Answer:
These are the answer choices:
a. Centralize decision making
b. deemphasize lower-level management training
c. control their managers tightly
d. deemphasize lower-level management accountability
e. decentralize authority
And this is the correct answer:
e. decentralize authority
Explanation:
The fact that top management at Sears gives significant freedom to regional and store managers means that they decentralize authority.
Instead of opting for a top-down management strategy, executive leaders at Sears opt for a more horizontal approach in which many tasks are left to the authority of the local managers, due to the fact that centralizing decision making in such a big business would be too complex and difficult to work out well in practice.
In other words, executive leaders at Sears decentralized authority because they feel that it will result in more efficiency.
Discuss the role that resources, organizational communications, and training play in the support and successful implementation of a marketing plan. Cite the study materials to support your ideas. In replies to peers, discuss whether you agree or disagree with their assessment and explain why by citing study materials.
Explanation:
A marketing plan is the set of well-defined actions that will help an organization achieve its marketing objectives and goals.
Therefore, for the process of implementing the marketing plan to be successful it must consider the systemic set that makes up the organization.
First, resources must be allocated in such a way that there is a possibility of complying with all the marketing actions provided for in the plan, it must be necessary to be available in the organization, equipment, qualified personnel, raw materials, etc.
Organizational communication is also essential for the correct transfer of information so that an effective workflow occurs, without noise or conflict. A good manager must know how to communicate clearly and accurately, in order to support employees and supervise the work so that the marketing objectives are met, in addition to encouraging the realization of the work in the best possible way.
Training is also important for the development of employees and for them to be able to carry out activities, this is also a way of engaging and motivating employees to achieve organizational expectations.
Jones Corp. reported current assets of $199,000 and current liabilities of $140,000 on its most recent balance sheet. The working capital is:
Answer: $59000
Explanation:
The working capital is the capital that a business uses in its daily operations. It should be noted that the working capital is calculated as the difference between the current assets and the current liabilities.
From the question, we are told that
Jones Corp. reported current assets of $199,000 and current liabilities of $140,000 on its most recent balance sheet. Therefore, the working capital will be:
= $199,000 - $140,000
= $59,000
Travelwell manufactures and sells luggage and briefcases. Their marketing research indicates that durability is the attribute that consumers most desire in their luggage and briefcases. Travelwell now emphasizes durability in all of their promotional efforts. This strategy is intended to build brand equity.
a) true
b) false
Answer:
a) true
Explanation:
When we are talking about building brand equity, we are talking about increasing our customers' perception and value of our brand or company's name. Building brand equity emphasizes the brand itself over any specific product or service that our company offers. E.g. Rolls Royce is the most luxurious car manufacturer in the world, and they built brand equity upon luxury in all its vehicles, not one specific car.
In this case, Travelwell is emphasizing a characteristic that should apply to all its product line, not just one specific type of luggage.
Branch Company provided the following information: Standard fixed overhead rate (SFOR) per direct labor hour $5.00 Actual fixed overhead $305,000 BFOH $300,000 Actual production in units 16,000 Standard hours allowed for actual units produced (SH) 64,000 Required Enter amounts as positive numbers and select Favorable (F) or Unfavorable(U). 1. Using the columnar approach, calculate the fixed overhead spending and volume variances. (1) (2) (3) Spending Volume 2. Using the formula approach, calculate the fixed overhead spending variance. $ 3. Using the formula approach, calculate the fixed overhead volume variance. $ 4. Calculate the total fixed overhead variance. $
Answer:
1. $5000 unfavorable
2. 3000 hrs favorable
Explanation:
Fixed Overhead spending variance
Budgeted fixed overhead - Actual fixed overhead
$300,000 - $305,000
= $5,000 unfavorable
Fixed Overhead volume variance
Actual volume = actual fixed overhead / Actual fixed overhead per hr
= $305,000 / $5
= 61000 hrs
(Budgeted volume - Actual volume) * budgeted rate
64000 hrs - 61000 hrs
= 3000 hrs favorable
The following items were selected from among the transactions completed by O’Donnel Co. during the current year:
Jan. 10. Purchased merchandise on account from Laine Co., $240,000, terms n/30.
