Answer:
c. it ignores all cash flows after the payback period
d. it ignores the time value of money.
Explanation:
Payback period as far as capital budgeting is concerned can be regarded as time that is required for recouping of funds that is been expended during setting up of an investment, or the funds required to get to break-even point. It should be noted that weaknesses of the payback period are;
✓. it ignores all cash flows after the payback period
✓ it ignores the time value of money.
During the month of March, Munster Company's employees earned wages of $64,000. Withholdings related to these wages were $4,896 for FICA, $7,500 for federal income tax, $3,100 for state income tax, and $400 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $700 for state unemployment tax. Journalize payroll entries.
Answer:
A. Dr salaries and wages expense for 64,000
Cr to FICA taxes payable for 4,896
Cr Federal Income Tax Payable for 7,500
Cr State Income Tax Payable for 3,100
Cr Union Dues Payable for 400
Cr Salaries and Wages Payable for 48,104
B. Dr payroll tax expense for 5,596
Cr FICA tax payable for 4,896
Cr State Unemployment for 700
Explanation:
Preparation to Journalize the payroll entries
A. Dr salaries and wages expense for 64,000
Cr to FICA taxes payable for 4,896
Cr Federal Income Tax Payable for 7,500
Cr State Income Tax Payable for 3,100
Cr Union Dues Payable for 400
Cr Salaries and Wages Payable for 48,104
(64,000-4,896-7,500-3,100-400)
B. Dr payroll tax expense for 5,596
(4,896+700)
Cr FICA tax payable for 4,896
Cr State Unemployment for 700
Corning Company has a decentralized organization with a divisional structure. Two of these divisions are the Appliance Division and the Manufactured Housing Division. Each divisional manager is evaluated on the basis of ROI. The Appliance Division produces a small automatic dishwasher that the Manufactured Housing Division can use in one of its models. Appliance can produce up to 20,000 of these dishwashers per year. The variable costs of manufacturing the dishwashers are $98. The Manufactured Housing Division inserts the dishwasher into the model house and then sells the manufactured house to outside customers for $73,000 each. The division's capacity is 4,000 units. The variable costs of the manufactured house (in addition to the cost of the dishwasher itself) are $42,600.
Required:
Assume that all of the dishwashers produced can be sold to external customers for $328 each. The Manufactured Housing Division wants to buy 5,400 dishwashers per year. What should the transfer price be?
Answer:
$328
Explanation:
The best transfer price is within the range of the Minimum and Maximum transfer price.
1. Minimum Transfer Price
Minimum Transfer Price is the price that is acceptable to the transferring division and out of a range of acceptable prices, it is that which would be the best for the company
Minimum Transfer Price = Variable Cost - Internal Savings + Opportunity Cost
thus,
given the following data on the Transferring Division - Appliance Division and Receiving Division,
Appliance Division :
Total Capacity = 20,000 dishwashers
Total Variable Costs = $98
Sale Price to External Market = $328
Manufactured Housing Division :
Demand = 5,400 dishwashers
House Sale Price = $73,000
Total Capacity = 4,000 houses
Variable Costs = $42,600
there will be an opportunity costs on the external market for 5,400 dishwashers supplied internal to Manufactured Housing Division
Opportunity costs = Contribution per unit
= $328 - $98
= $230
therefore,
Minimum Transfer Price = $98 + $230 = $328
2. Maximum Transfer Price
It is the maximum price that causes the receiving division to break even. The Maximum Transfer Price can never be more than what the receiving division can purchase externally and also can never be more than the selling price of transferring division
thus,
Maximum Transfer Price = $328
Conclusion :
The transfer price should be $328
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division’s return on investment (ROI), which has been above 20% each of the last three years. Casey is considering a capital budgeting project that would require a $3,500,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company’s discount rate is 16%. The project would provide net operating income each year for five years as follows: Sales $ 3,400,000 Variable expenses 1,600,000 Contribution margin 1,800,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 700,000 Depreciation 700,000 Total fixed expenses 1,400,000 Net operating income $ 400,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the project’s net present value? 2. What is the project’s internal rate of return? 3. What is the project’s simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-b. Would Casey be inclined to pursue this investment opportunity?
Answer:
1. What is the project’s net present value?
NPV = $101,7232. What is the project’s internal rate of return?
IRR = 17.24%3. What is the project’s simple rate of return?
simple rate of return = 11.43%4-a. Would the company want Casey to pursue this investment opportunity?
Yes, since the NPV is positive4-b. Would Casey be inclined to pursue this investment opportunity?
