Answer:
1) a. 0.2 TVs , 5 bottles
b. 0.33 TVs , 3 bottles
2) Coastal realm has a comparative advantage in producing digital TVs.
Border Kingdom has a comparative advantage in producing bottles of wine.
Explanation:
1)
a. In Border Kingdom:
Opportunity cost of producing 300 bottles of wine = production of 60 TVs.
Thus opportunity cost of producing 1 bottle of wine = 60/300 = 0.2 TVs
Opportunity cost of producing 1 TV = 300/60 = 5 bottles.
b. In Coastal realm:
Opportunity cost of producing 1 bottle of wine = 50/150 = 0.33 TVs
Opportunity cost of producing 1 TV= 150/50 = 3 bottles
2)
From the above, it is seen that the opportunity cost of producing 1 wine bottle is lower for Border Kingdom and the opportunity cost of producing TV is lower for Coastal Realm, therefore, the country Border Kingdom should produce wine bottles and Coastal Realm should produce TV's.
Jewel Service anticipates the following sales revenue over a five-month period: The company's sales are 40% cash and 60% credit. Its collection history indicates that credit sales are collected as follows: How much cash will be collected in January? In February? In March? For the quarter in total? Complete the cash budget to determine how much cash will be collected in January, February, March and for the quarter in total. (Round your answers to the nearest whole dollar.)
Answer:
I looked up the missing information, hopefully it's the same as your question. If not you can adjust the answer.
Its collection history indicates that credit sales are collected as follows:
25% in the month of the sale 50% in the month after the sale 15% two months after the sale 10% are never collectedsales revenue:
November $16,100 December $10,400 January $15,600 February $12,400 March $14,400Jewel Services
Cash Collections budget
For the months of January, February, and March
cash collected from sales January February March Quarter
from November sales $2,415 $2,415
from December sales $5,200 $1,560 $6,760
from January sales $3,900 $7,800 $2,340 $14,040
from February sales $3,100 $6,200 $9,300
from March sales $3,600 $3,600
Total $11,515 $12,460 $12,140 $36,115
he financial manager at Starbuck Industries is considering an investment that requires an initial outlay of $24,000 and is expected to produce cash inflows of $1,000 at the end of year 1, $5,000 at the end of years 2 and 3, $14,000 at the end of year 4, $9,000 at the end of year 5, and $7,000 at the end of year 6. a. Select the time line option that represents the cash flows associated with Starbuck Industries' proposed investment. b. Which of the approaches—future value or present value—do financial managers rely on most often for decision making? Why?
Answer:
Please check the attached image for the timeline image.
present value. this is because in making the decision of whether to carry out a project, the decision is made at the beginning of of the project and not in the future. so it is important to determine the present value to know if the project is profitable and should be carried out.
Explanation:
Timeline is arranges a series of events in chronological order. cash inflows are recorded as positive while cash outflows have a negative sign in front of the amount.
present value is the sum of discounted cash flows
Using the following end-of-year information, calculate the number of days' sales in receivables for Year 2. Year 2: Sales are $82,500; average accounts receivable is $11,000. Year 1: Sales are $78,000; average accounts receivable is $10,000. a.48.7 b.46.8 c.7.8 d.7.5
Answer:
Days in Receivables:
Year 2:
= Average Receivables/Sales x 365 days
= $11,000/$82,500 x 365 days
= 48.67
= 49 days
Year 1:
= Average Receivables/Sales x 365 days
= $10,000/$78,000 x 365 days
= 46.79
= 47 days
Explanation:
a) Data:
Sales & Receivables
Year 2: Sales are $82,500; average accounts receivable is $11,000.
Year 1: Sales are $78,000; average accounts receivable is $10,000
b) he days' sales in receivables for company A measures the efficiency of credit collection by showing the number of days it takes company A to receive cash from its credit customers. It is an efficiency ratio that measures management's ability to manage credit policies.
Explain how self and social awareness can help you know your personal strengths and limitations and help you be more successful at work
Farrow Co. expects to sell 400,000 units of its product in the next period with the following results.
Sales (400,000 units) $ 6,000,000
Costs and expenses
Direct materials 800,000
Direct labor 1,600,000
Overhead 400,000
Selling expenses 600,000
Administrative expenses 1,028,000
Total costs and expenses 4,428,000
Net income $ 1,572,000
The company has an opportunity to sell 40,000 additional units at $12 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 16% and (2) administrative expenses would increase by $172,000.
Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.
Normal Volume Additional Volume Combined Total
Costs and expenses:
Total costs and expenses
Incremental income (loss)
from new business
Answer:
the combined total net income = $ 1,576,000
Incremental Income = $4,000
Explanation:
Calculation of the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.
Sales (400,000 units) $ 6,000,000
Additional Sales (40,000 units × $12) $480,000
Combined Sales $6,480,000
Costs and expenses :
Direct materials (800,000 + (800,000 / 400,000 × 40,000)) ( $880,000)
Direct labor (1,600,000 + (1,600,000 / 400,000 × 40,000)) ( $1,760,000)
Overhead 400,000 × 1.16 ($464,000)
Selling expenses ($600,000 )
Administrative expenses ($1,028,000 + $172,000) ($1,200,000)
Net income $ 1,576,000
Incremental Income / (loss)
Net Income After Accepting Offer $ 1,576,000
Less Income Before Accepting Offer $ 1,572,000
Incremental Income / (loss) $4,000
Tucker Company makes chairs. Tucker has the following production budget for January - March.
January February March
Units Produced 9666 11971 9743
Each chair produced uses 4 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% gf the production needs (in wood) for the next month.
How many board feet of wood does Tucker need to purchase in February? Round your answer to the nearest whole number.
Answer: 46,101 board feet of wood
Explanation:
Purchases can be calculated using the formula;
Purchases = Total Production Needs + Ending Inventory - Beginning Inventory
Total Production Needs
= Units produced * boards required per unit
= 11,971 * 4
= 47,884 units needed.
Ending Inventory.
This should be 20% of production needs for the next month
= 20% * (9,743 * 4)
= 7,794 units
Beginning Inventory
This will be the ending inventory of January. The ending inventory of January is 20% of February needs.
= 20% * 47,884
= 9,577 units.
Purchases for February = 47,884 + 7,794 - 9,577
= 46,101 board feet of wood
To create the proper style for an argumentative essay, a writer should
add personal statements.
O include vague language.
O incorporate slang words.
O provide clear statements.
Answer:
Provide clear statements
The government can pay for projects to create work
Explanation:
To create the proper style for an argumentative essay, a writer should
provide clear statements.
What is argumentative essay?An argumentative essay can be defined as a writing essay in which the writer is meant include evidence as well as detailed fact that will help to backup the argument.
When writing an argumentative essay it is important that the writer provide clear statement to as well focus on the evidence.
Therefore to create the proper style for an argumentative essay, a writer should provide clear statements.
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On January 1, 2020, the Oriole Company had $2,990,000 of $10 par value common stock outstanding that was issued at par and Retained Earnings of $1,150,000. The company issued 146,000 shares of common stock at $16 per share on July 1. On December 15, the board of directors declared a 10% stock dividend to stockholders of record on December 31, 2020, payable on January 15, 2021. The market value of Oriole Company stock was $17 per share on December 15 and $17 per share on December 31. Net income for 2020 was $580,000.
Required:
Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
Answer:
Oriole Company
Journal Entries:
July 1:
Debit Cash Account $2,336,000
Credit Common Stock $1,460,000
Credit Paid-in In Excess of Common Stock $876,000
To record the issuance of 146,000 shares of common stock, par $10 at $16 per share.
December 15:
Debit Retained Earnings $445,000
Stock Dividends Payable $445,000
To record the declaration of a 10% stock dividend.
Explanation:
a) Stockholders of record on December 31, 2020:
Number of shares in issue at beginning 299,000
Number of shares issued on July 1 146,000
Total 445,000
10% of 445,000 = 44,500 shares
b) Stock Dividends declared on December 15 will result to the issuance of 44,500 shares to stockholders. To finance this stock dividend, the Retained Earnings account is debited while the Stock Dividends Payable is credited. When the shares are issued on January 15, the Stock Dividends Payable (Distributable) will be debited and the Common Stock credited with the par value. The market price of $17 does not affect the company's records.
