Answer:
The store's insurance company is right to deny the claim, provided it is written down in the insurance policy agreement between the store and the insurance company. The policy agreement requires the keeping of a trained guard dog on the premises at ALL times.
Explanation:
The violation of a policy condition can only be overlooked if it is not stated in the insurance agreement. The promise to keep a trained guard dog on the premises is a policy condition. Taking the dog home for a night violates that condition. You could have brought a substitute dog on the night of the dog's birthday. This way, it could have frustrated the burglar's efforts on the faithful day.
Chino Company manufactures fabric and clothing. Managers can either sell the unfinished fabric to other clothing manufacturers or incur additional conversion costs to create a finished garment. The costs incurred to produce the unfinished fabric are $400,000, which are allocated to the products based on the sales value of the unfinished fabric. Following is information concerning the clothing that can be produced from the fabric: Product Number of Units Selling Price of Unfinished Fabric Selling Price after Processing Further Additional Processing Cost Pants 6,000 $20.00 $30.00 $28,450 Shirts 12,000 23.20 32.40 64,400 Coats 4,000 38.80 43.20 18,300 Required: 2-a. Calculate the increase or decrease in profit if the products are processed further. 2-b. Which products should be sold as unfinished fabric and which should be further processed
Answer:
a. increase in profits = $170,400 - $92,850 = $77,550 if only pants and shirts are processed further
if all products are processed further, profits = $188,000 - $111,150 = $76,850
b. pants and shirts should be processed further
Explanation:
Product Number Selling Price of Selling Price Additional
of units unfinished fabric after Proc. F. Processing Cost
Pants 6,000 $20.00 $30.00 $28,450
Shirts 12,000 23.20 32.40 64,400
Coats 4,000 38.80 43.20 18,300
Additional revenue per unit
Pants $10 x 6,000 = $60,000 ≥ $28,450
Shirts $9.20 x 12,000 = $110,400 ≥ $64,400
Coats $4.40 x 4,000 = $17,600 ≤ $18,300
he exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. What is the total compensation cost for this plan
Answer:
$63,500
Explanation:
Missing word "Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 63,500 $1 par common shares. The exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model"
On January 1, 2021, options were granted for 84,000 $1 par common shares
The exercise price equals the $4 market price of the common stock on the grant date.
Each option has a fair value of $1 based on an option pricing model.
Total compensation cost for this plan = Estimated Fair value per option* Option granted
Total compensation cost for this plan = 63,500 * $1
Total compensation cost for this plan = $63,500
Pagemaster Enterprises is considering a change from its current capital structure. The company currently has an all-equity capital structure and is considering a capital structure with 30 percent debt. There are currently 2,150 shares outstanding at a price per share of $70. EBIT is expected to remain constant at $20,000. The interest rate on new debt is 10 percent and there are no taxes. a.Rebecca owns $30,100 worth of stock in the company. If the firm has a 100 percent payout, what is her cash flow
Answer:
Pagemaster Enterprises and Rebecca
If the firm has a 100 percent payout, Rebecca's cash flow is:
= $3,097.
Explanation:
a) Data and Calculations:
Outstanding shares = 2,150
Current price of shares = $70 per share
Market value of outstanding shares = $150,500 ($70 * 2,150)
Debt = 30% of $150,500 = $45,150
Equity = 1- 0.30 = 0.70 or 70%
Interest rate on new debt = 10%
Interest expense = $4,515 ($45,150 * 10%)
EBIT = $20,000
Interest (4,515)
EBT = $15,485
Dividend payout ratio = 100%
Rebecca's investment value = $30,100 = 20% ($30,300/$150,500 * 100)
Therefore, Rebecca's cash flow = $3,097 (20% of $15,485)
A firm currently has a 43 day cash cycle. Assume that the firm changes its operations such that it increases its receivables period by 2 days, decreases its inventory period by 1 day and increases its payables period by 3 days. What will the length of the cash cycle be after these changes
Answer:
41 days
Explanation:
Calculation to determine What will the length of the cash cycle be after these changes
Using this formula
Cash cycle Length=Cash cycle+Increases in receivables period -Decreases in inventory period -Increases in payables period
Let plug in the formula
Cash cycle Length = 43 days+2 days -1 days - 3 days
Cash cycle Length= 41 day
Therefore What will the length of the cash cycle be after these changes is 41 days
The production of chicken often results in offending odors that are picked up by the wind and blown over rural communities. This is an example of a ______ externality, the result of which are spillover ______ and an _____ of resources to chicken production. *
Answer:
Negative; cost; allocation.
