Exercise 11-1 Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,800,000 Net operating income $ 5,000,000 Average operating assets $ 35,800,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)

Answers

Answer 1

Answer:

1. 28.09 %

2.0.50 times

3.13.97 %

Explanation:

Margin = Profit / Sales × 100

            = $ 5,000,000 / $ 17,800,000 × 100

            = 28.09 % (2 decimal places.)

Turnover = Sales / Total Assets

               = $ 17,800,000 / $ 35,800,000

               = 0.50 times (2 decimal places.)

Return on investment = Divisional Profit Contribution / Assets employed in the  division × 100

                                    =  $ 5,000,000 / $ 35,800,000 × 100

                                    = 13.97 % (2 decimal places.)


Related Questions

Classify each of the tasks according to whether or not they are tasks of the Federal Reserve. Tasks of the Federal Reserve Not tasks of the Federal Reserve

Answers

Answer:

Tasks of the Federal Reserve

Managing the U.S. Money Supply - one of the main functions of the Federal Reserve is managing the money supply: the quantity of money that there is in the economy. The Federal Reserve can either increase or contract the money supply.

Printing paper currency - when the Federal Reserve increases the money supply, part of that supply is printed as paper currency.

Acting as a lender of last resort - when commercial banks or governments do not have any other creditor, they turn to the Federal Reserve, which has the obligation to act as a lender of last resort.

Engaging in monetary policy - this is the reason why the Federal Reserve exists in first place. The main activity of the Fed is to engage in monetary policy, mainly with the goal of controlling inflation, and easing economic cycles.

Not tasks of the Federal Reserve

Creating the federal budget - the federal budget is developed by the president, and also by the Congress.

Engaging in fiscal policy - fiscal policy is responsability of the president, and the Congress.

Managing Europe's money supply - The Federal Reserve only manages the money supply of the United States. Europe's money supply is managed by the European Central Bank in the case of the Eurozone, and by different national central banks in the case of countries that are not part of the Euro.

Answer:

Tasks of the Federal Reserve:

Managing the US money supply

Acting as a lender of last resort

Engaging in monetary policy

Not tasks of the Federal Reserve:

Creating the federal budget

Printing paper currency

Engaging in fiscal policy

Managing India’s money supply

Exercise D Viking Corporation is operating at 80% of capacity, which means it produces 8,000 units. Variable cost is $100 per unit. Wholesaler Y offers to buy 2,000 additional units at $120 per unit. Wholesaler Z proposes to buy 1,500 additional units at $140 per unit. Which offer, if either, should Viking Corporation accept

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

The variable cost is $100 per unit.

Wholesaler Y offers to buy 2,000 additional units at $120 per unit.

Wholesaler Z proposes to buy 1,500 additional units at $140 per unit.

We need to choose the best alternative, in this case, the one with the higher increase in income:

Effect on income= total contribution margin

Wholesaler Y:

Effect on income= 2,000*(120 - 100)= $40,000 increase

Wholesaler Z:

Effect on income= 1,500*(140 - 100)= $60,000 increase

The best option is to sell the units to Wholesaler Z. If Wholesaler Y accepts, you can still sell 500 more units.

A stock has an expected return of 13 percent, the risk-free rate is 4.1 percent, and the market risk premium is 5.3 percent. What is the stock's beta?

Answers

Answer:

Stock Beta = 1.68

Explanation:

The expected return on stock can be estimate using te capital asset pricing model (CAPM).

The capital pricing model establishes the relationship between expected return from a stock and its systematic risk . The systematic risk is that which affects all players (businesses and firms) in the entire market, such risks are occasioned by changes in interest rate, exchange rate e.t.c

According to the model , the expected return is computed as follows

E(r) = Rf + β(Rm-Rf)

Rf- risk -free rate, Rm-Rf - market premium ,  β- beta

DATA:

E(r) = 13%, Rm-Rf = 5.3 , risk-free rate- 4.1%, β?