Feb. 9. Issued a 30-day, 4% note for $240,000 to Laine Co., on account.
Mar. 11. Paid Laine Co. the amount owed on the note of February 9.
May 1. Borrowed $160,000 from Tabata Bank, issuing a 45-day, 5% note.
June 1. Purchased tools by issuing a $180,000, 60-day note to Gibala Co., which discounted the note at the rate of 5%.
15. Paid Tabata Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 7% note for $160,000. (Journalize both the debit and credit to the notes payable account.)
July 30. Paid Tabata Bank the amount due on the note of June 15.
30. Paid Gibala Co. the amount due on the note of June 1.
Dec. 1. Purchased office equipment from Warick Co. for $400,000, paying $100,000 and issuing a series of ten 5% notes for $30,000 each, coming due at 30-day intervals.
15. Settled a product liability lawsuit with a customer for $260,000, payable in January. O’Donnel accrued the loss in a litigation claims payable account.
31. Paid the amount due Warick Co. on the first note in the series issued on December 1.
Required:
a. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year.
b. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):
1. Product warranty cost, $23,000.
2. Interest on the nine remaining notes owed to Warick Co. Assume a 360-day year.
Answer:
Explanation:
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year.
The solution to the above has been attached.
b. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):
The solution to the question has been attached.
It should be noted that:
March 11: Interest Expense was calculated as:
= ($240,000 × 30/360 × 4%)
= $240,000 × 0.0833 × 0.04
= 800
Check the attached file
What is the nominal interest rate (k) of a 5-year U.S. Treasury bond with a real risk-free rate of interest of 1% and inflation expected to be at 3.5% per year
Answer:
The nominal interest rate is 4.50%
Explanation:
Nominal interest=real interest rate+inflation rate
The real interest rate is the return earned by an investor without considering the inflation rate in the economy which is 1%
inflation rate is the movement in prices of goods and services in the economy i.e 3.5%
nominal interest rate=1%+3.5%
nominal interest rate=4.5%
Wheat Corporation pays $ 528 comma 000 for 100 comma 000 shares to acquire 45% common stock of Grain Investments, Inc. on January 5, 2018. Wheat Corporation sells 12 comma 000 shares for $ 54 comma 000 on January 6, 2018. What is the correct journal entry for the transaction on January 6, 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
Explanation:
Based on the information given in the question, the following can be deduced:
The purchase price per share will be:
= $528,000/100,000
= $5.28
The selling price per share will be:
= $54,000/12,000 = $4.50
The loss on the sale of the marketable securities will then be:
= 12,000 x (4.50 - 5.28)
= 12,000 × 0.78
= $9,360
The file has been attached.
This exit strategy allows the entrepreneur an opportunity to buy back venture capital stock at cost and an additional premium. a. buyback b. retract clause c. IPO d. exit clause
Answer:
A. Buyback
Explanation:
The exit strategy that provides the entrepreneur an opportunity to purchase back venture capital stock at cost and an additional premium is a Buyback
A buyback is when an entrepreneur buys its own shares in the stock market. It is a repurchase and minimizes/decreases the number of shares outstanding, which causes earnings per share to be inflated and, in many cases, the stock value also.
A corporation produces a single product and has the following cost structure
Number of units produced each year 7000
Variable costs per unit
Direct materials 51
Direct labor 12
Variable manufacturing overhead 2
Variable selling and administrative expense 5
Fixed costs per year
Fixed manufacturing overhead.. 441000
Fixed selling expense 112000
The absorption costing unit product cost is:______.