No, since it will decrease the average ROIExplanation:
initial outlay = -$3,500,000
cash flow years 1-5 = $400,000 + $700,000 = $1,100,000
discount rate = 16%
using a financial calculator:
NPV = $101,723
IRR = 17.24%
simple rate of return = $400,000 / $3,500,000 = 11.43%
Stonewall Corporation issued $52,000 of 5%, 10-year convertible bonds. Each $1,000 bond is convertible to 10 shares of common stock (par $50) of Stonewall Corporation. The bonds were sold at 105 on January 1, 2020. Required a. Provide the entry for Stonewall Corporation on January 1, 2020, for the bond issuance. b. Provide entries for Stonewall Corporation assuming that the conversion privilege is subsequently exercised immediately after the end of the third year. Assume that at the date of conversion, 30% of any premium or discount has been amortized and the common stock was selling at $325 per share. Use the book value method. Note: List multiple debits or credits (when applicable) in alphabetical order.
Answer:
A January 1, 2020
Dr Cash $54,600
Cr Bonds payable $52,000
Cr Premium on bonds payable $2,600
B. December 21 2022
Dr Bonds payable $52,000
Dr Premium on bonds payable $1,820
Cr Common stock $26,000
Cr Paid in capital in excess of Par $27,820
Explanation:
Preparation of the entry for Stonewall Corporation
A January 1, 2020
Dr Cash $54,600
($52,000+$2,600)
Cr Bonds payable $52,000
Cr Premium on bonds payable $2,600
(5%*$52,000)
(To record issue of bonds for premium)
B. December 21 2022
Dr Bonds payable $52,000
Dr Premium on bonds payable $1,820
(100%-30%*$2,600)
Cr Common stock $26,000
(52*10*50)
Cr Paid in capital in excess of Par $27,820
($52,000+$1,820-$26,000)
(To record conversion of bonds into Common Stock)
Financial information is presented below: Operating expenses $ 45000 Sales returns and allowances 3000 Sales discounts 7000 Sales revenue 160000 Cost of goods sold 96000 Gross Profit would be $64000. $54000. $61000. $67000.
Explanation:
160,000−3,000−96,000=61000
expenses are not taken into account because their not required to find the gross profit.
Financial information is presented below: Operating expenses $ 45000 Sales returns and allowances 3000 Sales discounts 7000 Sales revenue 160000 Cost of goods sold 96000 Gross Profit would be "$64000". The correct option is A.
To calculate the Gross Profit, we use the formula:
Gross Profit = Sales Revenue - Cost of Goods Sold
Given the financial information,
Sales Revenue = $160,000
Cost of Goods Sold = $96,000
Gross Profit = $160,000 - $96,000
Gross Profit = $64,000
Therefore, the correct option is A that is $64,000.
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Fran is a CPA who has a small tax practice in addition to working as the controller for a local manufacturing business. Fran runs her tax practice out of a 150-square foot office in her home where she meets clients and works on their tax returns and researches their tax issues. She meets the exclusive use test for this space. The gross income from her tax practice amounts to $7,500 for the year. Business expenses amount to $1,000. Based on square footage, $4,000 of Fran's mortgage interest and real estate taxes are allocable to the home office. The allocable portion of maintenance, utilities, and depreciation is $4,500. Assuming no other expenses related to the business were incurred, what amount of the maintenance, utilities, and depreciation is deductible by Fran
Answer:
$ 2,500
Explanation:
It is given that Franc is a certified public accountant(CPA) who is doing small tax practice in addition to the working as a controller of a local manufacturing business. The data provided in the question for his expenses includes maintenance, utilities and depreciation are of level 3 expenses that are limited to a taxable income remaining after allowing the direct business expenses and the mortgage and the real estate taxes.
Therefore, the income limit is = $ 7,500 - $ 1,000 - $ 4,000
= $ 2,500
Thus the allowance is limited to value of $ 2,500.
Question 8
The economic theory of scarcity states that because resources are limited, people have to do which of the following?
А
make choices
B
borrow money
С
share with others
D
pay taxes
Answer:
A
Explanation:
people have to make choice due to limited (opportunity cost)
The economic theory of scarcity states that because resources are limited, people have to make choice. Option (a) is correct.
What do you mean by Scarcity?One of the fundamental ideas in economics is scarcity. It indicates that there is a gap between the supply and demand for an item or service. As a result, scarcity may restrict the options available to consumers, who in the end drive the economy.
An economic theory that describes the price link between dynamic supply and demand is the scarcity principle. The scarcity principle states that when an item has a low supply and a high demand, its price rises to accommodate the anticipated demand.
Economic scarcity is primarily caused by structural, supply- and demand-induced factors. Demand-induced refers to situations where demand increases despite a stable supply.
Therefore, Option (a) is correct. The economic theory of scarcity states that because resources are limited, people have to make choice.
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Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 15 percent a year for the next 4 years and then decreasing the growth rate to 3.5 percent per year. The company just paid its annual dividend in the amount of $0.20 per share. What is the current value of one share of this stock if the required rate of return is 15.5 percent
Answer:
Combined Communications
The current value of one share of this stock if the required rate of return is 15.5 percent is:
= $46.00.