Applying this model, we have

13% = 4.1% + β× (5.3%)

0.13 = 0.041 + 0.053β

Collecting like terms

0.053β= 0.13 - 0.041

divide both sides by 0.053

β=  (0.13 - 0.041)/0.053

β = 1.679

Stock Beta = 1.68

Neither the payback period nor the accounting rate of return methods of evaluating investments considers the time value of money.
a) True
b) False

Answers

Answer:

The answer is true.

Explanation:

Both of payback period and Accounting Rate of Return do not consider the time value of money. And this is one of the big disadvantages in using these methods as a means of valuating capital project.

While payback period is the length of time it takes a firm to recover the cost of an investment, accounting rate of return is annual return(profit) on investment.

Payback period is only interested in when it will get its Investment back. It ignores the value or time after this investment has been realized.

Consider the market for minivans (Some would describe a minivan as a family car). Looking at the two statements, which one is true and which one is false? Then again, are they both true or both false? Statement 1: People decide to have fewer children. The demand curve for minivans will shift to the right. Statement 2: The stock market crashes lowering people’s wealth (Hint: Minivan would be considered a normal good). The demand curve for minivans will shift to the right.

Answers

Answer:

both statements are false

Explanation:

if People decide to have fewer children, there would be less demand for minivans as a result the demand curve would shift to the left.

also, if The stock market crashes lowering people’s wealth and minivans are normal goods, the demand for minivans would fall and the demand curve would shift to the left.

A leftward shift signifies a fall in demand while a rightward shift signals a rise in demand

Normal goods are goods that are goods whose demand increases when income increases and falls when income falls

Find end inventory and cost of goods
Date Transactions Units Unit Cost Total Cost
June 1 Beginning inventory 16 $ 340 $ 5,440
June 7 Sale 11
June 12 Purchase 10 330 3,300
June 15 Sale 12
June 24 Purchase 10 320 3,200
June 27 Sale 8
June 29 Purchase 10 310 3,100
$ 15,040

Answers

Answer:

End inventory = $4,730

Cost of goods sold = $10,310

Explanation:

Note: This question is not complete. The complete question is therefore provided in the attached Microsoft word document before answering the question as follows:

a. Calculation of ending inventory

Number of units of Beginning inventory remaining unsold = 16 - 11 - 3 - 1 = 1 unit

Value of number of units Beginning inventory remaining unsold = 1 * $340 = $340

Number of units June 12 Purchase remaining unsold = 10 - 9 = 1 unit

Value of number of units June 12 Purchase remaining unsold = 1 * $330 = $330

Number of units of June 24 Purchase remaining unsold = 10 - 7 = 3 units

Value of number of June 24 Purchase remaining unsold = 3 * $320 = $960

Value of number of June 29 Purchase remaining unsold = 10 * $310 = $3,100

Therefore, End inventory is the addition of all the values of units remaining unsold as follows:

End inventory = $340 + $330 + $960 + $3,100 = $4,730

b. Calculation of cost of goods sold

June 7 cost of goods sold = 11 * $340 = $3,740

June 15 cost of goods sold = (3 * $340) + (9 * $330) = $3,990

June 27 cost of goods sold = (1 * $340) + (7 * $320) = $2,580

Cost of goods sold can therefore be calculated as follows:

Cost of goods sold = June 7 cost of goods sold + June 15 cost of goods sold + June 27 cost of goods sold = $3,740 + $3,990 + $2,580 = $10,310

Sweeties, Inc., manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $369,000, $146,000, and $97,600, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $30,200, and work in process at the end of the period totaled $28,400.
Required:
A1) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials.
A2) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor.
A3) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.
B. On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting.

Answers

Answer:

A1) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials.

Dr Work-in process: Refining Department 369,000  

    Cr Materials inventory 369,000

A2) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor.

Dr Work-in process: Refining Department 146,000  

    Cr Wages payable 146,000

A3) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.