A) $149 per unit
B) $65 per unit
C) $63 per unit
D) $128 per unit
Answer:
D) $128 per unit
Explanation:
The computation of the unit product cost using the absorption costing is shown below:
= Direct materials per unit + direct labor per unit + Variable manufacturing overhead per unit + fixed manufacturing overhead per unit
= $51 + $12 + $2 + ($441,000 ÷ 7,000 units)
= $128
We simply added the direct material, direct labor, variable manufacturing overhead per unit, and the fixed manufacturing overhead per unit
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.60 15,000 units Sprockets 0.20 50,000 units Additional information about the company follows:
a. Hubs require $39 in direct materials per unit, and Sprockets require $18.
b. The direct labor wage rate is $12 per hour.
c. Hubs are more complex to manufacture than Sprockets and they require special equipment.
d. The ABC system has the following activity cost pools:
Estimated Activity Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total Machine setups (number of setups) $ 28,980 140 112 252 Special processing (machine-hours) $ 92,000 4,600 0 4,600 General factory (organization-sustaining) $ 89,000 NA NA NA
Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit product cost of each product according to the ABC system. (Round intermediate calculations and final answers to 2 decimal places.)
Answer:
Fogerty Company
1. Computation of the activity rate for each activity cost pool:
a. Machine setups = Total machine setups overhead costs/total machine setups
= $28,980/252 = $115 per machine set up
b. Special processing = Total special processing overhead costs/total machine hours
= $92,000/4,600 = $20 per machine hour
c. General factory = $89,000/65,000 = $1.369 per unit produced
2. Determination of the unit product cost of each product using ABC system:
Hubs Sprockets
Total production costs $825,640 $1,101,340
Units produced 15,000 50,000
Unit product cost = $55.04 $22.03
Explanation:
a) Data and Calculations:
Activity Cost Pool Overhead Hubs Sprockets Total
(Activity Measure) Costs
Machine setups
(number of setups) $ 28,980 140 112 252
Special processing
(machine-hours) $ 92,000 4,600 0 4,600
General factory
(organization-sustaining) $ 89,000 NA NA NA
Direct labor-hours per unit 0.60 0.20
Total units produced 15,000 50,000 65,000
Direct materials required per unit $39 $18
Direct labor wage rate per hour $12 $12
b) Total direct labor-hours 9,000 10,000 19,000
c) Activity rate for each activity cost pool:
1. Machine setups = Total machine setups overhead costs/total machine setups
= $28,980/252 = $115 per machine set up
2. Special processing = Total special processing overhead costs/total machine hours
= $92,000/4,600 = $20 per machine hour
3. General factory = Total general factory overhead costs divided by total units produced
= $89,000/65,000 = $1.3692 per unit produced
d) Overhead Allocation:
Hubs Sprockets Total
Machine setups $16,100 $12,880 $28,980
Special processing 96,000 0 96,000
General factory 20,540 68,460 89,000
Total overhead costs $132,640 $81,340 $213,980
e) Total costs per product
Hubs Sprockets Total
Direct materials costs $585,000 $900,000 $1,485,000
Direct labor costs $108,000 $120,000 $228,000
Total overhead costs $132,640 $81,340 $213,980
Total production costs $825,640 $1,101,340 $1,926,980
Units produced 15,000 50,000
Unit product cost = $55.04 $22.03
f) Activity based costing system (ABC) is a costing technique that accumulates according to activity pools and allocates costs based on the activities carried out. For example, the general factory overhead costs, could be allocated based on direct labour hours, machine hours, or total units of production. It calculates the allocation rate based on the accepted activity pool.
To develop compensation systems for workers, managers should: use all the information available about the workers regardless of the cost of obtaining the information use all the information available only if managers have a concern about the performance of workers. not use any information available if workers are paid efficiency wages. None of the above
Answer:
The correct answer is A
Explanation:
Performance and compensation go hand in hand. To know design a compensation system that takes into account all the information about one's workers is to create suitable compensation for that company.
