Answer:
B. It is the most basic level of international market development.
Explanation:
In the context for hitting or reaching of the global market, there are key strategies that play out in getting what is needed to keep a market; these factors consists of exporting, franchising, joint ventures, licensing, foreign subsidiaries, foreign direct investment and strategic alliances.
Exporting is explained as the process of transporting a certain goods or services over international borders for trade or sale and this well known to be the first step and important strategy at a point like this.
This is why for direct investments, the option that it is the most basic level of international market development is the true statement above.
What is the appropriate description for a plant-processing franchise?
Answer:
Explanation:
The appropriate description for this would be that A franchisee focuses on making a franchisor’s product using the franchisor's manufacturing method or recipe. This is because the processing plant does not focus on selling the product instead their sole responsibility is creating the franchisor's product using their exact instructions in order to replicate their product for another company to sell.
"A company offers ID theft protection using leads obtained from client banks. Four employees work 40 hour a week on the lead, at a pay rate of $35 per hour per employee. Each employee identifies an average of 3500 potential leads a week from a list of 6000. An average of 3 percent actually sign up for the service, paying a one-time fee of $60. Material costs are $1500 per week, and overhead costs are $8000 per week. What is the multi-factor productivity for this operation in fees generated per dollar of input (rounded to 2 decimals)?"
Answer:
1.67
Explanation:
The computation of multi-factor productivity is shown below:-
Multi-factor productivity = Potential leads × Number of workers × Fee × Conversion percentage ÷ Labor cost + Material cost + Overhead cost
= 3,500 × 4 × $60 × 0.03 ÷ 4 × 40 × $35 + $1,500 + $8,000
= 25,200 ÷ 15,100
= 1.67
Therefore for computing the multi-factor productivity we simply applied the above formula.
Unit cost
4. During 2015, M Co. sold 30000 units at $60 per unit. The beginning period showed 5000 units in
inventory and produced 25000 units during the year. The following production costs and selling
and administrative expenses were:
Number of
Total costs
Units
Beginning inventory:
Direct materials
$ 33,500
5,000
Direct labor
77,500
5,000
Variable factory overhead
9,000
5,000
Fixed factory overhead
10,000
5,000
$
6.70
15.50
1.80
2.00
$
Current period costs:
Direct materials
Direct labor
Variable factory overhead
Fixed factory overhead
$ 175,000
405,000
45,000
50,000
25,000
25,000
25,000
25,000
7.00
16.20
1.80
2.00
Selling and administrative expenses:
Variable
Fixed
$ 65,000
45,000
Instructions: NOTE: SHOW ALL WORK.
1. Prepare both an absorption and variable costing income statement.
2. Determine and give reason for difference in income from operations in part (1).
Answer:
M Co.
1. Absorption and Variable Costing Income Statements:
Absorption Costing Variable Costing
Sales Revenue $1,800,000 $1,800,000
Product Cost of goods sold:
Beginning Inventory 130,000 120,000
Period's Production cost 675,000 (805,000) 625,000
Variable Selling & Administration expenses 65,000 (810,000)
Contribution $990,000
Gross profit $995,000
Period Costs:
Beginning Inventory overhead 10,000
Fixed factory overhead 50,000
Selling & Admin expenses (110,000) 45,000 (105,000)
Net Income $885,000 $885,000
2a. Determination of difference in income from part 1:
Absorption costing has a gross profit of $995,000
While variable costing has a contribution of $990,000
Their net income is the same at $885,000
2b. Reason for difference in income from part 1:
The reason for the difference is that absorption costing calculates gross profit, which includes all the costs of production (variable and fixed) in the cost of goods sold, while variable costing system calculates contribution, which includes only the variable costs in the cost of goods sold with fixed costs treated as period costs for arriving at the net income.
We would have noticed some differences in the Net Income under absorption and variable costing systems if there had been some ending inventory.
