Answer:
A. $16,041 billion
B. $33 billion
Explanation:
A. Calculation to Determine what GDP for this economy is using the expenditure approach
Using this formula
GDP by expenditure method=C+I+G+X-M
Let plug in the formula
GDP by expenditure method= 6,300+2,300+4,521+3,120-200
GDP by expenditure method=$16,041 billions
Therefore GDP for this economy is $16,041 billion
B. Calculation to determine the statistical discrepancy.
First step is to calculate GDP at MP by income method
GDP at MP by income method=8,174+365+903+1,895+1,343+1,987+1,341
GDP at MP by income method=$16,008 billions
Now let calculate the Statistical discrepancy using this formula
Statistical discrepancy= GDP by expenditure method - GDP by income method
Let plug in the formula
Statistical discrepancy=$16,008-$16,041
Statistical discrepancy=$33 billions
Therefore the statistical discrepancy between national income and net national product, obtained when GDP is measured using the expenditure approach is $33 billion.
An investor obtained a fully amortizing mortgage five years ago for $95,000 at 11-percent for 30 years. Mortgage rates have dropped, so that a fully amortizing 25-year loan can be obtained at 10-percent. There is no prepayment penalty on the mortgage balance of the original loan, but three points will be charged on the new loan and other closing costs will be $2,000. All payments are monthly.
Required:
a. Should the borrower refinance if he plans to own the property for the remaining loan term? Assume that the investor borrows only an amount equal to the outstanding balance of the loan.
b. Would your answer to part (a) change if he planned to own the property for only five more years?
Answer:
a) yes, you should refinance the loan
b) yes, you should refinance the loan
Explanation:
the original monthly payment = $904.71
after 60 payments, the principal owed = $838.79
the difference between both payments = $904.71 - $838.79 = $65.92
in order to determine whether the loan should be refinanced or not, we must find the present value of refinancing costs:
are 300 payments of $65.92 worth more than $2,000?
PV = $65.92 x 110.162 (PVIFA, 0.833%, 300 periods) = $7,261.88 ≥ $2,000
PV = $65.92 x 47.07(PVIFA, 0.833%, 60 periods) = $3,102.85 ≥ $2,000
Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,400 per acre. At the time of purchase, the land without the timber was valued at $400 per acre. In 2010, Stanislaw built fire lanes and roads, with a life of 30 years, at a cost of $84,000. Every year, Stanislaw sprays to prevent disease at a cost of $3,000 per year and spends $7,000 to maintain the fire lanes and roads. During 2011, Stanislaw selectively logged and sold 700,000 board feet of timber, of the estimated 3,500,000 board feet. In 2012, Stanislaw planted new seedlings to replace the trees cut at a cost of $100,000.
Instructions
a. Determine the depreciation expense and the cost of timber sold related to depletion for 2011.
b. Stanislaw has not logged since 2011. If Stanislaw logged and sold 900,000 board feet of timber in 2022, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2022.
Answer:
a. Depreciation expense = Cost/Life = $84,000/30 = $2,800 per year
b. Cost of timber sold = Per arce - Land value = $1,400 - $400 = $1,000
Timber value = Cost of timber sold * Acre = $1,000 * 9,000 acres = $9,000,000
Land value = Timber value/Estimated Board feet * Sold Board feet = 9,000,000/3,500,000 * 700,000 = $1,800,000
Total Cost of timber sold = Timber value - Land value = $9,000,000 - $1,800,000 = $7,200,000
Depletion = Timber value * [Total Cost of timber sold+Replacement cost/Estimated Board feet]
Depletion = $900,000 * $7,200,000+$100,000/5,000,000
Depletion = $900,000 * 1.46
Depletion = $1,314,000
Which of the following are mechanisms that have evolved to mitigate potential agency problems?
I) Using the firm's stock options for compensation
II) Hiring bickering family members as corporate spies
III) Boards of directors forcing out underperforming management
IV) Security analysts monitoring the firm closely
V) Takeover threats
Answer:
I) Using the firm's stock options for compensation
III) Boards of directors forcing out underperforming management
IV) Security analysts monitoring the firm closely
V) Takeover threats
Explanation:
Agency problem can be regarded as
conflict of interest which are inherent that can exist between management of a company and its stockholders. It exist when there is expectation that one party act in the best interest of other.