Mayall Corporation is developing standards for its products. Each unit of output of the product requires 0.92 kilogram of a particular input. The allowance for waste and spoilage is 0.02 kilogram of this input for each unit of output.The standard quantity in kilograms of this input per unit of output should be:_________
a. 0.90
b. 0.92
c. 0.79
d. 1.05
Answer:
The answer is 0.94kg , hence not among the given options
Explanation:
To arrive at the standard quantity in kilograms of the input per unit of output, we will sum up each unit of output plus allowance for waste and spoilage
= 0.92kg + 0.02kg
= 0.94kg
Which of the following is a reason cash flows may differ from accounting income? The total number of units sold will be different for accounting income and cash flows. Depreciation is a tax-deductible expense but is not a cash outlay. Which of the following best describes incremental cash flows? They are the difference between the cash flows the firm will have if it accepts the project versus the cash flows it will have if it rejects the project. Incremental cash flows are not relevant because they will occur whether or not the project is accepted.
Answer:
1. Depreciation is a tax-deductible expense but is not a cash outlay.
2. They are the difference between the cash flows the firm will have if it accepts the project versus the cash flows it will have if it rejects the project.
Explanation:
1. Depreciation as a non-cash outlay is removed from the Net Income when it is calculated for tax purposes. However, when calculating the Net Cash-flow, it is added back because the Cash-flow statement deals with how much actual money the business has and because depreciation does not actually take any money, it would need to be added back in the cash-flows as opposed to Accounting income where it is removed.
2. Incremental Cash-flows get their name from the fact that they will add income to a firm. This cash-flow comes if the company accepts a project as opposed to rejecting it and the cash they get from this increases their cash-flow making it incremental.
Delta Company sells mini-flash drives. The selling price is $10 each and the variable costs are $8. If fixed costs are $3,000, how much in sales dollars must Delta have to break even
Answer:
Break-even point (dollars)= $15,000
Explanation:
Giving the following information:
The selling price is $10 each and the variable costs are $8.
Fixed costs are $3,000.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 3,000 / [(10 - 8)/10]
Break-even point (dollars)= $15,000
Identifying the median voter
Sam, Andrew, and Darnell are roommates who are trying to decide how much money to spend on heat in their apartment each month.
A. Andrew would ideally contribute $15. However, he would prefer contributing $55 to contributing $0 because he does not want to freeze.
B. Sam hates being cold. Therefore, he would ideally like each to contribute $55 to heat, and his utility declines at a constant rate as the roommates decrease the amount of money they spend.
C. Darnell does not care about heat and is on a tight budget. Therefore, he prefers to contribute no money to heat, and his utility declines at a constant rate as the roommates increase the amount of money they spend.
Suppose the three roommates vote on spending either so, $15, or $55 on heat using the Borda count system of voting. That is, each roommate awards three points to his first choice, two points to his second choice, and one point to his third choice
Answer:
The median voter here is $55 based on the allocated points in order of preference.
This is the vote that avoids the two extremes of 5 and 7
Explanation:
Voting with the Borda count system of voting:
$0 $15 $55
Andrew 1 3 2
Sam 1 2 3
Darnell 3 2 1
Total points 5 7 6
The median voter is the selection that is based on choosing the median in a spectrum, so that the extremes are avoided. In this case, the extremes win points 5 and 4, with the median as 6.
The voting was done by using the Borda count system of voting. With this system, points are allocated based on personal preferences. The preference that is favored most is given the highest point, and so on. This implies that the preference that is least favoured is given the lowest point.
A company's flexible budget for 13,200 units of production showed sales, $54,120; variable costs, $21,120; and fixed costs, $18,000. The operating income expected if the company produces and sells 19,600 units is:
Answer:
Net income= $31,000
Explanation:
Giving the following information:
Production= 13,200
Sales= 54,120
Variable costs= $21,120
Fixed costs= $18,000
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= total contribution margin/number of units
Unitary contribution margin= (54,120 - 21,120) / 13,200
Unitary contribution margin= $2.5
Now, for 19,600 units:
Total contribution margin= 2.5*19,600= 49,000
Fixed costs= (18,000)
Net income= 31,000
The Cell Inc., a microbiology research laboratory headquartered in the United States, has been losing money. The CEO decides to outsource some production to companies in developing countries. This decision to shift functions or processes to less developed countries is most likely due to their
Answer:
ghjkgg 9ycutzts5a64sts64d6ix74s
The decision of the Ceo of Cell Inc. microbilogy research laboratory to outsource some production in developing countries so that maximum output and fast deliveries can be expected to customers and also by the company can focus on various other factors affecting the business.