Dr Work-in process: Refining Department 97,600  

    Cr Manufacturing overhead: Refining Department 97,600

B. On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting.

Dr Work-in process: Sifting Department 614,400  

    Cr Work-in process: Refining Department 614,400

$30,200 - $28,400 + $369,000 + $146,000 + $97,600 = $614,400

Sunland Company purchases $50,400 of raw materials on account, and it incurs $61,300 of factory labor costs. Journalize the two transactions on March 31, assuming the labor costs are not paid until April.
No. Date Account Titles and Explanation Debit Credit
a) Mar. 31

b) 31

Answers

Answer:

A. Mar 31

Dr Raw materials $50,400

Cr Account pay $50,400

B. 31

Dr Factory labour $61,300

Cr Factory wages $61,300

Explanation:

Preparation of the Journal entries for Sunland Company

A. Since we were told that the company purchases the amount of $50,400 of raw materials on account this means that the transaction will be recorded as:

Mar 31

Dr Raw materials $50,400

Cr Account pay $50,400

B. Based on the information given we were told that the company incurs the amount of $61,300 of factory labor costs this means that the transaction will be recorded as:

31

Dr Factory labour $61,300

Cr Factory wages $61,300

Which of the following types of contracts does not fall within the statute of frauds? Select one: A. Contracts not performed within six months B. Contracts for the sale of goods totaling more than $500 C. Contracts for one party to pay the debt of another party if the initial party fails to pay D. Promises made in consideration of marriage E. Agreements related to an interest in land

Answers

Answer:

Correct Answer:

C. Contracts for one party to pay the debt of another party if the initial party fails to pay

Explanation:

In a business setting which exist between two parties, when there is a renegation of agreement between the parties involved by one person, then there is consequences. In a situation where the renegation of agreement was deliberate, then, fraud is said to have occurred.

Option C does not fall within the statue of fraud.

The type of contract that does not fall within the statute of fraud is when the one part agrees to pay the debt of another party.

The following are the situations where the fraud could have existed:

Contract not performed for six months. The sale of goods is more than $500.The promise is made for marriage. Agreements are to be done for land.

Therefore we can conclude that the type of contract that does not fall within the statute of fraud is when the one part agrees to pay the debt of another party.

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Childress compnay produces three products, K1, S5, and G9. Each product uses the same type of material. K1 uses 4.5 pounds of the material, S5 uses 3 pounds , and G9 uses 5.5 pounds. Demand for all products is strong but only 59900 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows.

K1 S5 G9
Selling price $158.38 $114.80 $204.52
Variable costs 86.00 91.00 139.00

Required:
Calculate the contribution margin per pound for each of the three products.

Answers

Answer:

Product                               K1                         S5                       G9

                                             $                      $                                   $

Contribution per pound      16.08                    7.93        11.91

Explanation:

Contribution per pound is equate to contribution per unit divided quantity of material required per unit of product.

Contribution per pound = Contribution per unit/quantity of material

Contribution per unit =selling price - variable cost per unit

Product                               K1                         S5                       G9

                                           $                      $                                   $

Selling price                      158.38                   114.80              204.52

Variable cost                     (86.00)                 (91.00)             (139.00)                                    

Contribution per unit          72.38             23.8           65.52

Material per unit (pounds)   4.5                         3                       5.5

Contribution per pound      16.08             7.93             11.91

Calculate the earnings of workers A, B and C under the Straight Piece

Rate System and Merrick’s Differential Piece Rate System from the

following particulars.

Normal rate per hour: Rs. 5.40

Standard time per unit: 1 minute

Output per day is as follows.

Worker A – 390 units

Worker B – 450 units

Worker C – 600 units.

Working hours per day are 8

Answers

Answer:

Earnings of Workers:

                             Rates Systems

Worker  Straight Piece   Merrick's Differential Piece

A                $35.10                   $28.08

B                $40.50                  $32.40

C               $54.00                  $64.80

Explanation:

a) Data:

Normal rate per hour: Rs. 5.40

Standard time per unit: 1 minute

Output per day is as follows.