It should be noted that Mechanism that are used in mitigation of potential agency problems are;
I) Using the firm's stock options for compensation
III) Boards of directors forcing out underperforming management
IV) Security analysts monitoring the firm closely
V) Takeover threats
It's best if you share the details of a personal appointment when you need to request time off work. True Or False
Answer:
False
Explanation:
A firm now operates as a C-Corporation. The firm has earnings before taxes of $433,743 per year and pays out all its net earnings as dividends. The firm has a corporate tax rate is 24 percent. The firm has only one owner who faces a personal income tax rate of 27 percent. What is the spendable income for the owner of the C-Corporation
Answer:
The Spending income for the owner of the C-Corporation is:
= $240,641.
Explanation:
a) Data and Calculations:
Earnings before taxes = $433,743
Corporate tax rate = 24%
Corporate tax expense = 104,098 ($433,743 * 24%)
Net Earnings after taxes = $329,645
Dividends paid out = $329,645
Retained earnings = $0
Taxable income for the owner of the C-Corporation = $329,645
Income tax rate for the owner of the C-Corporation = 27%
Income tax for the owner of the C-Corporation = $89,004 ($329,645 * 27%)
Spending income for the owner of the C-Corporation = $240,641
b) The owner of this C-Corporation cannot avoid double taxation at the corporate and individual levels. To avoid this, the owner can choose an S-Corporation.
Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.
Production Activity
Indirect Labor
Indirect Materials
Other Overhead
Grinding
$320,000
Polishing
$135,000
Product modification
600,000
Providing power
$255,000
System calibration
500,000
Additional information on the drivers for its production activities follows.
Grinding
13,000 machine hours
Polishing
13,000 machine hours
Product modification
1,500 engineering hours
Providing power
17,000 direct labor hours
System calibration
400 batches
Required
1. Classify each activity as unit level, batch level, product level, or facility level.
2. Compute the activity overhead rates using ABC. Form cost pools as appropriate.
3. Determine overhead costs to assign to the following jobs using ABC.
Job 3175
Job 4286
Number of units
200 units
2,500 units
Machine hours
550 MH
5,500 MH
Engineering hours
26 eng hours
32 eng. hours
Batches
30 batches
90 batches
Direct labor hours
500 DLH
4,375 DLH
4. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?
5. If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286?
6. Compare the overhead costs per unit computed in requirements 4 and 5 for each job. Which method more accurately assigns overhead costs?
Answer:
Craftmore Machining
1. Classification of activity as unit level, batch level, product level, or facility level:
Production Activity Level
Indirect Labor Facility
Indirect Materials Product
Grinding Product
Polishing Product
Product modification Product
Providing power Facility
System calibration Batch
2. The Activity Overhead Rates using ABC:
Grinding = $24.62/machine hour
Polishing = $10.38/machine hour
Product modification = $400/eng.h
Providing power = $15/DLH
System calibration = $1.25/batch
3. Assignment of overhead costs:
Job 3175 Job 4286
Number of units 200 units 2,500 units
Machine hours 550 MH 5,500 MH
Engineering hours 26 eng hours 32 eng. hours
Batches 30 batches 90 batches
Direct labor hours 500 DLH 4,375 DLH
Job 3175 Job 4286
Grinding = $24.62/machine hour $13,541 $135,410
Polishing = $10.38/machine hour 5,709 57,090
Product modification = $400/eng.h 10,400 12,800
Providing power = $15/DLH 7,500 65,625
System calibration = $1.25/batch 37.50 112.50
Total costs allocated $37,187.50 $271,037.50
Cost per unit $185.94 $108.42
4. Overhead cost per unit:
Job 3175 , Overhead cost per unit = $185.94 ($37,187.50/200)
Job 4286 Overhead cost per unit = $108 ($271,037.50/2,500)
5. Plantwide overhead rate
Total overhead costs = $1,810,000
Total direct labor hours = 4,875
Overhead rate = $1,810,000/4,875 = $371.28
Job 3175 Job 4286
Direct labor hours 500 DLH 4,375 DLH
Total overhead cost $185,640 $1,624,350
Overhead cost per unit $928.20 $649.74
6. Overhead cost per unit Job 3175 Job 4286
Using ABC $185.94 $108.42
Using Plantwide rate $928.20 $649.74
ABC rate more accurately assigns overhead costs than using plantwide rate.