For instance, the manager should know whether it is non-financial rewards that its management want. Sometimes, staff don't care about official cars, and fantastic health insurances. They just want a great take-home package.
The manager must know this information at all costs. To ignore is to risk the loss of staff, valuable time and even position in the industry.
Cheers!
Lindley Corp.'s stock price at the end of last year was $33.50, and its book value per share was $25.00. What was its market/book ratio? a. 1.48 b. 1.63 c. 1.34 d. 1.41 e. 1.55
Answer:
C. 1.34
Explanation:
Lindley Corp.'s stock price at the end of last year was $33.50, and its book value per share was $25.00. What was its market/book ratio?
To calculate the ratio:
stock price at the end of last year was $33.50 divided by value per share of $25.00
= 33.50/25.0
= 1.34
Recall the example in the text where Ford Motor Company was building a new engine plant in Windsor that was to focus on the "team approach" to building the engines. Which of the following statement is true regarding that example?
A. The majority of those hired were university educated and had experience in the team approach.
B. One of the goals of the training was to improve attitudes toward the team approach.
C. Evaluation of the training indicated an improvement in employees’ communication skills.
D. The promise of training related to self-fulfillment never materialized.
Answer: One of the goals of the training was to improve attitudes toward the team approach.
Explanation:
For organizational goals and objectives to be achieved in an organization, the attitude of the team matters. A positive attitude is required to build teamwork.
When Ford Motor Company was building a new engine plant in Windsor that was to focus on the "team approach" to building the engines, one of the goals of the training was to improve attitudes toward the team approach. A positive attitude brings about creativity and enhances productivity.
Brand managers know that increasing promotional budgets eventually result in diminishing returns. The first one million dollars typically results in a 26% increase in awareness, while the second million results in adding another 18% and the third million in a 5% increase. Andrews’s product Adam currently has an awareness level of 80% . While an important product for Andrews, Adam’s promotion budget will be reduced to one million dollars for the upcoming year. Assuming that Adam loses one-third of its awareness each year, what will Adam’s awareness level be next year?
Answer:
52.88%
Explanation:
The computation of the awareness level for next year is shown below
But before that we need to find out the ending awareness i.e Y which is
= 80% × (1 - 1 ÷ 3)
= 53.33%
Now awareness after the promotion is
= 53.33% + 26%
= 79.33%
Now the ending awareness i.e (Y +1) is
= 79.33% × 2 ÷ 3
= 52.88%
Hence, the awareness level next year is 52.88%
The annual average CPI for 2016 was 240.5. If the CPI for 2010 was 218.1, then what was the inflation rate for the years 2010-2016 (%)
Answer: 9.31%
Explanation:
The Consumer Price Index (CPI) is able to check the price change per year by pricing a fixed basket of goods in different years. It can be used to calculate inflation with the formula;
Inflation rate = (CPI target year - CPI base year / CPI base year) *100
= [tex]\frac{240.5-218.1}{218.1} * 100%[/tex]
=9.31%
During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. In addition, factory overhead charged to production was $32,000. The entry to record the direct labor costs is a. Work in Process150,000 Wages Payable150,000 b. Wages Payable150,000 Work in Process150,000 c. Wages Payable175,000 Work in Process175,000 d. Work in Process175,000 Wages Payable175,000
Answer:
d. Work in Process 175,000 Wages Payable 175,000
Explanation:
Production Orders and General factory expenses are all manufacturing costs and are included in Work In Process Cost for Inventory Valuation. Since the wages have not been paid yet, a Liability account - Wages Payable has to be credited in total of amount due.
A company purchased $10,400 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $700, was added to the invoice amount. On June 20, it returned $1,120 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:A company purchased $10,400 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $700, was added to the invoice amount. On June 20, it returned $1,120 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:
Answer:
The cash paid on June 24 equals: $9,780
Explanation:
When the company purchased merchandise, the following entries are recorded.