Explanation:
Data and Calculations:
1. Sales = 30,000 units at $60 per unit = $1,800,000
Beginning inventory = 5,000 units
Production during the year = 25,000
2. Production costs and Expenses:
Number of Units Unit costs Total Costs
Beginning inventory: 5,000
Direct materials 5,000 $6.70 $ 33,500
Direct labor 5,000 15.50 77,500
Variable factory overhead 5,000 1.80 9,000
Fixed factory overhead 5,000 2.00 10,000
Variable unit cost = $24 ($6.70 + 15.50 + 1.80)
Variable cost = $120,000 (5,000 x $24)
Total cost = $130,000 ($120,000 + 10,000)
Current period costs:
Direct materials 25,000 7.00 $ 175,000
Direct labor 25,000 16.20 405,000
Variable factory overhead 25,000 1.80 45,000
Fixed factory overhead 25,000 2.00 50,000
Variable cost per unit = $25 ($7.00 + 16.20 + 1.80)
Total variable cost = $625,000 (25,000 x $25)
Total absorption cost = $675,000 ($625,000 + 50,000)
Selling and administrative expenses:
Variable $ 65,000
Fixed 45,000
Total selling and administrative expenses $110,000
Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking.
a. 900 units of inventory shipped on consignment by Peete to another company.
b. 3,000 units of inventory in transit from a supplier shipped FOB destination.
c. 1,200 units of inventory sold but being held for customer pickup.
d. 500 units of inventory held on consignment from another company.
Answer:
a. 900 units of inventory shipped on consignment by Peete to another company.
INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO PEETE COMPANYb. 3,000 units of inventory in transit from a supplier shipped FOB destination.
NOT INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO THE SELLER (FOB DESTINATION)c. 1,200 units of inventory sold but being held for customer pickup.
NOT INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO THE CUSTOMERd. 500 units of inventory held on consignment from another company.
NOT INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO THE CONSIGNORThe ____ the existing spot price relative to the strike price, the ____ valuable the call options will be.
Answer:
The Higher the existing spot price relative to the strike price the more valuable the call options will be.
Explanation:
Spot price simply refers to how much a particular stock is trading in the market (that is, Market Price of the Stock).
Strike Price, also known as exercise price, is the price at which a person (corporate or individual) can purchase security.
Call options refers to the option to purchase an asset at an agreed price prior to/or at a particular day.
If for instance an employee is presented with Stock Options at a particular price, it will be more attractive for him or her if the price at which it is being offered is lower than it's actual market value. That way, he or she has already made a profit.
For example, if the spot price for the stock of Google is $2000/Unit and it is offered to an employee at $1450, if he elects to buy it at that time, he stands a chance to make $550 on each unit that if he sells whilst the spot price is still reasonable.
Cheers!
Answer:
The higher the existing spot price relative to the strike price, the less valuable the call options will be.
Explanation:
Call options refer to financial contracts in which the buyer of the option has the right, but not obligation, to buy asset or instrument at an already agreed price on or before a particular date. The particular date is also known as the expiration date.
The strike price is refers to the price at which a put or call option can be exercised on or before a particular date.
The spot price refers the current market price at which an instrument or asset is bought or sold now for immediate payment and delivery.
The relationship between the strike price and the spot price is that a call option is most valuable when the strike price is higher than the spot price. At this point, the call option is said to be in the money (ITM). On the other hand, a call option is least valuable when the strike price is lower than the spot price. At this point, the call option is said to be out of the money (OTM).
Based on the explantion above, therefore, the higher the existing spot price relative to the strike price, the less valuable the call options will be.
Suppose $1 comma 500 is deposited in a bank account today (time 0), followed by $1 comma 500 deposits in years 2, 4, 6, and 8. At 9% annual interest, how much will the future equivalent be at the end of year 12?
Answer:
$15,391.91
Explanation:
the first step is to find the present value of the cash flows. After the future value of the sum would be determined.
present value is the sum of discounted cash flows.
present value can be determined using a financial calculator
Cash flow in year 0 = $1500
Cash flow in year 1 = 0
Cash flow in year 2 = $1500
Cash flow in year 3 = 0
Cash flow in year 4 = $1500
Cash flow in year 5 = 0
Cash flow in year 6 = $1500
Cash flow in year 7 = 0
Cash flow in year 8 = $1500
I = 9%
PV = $5472.36
The formula for calculating future value:
FV = P (1 + r) n
FV = Future value
P = Present value
R = interest rate
N = number of years
$5472.36(1.09)^12 = $15,391.91
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On August 1, 2017, Gonzaga Corporation issued $600, 000, 7%, 10-year bonds at face value. Interest is payable annually on August 1. Gonzaga's year-end is December 31.