Explanation:
a) Data and Calculations:
Annual dividend = $0.20
Expected growth rate for the next 4 years - 15%
Expected growth rate after 4 years = 11.5% (15% - 3.5%)
Required rate of return = 15.5%
Current Price of the share = Annual Dividend * (1 + Dividend Growth Rate)/ (Required rate of return - Dividend Growth Rate)
= ($0.20 * 1 + 0.15)/ (0.155 - 0.15)
= $0.23/0.005
= $46
Future Price after 4 years = ($0.23 * 1 + 0.115)/(0.155 - 0.115)
= $0.25645/0.04
= $6.41
Kaelea, Inc., has no debt outstanding and a total market value of $81,000. Earnings before interest and taxes, EBIT, are projected to be $9,800 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 23 percent higher. If there is a recession, then EBIT will be 32 percent lower. The company is considering a $23,100 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of stock. There are currently 5,400 shares outstanding. Assume Kaelea has a tax rate of 40 percent.
Required:
a. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued.
b. Calculate the percentage changes in EPS when the economy expands or enters a recession.
c. Calculate earnings per share, EPS, under each of the three economic scenarios after the recapitalization.
d. Calculate the percentage changes in EPS when the economy expands or enters a recession.
Answer:
a. We have:
EPS under normal = $1.09 per share
EPS under expansion = $1.34 per share
EPS under recession = $0.74 per share
b. We have:
Percentage changes in EPS when the economy expands = 23%
Percentage changes in EPS when the economy enters recession = –32%
c. We have:
EPS under normal after recapitalization = $1.24
EPS under expansion after recapitalization = $1.59 per share
EPS under recession after recapitalization = $0.75 per share
d. We have:
Percentage changes in EPS after recapitalization when the economy expands = 28.23%
Percentage changes in EPS when the economy enters recession = –39.52%
Explanation:
a. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued.
Shares outstanding = 5,400
Net income under normal = EBIT under normal - (EBIT under normal * Tax rate) = $9,800 - ($9,800 * 40%) = $5,880
EPS under normal = Net income under normal / Shares outstanding = $5,880 / 5,400 = $1.09 per share
Net income under expansion = (EBIT under normal * (100% + Percentage increase in EBIT)) - ((EBIT under normal * (100% + Percentage increase in EBIT)) * Tax rate) = ($9,800 * (100% + 23%)) – (($9,800 * (100% + 23%))* 40%) = $7,232.40
EPS under expansion = Net income under expansion / Shares outstanding = $7,232.40 / 5,400 = $1.34 per share
Net income under recession = (EBIT under normal * (100% - Percentage decrease in EBIT)) - ((EBIT under normal * (100% - Percentage decrease in EBIT)) * Tax rate) = ($9,800 * (100% - 32%)) – (($9,800 * (100% - 32%))* 40%) = $3,998.40
EPS under recession = Net income under recession / Shares outstanding = $3,998.40 / 5,400 = $0.74 per share
b. Calculate the percentage changes in EPS when the economy expands or enters a recession.
Percentage changes in EPS when the economy expands = ((EPS under expansion - EPS under normal) / EPS under normal) * 100 = (($1.34 - $1.09) / $1.09) * 100 = 23%
Percentage changes in EPS when the economy enters recession = ((EPS under recession - EPS under normal) / EPS under normal) * 100 = (($0.74 - $1.09) / $1.09) * 100 = –32%
c. Calculate earnings per share, EPS, under each of the three economic scenarios after the recapitalization.
Market price per share = Total market value / Shares outstanding before recapitalization = $81,000 / 5,400 = $15
Number of shares to repurchase = Debt amount / Market price per share = $23,100 / $15 = 1,540
Shares outstanding after recapitalization = Shares outstanding before recapitalization - Number of shares to repurchase = 5,400 – 1,540 = 3,860
Interest on debt = Debt amount * Interest rate = $23,100 * 8% = $1,848
Net income under normal after recapitalization = EBIT under normal – Interest on debt - ((EBIT under normal – Interest on debt) * Tax rate) = $9,800 - $1,848 - (($9,800 - $1,848) * 40%) = $4,771.20
EPS under normal after recapitalization = Net income under normal after recapitalization / Shares outstanding after recapitalization = $4,771.20 / 3,860 = $1.24
EBIT under expansion = EBIT under normal * (100% + Percentage increase in EBIT) = ($9,800 * (100% + 23%)) = $12,054
Net income under expansion after recapitalization = EBIT under expansion – Interest on debt – ((EBIT under expansion – Interest on debt) * Tax rate) = $12,054 - $1,848 - (($12,054 - $1,848) * 40%) = $6,123.60
EPS under expansion after recapitalization = Net income under expansion after recapitalization / Shares outstanding after recapitalization = $6,123.60 / 3,860 = $1.59 per share
EBIT under recession = EBIT under normal * (100% - Percentage decrease in EBIT) = ($9,800 * (100% - 32%)) = $6,664
Net income under recession after recapitalization = EBIT under recession – Interest on debt – ((EBIT under recession – Interest on debt) * Tax rate) = $6,664 - $1,848 - (($6,664 - $1,848) * 40%) = $2,889.60
EPS under recession after recapitalization = Net income under recession after recapitalization / Shares outstanding after recapitalization = $2,889.60 / 3,860 = $0.75 per share
d. Calculate the percentage changes in EPS when the economy expands or enters a recession.