Worker A – 390 units  

Worker B – 450 units

Worker C – 600 units

Working hours per day are 8

b) Calculations:

i) Standard units per day = 8 x 60 minutes = 480 units

ii) Earnings per day is as follows.

Worker A – 390 units :

Straight piece Wages = 390 / 60 x $5.40 = $35.10

Merrick's Earnings = 390/60 x $5.40 x 0.8 = $28.08

Worker B – 450 units :

Straight piece Wages = 450 / 60 x $5.40 = $40.50

Merrick's Earnings = 450/60 x $5.40 x 0.8 = $32.40

Worker C – 600 units:

Straight piece Earnings = 600 / 60 x $5.40 = $54

Merrick's Earnings = 600/60 x $5.40 x 1.2 = $64.80

c) The factor for multiplying the rate is obtained by dividing the units produced by the number of minutes in an hour, in order to convert output to a rate based on the hour.

d) The standard output per day helps Merrick in calculating the weights to be assigned to each worker and differentiate the slow worker from the superior worker (hence, the name: Merrick's Differential Piece Rate).  The slow workers (those who produce below the standard output) are paid a rate lower than the standard rate by adding a weight of 0.8  as a punishment while the superior worker is assigned a weight of 1.20 as a reward for good performance.  Meanwhile, a standard performer who produced 480 units will be paid the normal rate or weighed as 1.0.  

Marco was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing

Answers

n the video, Marco says he was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing ............... when they send Marco to seminars instead of, for example, increasing his salary in exchange for his continued high performance at MBSC. They could maintain Marco’s high level of motivation by:........................

A. Sending him on an all-expense-paid Caribbean cruise for two weeks

B. Reimbursing his tuition as he seeks a master’s degree in fitness management

C. Reassuring him that he has a job with MBSC as long as he performs well

D. Setting up an employee discount program at a nearby coffee shop, laundromat, and tasalon

Answer:

Valence

C. Reassuring him that he has a job with MBSC as long as he performs well

Explanation:

By sending Marco to seminars, Mike and Bob are addressing VALENCE;  a psychological value  an individual put on  another person, in relation to the attractiveness of individual whose a psychological value has been placed. In this case, a psychological value placed on Macro by his managers is the valuable rewards they would get from his professional development, rather than increasing his salary in exchange for high performance.

Therefore, they could maintain Marco’s high level of motivation by reassuring him that he has a job with MBSC as long as he performs well.

Steve goes to Tri-State University and pays $40,000 in tuition. Steve works a part-time job to pay for his schooling and has an AGI of $17,000. How much is his American Opportunity Credit? Group of answer choices

Answers

Answer:

$2,500

Explanation:

The calculation of American opportunity tax credit is shown below:-

According to the given situation, Steve's part-time job wouldn't come in between his not applying for the credit as the AGI is lower than the applying number.

Therefore, the credit would be 100% of first is

= $2,000 + 25% (Increased)

= $2,500

On November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $27,000. What is the maturity value of the note on March 1

Answers

Answer: $27,900

Explanation:

From the question, we are informed that on November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $27,000.

The maturity value of the note on the note on March 1 will be the face value plus the interest. This will be:

= $27,000 + [($27,000 × 10%)/360 × 120]

= $27,000 + [($2700/360) × 120]

= $27,000 + ($7.5 × 120)

= $27,000 + $900

= $27,900

On February 12, Travis Company purchased merchandise on account from a supplier for $10,300. terms 2/10, net 30.
On February 14. Travis returned $1,550 of the merchandise purchased.
On February 17, Travis Company paid for the merchandise.
Assume Travis Company is using the periodic inventory system, record the journal entries required for the above transactions.