Merchandise $10,400 (debit)
Freight Charges $700 (debit)
Accounts Payable $11,100 (credit)
When the company returned merchandise, the following entries are recorded.
Accounts Payable $1,120 (debit)
Merchandise $1,120 (credit)
When the company pay for the merchandise, the payment is made within the discount period and is eligible for a cash discount of 3%.
Accounts Payable $9,980 (debit)
Discount Received $200 (credit)
Cash $9,780 (credit)
Conclusion :
The cash paid on June 24 equals: $9,780
At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: Beginning WIP direct materials $ 38 comma 000 Beginning WIP conversion costs $20,250 Costs of materials added $ 393 comma 100 Costs of conversion added $271,125 WIP beginning (50% for conversion) 20 comma 200 units Units started 120 comma 500 units Units completed and transferred out 106 comma 700 units WIP ending (60% for conversion) 34 comma 000 units What is the cost per equivalent unit for direct materials? (Round your final answer to the nearest cent.)
Answer:
$2.79 per unit
Explanation:
Given that :
Beginning WIP direct materials $ 38, 000
Beginning WIP conversion costs $20,250
Costs of materials added $ 393, 100
Costs of conversion added $271,125
WIP beginning (50% for conversion) 20,200 units
Units started 120,500 units
Units completed and transferred out 106,700 units
WIP ending (60% for conversion) 34,000 units
We are to find the cost per equivalent unit for direct materials? (Round your final answer to the nearest cent.)
Let first calculate the total equivalent units for direct materials which is:
= Units completed and transferred out + WIP ending
= (106,700 + 34000) units
= 140700 units
The cost per equivalent unit for direct materials = Costs of materials added (a)/ equivalent number of unit (b)
The cost per equivalent unit for direct materials = $ 393, 100/140700 unit
The cost per equivalent unit for direct materials = $2.79 per unit
"Diversity on attributes such as cultural background, race, and attitudes is associated with communication problems and ultimately poor team effectiveness." This statement represents the theory of the ________ approach to diversity in teams.
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Diversity combining
b) Cooperative diversity
c) Surface-level
d) Similarity-attraction
And the correct answer is the option D: Similarity-attraction
Explanation:
To begin with, the concept known as "Similarity-attraction" refers to a theory that mainly establishes that people like and are attracted to each other regarding their similarities and not their differences, therefore that this theory holds that the people will find more confidance in teams where the others are similar to one and that team will have mor effectiveness than those who are full of members with differences.
_____ uses an iterative process that repeats the design, development, and testing steps as needed, based on feedback from users.
Answer: Rapid Application Development (RAD)
Explanation:
Rapid Application Development (RAD) is a method of developing software that tries more to develop a working model first and then adjusts as it receives feedback from users. It essentially is evolving every time because instead of planning for what is needed ahead of time, it simply makes a product and changes it as needed to fit the actual needs of the customers.
Answer: Rapid Application Development
Explanation: got it right on edgen
Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $15 per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the sunk costs for Garrison?
Answer:
the $4,000 spent on a new software
Explanation:
Sunk costs are costs that the business has already incurred and they cannot be recovered no matter what decision they make.
in this case, the company must decide whether to hire 2 part time employees or only on full time employee. But no matter which decision they make, the money spent on the new computer software cannot be recovered. That is why the money spent on the new software is considered a sunk cost.