Explanation:
a) Data and Calculations:
Production Activity
Indirect Labor
Indirect Materials
Other Overhead Costs Usage Usage Rate
Grinding $320,000 13,000 machine hours $24.62/mh
Polishing $135,000 13,000 machine hours $10.38/mh
Product modification 600,000 1,500 engineering hours $400/eng.h
Providing power $255,000 17,000 DLH $15/DLH
System calibration 500,000 400 batches $1.25/batch
Total overhead $1,810,000
b) Craftmore incurs unit-level costs each time a unit is produced. It incurs batch-level costs each time it produces a batch of goods. It incurs product-level costs to support the production of each type of product. Finally, Craftmore's facility-level costs sustain the facility's general manufacturing process.
it is a type of business that keeps the dealings,assets,and bank accounts seperate from his/her personal assets?
Answer:
A sole proprietorship
Explanation:
A sole proprietorship is a business owned, organized, and run by a sole proprietor. It is legally advisable that all business and private activities of any form of business are conducted separately. Commingling business dealings, assets, and especially bank accounts with private affairs do cause problems for the business person.
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
Cutting Finishing
Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 30,000
Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000 5,000
Total fixed manufacturing overhead cost . . . . . . . . . . . . . . . . $264,000 $366,000
Variable manufacturing overhead per machine-hour . . . . . . ....$2.00 ______
Variable manufacturing overhead per direct labor-hour . . . . . _____ $4.00
Required:
Compute the predetermined overhead rate to be used in each department.
Answer and Explanation:
The computation of the predetermined overhead rate is shown below:
For Cutting department
= Variable manufacturing overhead per machine hour + (Total fixed manufacturing overhead ÷ machine hours)
= $2 + ($264,000 ÷ 48,000)
= $2 + $5.50
= $7.50
For finishing department
= Variable manufacturing overhead per direct labour + (Total fixed manufacturing overhead ÷ direct labor hours)
= $4 + ($366,000 ÷ 30,000)
= $4 + $12.20
= $16.20
the balance in the supplies account, before adjustment at the end of the year is 2750. the inventory of supplies at the end of the year was determined to be 600. the estimated depreciation on equipment at the end of the year is 1600. journalize the adjusting entries required at the end of the year to recognize
A. supplies used during the year and
B. depreciation expense for the year.
Answer and Explanation:
The adjusting entries are shown below:
a. Supplies Expense Dr ($2,750 - $600) $2,150
To Supplies $2,150
(being supplies expense is recorded)
Here supplies expense is debited as it increased the expense and credited the supplies as it decreased the assets
b. Depreciation expense $1,600
To Accumulated depreciation $1,600
(being depreciation expense is recorded)
Here depreciation expense is debited as it increased the expense and credited the accumulated depreciation as it decreased the assets
Jill Angel holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.88. Stock Investment Beta A $50,000 0.50 B $50,000 0.80 C $50,000 1.00 D $50,000 1.20 Total $200,000 If Jill replaces Stock A with another stock, E, which has a beta of 1.45, what will the portfolio's new beta be
Answer:
1.11
Explanation:
Calculation for what will the portfolio's new beta be
First step is to Calculate the weight of each investment
Stock E $ 50,000 / $ 2,00,000
Stock E= 0.25
Stock B $ 50,000 / $ 2,00,000
Stock B= 0.25
Stock C $ 50,000 / $ 2,00,000
Stock C = 0.25
Stock D $ 50,000 / $ 2,00,000
Stock D = 0.25
Now let calculate the portfolio new beta
Weight Beta
Stock E 0.25* 1.45 = 0.36
Stock B 0.25 * 0.80 = 0.20
Stock C 0.25* 1.00 = 0.25
Stock D 0.25 * 1.20 = 0.30
Total 1.11
(0.36+0.20+0.25+0.30)
Therefore portfolio's new beta will be 1.11
An engineering student has just finished the freshman year and has received an offer of $20,000 per year in a full-time job. with prospects of salary increasing 3 % per year until retirement after 33 years. If employment is taken, the student will likely not finish his engineering degree. Tuition and other costs are $10,000 next year, increasing at 7% per year. A starting salary of $45.000 could be expected upon graduation from the fouryear program. Salary increases in the engineering job are estimated at 4% per year until retirement after 30 years.
Required:
On the basis of economics alone, should the student take the job now or finish college? Analyze as two mutually exclusive alternatives and solve with present worth analysis. Interest rate is 7%.