Answers

Answer:

February 12

Dr Merchandise Inventory 10,300

Cr Accounts Payabe 10,300

February 14

Dr Accounts Payable 1,550

Cr Merchandise Inventory 1,550

February 17

Dr Accounts Payable 8,750

Cr Cash 8,575

Cr Merchandise Inventory 175

Explanation:

Preparation of the Journal entries for Travis Company using periodic inventory system

A. Based on the information given we were told that the company purchased merchandise on account from a supplier for the amount of $10,300 this means that the transaction will be recorded as:

February 12

Dr Merchandise Inventory 10,300

Cr Accounts Payabe 10,300

B. Since the company returned the amount of $1,550 of the merchandise purchased this means that the transaction will be recorded as:

February 14

Dr Accounts Payable 1,550

Cr Merchandise Inventory 1,550

C. Based on the information given we were told that the company paid for the merchandise, this means that the transaction will be recorded as:

February 17

Dr Accounts Payable 8,750

(10,300-1,550)

Cr Cash 8,575

(98%*8,750)

Cr Merchandise Inventory 175

(2%*8,750)

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

Answers

The journal entry for recording the warranty expense is

Dr Warranty Expense 7,400

    Cr Estimated Warranty Liability 7,400

Journal entry:

Dr Warranty Expense 7,400 (185,000 x 0.04)

    Cr Estimated Warranty Liability 7,400

(being warranty expense is recorded)

here expense is debited as it increased the expense and liability should be credited as it also increased the liability.

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The entry for the warranty expense would be recorded in the form of the Journal entry by debiting the Warranty Expense and crediting the Estimated Warranty Liability with the amount of $7,400.

What is the Journal entry?

Journal entry is defined as the primary books of accounting, it records the financial transactions of the firm as a form of recording the transaction by applying the golden rules of accounting.

This process of recording involves of transactions by giving the debit as well as credit effect of the transaction in such a manner that the transactions are recorded properly.

The Journal entry of the given case is:

Warranty Expense a/c            Dr.     $7,400

            To Estimated Warranty Liability a/c                     $7,400

(being warranty expense is recorded)

The amount is calculated as:

185,000 × 0.04 = $7,400

Therefore, both the accounts are recorded with the $7,400.

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Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D 0 = $0.90; P 0 = $27.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings? 9.29% 9.68% 10.08% 10.50% 10.92%

Answers

Answer:

10.50%

Explanation:

According to the given situation, the solution of cost of equity from retained earning is shown below:-

Cost of equity = (D0 × (1 + g) ÷ P0) + g

Now we will put the values into the above formula.

= (0.90 × (1 + 0.07) ÷ 27.50) + 0.07

= 10.50%

Therefore for determining the cost of equity from retained earning we simply applied the above formula.

For much of the 1990s, the U.S. economy was experiencing long-run economic growth, low unemployment, and a stable inflation rate. Which of the following would give rise to these outcomes?
A. an increase in aggregate demand and short-run aggregate supply
B. a decrease in aggregate demand and short-run aggregate supply
C. a decrease in aggregate demand and an increase in short-run aggregate supply
D. an increase in aggregate demand and a decrease in short-run ag

Answers

Answer: . an increase in aggregate demand and short-run aggregate supply

Explanation:

From the question, we are informed that during the 1990s, the economy of the United States was experiencing long-run economic growth, low unemployment, and a stable inflation rate.

The reason for this is due to an increase in aggregate demand and short-run aggregate supply. This two factors will lead to the long run economic growth which the United States experienced.

Zarina Corp. signed a new installment note on January 1, 2018, and deposited the proceeds of $15,000 in its bank account. The note has a two-year term, compounds 4 percent interest annually, and requires an annual installment payment on December 31. Zarina Corp.
Required:
1. Use an online application, such as the loan calculator with annual payments at mycalculators.com, to generate an amortization schedule. Enter that information into an amortization schedule with the following headings: Year, Beginning Notes Payable, Interest Expense, Repaid Principal on Notes Payable, and Ending Notes Payable.
2. Prepare the journal entry on January 1, 2018, the adjusting journal entry to accrue interest on March 31, 2018. Assuming the journal entry from requirement 3 also is recorded on June 30, September 30, and December 31, 2018, prepare the journal entry to record the first annual installment payment on December 31, 2018.
3. Calculate the amount of interest expense that should be accrued for the quarter ended March 31, 2019.