Percentage changes in EPS after recapitalization when the economy expands = ((EPS under expansion after recapitalization - EPS under normal after recapitalization) / EPS under normal after recapitalization) * 100 = (($1.59 - $1.24) / $1.24) * 100 = 28.2%
Percentage changes in EPS when the economy enters recession = ((EPS under recession - EPS under normal) / EPS under expansion) * 100 = (($0.75 - $1.24) / $1.24) * 100 = –39.52%
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information:
November 30 December
Debit Credit Debit Credit
Supplies $1,550 $3,050
Prepaid Insurance 6,200 $4,650
Salaries Payable $10,100 $15,100
Deferred Revenue 2,100 $1.050
The following information is known for the month of December:
A. Purchases of supplies during December total $3,600.
B. Supplies on hand at the end of December equal $3,050.
C. No insurance payments are made in December.
D. Insurance cost is $1,550 per month.
E. November salaries payable of $10,100 were paid to employees in December. Additional salaries for December owed at the end of the year are $15,100.
F. On November 1, a tenant paid Golden Eagle $3,150 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.
Required:
Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31.
Answer:
December 31
Dr Supplies expense $2100
Cr Supplies $2100
December 31
Dr Insurance expense $1,550
Cr Prepaid insurance $1,550
December 31
Dr Salaries expense $15,100
Cr Salaries payable $15,100
December 31
Dr Deferred revenue $1,050
Cr Rent revenue $1,050
Explanation:
Preparation of the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31.
December 31
Dr Supplies expense $2100
Cr Supplies $2100
( $1,550+3,600-$3,050= $2100)
( To record supplies expense)
December 31
Dr Insurance expense $1,550
Cr Prepaid insurance $1,550
( To record insurance expense)
December 31
Dr Salaries expense $15,100
Cr Salaries payable $15,100
( To record salaries expense)
December 31
Dr Deferred revenue $1,050
Cr Rent revenue $1,050
($3,150 x 1/3= $1,050)
( To record rent revenue)
An increase in personal income tax will ________ the amount of money consumers have to spend for food. a. increase c. replace b. reduce d. not change
Answer
I think it is
Explanation:
Deindustrialization affects the economic landscape of countries. Describe the change in the dominant economic sector during industrialization and during deindustrialization. Explain ONE spatial change in manufacturing employment patterns as a result of deindustrialization. Explain ONE likely outcome of deindustrialization in a region of manufacturing communities. Comparing the development of steel and the invention of the computer chip, explain how technological development drove economic change in both the Industrial Revolution and the transition to a service-based economy. Describe the significance of a growth pole in an urban or regional economy. Explain how post-Fordist methods of production have transformed operations at individual factories. Explain the degree to which least-cost theory predicts the local site-selection factors for the location of multinational service industry corporate offices.
Answer:
a. One spatial change in manufacturing employment patterns as a result of deindustrialization is production shift.
b. Companies may move their industrial activities and manufacturing jobs to areas with a lower cost of labor.
c. Some natural places could be deemed unfit for humans.
d. Facilitating the construction of railroads, bridges, tall buildings, larger ships, and other infrastructure, Powering service-sector industries such as information technology, financial services, retail, and education, all of which depend on the processing power and connectivity brought about by the computer chip.
e. A growth pole is significant to an urban economy as it will attract supporting businesses such as retail establishments, restaurants, and other service industries to the city or urban area on a local scale.
f. Post-fordism methods of production have transformed operation at individual factories by instead of workers working only one task all day and not being able to perform other tasks in the factory the workerscould now work multiple tasks and were not concealed to one specific area of work, this also made the workers more appealing to other factories and made it to where they could work other positions for more money and could not be so easily concealed for one spot.
Explanation:
A+
The aspects of deindustrialization lead to the economic effects that made changes in the dominant economic sectors.
What is de-industrialization ?The de-industrialization is social and the economic changes that were created due to the removal of the industrial capacity of activity.
The spatial changes in manufacturing employment patterns were a result of the process. The companies may move their industrial activities and manufacturing jobs towards a lower cost of labor. There are some natural places that would be unfit for humans. The construction of the railroads, bridges, the tall buildings, larger ships, etc.,
The growth pole of urban economy as it will attract supporting the businesses such as the retail establishments, restaurants, and other service industries to the city or urban area on a local scale. The post-Fordism methods gave made changes in the operation of individual factories.