You short-sell 200 shares of Rock Creek Fly Fishing Co. today at $50 per share. If you want to limit your loss to $2,500, $ Blank 1. Fill in the blank, read surrounding text. is the maximum price per share you should place when you close your position
Answer:
So, the maximum price per share that should place is $62.5
Explanation:
As per given data
Current Price of stock = $50
Numbers of share = 200 shares
Limit of loss = $2,500
We will use the following formula to calculate the Maximum price of stock
Total Maximum loss possible = [ ( Prefix Price of share - Current price of share ) x Numbers of shares of stock ]
$2,500 = [ ( Prefix Price of share - $50 ) x 200 ]
$2500 / 200 = Prefix Price of share - $50
$12.5 + $50 = Prefix Price of share
$62.5 = Prefix Price of share
Therefore, thee order will be stopped at $62.50
Creighton Construction ordered $200,000 worth of steel beams for a new project. The invoice listed trade discounts of 30/20/15. The Net Price = $95,200
A. True
B. False
Answer:
A. True
Explanation:
The trade discounts of 30/20/15 indicate that the discounts are deducted one after the other from the list price.
First, you calculate the price after the 30% discount from $200,000:
200,000*(1-0.3)=200,000*0.7= $140,000
Now, you have to calculate the new value after the 20% discount from $140,000:
140,000*(1-0.2)=140,000*0.8= $112,000
Then, you have to calculate the new value after the 15% discount from $1112,000:
112,000*(1-0.15)=112,000*0.85=$95,200
According to this, the Net Price is $95,200 and the statement is true.
Suppose that a country has no public debt in year 1 but experiences a budget deficit of $50 billion in year 2, a budget deficit of $30 billion in year 3, a budget surplus of $20 billion in year 4, and a budget deficit of $2 billion in year 5. a. What is the absolute size of its public debt in year 5?
Answer:
= $62 billion
Explanation:
Since the country started year 1 with no public debt,
The country's debt at the end of year 5 = $50 (deficit year 2) + $30 (deficit year 3) - $20 (surplus year 4, negative deficit) + $2 (deficit year 5)).
= $62 billion
The country's debt at the end of year 5 = $62 billion
Public debt is the sum of deficits and surpluses (negative deficits) over time.
A firm's collection policy, i.e., the procedures it follows to collect accounts receivable, plays an important role in keeping its average collection period short, although too strict a collection policy can reduce profits due to lost sales.
a) true
b) false
Answer:
a) true
Explanation:
The average collection period could be computed by
= Total number of days in a year ÷ account receivable turnover ratio
It determines the number of days in which the customers pay the amount to the company.
If the payment is made within the prescribed time or early so it shows the goods performance else it reflects the worst performance
Therefore according to the given situation, if there is strictness in collection policy which ultimately reduced profit due to lost sales plays a very important role in shorten the collection period
Under the NASAA Model Rule covering Investment Adviser records, the adviser's articles of incorporation must be retained for:
Answer:
3 years
Explanation:
Under the NASAA Model Rule covering Investment Adviser records, the adviser's articles of incorporation must be retained for a total of 3 years. As stated in Rule 203(a)-2
"Partnership articles and any amendments, articles of incorporation, charters, minute books, and stock certificate books of the investment adviser and of any predecessor, shall be maintained in the principal office of the investment adviser and preserved until at least three years after termination of the enterprise."
When other factors such as health and illiteracy rates are added to global comparisons of GDP and population, which of the following is likely to be revealed?
A. rough comparisons between regions as data are not available
B. very wide differences in the standard of living
C. 2% of the world's GDP comes from agriculture in low-income countries
D. the similarity in the low degree of urbanization
Answer:
The answer is B. very wide differences in the standard of living
Explanation:
Economists use Gross Domestic Product (GDP) which is the final value of all goods and services produced within a country during a given period of time, usually a year as the ultimate yardstick for measuring and ranking countries' wealth, standard of living and/or illiteracy level.
And GDP per capita measures a country's economic output per person. It is by dividing the GDP of a country by its total population. Countries with the highest value are known to have a high standard of living, better health care and high literacy level and vice-versa.
Gustavson Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Wholesaling.