1. Prepare journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. Prepare journal entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
3. Prepare journal entry to record the payment of interest on August 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer: Please see answers in the explanation column
Explanation:
journal entry to record the issuance of the bonds.
Date Account Debit Credit
August 1st Cash $600, 000
2017 Bonds payable $600, 000
2, journal entry to record the accrual of interest on December 31, 2017.
Date Account Debit Credit
Dec 31st Interest Expense $17,500
2017 Interest payable $17,500
Calculation =
Interest = P X T X R
From August - December31st = 5 months
600,000 x 5/12 x 7%= 600,000 x 0.07 x5/12= $17,500
3. journal entry to record the payment of interest on August 1, 2018
Date Account Debit Credit
Aug 1st Interest Expense $24,500
2018 Interest payable $17,500
Cash $42,000
Calculation =
Interest = P X T X R
From January- August `1st= 7 months
600,000 x 7/12 x 7%= 600,000 x 0.07 x7/12= $24,500
The price elasticity of supply for basmati rice (an aromatic strain of rice) is likely to be which of the following?
A. High in both the long run and the short run, because the inputs required to produce basmati rice can easily be duplicated.
B. Low in both the long and short runs, because rice farming requires only unskilled labor.
C. High, because consumers have a lot of other kinds of rice and other staple foods to choose from.
D. Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted.
Answer: D. Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted.
Explanation:
Price Elasticity of Supply refers to how Supply changes in response to a change in price. Essentially, if the price of a good increases, will Supplier supply more or less of that good as a result and by how much will they do so.
In the short run, the farmers would have already planted the crops and so would be unable start changing the quantity that they expect from the harvest. They will therefore supply the amount they harvested regardless of a price change.
In the long run however, they can change the amount of rice planted depending on the price of the rice in the market. Price Elasticity is therefore higher in the long run than in the short run.
how to calculate WACC using the CAPM
Answer:
The CAPM formula is widely used in the finance industry. It is vital in calculating the weighted average cost of capital. The WACC formula is = (E/V x Re) + ((D/V x Rd) x (1-T)).
Atom Endeavour Co. issued $21 million face amount of 4.0% bonds when market interest rates were 4.46% for bonds of similar risk and other characteristics.
Required:
a. How much interest will be paid annually on these bonds? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)
Atom Endeavour Co. issued $21 million face amount of 4.0% bonds when market interest rates were 4.46% for bonds of similar risk and other characteristics.
Required:
a. How much interest will be paid annually on these bonds? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)
Annual Interest payment+
b. Were the bonds issued at a premium or discount?
-- Premium
-- Discount
c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year?
-- Interest expense will be less than the interest paid.
-- Interest expense will be more than the interest paid.
-- Interest expense will be equal to the interest paid.
Answer:
A. $840,000
B. Discount
C. Annual interest expense on these bonds will be more than the amount of interest paid each year.
Explanation:
Data
Bonds issued = $21,000,000
Coupin rate = 4.0%
Market Interest rate = 4.46%
Requirement A: Annual interest amount
Interest amount = Bonds issued x coupon rate
Interest amount = $21,000,000 x 4.0%
Interest amount = $840,000
Requirement B: Whether it is Premium or Discount?
Bonds that Atom Endeavour Co. issued are discount as you can clearly see in the data that the market rate is higher than the coupon rate. Investors who will buy these bonds surely expect a capital gain.
Requirement C:
The discount on the issue of bonds is amortized to interest expense over the life of the bond, therefore the interest expense on these bonds will be more than the amount of interest paid each year,
When talking about economic profits in a perfectly competitive market, the difference between the long run and the short run is that, in the short run, firms:
The vast majority of for-profit businesses in the United States operate as which of the following?
a. Sole proprietorships
b. General partnerships
c. Subchapter S corporations
d. Limited liability corporations
e. Ccorporations
Answer:
a. Sole proprietorships
Explanation:
Sole proprietorships are the most common for-profit business type in the United States.