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In July, 2013 the consulting firm Mercer released results from a survey where workers in the U.S. expected a 2.9% increase in pay in 2014. Assuming this occurs and it was the only development in the labor market that year, how would this affect the AS curve
Answer:
A 2.9% pay increase in 2014 for U.S. workers will cause the AS (aggregate supply) curve to shift inward in the short-run, signaling a decline in the quantity supplied.
Explanation:
The supply quantity declines because a pay increase increases suppliers' cost of production and reduces their ability to produce more goods and services. On the contrary, a fall in workers' pay causes the aggregate supply curve to shift outward, thereby increasing the quantity supplied. In the long-run, the pay increase will increase aggregate demand, thereby pushing prices to increase, while, at the same, suppliers try to increase the quantity supplied to meet with increased prices and demand.
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 4.3%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (S) 13% 34% Bond fund (B) 6 27
Question Completion:
What is the Sharpe ratio of the best feasible CAL? (Round your answer to 4 decimal places.)
Answer:
The best feasible CAL (Capital Allocation Line):
The calculated Sharpe Ratio of the Stock Fund (S) is higher than the Sharpe Ratio of the Bond Fund (B). Therefore, the better option is for the pension fund manager to choose the stock.
Explanation:
a) Data and Calculations:
T-bill money market fund yield rate = 4.3% (This is the Risk Free Rate)
Probability Distribution of the risky funds:
Expected Standard
Return Deviation
Stock fund (S) 13% 34%
Bond fund (B) 6 27
Sharpe Ratio = (Expected Return of Investment - Risk Free Rate) / Standard Deviation of excess return of investment
Sharpe Ratio For Stock Fund (S) = (13% - 4.3%) / 34% = 0.2559
Sharpe Ratio For Bond Fund (B) = (6% - 4.3%) / 27% = 0.0630
b) The Sharpe Ratio is an important investment decision-making tool. It creates an understanding of the additional risk of an investment above the comparable risk-free investment by showing the excess return accruable to an investor if she chooses the riskier asset over the risk-free investment. The Sharpe Ratio formula is given as the difference between the expected return on an investment and the risk-free return, which is then discounted by its volatility. Volatility is the standard deviation of the expected return of the stock fund or the bond fund.
James, Inc., has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of 6 years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $594,000. The sales price per pair of shoes is $87, while the variable cost is $37. Fixed costs of $295,000 per year are attributed to the machine. The corporate tax rate is 22 percent and the appropriate discount rate is 10 percent.
What is the financial break-even point?
Answer:
James, Inc.
The financial break-even point in:
Sales unit = 8,322
Sales dollars = $724,014
Explanation:
a) Data and Calculations:
Cost of machine purchased = $594,000
Estimated economic life = 6 years
Salvage value = $0
Sales price per pair of shoes = $87
Variable cost per pair of shoes = 37
Contribution margin per pair = $50
Discounted contribution = $50 * 0.909 = $45.45
After-tax contribution = $35.45 ($45.45 * 0.78)
After-tax contribution margin ratio = $35.45/$87 * 100 = 41%
Fixed cost per year = $295,000
Corporate tax rate = 22%
Discount rate = 10%
Break-even point = Fixed cost/After-tax contribution
= $295,000/$35.45
= 8,322 units
= $724,014 ($87 * 8,322)
Suppose 70% of all companies are classified as small companies and the rest as large companies. Suppose further, 82% of large companies provide training to employees, but only 18% of small companies provide training. A company is randomly selected without knowing if it is a large or small company; however, it is determined that the company provides training to employees.
What are the prior probabilities that the company is a large company or a small company? (Round the answers to 2 decimal place.)
p(small) =
p(large) =
What are the revised probabilities that the company is large or small? (Round your answers to 4 decimal places.) p(small) =
p(large) =
Based on your analysis, what is the overall percentage of companies that offer training? (Round your answer to 1 decimal place.)
Percentage = %
Answer:
a) p(small) = 0.126
p(large) = 0.246
b) p(small) = 0.6613
p(large) = 0.3387
c) 37.2%
Explanation:
A) determine that the company picked is a large company or small company
condition : the company provides training to its employees
Given data:
p( small ) = 0.7, p( large ) = 0.3, p( training ∩ small ) = 0.18, p( training ∩ large ) = 0.82 , p( No-training ∩ small ) = 0.82 , p( no-training ∩ large ) = 0.18
A) hence the probability of picking a small company that provides training
P( small | training ) = P(Training ∩ Small)* P(Small) = 0.18 * 0.7 = 0.126
Probability of picking a large company that provides training
P( large | training ) = P(training ∩ Large) *P(Large) = 0.82 * 0.3 = 0.246
B) Determine the revised probabilities that company picked is large or small
Revised probability for a large company; P( large | training )
P(Large | training) = P(Large ∩ training) / P(training)
= 0.246 / ( 0.126 + 0.246 ) = 0.6613
P( small | training ) = P( small ∩ training ) / P(training )
= 0.126 / ( 0.126 + 0.246 ) = 0.3387
C) Overall percentage of companies that offer training
p( training ) = 0.126 + 0.246 = 0.372 = 37.2%
What is the relationship between institutions, such as private property rights, and productive resources in terms of encouraging economic growth? Group of answer choices Private property rights mean that the government will produce no goods or services Private property rights allow resources to be used by those with the most political connections. Private property rights mean that everyone has the right to equal amounts of property. Private property rights encourage resources to be used in the most productive way.