What is a research laboratory?The scientific lab where the experiments or products research are made so that new products can be made or existing can be replaced in chemical biological or physical aspects.
What is outsourcing?The practice which is done by an individual or an organization by using third party to carry their business activities like performing tasks giving services to customers etc.
What is third party?The company or an individual which comes in between two aspects and try to manage or solve the issue or give solutions
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Sales revenue for a sporting goods store amounted to $528,000 for the current period. All sales are on account and are subject to a sales tax of 11?%.
Which of the following would be included in the journal entry to record the sales? transaction?
A. A debit to Accounts Receivable for $ 586,080.
B. A credit to Accounts Receivable for $528,000.
C. A debit to Sales Tax Payable for $58,080.
D. A debit to Sales Revenue for $ 528,000.
Answer:
The answer is A. A debit to Accounts Receivable for $ 586,080
Explanation:
Sales tax is an additional amount of money one pays based on a percentage of the selling price of goods and services that are purchased.
The sales tax amount will be added to sales revenue to form the total bill.
Sales revenue ----------------- $528,00
Sales tax -------------------------- 11%
Sales tax amount
$528,00 x 0.11
= $58,080
Therefore, total bill is:
$528,00 + $58,080
=$586,080.
Debit increases an asset(accounts receivable) while credit decreases an asset(accounts receivable).
Since the accounts receivable will increase, it will be on debit side.
Imprudential, inc., has an unfunded pension liability of $582 million that mustb be paid in 20 years. To assess the value of the firms stock, financialal analysts to discount the liability back to the present
If the relevant discount rate is 7.5 percent, what is the present value of this liability? (Enter your answer in dollars not in millions, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Present value $137,010,452.17
Explanation:
Calculation for the present value of Imprudential, inc. liability
Using this formula
Present Value = FV / (1 + r)^t
Where,
FV =$582,000,000
=(1 + r)=(1+0.075=1.075)
t=20 Years
Let plug in the formula
Present Value = $582,000,000 / (1.075)^20
Present Value=$582,000,000/4.2478511
Present value= $137,010,452.17
Therefore the present value of Imprudential, inc. liability will be $137,010,452.17
At a computer-consulting firm, the number of new clients that they have obtained each month has ranged from 0 to 6. the number of new clients has the probability distribution that is shown below. determine the expected number of new clients per month. # of clients probability 0 0.05 1 0.10 2 0.15 3 0.35 4 0.20 5 0.10 6 0.05
Answer:
3.05
Explanation:
The computer consulting firm is analyzing the performance of its company based on new clients each month. The data is given for six months and the probability distribution for number of new clients per month that the company has gained. The probability sum equals to 1 for the six months. The variance distribution is the squared value of each the difference by the mean. values of probability are squared and then their sum is taken to calculate variance deviation.
Suppose a seven-year, $ 1 comma 000$1,000 bond with aa 7.7 %7.7% coupon rate and semiannual coupons is trading with a yield to maturity of 6.45 %6.45%. a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.36 %7.36% (APR with semiannual compounding), what price will the bond trade for?
Answer:
a. Premium
b. $1,018.34
Explanation:
a. For computing the present value we need to apply the formula which is shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 6.45% ÷ 2 = 3.225%
NPER = 7 years × 2 = 14 years
PMT = $1,000 × 7.7% ÷2 = $38.50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,069.53
Since the present value is more than the face value so the bond is currently sold at a premium
b. For computing the present value we need to apply the formula which is shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 7.36% ÷ 2 = 3.68%
NPER = 7 years × 2 = 14 years
PMT = $1,000 × 7.7% ÷2 = $38.50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,018.34
What must be the price of a $ 2 comma 000 bond with a 5.8% coupon rate, annual coupons, and 30 years to maturity if YTM is 10.1 % APR?
Answer:
Price of bond= $1,196
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 5.8% × 2,000× = 116
PV of interest payment
A ×(1- (1+r)^(-n))/r
A- 116
r- annual yield 5.8%
n = 30
= 116 × (1-(1.101)^(-30)/0.101
= 1084.465
Step 2
PV of redemption Value
PV = $2000 × (1.101)^(-30)
= 111.53
Step 3
Price of bond
= 111.53 + 1084.465159 = 1195.99
Price of bond= $1,196
On January 1, an investment account is worth 300,000. M months later, the value has increased to 315,000 and 15,000 is withdrawn. 2M months prior to the end of the year, the account is again worth 315,000 and 15,000 is withdrawn. On December 31, the account is worth 315,000. The annual effective yield rate, using the dollar-weighted method, is 16%. Calculate M.