Explanation:
The production of chicken often results in offending odors that are picked up by the wind and blown over rural communities. This is an example of a negative externality, the result of which are spillover cost and an allocation of resources to chicken production.
Which factors are considered when deciding how to make goods and services?
Answer:
determining who has the greatest need
finances of prospective buyers(X)
methods traditionally used to make a good
ways to produce items at a lower cost or higher quality (X)
ways to make the biggest profit (X)
Explanation:
Which of the following statements about corporate governance in China is false? a. The state still uses direct and/or indirect controls to influence the strategies employed by most firms. b. The Chinese governance system may be tilting toward the Western model. c. Firms with higher state ownership tend to have lower market value and more volatility in those values over time. d. Private firms seek to establish political ties with the government to increase market value and avoid potential conflict between the principals.
Answer: D. Private firms seek to establish political ties with the government to increase market value and avoid potential conflict between the principals.
Explanation:
Corporate governance refers to a system of policies and rules, which dictate how the operations of an organization are manageed. The statements that are true about corporate governance in China include:
• The state still uses direct and/or indirect controls to influence the strategies employed by most firms.
• The Chinese governance system may be tilting toward the Western model.
• Firms with higher state ownership tend to have lower market value and more volatility in those values over time.
Therefore, the answer to the question will be option D as it's not true about corporate governance in China.
A store has the following demand figures for the last four years: Year Demand 1 100 2 150 3 112 4 200 Given a demand forecast for year 2 of 100, a trend forecast for year 2 of 10, an alpha of 0.3, and a beta of 0.2, what is the demand forecast for year 3 using the double exponential smoothing method
Answer:
125
Explanation:
Calculation to determine the demand forecast for year 3 using the double exponential smoothing method
Smoothed forecast for year 3 = (0.3 ×150) + (0.7 ×100) + 10
Smoothed forecast for year 3 = 45+70+10
Smoothed forecast for year 3 =125
Therefore the demand forecast for year 3 using the double exponential smoothing method will be 125
On July 22, George sold $24100 of inventory items on credit with the terms 2/15, net 30. Payment on $15500 sales was received on August 1 and the remaining payment was received on August 12. Assuming George uses the gross method of accounting for sales discounts, what entries was made on August 1 to record the cash received?
Answer:
Dr Cash $15,190
Dr Sales Discount $310
Cr Accounts Receivable $15,500
Explanation:
Based on the information given the Journal entries that was made on August 1 to record the cash received is :
August 1
Dr Cash $15,190
($15,500-$310)
Dr Sales Discount $310
($15500*.02=$310)
Cr Accounts Receivable $15,500
(To record the cash received)
People who booked a tour with a company in Alaska before COMID-19 can request a cash refund or a credit that they can use later meaning the company will still have the money. If too many people ask for cash refunds, the company will go out of business. Their customers, who are all around the world and do not know each other, prefer that the company stays in business while they receive a cash refund. No one wants the company to go out of business while they still have trip credit (so they would lose their money. Based on what you know about game theory, what is the most likely outcome?
A. Everyone will cooperate, take trip credit, and the company will stay in business.
B. Everyone will honor sunk costs, take the cash refund, and the company will go out of business.
C. Everyone will honor sunk costs, take trip credit, and the company will stay in business.
D. Everyone will follow their self-interest, request a cash refund, and the company will go out of business.
E. None of these.
Answer:
A. Everyone will cooperate, take trip credit, and the company will stay in business.
Explanation:
The people have booked the tour before COMID-19. It is an uncontrollable factor which is not in the control of anyone. The people and the company will have to bear the consequences of the COMID-19 together. If the customers ask for cash refund, it is not possible for the company to repay all its customers back because the company might have made necessary arrangements for their guests.
Bob listened to a new song and did not like it at all. Shortly thereafter, this song was used by a company as its new advertising jingle, and the song was played over and over, so Bob was repeatedly exposed to the song. You would expect Bob
Answer:
I would expect Bob to complain to the businesses owner that the song is driving him crazy
Explanation:
:)
The 10-year bond of Crown Electronics is selling at $960 each. The bond has a coupon rate of 8% and par value of $1,000. The firm will incur a $20 flotation cost for each bond issued. If the firm's tax rate is 40%, what is the after tax-cost of the firm's debt
Answer: 5.36%
Explanation:
The after-tax cost of debt refers to the interest that is paid on debt which is then less the income tax savings as a result of the deductible interest expenses.