Answer:
The relationship between institutions, such as private property rights, and productive resources in terms of encouraging economic growth is:
Private property rights encourage resources to be used in the most productive way.
Explanation:
Private property rights define the rights that individual persons have to possess, control, exclude others, derive income, or dispose of property. The main characteristics of private property rights are the rights of exclusivity, transferability, and enforceability. These rights are conferred and enforced by the law. They enable the property owner to exclude others from the costs and benefits that accrue to them from owning the property. They also enable the owner to be in a position to transfer the property from herself to others.
Big Ideas: The following Big Ideas are intended to provide clear focus and purpose to the lessons. Read each statement and think about how what you have learned will affect your current and future decisions.
1. Personal finance is 80% behavior and 20% head knowledge.
2. Many Americans are buried in debt.
3. Learn the language of money!
Answer:
Overall, each idea provides the notion that you need to learn about financial education and how financial security will impact a person's present and future life.
Explanation:
1- Personal finances correspond to 80% of behavior and 20% of head knowledge, due to the fact that it is important to learn about financial education in theory, but it is the set of balanced actions on how to deal with money that will impact fact about your financial life. That is, how you deal with the money you have is what it dictates if you have financial intelligence.
2- Many Americans are buried in debt many times for not seeking specific knowledge about finance, or for having the knowledge but not applying it. It is necessary for society to be aware of the importance of knowing how to manage your money, how to make investments, how to consume healthily and how to deal with your money in an advantageous way.
It is also necessary that there is more information available on financial education in social institutions and that this concept be more widely disseminated and discussed in society.
3- Learning the language of money means knowing how to manage your money. People often make harmful financial decisions without being aware of the impact that such decisions will have on their present and future. Knowing how much you earn, how much you spend and how much you save, is essential to keeping your finances balanced.
People can start by creating monthly spreadsheets to control their spending, there are several ways to know where your money is going and if it matches your life goals.
There is also a lot of information available on the internet about investments, how to invest in the short and long term and how to make money effectively.
Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics.
Microeconomics Macroeconomics
The effect of federal government spending on
the national unemployment rate.
The effect of government regulation on a
monopolist's production decisions.
The optimal interest rate for the Federal
Reserve to target.
Answer:
The effect of federal government spending on
the national unemployment rate. macro
The effect of government regulation on a
monopolist's production decisions. micro
The optimal interest rate for the Federal
Reserve to targets -microeconomics
Marginal Cost of Bikes $70 This graph shows the marginal costs of each bike, along with the market price. Select the correct answer from the options available. Based on this graph, at which level of production does the producer's profit stop increasing? $60 Market Price $50 $40 Marginal Cost O bike 4 O bike 5 O bike 6 $30 $20 O bike 7 $10 0 Bike 1 Bike 2 Bike 3 Bike 4 Bike 5 Bike 6 Bike 7
Answer:D) Bike 7
Explanation:
Answer:
D, bike 7
Explanation:
Masse Corporation uses part G18 in one of its products.
The company's Accounting Department reports the following costs of producing the 17,100 units of the part that are needed every year:
Per Unit
Direct materials $4.30
Direct labor 5.00
Variable overhead 8.00
Supervisor's salary 8.70
Depreciation of special equipment 9.30
Allocated general overhead 6.30
An outside supplier has offered to make the part and sell it to the company for $32.00 each.
If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided.
The special equipment used to make the part was purchased many years ago and has no salvage value or other use.
The allocated general overhead represents fixed costs of the entire company.
If the outside supplier's offer were accepted, only $23,100 of these allocated general overhead costs would be avoided.
In addition, the space used to produce part G18 could be used to make more of one of the company's other products, generating an additional segment margin of $33,000 per year for that product.
Required:
1. Calculate the effect on the company's total net operating income of buying part G18 from the supplier rather than continuing to make it inside the company.
2. Which alternative should the company choose?
Buy or Make
Answer:
Masse Corporation
1. The effect on the company's total net operating income of buying part G18 from the supplier rather than continuing to make it inside the company is an additional cost of $47,100.