Answers

Answer:

1)

the annual installment = $7,952.94

total Interest paid = $905.88

Year     Beginning            Interest           Repaid            Ending

            Notes Payable     Expense         Principal         Notes Payable

1            $15,000               $600               $7,352.94      $7,647.06

2           $7,647.06           $305.88           $7,647.06      $0

2)

March 31, 2018, accrued interests on notes payable

Dr Interest expense 150

    Cr Interest payable 150

June 30, 2018, accrued interests on notes payable

Dr Interest expense 150

    Cr Interest payable 150

September 30, 2018, accrued interests on notes payable

Dr Interest expense 150

    Cr Interest payable 150

December 31, 2018, accrued interests on notes payable

Dr Interest expense 150

    Cr Interest payable 150

December 31, 2018, first installment on notes payable

Dr Notes payable 7,352.94

Dr Interest payable 600

    Cr Cash 7,952.94

3)

March 31, 2019, accrued interests on notes payable

Dr Interest expense 76.47

    Cr Interest payable 76.47

1. The Amortization schedule is:

Year  Beginning Notes Interest expense   Repaid Principle  Ending notes

                    Payable                                      on notes payable    Payable

2018           15,000                     600                    7,353                     7,647

2019            7,647                      306                     7,647                       0

                                             

The annual payment is an annuity and can be found as:

Loan= Annuity x Present value interest factor of annuity, 4%, 2 years

15,000 = Annuity x 1.886

Annuity = 15,000 / 1.886

= $7,953

Principal repaid in first year = Amount paid - interest

= 7,953 - (15,000 x 4%)

=  7,953 - 600

= $7,353

Principal repaid in second year

= 7,953 - (4% x 7,647)

= $7,647

2.

Date                Account title                                      Debit                 Credit

Jan 1, 2018      Cash                                               $15,000

                       Notes Payable                                                          $15,000

Date                     Account title                                      Debit              Credit

March 31, 2018     Interest expense                             $150

                             Interest payable                                                        $150

Working:

= Loan amount x Rate x period of loan so far

= 15,000 x 4% x 3/ 12 months

= $150

Date                Account title                                      Debit                 Credit

Dec 1, 2018    Interest payable                                $600

                       Notes payable                                  $7,353

                        Cash                                                                          $7,953

3. Interest accrued March 31,2019:

= Loan amount in second year x 4% x 3/12 months

= 7,647 x 4% x 3/12

= $76

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The Pennington Corporation issued a new series of bonds on January 1, 1985. The bonds were sold at par ($1,000); had a 12% coupon; and mature in 30 years, on December 31, 2014. Coupon payments are made semiannually (on June 30 and December 31). a. What was the YTM on January 1, 1985?

Answers

Answer:

The YTM on January 1, 1985 was 6.00%.

Explanation:

The YTM is the interest rate used to determine the Present Value of Coupons and Principle and can be found as follows :

PV = $1,000

Pmt = ($1,000 × 12 %) / 2 = - $60

P/yr = 1

n = 30 × 2 = 60

Fv = - $1,000

YTM = ?

Using a Financial Calculator, the YTM is 6.00%

Therefore, the YTM on January 1, 1985 was 6.00%.

If the Fed lowers the interest​ rate, then A. only consumption expenditure decreases. B. only investment decreases. C. consumption expenditure decreases and investment increases. D. net exports will increase. E. both consumption expenditure and investment decrease.

Answers

Answer: D. net exports will increase.