Answer:
Since the $860,886.33 which is the present worth of net salary if he finishes his engineering degree is greater than the $357,788.81 which is the present worth of net salary if he does NOT finish his engineering degree, the student should finish college.
Explanation:
This can be dermined based on the following 3 steps:
Step 1: Calculation of present worth of net salary if he does NOT finish his engineering degree
This can be calculated using the formula for calculating the present worth (PW) of a growing annuity as follows:
PWN = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (1)
Where;
PWN = present worth of net salary if he does NOT finish his engineering degree = ?
P = Annual salary = $20,000
r = interest rate per year = 7%, or 0.07
g = growth rate of salary = 3% or 0.03
n = number of years = 33
Substituting the values into equation (1), we have:
PWN = ($20,000 / (0.07 - 0.03)) * (1 - ((1 + 0.03) / (1 + 0.07))^33)
PWN = $357,788.81
Step 2: Calculation of present worth net salary if he finishes his engineering degree
Calculation of the present worth of tuition and other costs
This can be calculated using the formula for calculating the present worth (PW) of a growing annuity as follows:
PWT = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (2)
Where;
PWT = present worth tuition and other costs = ?
P = Tuition and other costs next year = $10,000
r = interest rate per year = 7%, or 0.07
g = growth rate of tuition and other costs = 7% or 0.07
n = number of years = Number of years for engineering degree - One year already spent = 4 - 1 = 3
Substituting the values into equation (2), we have:
PWT = (10,000 / (0.07 - 0.07)) * (1 - ((1 + 0.07) / (1 + 0.07))^3)
PWT = undefined or 0
Note: The PWT is undefined because r = g here. Therefore, it should not be considered in the further analysis.
Calculation of the present worth of salary after graduation
This can be calculated using the formula for calculating the present worth (PW) of a growing annuity as follows:
PWG = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (3)
Where;
PWG = present worth of salary after graduation = ?
P = Starting salary = $45,000
r = interest rate per year = 7%, or 0.07
g = growth rate of salary = 4% or 0.04
n = number of years = 30
Substituting the values into equation (3), we have:
PWG = ($45,000 / (0.07 - 0.04)) * (1 - ((1 + 0.04) / (1 + 0.07))^30)
PWG = $860,886.33
Step 3: Decision
Present worth of net salary if he does NOT finish his engineering degree = $357,788.81
Present worth of net salary if he finishes his engineering degree = present worth of salary after graduation = $860,886.33
Since the $860,886.33 which is the present worth of net salary if he finishes his engineering degree is greater than the $357,788.81 which is the present worth of net salary if he does NOT finish his engineering degree, the student should finish college.
Cynthia Co. exchanged Building 24 which has an appraised value of $4,800,000, a cost of $7,600,000, and accumulated depreciation of $3,619,000 for Building M belonging to Waterway Co. Building M has an appraised value of $4,560,000, a cost of $9,096,000, and accumulated depreciation of $4,747,000. The correct amount of cash was also paid. Assume depreciation has already been updated.
Prepare the entries on both companies' books assuming the exchange had no commercial substance.
Answer:
See the journal entries below.
Explanation:
In the Book of Cynthia Co.
Book value of Building 24 = Cost of Building 24 - Accumulated depreciation of Building 24 = $7,600,000 - $3,619,000 = $3,981,000
Gain on disposal of Building 24 = Building 24 an appraised value of - Book value of Building 24 = $4,800,000 - $3,981,000 = $819,000
Basis for Building M = Building M appraisal value - Gain on disposal of Building 24 = $4,560,000 - $819,000 = $3,741,000
Cash = Accumulated Depreciation of Building 24 + Basis for Building M - Cost of Building 24 - Gain on Disposal of Building 24 = $3,619,000 + $3,741,000 - 7,600,000 - $819,000 = $1,059,000
The journal entries will look as follows:
Accounts Title Debit ($) Credit ($)
Accumulated Depreciation 3,619,000
Building M 3,741,000
Cash 1,059,000
Building 24 7,600,000
Gain on Disposal 819,000
To record the exchange of Building 24 for Building M from Waterway Co.
In the Book of Waterway Co.