When calculating the after-tax cost of debt, the effective tax rate of a company should be subtracted from 1, after which the difference will be multiplied by the cost of debt. This will therefore be:
= Rate (10,8% × 1000, -960 + 20, 1000) × (1-40%)
=5.36%
A maker of computer games expects to sell games at a price of per game. These units cost to produce. Selling, general, and administrative expenses are million and depreciation is . What is the EBIT break-even point for the number of games sold in this case?
Answer:
$33,684 units
Explanation:
Calculation to determine the EBIT break-even point for the number of games sold in this case
Using this formula
Units sold=(Selling, general, and administrative expenses+Depreciation)/(Price per game-Units cost)
Let plug in the formula
Units sold=($1,000,000+$280,000)/($48-$10)
Units sold = $1,280,000 / $38
Units sold= $33,684 units
Therefore the EBIT break-even point for the number of games sold in this case will be $33,684 units
Suppose that California Co., a U.S. based MNC, seeks to capitalize a difference in interest rates between euros and British pounds via the use of a carry trade. In particular, after 1 month, funds invested in euros will yield a 0.50% percent return, while funds invested in pounds will yield a return of 2.00% percent. Currently the spot rate of the British pound is $1.00 while the spot rate of the euro is $0.80. In other words, the pound is worth 1.25 euros. California Co. expects these spot rates to remain constant over the next month.
After 1 month, California Co. now has 612,000 pounds after investing their converted pounds. However, it is now time for California Co. to repay the 500,000 euro loan. If California Co. borrowed these euros at the prevailing rate of 0.50% percent, they must repay a total of ______________ euros. At the cross rate of 1.25, this repayment is equivalent to pounds. Thus, after repaying the loan, California Co. will have ___________ pounds.
Answer: See explanation
Explanation:
The loan repayment of the 5000 euros after one month will be:
= 500,000 × (1 + .5%)
= 500,000 × 1.0005
= 502,500
Converting 502500 euros to pounds will be:
= 502500/1.25
= 402,000
Therefore, the pounds remaining will be:
= 612,000 - 402,000
= 210,000 pounds
If California Co. borrowed these euros at the prevailing rate of 0.50% percent, they must repay a total of (502500 euros). At the cross rate of 1.25, this repayment is equivalent to (402,000) pounds. Thus, after repaying the loan, California Co. will have (210,000) pounds.
The Neptune Company offers network communications systems to computer users. The company is planning a major investment expansion but is unsure of the cost of equity capital as it has no publicly-traded equity. Your assignment is to determine an appropriate equity cost. List and explain the steps you will need to take to complete this assignment.
Answer:
Collect estimates of beta for firms in the same businessExplanation:
MAD Inc. has a capital structure consisting of 40 percent debt and 60 percent common equity financing. The company has $400 million in net income and plans to pay out 25 percent of their earnings as dividends. What is the maximum amount of new financing that the company can raise without selling new common stock
Answer:
$500 million
Explanation:
Retained earnings = Income * (1 - Dividend payout percentage)
Retained earnings = $400 million * (1-0.25)
Retained earnings = $400 million * 0.75
Retained earnings = $300 million
Amount that can be raise without selling new stock: Retained earnings / % of equity financing in total capital
= $300 million / 60%
= $300 million / 0.60
= $500 million
A stock is expected to return 8% in a normal economy, 12% if the economy booms, and lose 3% if the economy moves into a recessionary period. Economists predict a 56% chance of a normal economy, a 25% chance of a boom, and a 19% chance of a recession. The expected return on the stock is __%.
Answer: 6.91%
Explanation:
Expected return = Sum of (Probability of state of economy * Return given state of economy)
= (56% * 8%) + (12% * 25%) + (19% * -3%)
= 4.48% + 3% - 0.57%
= 6.91%
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture.
Required:
1. Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect.
A. Monthly flat fee to clean workshop
B. Laminate coverings for desktops
C. Taxes on assembly workshop
2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2018. Assume the following manufacturing costs:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: none (December 31, 2019)
Ending work in process: $550 (January 31, 2020)
Beginning finished goods inventory: none (December 31, 2019)
Ending finished goods inventory: $320 (January 31, 2020)
3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2018.
