales - variable costs
So,
Sales = quantity * the price
Let the Quantity be Y
$230 Y - $102.40 Y
=127.60 Y
Now,
The operating income = Contribution -fixed costs
which is,
127. 60 Y- (Other depreciation or decrease + decrease)
127. 60 Y- ( $333,000 + ($754,000/4))
= 127. 60 Y- ( $333,000 + $188,500)
Thus,
127. 60 Y - $521, 500
Now,
Tax rate at 21% on operating income is =26.796 Y - 109. 515
The profit after tax = operating income - tax
(127. 60 Y - $521, 500) -(26.796 Y - 109. 515)
= 100.804 Y - 411, 985
Additional depreciation = $188, 500
The operating cash inflow per year = 100.804 Y - 411, 985 + $188, 500
Thus,
The PVAF for 12 years , 4% = 3.037349
PV of operational cash inflow = 306.18 Y - 678, 802.02
However,
For the break even point: the initaila cash flow = The PV of functioning or operational cash inflow
So,
306.18 Y - 678, 802.02 =$ 754,400
306.18 Y = 1, 432, 802.02
Y = 4680 Units
Calvin Manufacturing purchased new equipment that reduces setup times when employees change templates between production runs. This equipment has also improved quality control measures throughout the entire manufacturing process. What type of technology is Calvin Manufacturing using
Answer:
Lean production
Explanation:
Lean production refers to the management approach in which the company reduced its cost or do cost cutting so that it can improve the quality of their product and services. It is applied to each level each department of management like - design, production, etc
In the given situation, Calvin Manufacturing reduced their setup times that results in improving their quality control measures
So this situation represent the lean production technology
Sarbanes-Oxley Act requires each of the following: (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.)
Required information An internal control system consists of the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies. It can prevent avoidable losses and help managers both plan operations and monitor company and human performance. Principles of good internal control include establishing responsibilities, maintaining adequate records, insuring assets and bonding employees, separating recordkeeping from custody of assets, dividing responsibilities for related transactions, applying technological controls, and performing regular independent reviews. Knowledge Check 01 Sarbanes-Oxley Act requires each of the following: (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 willl be automatically graded as incorrect.) An effective internal control ? Light penalties for violators Auditors must evaluate internal controls Auditor's work overseen by Public Accounting Board
Answer: An effective Internal Control
Auditors must evaluate internal controls
Auditor's work overseen by Public Accounting Board
Explanation:
The early part of the 21st century saw shocking financially improper activities by companies such as WorldCom and Enron exposed to the world. Investor Confidence was shaken and the government needed to do something to restore it.
This was why in 2002, the US Congress passed the Sarbanes-Oxley act that aimed to ensure that the actions of those companies were never repeated.
The act requires the following;
a) An effective Internal Control
The act requires that companies enact very effective Internal controls to detect financial irregularities and even went forward to make it the responsibility of the Top Executives to ensure that this is so.
b) Auditors must Evaluate Internal Controls.
Auditors had to change their auditing strategies that were deemed inefficient. They are now required to properly evaluate in-depth, the internal controls that a company adopts to be able to give an opinion on it and they do this based on the guidelines of the Public Accounting Board.
c) Auditor's work overseen by Public Accounting Board
The Public Company Accounting Oversight Board (PCAOB) was established by the Sarbanes-Oxley Act with it's main purpose being to monitor and oversee auditors as they audit companies so that they may protect the public from false financial information. They set rules and standards that Auditors must follow and these rules in turn have to be approved by the Securities and Exchanges Commission (SEC).
To ensure that the deeds of those corporations were never repeated, the US Congress created the Sarbanes-Oxley act in 2002:
An effective Internal Control.Auditors must evaluate internal controls.Auditor's work overseen by Public Accounting Board.US Congress passed the Sarbanes-Oxley act, all financial reports must contain an Internal Controls Report demonstrating that the company's financial data is accurate and that sufficient controls are in place to protect it.
A yearly evaluation of internal controls by a third-party CPA firm to see how successful each one is. The auditor of a publicly traded firm must vouch for management's evaluation of internal controls and provide a report on it.
As a result, the significance of the Sarbanes-Oxley Act requires are the aforementioned.
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