Building 24 = Building M cost + Cash - Building M depreciation = $9,096,000 + $1,059,000 - $4,747,000 = $5,408,000
The journal entries will look as follows:
Accounts Title Debit ($) Credit ($)
Accumulated Depreciation 4,747,000
Building 24 5,408,000
Building M 9,096,000
Cash 1,059,000
To record the exchange of Building M for Building 24 from Cynthia Co.
Assume the following adjustment data.
1. Supplies on hand at October 31 total $500.
2. Expired insurance for the month is $100.
3. Depreciation for the month is $75.
4. As of October 31, services worth $800 related to the previously recorded unearned revenue had been performed.
5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $280.
6. Interest expense accrued at October 31 is $70.
7. Accrued salaries at October 31 are $1,400.
Prepare the adjusting entries for the items above.
Answer:
1.Dr Supplies Expense $2,000
Cr Supplies $2,000
2. Dr Insurance Expense $100
Cr Prepaid Insurance $100
3. Dr Depreciation Expense $75
Cr Accumulated Depreciation- Equipment $75
4. Dr Unearned Service Revenue $800
Cr Service Revenue $800
5. Dr Accounts Receivable $280
Cr Service Revenue $280
6. Dr Interest Expense $70
Cr Interest Payable $70
7. Dr Salaries & Wages Expense $1,400
Cr Salaries & Wages Payable $1,400
Explanation:
Preparation of the adjusting entries
1. Dr Supplies Expense $2,000
Cr Supplies $2,000
[$2,500 - $500]
2. Dr Insurance Expense $100
Cr Prepaid Insurance $100
3. Dr Depreciation Expense $75
Cr Accumulated Depreciation- Equipment $75
4. Dr Unearned Service Revenue $800
Cr Service Revenue $800
5. Dr Accounts Receivable $280
Cr Service Revenue $280
6. Dr Interest Expense $70
Cr Interest Payable $70
7. Dr Salaries & Wages Expense $1,400
Cr Salaries & Wages Payable $1,400
find three examples of managers
you would describe as master managers. Write a paper describing these individuals
as managers and why you think they deserve this title.
ms
Answer:
All managers must be comfortable with three main types of activities or roles. To do their jobs, managers assume these different roles. No manager stays in any one role all of the time, but shifts back and forth. These roles are leadership (or interpersonal), informational, and decision making.
Explanation:
Hope it helps kahit na ndi ko na sagot ung main question.
The three examples of managers that we would describe as master managers are advertisement manager, accounting manager and analytics manager. The roles of managers are leadership, informational, and decision making.
What is an information?An information refers to something that has the power to inform. At the most fundamental level information pertains to the interpretation of that which may be sensed.
The digital signals and other data use discrete signs or alogrithms to convey information, other phenomena and artifacts such as analog signals, poems, pictures, music or other sounds, and the electrical currents convey information in a more continuous form.
Information is not knowledge itself, but its interpretation is important. An Information can be in a raw form or in an structured form as data. The information available through a collection of data may be derived by analysis by expert analysts in their domain.
Learn more about information here:
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-At which point are you producing all running shoe
inserts and no hiking boot inserts?
-Which production point would be a goal for the future
but cannot be attained now?
Answer is A,X
Answer:
the guy above is right trust me (kid in all cp classes)
Explanation:
but yea he is correct
Gross Domestic Product (GDP) can be defined as: I. The sum of all incomes while adjusting for indirect business taxes and foreign incomes. II. The market value of goods and services sold in an economy in some time period. III. The total market value of final goods and services produced in an economy in some time period. III only I and II only I, II and III II and III only I and III only
Answer:
I and III only
Explanation:
The full form of GDP is Gross domestic product. It is the sum of all the income at the time when the business taxes i.e. indirect and the foreign incomes would be adjusted also it is a sum total of market value of the goods and services i.e. final generated in an economy for a time period
Therefore the I and III statements are true
An article in The Globe and Mail, February 16, 2002, reported that IBM used the $300 million proceeds of a sale of one of its business units to reduce operating expenses in its fourth quarter 2001 income statement. This added about 8 cents per share to its fourth quarter earnings. As a result, IBM beat analysts' forecasts by 1 cent per share.
IBM defended its treatment by claiming that buying and selling businesses is a normal business practice, and that most of the sale proceeds related to intellectual property that it had developed. The article quotes a Merrill Lynch analyst as saying, "Our only concern is that the company could have done more to call out the magnitude of the transaction." According to the article, IBM's share price fell by 4% as a result of this news.