A sole proprietorship is a business entity that has only one owner, and for which, no accounting and legal distinction exist between the business entity and the owner.
This means that the business entity and the owner are taxed under the same terms, and that the owner has unlimited responsability for the sole proprietorship business. For example, in case of bankruptcy, the owner may have to respond to creditors with his own personal wealth.
Chang Co. issued a $50,172, 120-day, discounted note to Guarantee Bank. The discount rate is 10%. Assuming a 360-day year, the cash proceeds to Chang Co. are:___________.
A. $55,189
B. $50,172
C. $50,590
D. $48,500
Assuming a 360-day year, the cash proceeds to Chang Co. are $50,172. Thus, option (B) is correct
What is the rate?A number, amount, or degree measured in relation to another object. She typed at a speed of 80 words per minute. a charge or payment based on another quantity. more specifically: the premium per insurance unit. A rate in mathematics is the comparison of two related values expressed in different units.
Discounted note to Guarantee Bank. The discount rate is 10%. Assuming a 360-day year, the cash proceeds to Chang Co. are $50,172Investors buy discount notes at a price less than the note's face value since they are issued at a discount to par.
60 miles per hour is a standard or measure for a specific number or amount of one item when compared to a unit of another thing. a set price per quantity unit: 10 cents per pound is the price. To lower costs and prices for all home furniture.
Therefore, Thus, option (B) is correct
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The detailed day-to-day operational decisions essential to the overall success of marketing strategies are referred to as
Answer:
Marketing tactics.
Explanation:
The detailed day-to-day operational decisions essential to the overall success of marketing strategies are referred to as marketing tactics.
Marketing tactics can be defined as both a strategic short-term and long-term actions employed by an organization to promote its goods and services with the intention of increasing sales and achieving a competitive market advantage by satisfying customers wants or need.
Hence, the purpose of a marketing tactics is to achieve substantial level of customer satisfaction as well as using the organization's limited financial resources efficiently in order to boost the effective promotion and sales of its products.
Some examples of marketing tactics are;
1. An organization sending newsletters or emails to its new and existing customers.
2. Participating in the exhibition of products in a trade fair.
3. Promotion of products on social media platforms.
Which of the following choices are both the stock and options positions on different sides of the market
a- long call / short stock
b- short call / long stock
c- long put / short stock
d- short put / long stock
Answer:
a- long call / short stock.
b- short call / long stock.
Explanation:
In trading and investment, a stock option can be defined as a contract that states that the buyer as the right to buy (call) or sell (put) an asset at a particular price at any time but necessarily obligational. Thus, it is strictly at the discretion of the buyer (investor).
Generally, in a long (buy) position, a buyer hopes that the price of stocks will rise because he or she will typically profit from a rise in price.
However, a short (buy) position, a buyer hopes that the price of stocks will fall because he or she will typically profit from a fall in price.
Hence, a long and short position are both on different sides of the market.
Therefore, the following choices are both the stock and options positions on different sides of the market;
a. Long call/short stock.
b. Short call/long stock.
However, a stock and options positions both on the same side of the market are;
a. Long call/long stock.
b. Long put/short stock.
In a nutshell, in a rising market long stock positions are profitable while in a falling or perhaps stable market short calls are profitable to investors.
Which of the following is an incorrect statement? a If individual audit risk remains the same, detection risk bears an inverse relationship to inherent and control risk. b The greater the inherent and control risk the auditor believes exist the less detection risk that can be accepted. c The auditor might make separate or combined assessments of inherent risk and control risk. d Detection risk cannot be changed at the auditor’s discretion.
Answer:
d Detection risk cannot be changed at the auditor’s discretion.
Explanation:
Audit risk can be defined as the risk that financial reports issued by an auditor are materially incorrect due to fraud or errors, despite the fact that the inappropriate audit opinion states that the financial reports are void of any material misstatements. There are two (2) main components of an audit risk, these are;
1. Detection risk: this deals with the fact that procedures used by the auditor will not detect any material misstatement as a result of errors.
2. Risk of material misstatement: this deals with the material misstatements of financial statements before auditing. There are two main types namely, inherent and control risks.