Answer:
M = 3
Explanation:
The first withdrawal takes place 1 - M/12 months until the end of the year. The second withdrawal takes place 2M/12 months before the end of the year.
$315,000 = ($300,000 x 1.16) - {$15,000 x [1 + 0.16(1 - M/12)]} - {$15,000 x [1 + 0.16(2M/12)]}
$315,000 = $348,000 - [$15,000 x (1.16 - 0.16M/12)] - [$15,000 x (1 + 0.32M/12)]
$315,000 = $348,000 - $17,400+ 200M - $15,000 - 400M
$315,000 = $315,600 - 200M
200M = $315,600 - $315,000 = $600
M = 600 / 200 = 3
Steve Madison needs $353,100 in 10 years.How much must he invest at the end of each year, at 9% interest, to meet his needs?
Answer:
$23,241.07
Explanation:
To determine the annual annuity, this formula would be used
PV = FV / annuity factor
Annuity factor = {[(1+r)^n] - 1} / r = (1.09^10 - 1 ) / 0.09 = 15.192930
$353,100 / 15.192930 = $23,241.07
From past records it is known that 10% of items from a production line are defective. If two items are selected at random, what is the probability that only one is defective?
Answer:
0.2
Explanation:
The Probability distribution is the function which describes the likelihood of possible values assuming a random variable. The 10% of the items from the production line are assumed to be defective. There is a sample selection of 2 items. The probability that one of the item among the selected sample of two items is found defective is 0.2 (2 items sample *10%)
Smith Services, Inc., was a trucking company established in 2000 and owned by Tony Smith as the sole shareholder. Smith Services, Inc., had an account with Laker Express, a fuel provider, and often would charge fuel purchases for the company trucks to that account. Smith’s employees would fuel their vehicles and sign the account slip with a notation that the purchase was for Smith Services, Inc. Laker Express would bill Smith Services regularly for the charges on the account. After several months of low business, Smith Services ceased doing business and was dissolved in 2013, with its assets being distributed to creditors. Laker Express only recovered a small part of the amount owed by Smith Services, Inc. Tony Smith then opened up a new trucking service business as a sole proprietor. Laker Express sought to recover Smith Services' unpaid fuel charges, which amounted to about $35,000, from Smith. He argued that he was not personally liable for a corporate debt. Should a court hold Tony Smith personally liable?
Assume that in addition to the facts given, that evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles. Does this change the outcome?
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Answer:
Smith Services, Inc. and Laker Express
a. A court should not hold Tony Smith personally liable for the corporate debt of Smith Services, Inc to the tune of $35,000 representing unpaid fuel charges to Laker Express. This decision is given based on the facts presented in the case, so far.
b. Assuming that in addition to the given facts, evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles, then this evidence changes the outcome. Smith Service, Inc. has met one of the conditions for piercing the corporate veil. This condition is commingling the corporate account with personal expenses and use of corporate assets. This may also question if proper accounting records were being kept at the Smith Services.
c. Therefore,
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Explanation:
To protect the legal status of corporations like Smith Services Inc. as limited liability entities, State courts reluctantly pierce the corporate veil, unless the requirements, which vary from state to state, are met. If Tony Smith does not the court to pierce the corporate veil of Smith Services, Inc., his former company should have used corporate assets only for corporate purposes. Based on the unpaid fuel charges, Tony Smith did not maintain the separation of ownership from his Smith Services, Inc. since he, his wife, their kids, and apparently the employees fuelled their personal cars on fuel charge to Laker Express for Smith Services, Inc. to offset.
1. Given this new evidence, a court would likely find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court would not likely find that the corporation was undercapitalized.
3. The court would not likely find that the corporation was created to evade an existing legal obligation.
4. The court likely would not find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely would find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely would pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
According to the case in hand, Tony Smith, the sole owner of Smith Services, a trucking company was accused of misappropriation of fuel for several years, up to the tune of $35, 000 which may or may not be the reason why the company went bankrupt.