Explanation:

Lower interest rates decrease the value of a currency because less investors will invest in it. This reduced currency value will mean that exports will become cheaper as they are quoted in the domestic currency. As the exports are cheaper, more countries will buy them leading to an increase in Net exports.

g If the Fed is concerned about a possible​ recession, it​ ________ the federal funds rate​ and, in​ response, longterm interest rates​ ________ by a​ ________ amount than the change in shortterm rates. A. ​lowers; increase; smaller B. ​lowers; decrease; smaller C. ​raises; decrease; larger D. ​raises; increase; smaller E. ​raises; increase; larger

Answers

Answer:

The Fed

Concern about possible recession:

E. ​raises; increase; larger

Explanation:

The federal funds rate is a short-term monetary policy tool that the Federal Reserve deploys to control expansionary or recessionary economic conditions.  It is the interest rate that Federal Reserve allows banks with excess to charge other banks that need to borrow to shore up their deficits.  This interest rate is a short-term rate when compared to the long-term interest rates that banks charge consumers of its products and services.  The long-term interest rates are affected by the inflation rates.  

Consider the circular flow model to answer the questions that follow.

a. In the circular flow model, households provide inputs to firms through the _____________ and in exchange receive _____________ from firms.
b. In the circular flow model, firms receive ___________ from households when households purchase goods and services in the

Answers

Answer:

The answer is :

A. Resource market - income

B. Expenditure - product market.

Explanation:

A. Resource market - income

B. Expenditure - product market

The circular flow model shows how money moves through the economy in exchange for goods, services, and resources.

A.

In circular flow of income, households provide inputs to firms through the resource market(matket where households supply land, labor, capital, and entrepreneurship) in exchange for money(income or wages).

B.

Also in circular flow of income, firms receives expenditure from household and this type of market is called product market(which refers to a place where goods and services are bought and sold)

When using the cost of production report to analyze the change in direct materials cost per equivalent unit compared to conversion cost per equivalent unit, an investigation may reveal that direct materials costs:_____.
a. will never decrease due to the way the cost is calculated.
b. will never increase due to the way the cost is calculated.
c. may increase or decrease between periods, depending on the fluctuation of the cost of the direct materials.
d. will only increase if conversion costs increase as well.

Answers

Answer:

The correct answer is the option C: May increase or decrease between periods, depending on the fluctuation of the cost of the direct materials.

Explanation:

To begin with, in the field of business a manager or an account would perfectly know that when using the cost of production report with the purpose to analyze the change in direct materials costs per equivalent unit compared to conversion cost per unit the investigation will reveal that the direct material costs may increase or decrease between periods, depending on the fluctuation of the cost of those materials due to the fact that the fluctuation mentioned will arise if the company starts using more direct material in the production so that means that the volumen will increase as well as the costs of it

The founder of Alchemy Products, Inc., discovered a way to turn lead into gold and patented this new technology. He then formed a corporation and invested $200,000 in setting up a production plant. He believes that he could sell his patent for $50 million.
a. What are the book value and market value of the firm?
b. If there are 1 million shares of stock in the new corporation, what would be the price per share and the book value per share?

Answers

Answer:

Book Value is $0.2 million

Market Value is $50 million

Book Value per share is $0.2 per share

Market Value per share is $50 per share

Explanation:

Part A. The book value of Alchemy Products Inc., is $0.2 million and its market value is $50 million.

Part B.

The Book value per share of Alchemy Products Inc., is calculated as under:

Book Value per share = $0.2 million / 1 Million shares   =  $0.2 per share

The Market value per share of Alchemy Products Inc., is calculated as under:

Market Value per share = $50 million / 1 Million shares   =  $50 per share

A firm currently sells $1,750,000 annually of an expensive product line. That firm is considering a similar, less expensive, discount line, and projects sales of $380,000. The discount line is expected to reduce sales of the expensive product line to $1,575,000. What is the incremental revenue associated with the discount product line?