The following statements are true and correct;
A. If individual audit risk remains the same, detection risk bears an inverse relationship to inherent and control risk.
B.The greater the inherent and control risk the auditor believes exist the less detection risk that can be accepted.
C. The auditor might make separate or combined assessments of inherent risk and control risk.
However, saying that detection risk cannot be changed at the auditor’s discretion is false. Since it is arises as a result of error, if the auditor conducts a proper sampling procedure it can be detected and eventually changed.
Payback period The Ball Shoe Company is considering an investment project that requires an initial investment of $ 544,000 and returns after-tax cash inflows of $77,624 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a. Determine the payback period for this project. b. Should the company accept the project?
Answer:
Payback period is 7.01 years
The project should be accepted
Explanation:
The payback period is the time taken for the initial cash outlay of $544,000 to recoup itself, in other words,the length of time taken for the company to receive cash inflows equivalent to the amount invested initially.
payback period=initial capital outlay/annual after-tax cash inflows
payback period=$544,000/$77,624= 7.01 years.
It shows that the project's payback is lesser than the company's target,hence,the project should be accepted
Virginia owns an interior design company and hires freelance decorators to help with large jobs. In this way, she is able to keep costs low by only employing staff when they are needed. However, over time Virginia has added full‐time staff members as the company grows. How would you classify Virginia’s company? Group of answer choices As an investment center As a profit center As a cost center but not a profit center As both a cost center and a profit center, but not an investment center
Answer: As an investment centre
Explanation:
Based on the question, we are told that Virginia owns an interior design company and hires freelance decorators to help with large jobs and that by doing this, she is able to keep costs low by only employing staff when they are needed. Virginia's company is an investment centre.
An investment center is a business unit that is within an entity that is responsible for its own assets, revenue, and expenses and its financial results will be based on these factors. An investment center focuses on how it will minimize costs.
On November 1, 2013, Wenger Co. paid its landlord $4,260 in cash as an advance rent payment on its store location. The six-month lease period ends on April 30, 2014, at which time the contract may be renewed. Required: a.1 Prepare the horizontal model to record the six-month advance rent payment on November 1, 2013. (+ for increase and – for decrease).
Answer:
The journal entry should be:
November 1, 2013, six months of rent paid in advance
Dr Prepaid rent 4,260
Cr Cash 4,260
Assets = liabilities + equity
cash prepaid rent
-$4,260 $4,260 $0 $0
Revenues - Expenses = Net income
$0 $0 $0
This operation represents an operating cash flow activity.
Alvarez Company’s output for the current period yields a $22,000 favorable overhead volume variance and a $52,900 unfavorable overhead controllable variance. Standard overhead applied to production for the period is $226,000. QS 23-16 Overhead cost variances LO P4 What is the actual total overhead cost incurred for the period?
Answer:
$256,900
Explanation:
The computation of actual total overhead cost is shown below:-
The Actual overhead cost incurred
= Standard overhead cost + Unfavorable overhead controllable variance - Favorable overhead volume variance
= $226,000 + $52,900 - $22,000
= $278,900 - $22,000
= $256,900
Therefore for computing the actual total overhead cost we simply applied the above formula.
Amos Rubber company manufactures tires. They reported the following information from their operations last period: Cost of Direct Materials used in production: $35,000 Cost of Direct Labor wages: $40,000 Variable Manufacturing Overhead: $30,000 Fixed Manufacturing Overhead: $75,000 Total units produced and sold: 50,000 Under absorption costing, the per-unit cost is greater than the variable per-unit cost by how much?
Answer:
The per-unit cost under absorption costing is greater than the variable per-unit cost by $1.50.
Explanation:
Units costs under variable costing include only the variable manufacturing costs.
Manufacturing Costs - Variable Costing
Direct Materials used in production: $35,000
Cost of Direct Labor wages: $40,000
Variable Manufacturing Overhead: $30,000
Total Costs $105,000
Unit Cost = $105,000/ 50,000
= $2.10
Units costs under absorption costing include both the variable manufacturing costs and fixed manufacturing costs.