Answer:
Business Solutions
1. Costs Classification:
A. Monthly flat fee to clean workshop = fixed / indirect
B. Laminate coverings for desktops = variable / direct
C. Taxes on assembly workshop = fixed / indirect
2. A Schedule of Cost of Goods Manufactured:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: 0
Ending work in process: (550)
Cost of goods manufactured $3,500
3. Cost of goods sold:
Beginning finished goods inventory: $0
Cost of goods manufactured $3,500
Ending finished goods inventory: $320
Cost of goods sold = $3,180
Explanation:
a) Data and Calculations:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: none (December 31, 2019)
Ending work in process: $550 (January 31, 2020)
Beginning finished goods inventory: none (December 31, 2019)
Ending finished goods inventory: $320 (January 31, 2020)
b) Variable costs are input or direct costs that change with the level of output. Fixed costs are indirect costs that do not change based on the units produced.
Why would an investor prefer purchasing bonds to purchasing stocks?
A. Unlike stocks, bonds are guaranteed to return a profit to the
investor.
B. Bonds are typically less risky than stocks.
O C. Unlike stocks, when an investor owns bonds, they own a tiny part
of the company
D. Bonds are more likely than stocks to make huge profits.
Answer:
B. Bonds are typically less risky than stocks.
Explanation:
Answer: B. Bonds are typically less risky than stocks
Explanation:a. p. e. x. (just took the test)
A company projects an increase in net income of $135,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment
Answer:
the annual rate of return is 22.50%
Explanation:
The computation of the annual rate of return is shown below:
Average investment is
= ($900,000 + $300,000) ÷ 2
= $600,000
Now
Annual rate of return is
= Annual net income ÷ Average investment
= $135,000 ÷ $600,000
= 22.50%
hence, the annual rate of return is 22.50%
Jason and Katrina work on the loading dock for Longhaul Transport Company. Jason has a disability. Katrina has seniority. Jason asks for a transfer, which would represent an accommodation for his disability. Longhaul gives the transfer to Katrina on the basis of her seniority. Jason files a suit against Longhaul for discrimination on the basis of his disability. The court is most likely to rule that:___.
1. Jason’s disability is a sufficient basis for relief.
2. Katrina’s seniority is a good defense.
3. Longhaul’s action was a business necessity.
4. Longhaul’s action was a reasonable accommodation.
Answer:
Katrina's seniority is a good defense.
Explanation:
Industrial Jurisprudence
This is refered to as a system of rules and regulations that is used by labor and management fashion to show their specific employment rights and obligations in the work environment.
Seniority System
This is refered to as different rules and procedures usually within an agreement that shows the allocation of certain job situations including promotion, layoff and recall, as well as certain economic benefits based on length of service. This is application to many organizations.
Seniority
This very important measure of employee job security and it start with acquiring seniority on the date & time of hire (cannot be awarded until completion of probationary period).
Jason may lose the case as a result of the seniority system.
Brodrick Company expects to produce 21,600 units for the year ending December 31. A flexible budget for 21,600 units of production reflects sales of $496,800; variable costs of $64,800; and fixed costs of $140,000. QS 23-3 Flexible budget LO P1 If the company instead expects to produce and sell 26,300 units for the year, calculate the expected level of income from operations.
Answer:
Brodrick Company
If the company instead expects to produce and sell 26,300 units for the year, the expected level of income from operations is:
= $386,000.
Explanation:
a) Data and Calculations:
Expected production for the year ending December 31 = 21,600 units
Sales based on 21,600 units = $496,800 ($23 per unit)
Variable costs on 21,600 units 64,800 ($3 per unit)
Contribution margin = $432,000 ($20 per unit
Fixed costs = 140,000
Net operating income = $292,000
Expected level of income from operations (26,300 units):
Sales revenue (26,300 * $23) = $604,900
Variable costs (26,300 * $3) = 78,900
Contribution margin $526,000
Fixed costs = 140,000
Net operating income = $386,000
Cromartie Ltd. prepares its financial statements according to International Financial Reporting Standards. During 2021 the company incurred $1,245,000 in research expenditures to develop a new product. An additional $756,000 in development expenditures were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2021 fiscal year. Sale of the product began in 2020. What amount of the above expenditures would Cromartie expense in its 2021 income statement
Answer: $1,245,000
Explanation:
Going by IFRS standards, Research and Development Costs should be expensed as incurred so long as commercial feasibility has not been established.