While not mentioned in this article, the SEC opened a preliminary inquiry into IBM's accounting practice, expressing concerns that IBM had let it be known that the reason for its higher operating earnings was tight cost controls, rather than the sale proceeds. This inquiry was subsequently dropped, but the SEC issued a bulletin reminding firms to report gains or losses on asset sales separately from operating costs.
Required
Explain why IBM's share price dropped following the Merrill Lynch analyst's comment and the news of the SEC's preliminary inquiry.
Answer:
The sale of business units are one time events that should not be common. If the only way that IBM can show profit is by selling business divisions, in a very short time it will run out of divisions to sell. A company's intrinsic value is given by its cash flows, especially the operating cash flow.
KB Homes is a nationwide home builder that develops entire communities of dozens and even hundreds of homes, in addition to, building custom homes for individual customers. While a Job Costing system is appropriate for the custom home building, their new controller is planning on using a Process Costing system for the large developments. She argues that because even large developments of 100 homes only offer three or four different floor plans and thus would be more efficient for tracking costs because of the homogeneity. Do you agree or disagree? Why?
Answer:
Answer is explained in the explanation section below.
Explanation:
Yes, I do agree.
Reasoning:
The Argument of the new supervisors in favor of applying the technological calculation to large projects which have homogeneous buildings with 3-4 different floor plans is correct. There are no settings for buildings / dwellings with the same layout and all units go through the same processes and use the same funds. For major developments of a homogeneous nature, instead of creating works to make for each unit and cost collection separately for each unit, a process that costs each floor a plan as a separate product will be much easier and more efficient for control purposes.
This procedure will also provide important data, and reintroduction and monitoring will be much easier.
Creating individual work, so that it is only more difficult to follow a work order, costs and to monitor a large number of work orders at a given moment, which can easily be avoided by adopting a process that costs money.
Therefore, the arguments put forward by the new controller are quite acceptable.
Compute the future value of $1,900 continuously compounded for: a. 7 years at an annual percentage rate of 8 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. 5 years at an annual percentage rate of 11 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. 8 years at an annual percentage rate of 5 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. 5 years at an annual percentage rate of 7 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
$14,407.72
$10,604.64
$15,979.32
Explanation:
The formula to be used is :
FV = PV x е^r x N
FV = Future value
P = Present value
R = interest rate
N = number of years
$1,900 x e^0.08 x 7 = $14,407.72
$1,900 x e^0.11 x 5 = $10,604.64
$1,900 x e^0.05 x 8 = $15,979.32
Olympic Sports has two issues of debt outstanding. One is a 5% coupon bond with a face value of $33 million, a maturity of 10 years, and a yield to maturity of 6%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, and a coupon rate of 6%. The face value of the issue is $38 million, and the issue sells for 90% of par value. The firm's tax rate is 30%.
a. What is the before-tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. What is Olympic's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer and Explanation:
The computation is shown below
a. For before tax cost of debt
But before that following calculations need to be determined
For Bond 1:
Face value = $33,000,000
Coupon payment = 0.05 × $33,000,000 = $1,650,000
The Price of the bond is
= Coupon × [ 1 - 1 ÷ ( 1 + r)^n] ÷ r + FV ÷ ( 1 + r)^n
= $1,650,000 × [ 1 - 1 ÷ ( 1 + 0.06)^10] ÷ 0.06 + $33,000,000 ÷ ( 1 + 0.06)^10
= 1,650,000 × 7.360087 + 18,427,027.64
= $30,571,171.196
For Bond 2:
Price = 0.9 × $38,000,000
= $34,200,000
Now
Coupon = 0.06 × $38,000,000
= $2,280,000
Now before tax cost of debt is
Given that
PV -$34,200,000,
FV $38,000,000,
N 15,
PMT $2,280,000
The formula is shown below:
= RATE(NPER,PMT, PV,FV,TYPE)
After applying the above formula, the Before tax cost of debt of bond is 7.1053%
Now
Total market value is
= $34,200,000 + $30,571,171.196
= $64,771,171.19
And,
finally
Before tax cost of debt for olympic is
= ($30,571,171.196 ÷ 64,771,171.19) × 0.06 + ($34,200,000 ÷ 64,771,171.19) × 0.071053
= 0.028319 + 0.037517
= 0.0658 or 6.58%
b)
And,
After tax cost of debt is
= 0.0658× ( 1 - 0.3)
= 0.0461 or 4.61%
Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per week that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.