2. Masse Corporation should continue to produce the part in-house. The "Make" alternative is better.
Explanation:
a) Data and Calculations:
Units of part G18 needed yearly = 17,100
Costs of production:
Direct materials $4.30
Direct labor 5.00
Variable overhead 8.00
Supervisor's salary 8.70
Total variable costs= $26 * 17,100 = $444,600
Avoidable general overhead cost = $23,100
Total avoidable costs = $467,100
Outside supplier's offered price for the part = $32 each
Total cost for the outside supply = $547,200 ($32 * 17,100)
Unavoidable fixed costs:
Depreciation of special equipment 9.30
Allocated general overhead 6.30 * 17,100 = $107,730
Unavoidable cost = $84,630 ($107,730 - $23,100)
b) The effect on the company's total net operating income of buying part G18 from the supplier rather than continuing to make it inside the company is an additional cost of $47,100 ($547,200 - $467,100 - $33,000).
Lilly's team had trouble keeping up with all the changes being made to the specifications for the website. They would have greatly benefited from the concept of
A) transparency in the work process
B) outsourcing
C) shared calendars and task bars
D) personal productivity
Answer:
c
Explanation:
that way they all know what to do
Shared calendars and task bars could have greatly benefited Lilly's team to keep up with all the changes being made to the specifications for the website. Therefore, option B is correct.
What is an website?A website is a collection of related web pages that are accessible via the internet using a web browser. Websites are typically created and maintained by individuals, organizations, or businesses to provide information, sell products or services, or engage with their audience.
Websites can be static or dynamic, with static websites containing fixed content that rarely changes, and dynamic websites featuring interactive content that is updated regularly.
Websites can be accessed using a unique URL or web address and can include a variety of multimedia elements, such as images, videos, and audio. Websites can be designed using a range of technologies, including HTML, CSS, JavaScript, and server-side scripting languages, among others.
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IBM stock currently sells for 64 dollars per share. The implied volatility equals 40.0. The risk-free rate of interest is 5.5 percent continuously compounded. If you shorted an option on 100 shares of IBM stock with strike price 69 and maturity 9 months, how many shares of stock would you have to buy (sell) to create a delta-neutral hedge
Answer:
53.19
Explanation:
$64 per share
Implied volatility = 40.0
risk-free rate of interest = 5.5%
number of shares shorted ( N ) = 100
strike price = 69
with maturity = 9 months
Calculate number of shares of stocks you have to be buy(sell) to create a delta-neutral hedge
we will apply the Black Scholes Formula
= N [ (ln(64/69) + (5.5%+(40%)^2 / 2) * (9/12)) / (40%* √(9/12)) ]
= N [ (ln(64/69) + (0.055+(0.40)^2 / 2) * (9/12)) / (0.40* √(9/12)) ]
= N * 0.5319
Number of shares to create a delta neutral hedge = 100 * 0.5319 = 53.19
The number of shares of stock that the person would have to buy in order to be able to create a delta-neutral hedge will be 53.19.
The following can be depicted from the question:
Implied volatility = 40.0Risk-free rate of interest = 5.5%Strike price = 69Number of shares shorted = 100Therefore, the number of shares to create a delta-neutral hedge will be:
= N[(In64/69) + (5.5% + (40%)² / 2) × (9/12) / (40% × ✓0.75)]
= N[(In0.9275) + (0.055 + 0.40)² / 2) × 0.75 / (0.40 × ✓0.75)
= N × 0.5319
= 100 × 0.5319
= 53.19
Therefore, the number of shares of stock is 53.19.
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Iaukea Company makes two products from a common input. Joint processing costs up to the split-off point total $47,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
Product X Product Y Total
Allocated joint processing costs $17,900 $27,200 $45,100
Sales value at split-off point $25,400 $37,000 $62,400
Costs of further processing $22,400 $16,700 $39,100
Sales value after further processing $47,000 $54,700 $101,700
Required:
a. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
b. What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?
Answer:
Product Net monetary advantage
X (800)
Y 1,000
Explanation:
A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all costs incurred up to the split-off point are irrelevant to the decision to process further .
Product X
$
Additional sales revenue from further processing
( 47,000-25,400) 21600
Further processing cost (22,400)
Net monetary advantage (800)
Product Y
$
Additional sales revenue from further processing
( 54,700-37,000) 17,700
Further processing cost (16,700)
Net monetary advantage 1,000
Product Net monetary advantage
X (800)
Y 1,000
Midwest Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $132,000 with a $16,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $34,000 per year. In addition, the equipment will have operating and energy costs of $5,380 per year. Determine the average rate
Answer:
23%
Explanation:
The computation of the average rate is shown below:
But before that following calculations to be done
Annual Depreciation is
= ($132,000 - $16,000) ÷ 10
= $11,600
The Annual Net Income would increase by
= $34,000 - $5,380 - $11,600
= $17,020
Now Average Investment is
= ($132,000 + $16,000) ÷ 2
= $74000
The Average rate of return is
= Increase in Annual Net Income ÷ Average Investment
= $17,020 ÷ $74,000
= 23%
Laura smiles as her employees file into the meeting room of the small vet clinic for their weekly staff meeting. Laura has owned the clinic for the last 20 years, but next week will be her last week as owner before she retires and her son Matthew and his wife Ayla take over the clinic. During the meeting, her team members provide Laura with status updates on the work they've been doing. Laura learns that her team has successfully completed their current project. The team members have now dispersed to focus on other projects or responsibilities. Which stage of team development does this represent
Answer:
Adjourning
Explanation:
The adjourning is the stage where the team would be disperse when the project is finished
As in the given situation, since Laura's team has completed the project and they are moved to the other responsibilities
So as per the given situation, the team development represent the adjourning stage
hence, the same is relevant and considered too.