Manufacturing Costs - Absorption Costing
Direct Materials used in production: $35,000
Cost of Direct Labor wages: $40,000
Variable Manufacturing Overhead: $30,000
Fixed Manufacturing Overhead: $75,000
Total Costs $180,000
Unit Cost = $180,000/ 50,000
= $3.60
Difference :
Unit Cost - Absorption Costing $3.60
Less Unit Cost - Variable Costing $2.10
Difference $1.50
Conclusion :
The per-unit cost under absorption costing is greater than the variable per-unit cost by $1.50.
The per-unit cost under absorption costing is greater than the variable per-unit cost by $1.50.
Calculation of per-unit as follows:Units costs under variable costing involved only the variable manufacturing costs.
So,
Manufacturing Costs - Variable Costing
Direct Materials used in production: $35,000
Cost of Direct Labor wages: $40,000
Variable Manufacturing Overhead: $30,000
Total Costs $105,000
Now
Unit Cost = $105,000/ 50,000
= $2.10
Unit costs under absorption costing involve both the variable manufacturing costs and fixed manufacturing costs.
So,
Manufacturing Costs - Absorption Costing
Direct Materials used in production: $35,000
Cost of Direct Labor wages: $40,000
Variable Manufacturing Overhead: $30,000
Fixed Manufacturing Overhead: $75,000
Total Costs $180,000
Unit Cost = $180,000/ 50,000
= $3.60
Now the difference is
Unit Cost - Absorption Costing $3.60
Less Unit Cost - Variable Costing $2.10
Difference $1.50
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Suppose a monopoly firm produces a medical device and can sell 15 items per month at a price of $2,000 each. In order to increase sales by one item per month, the monopolist must lower the price of its medical device by $100 to $1,900. The marginal revenue of the 16th item is: Group of answer choices
Answer: $400
Explanation:
Marginal Revenue is the revenue that is added by one additional unit.
When the product was selling at $2,000 it sold 15 units meaning the total revenue was;
= 2,000 * 15
= $30,000
When the product started selling for $1,900 it would be able to sell 16 units so the total Revenue is;
= 16 * 1,900
= $30,400
The difference in total Revenue is as a result of 1 extra unit, the 16th unit which contributed an amount of;
= 30,400 - 30,000
= $400
Buckeye Incorporated has operating income of $ 434,000, a sales margin of 7%, and a capital turnover rate of 2. What amount would Buckeye report for sale
Answer:
The amount Buckeye would report for sale is $6,200,000.
Explanation:
Sale refers to income or revenue that a company got by selling its goods or providing its services.
In accounting ratio analysis, sales margin is obtained by dividing the operating profit by sale. Therefore, the formula for sales margin can be written as follows:
Sales margin = Operating income / Sale ................... (1)
To obtain Sale, we can substitute the figures for sales margin and operating profit from the question into equation (1) and then solve for sale as follows:
7% = $434,000 / Sale
Sale * 7% = $434,000
Sale = $434,000 / 7%
Sale = $6,200,000
Therefore, the amount Buckeye would report for sale is $6,200,000.
Categorize each statements as a component of Gross Domestic Product (GDP): consumption, investment, government, or net exports. If it is not included in GDP, leave it.
i. Consumption
ii. Investment
iii. Goverment
iv. Net exports
Answer:
The Gross Domestic Product (GDP) is a measure of the value of all final Goods and Services in an Economy in a given period usually a year.
It can be calculated using the Expenditure method which is;
= Consumption + Investment + Government Spending + Net Exports
Consumption
Here, the final goods and services that all households in the Economy purchased and used for the year are included. It is usually the largest component of GDP.
The following will fall here.
- Ice cream
- A domestically manufactured personal computer
- Cab fare for personal use
- A ticket to a local sporting event
- 55 cent tacos
Investment
The Goods that will fall under here include Capital goods purchased or made in an Economy for the purpose of increasing production capacity.
Of the goods listed only one will fall here being;
- A Domestically Manufactured Personal Computer.
Government Spending
This includes all Public Spending in the Economy on goods and services for things such as Health and Defense but excluding transfer payments such as Social Security.
- Public School Teacher's Salary will fall under here.
Net Exports
These are the Exported goods from the country less the goods that it imported. From the above only one item falls under this category;
- Exported Doll House
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $14 per share 10 years from today and will increase the dividend by 5 percent per year thereafter.