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George Company has a relevant range of 150,000 units to 400,000 units. The company has total fixed costs of $527,000. Total fixed and variable costs are $622,500 at a production level of 176,000 units. The variable cost per unit at 350,000 units is
Answer: $0.54
Explanation:
Total cost = Fixed cost + Variable cost
$622,500 = $527,000 + Variable cost
Variable cost = $622,500 - $527,000
Variable cost = $95,500
Variable cost per unit will be calculated as the variable cost divided by the production unit. This will be:
= $95,500/176,000
= $0.54
The variable cost per units is $0.54.
Compute the present value of a $2,000 deposit in year 1, and another $1,500 deposit at the end of year 3 if interest rates are 10 percent.
Answer:
the present value formula that I will use is the following:
present value = future value / (1 + interest rate)ⁿ
in the first case, the present value of $2,000 in 1 year is:
PV = $2,000 / (1 + 10%) = $2,000 / 1.1 = $1,818.18
in the second case, the present value of $1,500 in 3 years is:
PV = $1,500 / (1 + 10%)³ = $1,500 / 1.331 = $1,126.97
The following transactions are for Crane Company. 1. On December 3, Crane Company sold $513, 500 of merchandise to Sheridan Co., terms 3/10, n/30. The cost of the merchandise sold was $318, 300. 2. On December 8, Sheridan Co. was granted an allowance of $24, 700 for merchandise purchased on December 3. 3. On December 13, Crane Company received the balance due from Sheridan Co.
(a) Prepare the journal entries to record these transactions on the books of Crane Company. Crane Company uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(b) Assume that Crane Company received the balance due from Sheridan Co. on January 2 of the following year instead of December 13, Prepare the journal entry to record the receipt of payment on January 2. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
a) December 3, 202x, merchandise sold to Sheridan Co., terms 3/10, n/30
Dr Accounts receivable 513,500
Cr Sales revenue 513,500
Dr Cost of goods sold 318,300
Cr Merchandise inventory 318,300
December 8, merchandise allowance
Dr Sales returns and allowances 24,700
Cr Accounts receivable 24,700
December 13, invoice collected from Sheridan Co.
Dr Cash 474,136
Dr Sales discounts 14,664
Cr Accounts receivable 488,800
b) January 2, invoice collected from Sheridan Co.
Dr Cash 488,800
Cr Accounts receivable 488,800
Use the aggregate expenditures model and assume an economy is in equilibrium at $5 trillion which is $250 billion below full-employment GDP. If the marginal propensity to consume (MPC) is 0.60, full-employment GDP can be reached if government spending:
Answer:
Government must reduce spending by 100 billion to reach full employment
Explanation:
First, let plug in the MPC to find the spending multiplier
Spending Multiplier = 1 / 1 - MPC
Spending Multiplier = 1 / 1-0.6
Spending Multiplier = 1 / 0.4
Spending Multiplier = 2.5
We also know that we are looking to change the equilibrium output (Y) by -250 billion
ΔG * Multiplier = ΔY / Multiplier
= -250 billion / 2.5
= -100 billion
Therefore, government must reduce spending by 100 billion to reach full employment
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $450,000 per year. Thus, in one year you receive $1.45 million. In two years, you get $1.7 million, and so on.
If the appropriate interest rate is 8%, what is the present value of your winnings?
Answer:
$22,419,192.19
Explanation:
i used an excel spreadsheet to calculate the future payments and their present value. If the payments increase by $450,000 each year, the second payment will equal $1.9 million, not $1.7 million.
year payment
0 $1,000,000
1 $1,450,000
2 $1,900,000
3 $2,350,000
4 $2,800,000
5 $3,250,000
6 $3,700,000
7 $4,150,000
8 $4,600,000
9 $5,050,000
10 $5,500,000
present value = $22,419,192.19
Answer:
21,624,467.720
Explanation:
With an increase in product advertising of $50 million you expect to increase sales by 10,000 units. If unit grow margin is $4,800, will the additional advertising increase product contribution?
Answer:
Income will decrease by $2,000,000.
Explanation:
Giving the following information:
Advertising increase= $50,000,000
Units increase= 10,000 units
Unit contribution margin= $4,800
To calculate the total effect on income, we need to use the following formula:
Effect on income= total contribution margin - increase in fixed costs
Effect on income= 10,000*4,800 - 50,000,000
Effect on income= $2,000,000 decrease
Income will decrease by $2,000,000.
In the price range where demand is inelastic, a decrease in price will result in a decrease in total revenue. True or False?