Service Departments Operating Departments Administrative Facilities Assembly Wholesaling
Dept Costs $26,840 $59,400 $183,430 $321,190
Employee hours 4,000 2,000 29,000 15,000
Space occupied 2,000 2,000 30,000 6,000
Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. The total Wholesaling Department cost after the allocations of service department costs is closest to:_______.a. $337,530b. $331,090c. $340,240
d. $340,426
Answer:
c. $340,240
Explanation:
The computation of total Wholesaling Department cost is shown below:-
Administrative costs = $26,840 × 15,000 ÷ (29,000 + 15,000)
= $26,840 × 15,000 ÷ 44,000
= $9,150
Facilities costs = $59,400 × 6,000 ÷ (30,000 + 6,000)
= $59,400 × 6,000 ÷ 36,000
= $9,900
Total wholesaling department
= Wholeselling department cost + administrative cost + facilities cost
= $321,190 + $9,150 + $9,900
= $340,240
The city of Modesto, California needs more water. The town engineer has selected two plans for comparison: a gravity-based plan (divert water from the Sierras and pipe it by gravity to the city) and a pumping plan (pump water from a closer water source to the city). The pumping plant would be built in two stages, with half-capacity installed initially and the other half installed 10 years later.The analysis should assume a 40-year life, 10% interest on the municipal loan used to finance the project, and no salvage value of the project or equipment and the end of its life. Gravity Pumping Initial investment $2.8 million $1.4 millionAdditional investment in year 10 None $200,000Operation and maintenance $10,000/yr $25,000/yr Power cost Average the first 10 years None $50,000/yr Average the next 30 years None $100,000/yr(a) Use an annual cash flow analysis to find out which plan is preferred(b) What is the breakeven investment cost in year 10 to make these two projects equally preferable?
Answer:
a pumping plan (pump water from a closer water source to the city) is prefered.
the breakeven investment cost in year 10 is $1311018. 802 in order to make these two projects equally preferable
Explanation:
From the given information; we are to :
(a) Use an annual cash flow analysis to find out which plan is preferred
(b) What is the breakeven investment cost in year 10 to make these two projects equally preferable?
The two plans selected by the engineer are:
a gravity-based plan (divert water from the Sierras and pipe it by gravity to the city)
a pumping plan (pump water from a closer water source to the city).
In order to achieve that; let's find out the Present Value for each plan.
The Present Value (PV) of cost related to a gravity-based plan is:
[tex]PV = 2800000 +1000 a_{40} _{\urcorner}[/tex] at 10%
[tex]PV = 2800000 +97790.50[/tex]
PV = $2897790.5
The Present Value (PV) of cost related to a pumping plan
[tex]PV = 1400000+ \dfrac{200000}{(1+i)^{10}}+ 25000 a_{40}_{\urcorner}+5000 a_{10}_{\urcorner} + \dfrac{100000 a_{30} _{\urcorner}}{(1+i)^{10}}[/tex] at 10%
PV = 1400000 + 77108.66 + 244476.27 + 307228.36+363448.36
PV = $2392261.65
Thus; we consider the PV with lower value in order to determine which plan is prefered.
Thus; a pumping plan (pump water from a closer water source to the city) is prefered.
(b).
What is the breakeven investment cost in year 10 to make these two projects equally preferable
Let assume that I = the break even investment cost in year 10 for the prefered pumping plan.
Then;
$2897790.5 = $2392261.65 + (I/(1+i)¹⁰) at 10%
$2897790.5 - $2392261.65 = (I/(1+i)¹⁰) at 10%
$505528.85 = (I/(1+i)¹⁰) at 10%
0.3856 I = 505528.85
I = 505528.85/0.3856
I = $1311018.802
Thus; the breakeven investment cost in year 10 is $1311018.802 in order to make these two projects equally preferable
Matt is passionate about Hollister. It is the only place he'll buy his clothes. He hasn't shopped anywhere else in the last few years and will often write positive reviews on his blog about Hollister's merchandise. From a strictly marketing perspective, Matt's positive reviews reflect
Answer:
Bias
Explanation:
Bias is a preference towards something do to ignorance. he is being biased becuase he never goes to other stores to see if they are better