Required:
If the required return on this stock is 14 percent, what is the current share price?
Answer:
we have to divide the money
Explanation:
as it is written its
Swinnerton Clothing Company's balance sheet showed total current assets of $1,800, all of which were required in operations. Its current liabilities consisted of $575 of accounts payable, $300 of 6% short-term notes payable to the bank, and $145 of accrued wages and taxes. What was its net operating working capital that was financed by investors? Select the correct answer. a. $1,096 b. $1,088 c. $1,112 d. $1,080 e. $1,104
Answer:
d. $1,080
Explanation:
The computation of the net operating working capital that was financed by investors is shown below:
= Total current assets - account payable - accrued wages and taxes
= $1,800 - $575 - $145
= $1,080
By deducting the account payable and accrued wages from the total current assets we can calculate the net operating working capital and the same is to be considered
The equal total payments pattern for installment notes consists of changing amounts of interest but constant amounts of principal over the life of the note.
A. True
B. False
Answer:
B. False
Explanation:
The equal total payments pattern for installment notes is when the regular payments on an installment note are always for the same amount. However, the amounts of interest and principal change over the life of the note because at the begining, most of the payment amount goes toward the interest and as you make payments your principal starts to decrease making the amount that goes toward the interest to decrease and the money that goes towards the principal to increase. According to that, the statement is false.
In a cost-volume-profit chart, the a.total costs line must begin at zero. b.total costs line must end at the total fixed costs value on the vertical axis. c.total fixed costs line must begin at zero. d.slope of the total costs line is dependent on the variable cost per unit.
Answer:
d.slope of the total costs line is dependent on the variable cost per unit.
Explanation:
The total cost line takes the shape of a slope and begins from the total of the fixed cost for the relevant range and not zero.
This is because the total cost include a fixed cost and a variable cost element.The steepness of the slope is then dependent on the variable cost per unit.
An S corporation earns $ 9.00 per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of taxes paid if the company pays a $ 6.00 dividend?
Answer:
$4.41
Explanation:
S corporation earns $9.00 per share before tax is paid
Corporate tax rate is 39%
= 39/100
= 0.39
Personal tax rate on dividend is 15%
= 15/100
= 0.15
The rate on non-dividend income is 36%
The company pays $6.00 for dividend
Therefore, the total amount of taxes paid can be calculated as follows
Corporate tax= $9.00×0.39
= $3.51
Personal tax= $6.00×0.15
= $0.90
Total amount of tax paid= corporate tax+Personal tax
= $3.51+$0.90
= $4.41
Hence the total amount of taxes paid is $4.41
Rent Versus Buy. Alex Guadet of Nashville, Tennessee, has been renting a two-bedroom house for several years. He pays $900 per month in rent for the home and $300 per year in property and liability insurance. The owner of the house wants to sell it, and Alex is considering making an offer. The owner wants $160,000 for the property, but Alex thinks he could get the house for $150,000. Alex has talked to his banker and could get a 5 percent mortgage loan for 25 years to finance the remainder of the purchase price. The banker advised Alex that he would reduce his principal by $1,700 during the first year of the loan. Property taxes on the house are $1,400 per year. Alex estimates that he would need to upgrade his property and liability insurance to $1,200 per year and would incur about $3,000 in costs the first year for maintenance and improvements. Property values are increasing at about 3 percent per year in the neighborhood. Alex will have to pay $50 a month for private mortgage insurance. He is in the 25 percent marginal tax bracket.
b. Considering his reduction in principal the first year, how much interest would Alex pay during the first year of the loan?
Answer:
Rent Versus Buy. Alex Guadet of Nashville, Tennessee
b. Computation of Interest payable by Alex during the first year of the loan:
Interest = Net Mortgage amount x rate of interest
= ($148,300 x 5%)
= $7,415
Explanation:
a) Data and Calculation:
Mortgage amount = $150,000
Principal Reduction 1,700
Net Mortgage $148,300
b) Mortgage Interest is calculated as the Mortgage amount minus any reduction in the principal amount, multiplied by the interest rate. The interest represents the cost of capital that Alex pays for taking a mortgage on the property. For the bank, the interest represents the benefit for lending the mortgage loan to Alex.