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5.5 million on TV, radio, and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $8.2 million this year and $6.2 million next year. In addition, the company expects that new consumers who try the Mini Mochi Munch will be more likely to try Kokomochi's other products. As a result, sales of other products are expected to rise by $1.8 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 37%, and its gross profit margin averages 22% for all other products. The company's marginal corporate tax rate is 25% both this year and next year. Question 3a HomeworkAnswered What are the incremental earnings associated with the advertising campaign in its first year
Answer:
Kokomochi
The incremental earnings associated with the advertising campaign in its first year is:
= $0.3 million.
Explanation:
a) Data and Calculations:
Advertising campaign cost = $5.5 million
Mini Mochi Other Products Total
Much
Incremental sales revenue $8.2 million 1.8 million $10 million
Incremental cost of goods sold 5.2 million 1.4 million 6.6 million
Incremental gross profit $3.0 million 0.4 million 3.4 million
Advertising cost 3.1 million
Incremental earnings associated with the advertising campaign = $0.3 million
Advertising cost apportioned to:
This year = $8.2/$14.4 * $5.5 million = $3.1 million
Next year = $6.2/$14.4 * $5.5 million = $2.4 million
Sampson Company's accounting records show the following for the year ending on December 31, 2022. Purchase Discounts $ 11200 Freight-in 15600 Purchases 700020 Beginning Inventory 47000 Ending Inventory 57600 Purchase Returns and Allowances 12800 Using the periodic system, the cost of goods purchased is $660420. $717220. $708420. $691620.
Answer: $691620
Explanation:
Using the periodic system, the cost of goods purchased will be:
Purchases = 700020
Add: Freights = 15600
Less: Purchase discount = 11200
Less: Purchase return = 12800
Cost of goods purchased = 691620
mention any three differences between bookkeeping and accounting
Answer and Explanation:
The three differences between the bookkeeping and accounting is as follows:
1. The preparation of the financial statements would not be part of this but it should be the part of the accounting
2. The bookkeeping does not required any kind of skill set but in the accounting it require skill set to perform the calculations
3. Bookkeeping does not do any kind of analysis but the accounting perform the analyses, it use the bookkeeping information so that it would help to interpret the data.
The unadjusted and adjusted trial balances for American Leaf Company on October 31, 2018, follow:
American Leaf Company
Trial Balances
October 31, 2018
Debit Balances (Unadjusted) Credit Balances (Unadjusted) Debit Balances (Adjusted) Credit Balances(Adjusted)
Cash $16.00 $16.00
Accounts receivable 38.00 44.00
Supplies 10.00 7.00
Prepaid Insurance 22.00 10.00
Land 27.00 27.00
Equipment 41.00 41.00
Accumulated Depreciation-Equipment $7.00 $12.00
Accounts Payable 27.00 27.00
Wages Payable 0.00 2.00
Common Stock 22.00 22.00
Retained Earnings 74.00 74.00
Dividends 10.00 10.00
Fees Earned 70.00 76.00
Wages Expense 23.00 25.00
Rent Expense 6.00 6.00
Insurance Expense 0.00 12.00
Utilities Expense 3.00 3.00 20
Depreciation Expense 0.00 5.00
Supplies Expense 0.00 3.00
Miscellaneous Expense 4.00 4.00
$200.00 $200.00 $191.00 $191.00
Journalize the five entries that adjusted the accounts at October 31, 2018.
Answer:
1. Dr Accounts Receivable $6
Cr Fees Earned $6
2. Dr Supplies Expense $3
Cr Supplies $3
3. Dr Insurance Expense $12
Cr Prepaid Insurance $12
4. Dr Depreciation Expense $5
Cr Accumulated Depreciation—Equipment $5
5. Dr Wages Expense $2
Cr Wages Payable $2
Explanation:
Preparation of the five journal entries that adjusted the accounts at October 31, 2018.
1. Dr Accounts Receivable $6
Cr Fees Earned $6
($44-$38)
(To Accrued fees earned)
2. Dr Supplies Expense $3
Cr Supplies $3
($10-$7)
(To record Supplies used)
3. Dr Insurance Expense $12
Cr Prepaid Insurance $12
($22-$10)
(To record Insurance expired)
4. Dr Depreciation Expense $5
Cr Accumulated Depreciation—Equipment $5
($12-$7)
(To record Equipment depreciation)
5. Dr Wages Expense $2
Cr Wages Payable $2
($2-$0)
(To record Accrued wages)