Country Jeans (Pairs per hour of labor) Corn(Bushels per hour of labor)
Arcadia 5 10
Dolorium 4 16
Initially, suppose Arcadia uses 1 million hours of labor per month to produce corn and 3 million hours per month to produce jeans, while Dolorium uses 3 million hours of labor per month to produce corn and 1 million hours per month to produce jeans. Consequently, Arcadia produces 8 million bushels of corn and 48 million pairs of jeans, and Dolorium produces 15 million bushels of corn and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of corn and jeans it produces.
Arcadia's opportunity cost of producing 1 pair of jeans is _____ of corn, and Dolorium's opportunity cost of producing 1 pair of jeans is _____ of corn. Therefore, ____ has a comparative advantage in the production of jeans, and ____ has a comparative advantage in the production of corn.
Answer:
Arcadia's opportunity cost of producing 1 pair of jeans is 2 bushels of corn, and Dolorium's opportunity cost of producing 1 pair of jeans is 4 bushels of corn. Therefore, Arcadia has a comparative advantage in the production of jeans, and Dolorium has a comparative advantage in the production of corn.
Explanation:
maximum production
jeans corn
Arcadia 20 40
Dolorium 16 64
initial production
jeans corn
Arcadia 15 10
Dolorium 4 48
Arcadia's opportunity costs:
jeans = 40 / 20 = 2 bushels of corn
corn = 20 / 40 = 0.5 pairs of jeans
Dolorium's opportunity costs:
jeans = 64 / 16 = 4 bushels of corn
corn = 16 / 64 = 0.25 pairs of jeans
Question 6 of 10
Match each company, organization, or agency with the correct label.
Consumer
Reports
?
consumer advocacy
publication
Federal Trade
Commission
(FTC)
?
consumer protection
agency
Food and Drug
Administration
(FDA)
?
competition regulator
Answer:
I. Consumer Reports: consumer advocacy publication.
II. Federal Trade Commission (FTC): competition regulator.
III. Food and Drug Administration (FDA): consumer protection agency.
Explanation:
I. Consumer Reports: consumer advocacy publication. It is a non-profit organization in the United States of America saddled with the responsibility of consumer advocacy, investigative journalism, product testing and the enlightening of the general public.
II. Federal Trade Commission (FTC): competition regulator. It is an agency of the government of the United States of America saddled with the responsibility of promoting consumer protection and the enforcement of all civil antitrust laws.
III. Food and Drug Administration (FDA): consumer protection agency. It is a federal agency of the government of the United States of America saddled with the responsibility of protecting the consumers of edible products and public health safety.
Why is prioritization an important skill to practice as a student?
Prioritization allows us to make decisions about what is important so we can know what to focus on and what's not as important. Being able to discern tasks that are necessary from those that we should do is crucial. Prioritization is a critical skill to have, but can take some practice to achieve.
Onisha manages a group of apartment complexes and is trying to create a budget for next year. Below are the monthly expenses for the last three years, in thousands of dollars. Help her by finding the appropriate seasonal indices for April and October.
Year 1 Year 2 Year 3
January 170 180 195
February 180 205 210
March 205 215 230
April 230 245 282.3
May 240 265 290
June 315 330 390
July 360 400 420
August 290 335 330
September 240 260 290
October 240 270 294.8
November 230 255 280
December 195 220 250
Select one:
a. April = 0.24, October = 268.27
b. None of the other options.
c. April = 2.86, October = 1.01
d. April = 0.95, October = 1.01
e. April = 252.43, October = 268.27
f. April = 0.95, October = 22.36
Answer:
Onisha
The appropriate seasonal indices for April and October are:
d. April = 0.95, October = 1.01
Explanation:
a) Data and Calculations:
Year 1 Year 2 Year 3 Yearly Averages
January 170 180 195 181.67
February 180 205 210 198.33
March 205 215 230 216.67
April 230 245 282.3 252.43
May 240 265 290 265
June 315 330 390 345
July 360 400 420 393.33
August 290 335 330 318.33
September 240 260 290 263.33
October 240 270 294.8 268.27
November 230 255 280 255
December 195 220 250 221.67
Total average 264.92 (31,79.03/12)
April = 252.43/264.92 = 0.95
October = 268.27/264.92 = 1.01
b) A season index is defined by the value for the season divided by the seasonal average.