Answers

Answer:

$175,000

Explanation:

A firm currently makes an amount of $1,750,000 annually from an expensive product line

The firm projects a sales of $380,000

The discount line is expected to cause a reduction in the sales of the expensive product line to $1,575,000

Therefore, the incremental revenue associated with the discount product line can be calculated as follows

= $1,750,000-$1,575,000

= $175,000

Hence the incremental revenue associated with the discount product line is $175,000

Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effectiveinterest method and plans to hold these bonds to maturity. 5. On July 1, 2011, Patton Company should increase its Held-to-Maturity Debt Securities account for the Scott Co. bonds by

Answers

Answer:

$685.55

Explanation:

Patton company ;

Bond payments $376,100 × 0.055

= $20,685.55

Less face amount $400,000 × 0.05

= $20,000

Held-to-maturity debt securities $685.55

($20,685.55 - $20,000)

Note:

Effective yield(market rate)

= 11% ÷ 2

= 5.5%

Bonds

= 10% ÷ 2

= 5%

Following are the transactions of a new company called Pose-for-Pics.
Aug.1 Madison Harris, the owner, invested $8,300 cash and $35,300 of photography equipment in the company in exchange for common stock.
2 The company paid $3,900 cash for an insurance policy covering the next 24 months.
5 The company purchased office supplies for $1,060 cash.
20 The company received $5,131 cash in photography fees earned.
31 The company paid $855 cash for August utilities.
1 Madison Harris, the owner, invested $8,300 cash and $35,300 of photography equipment in the company in exchange for common stock.
2 The company paid $3,900 cash for an insurance policy covering the next 24 months.
3 The company purchased office supplies for $1,060 cash.
4 The company received $5,131 cash in photography fees earned.
5 The company paid $855 cash for August utilities.

Answers

Question Requirement:

Prepare an August 31st Trial Balance

Answer:

Pose-for-Pics

Trial Balance as of August 31st

Description                              Debit                Credit

Cash                                       $7,616

Photography Equipment      35,300

Common Stock                                             $43,600

Prepaid Insurance                  3,900

Supplies                                   1,060

Photography fees earned                                 5,131

Utilities                                       855

Total                                    $48,731             $48,731

Explanation:

a) Common Stock

Cash             8,300

Equipment 35,300

Total          43,600

b) Cash account:

Common stock $8,300

Insurance           (3,900)

Supplies             (1,060)

Fees                     5,131

Utilities                 (855)

Balance             $7,616

c) A trial balance is a list of general ledger balances at the end of a period.  It is an accounting tool to ensure that the two sides of the double entry bookkeeping are in balance.  Discrepancies are sorted out, if any.  It forms the basis for preparing the financial statements whereby temporary accounts are transferred to the income summary while the permanent accounts are taken to the balance sheet, after all adjustments have been made.

The market has an expected rate of return of 11.4 percent. The current nominal expected yield on U.S. Treasury bills is 4.3 percent. The inflation rate is 2.2 percent. What is the market risk premium? (round answer to whole number with two decimal points: i.e., use 1.23 percent instead of 0.0123)

Answers

Answer:

7.1%

Explanation:

According to the CAPM,

expected market return = risk free rate + market risk premium

11.4% = 4.3% + market risk premium

market risk premium  = 11.4% - 4.3% = 7.1%

a. Galaxy Sales has sales of $746,700, cost of goods sold of $603,200, and inventory of $94,300. How long on average does it take the firm to sell its inventory

Answers

Answer:

days of inventory on hand if 360 days is used = 360 / 6.396607 = 56.28 days

days of inventory on hand if 365 days is used = 365 / 6.396607 = 57.06 days

Explanation:

We are to determine the days of inventory on hand

days of inventory on hand = number of days in a period / inventory turnover

inventory turnover = cost of goods sold / inventory - $603,200 / $94,300 = 6.396607

days of inventory on hand if 360 days is used = 360 / 6.396607 = 56.28 days

days of inventory on hand if 365 days is used = 365 / 6.396607 = 57.06 days

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