Once this is established however, the costs after that are to be capitalized. In this scenario, the costs before feasibility are $1,245,000 so these costs are going to be expensed as periodic costs.
Sample means and ranges were obtained for five samples of 10 units per sample from a production process. Assume the process was considered to be in control during the period these samples were collected. The results are as follows:
Sample Mean Range
1 10.58 0.23
2 9.97 0.25
3 9.99 0.21
4 10.23 0.28
5 10.23 0.28
Required:
What is the central line of the X chart for this process
Answer:
10.20
Explanation:
Given the data :
Sample___ Mean ____Range
1 ________10.58 _____0.23
2________ 9.97 _____ 0.25
3 ________9.99 _____ 0.21
4 ________10.23_____ 0.28
5 ________10.23 _____0.28
The central line of the X_chart :
CL = xbar = Σx / n
CL = central line
x = mean values of the samples
n = number of samples
xbar = (10.58 + 9.97 + 9.99 + 10.23 + 10.23) / 5
xbar = 51 / 5
xbar = 10.20
Central line = 10.20
Your opinion is that CSCO has an expected rate of return of 0.15. It has a beta of 1.3. The risk-free rate is 0.04 and the market expected rate of return is 0.115. According to the Capital Asset Pricing Model, this security is
Answer:
Overpriced
Explanation:
The computation is shown below;
As we know that
Expected rate of return = risk free rate + beta × ( expected market rate of return - risk free rate )
= 0.04 + 1.3 × (0.115 - 0.04)
= 0.1375
As the return of the security is 0.1375 i.e. more than the expected rate of return i.e. 0.115
Hence, it is overpriced
On January 1, 2021, Red Inc. issued stock options for 210,000 shares to a division manager. The options have an estimated fair value of $4 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Red initially estimates that it is probable the goal will be achieved. Ignoring taxes, what is compensation expense for 2021
Answer:
$280,000
Explanation:
Fair value = $4
Options granted = 210,000 shares
Total compensation = Fair value*Options granted
Total compensation = $4 * 210,000
Total compensation = $840,000
Number of years = 3
Compensation per year = Total compensation / Number of years
Compensation per year = $840,000 / 3
Compensation per year = $280,000
The cost of purchasing 310 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $12,500. Kenton's accounting department reported no beginning inventory. What is the total sales value at the split-off point for paper
Answer: $36000
Explanation:
You didn't complete the question but based on what I got online, the price was given as $0.20. Therefore, the total sales value at the split-off point for paper will be calculated as:
= Total sheets × Price
= 180000 × $0.20
= $36000
Therefore, the total sales value at the split-off point for paper is $36000
While advocates of a market-oriented economy tend to argue that consumers benefit substantially when firms seek short-term profits by providing differentiated products, critics of market-oriented economies may argue that product differentiation (along with marketing and advertising) is _______________. Select the correct answer below: dishonest socially wasteful low quality boring
Answer: socially wasteful
Explanation:
Product differentiation is when a product is being distinguished from similar products in order to make it more appealing and therefore drive consumers choice.
It should be noted that critics of market-oriented economies may argue that product differentiation is socially wasteful.
Flint Corporation issues $440,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds
Answer:
$414,282.91
Explanation:
The issue price of the bonds is also known as the Present Value (PV) or current price of the Bonds and is calculated as :
FV = $440,000
PMT = ($440,000 x 9%) ÷ 2 = $19,800
P/yr = 2
N = 9 x 2 = 18
I/yr = 10%
PV = ?
Using a Financial calculator to input the values as above, the PV or issue price will be $414,282.91
Vick Vickers has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Vickers account for the cash received at the end of the engagement
Answer:
Vick Vickers
Vickers accounts for the cash received at the end of the engagement by debiting Cash account and crediting Consulting Fees (Revenue).
Explanation:
Then the fees received upfront, which were earlier credited to the Deferred Service Revenue account, are then closed by a debit to the Deferred Service Revenue and a credit to the Consulting Fees (Revenue) account. This is in line with the double-entry system of financial accounting and the new Revenue from Contracts with Customers, IFRS 15 or the ASC 606 equivalent.