FORco, a country F corporation, wants to open a sales office in the United States. FORco does not form a U.S. subsidiary, but instead operates in the U.S. as a branch. Country F does not have a income tax treaty with the U.S. If FORco loans operating funds to the U.S. branch, when the U.S. branch makes interest payment to FORco, the interest payment will be subject to:____.
Answer:
C. Subject to 30% withholding tax under the Branch Interest Withholding tax rules.
Explanation:
Options are "A. No interest withholding as the interest is deemed paid by the foreign corporation, since the U.S. branch is not a U.S. corporation. B. No interest withholding tax since the recipient of the interest is a foreign corporation. C. Subject to 30% withholding tax under the Branch Interest Withholding tax rules. D. Subject to 15% withholding tax under the Branch Profits tax rules. Reset Selection"
The interest payment will be subject to 30% withholding tax under the Branch Interest Withholding tax rules. Interest paid by a branch's U.S. trade or business, is considered U.S. source income and is subject to U.S. withholding tax at a rate of 30%, unless the tax is reduced or eliminated by a specific treaty or Code provision.
Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care.
1. Based on the given demand and supply, the given transportation problem is
________?
2. Before finding the initial solution, a dummy_____________ should be introduced.?
3. The total cost of the optimal solution =____________?
Answer:
hello your question has some missing part attached below is the missing demand curve
Answer :
1) the quantity of health procedures Individuals will demand is greater than the optimal quantity ( 20 procedures )
2) quantity of medical procedure
3) $200
Explanation:
1) Based on the given demand and supply, the given transportation problem is the quantity of health procedures Individuals will demand is greater than the optimal quantity ( 20 procedures )
2) A dummy quantity of medical procedure should be introduced
3) Total cost of optimal solution
optimal quantity of medical procedure ( Qd) * price of medical procedure(Qp)
= 20 * 100
= $200
The organizational structure is sometimes used in conjunction with the traditional line-and-staff structure.
A. functional
B. product
C. process
D. matrix
true or false the only reason to protect intellectual property is financial?
Answer:
false
Explanation:
Which of the statements is the best description of inflation? The prices of only consumer goods are increasing. The price of all goods and services have increased proportionately. The price of all goods and services in the economy are increasing. Real GDP is rising. An increase in the overall price level has occurred.
Answer:
An increase in the overall price level has occurred.
Explanation:
Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.
Mathematically, inflation is given by the formula;
Inflation = Nominal interest - Real interest rate
Hence, the best description of inflation is an increase in the overall price level has occurred.
Additionally, economics can be classified into two (2) main categories, namely;
1. Macroeconomics can be defined as the study of behaviors, performance and factors that affect the entire economy. Hence, it focuses on aggregate phenomena such as price level, economic growth, Gross Domestic Product (GDP), inflation, unemployment and national income levels with respect to the central bank, demand or supply shocks, government policies, aggregate spending and savings.
2. Microeconomics can be defined as the study of the effect of price and quantity levels through interactions between individual buyers and sellers in various markets. Simply stated, it focuses on analyzing or evaluating the decisions of consumers (buyers) and those of firms (sellers) such as methods of production, pricing; and the manner in which government policies affect those decisions.
Hence, macroeconomic is a kind of externalities that affects the levels of unemployment, inflation, or growth in the economy as a whole.
A corporation wishes to determine the fixed portion of its maintenance expense (a semivariable expense), as measured against direct labor hours, for the first 3 months of the year. The inspection costs are fixed; the adjustments necessitated by errors found during inspection account for the variable portion of the maintenance costs. Information for the first quarter is as follows:
Direct Labor Hours Maintenance Expense
January 34,000 $610
February 31,000 $585
March 34,000 $610
Required:
What is the fixed portion of Jacob's maintenance expense, rounded to the nearest dollar?
a. $283
b. $327
c. $258
d. $541
Answer:
b. $327
Explanation:
The computation of the fixed portion is shown below:
But before that variable maintenance expense per direct labor is
= ($610 - $585) ÷ (34000 hours - 31000 hours)
= $0.00833 per direct labor hour
Now
Total variable expense for 34,000 hours is
= $0.00833 × 34000
= $283
And, finally Fixed portion is
= $610 - $283
= $327
