Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17. What amount of units must be sold in order to realize an operating income of $100,000

Answers

Answer 1

Answer:

Target profit in units = 47058.82 rounded off to 47059 units

Explanation:

The break even units of sales are the number of units that must be sold in order for the company to have enough total revenue to cover its total costs. It is a point in the number of units where there is no profit or no loss.

We can use the break even analysis and formulas to calculate the number of units required to earn a certain target profit. Thus, we will just need to add the target profit amount to the fixed costs in the break even in units formula. The formula to calculate the target profit in units is,

Target profit in units = (Fixed costs + Target profit) / Contribution margin per unit

Target profit in units = (700000 + 100000) / 17

Target profit in units = 47058.82 rounded off to 47059 units

Related Questions

Listed below are certain costs (or discounts) incurred in the purchase or construction of new plant assets. Indicate whether the costs should be expensed or capitalized (included in the cost of the plant assets on the balance sheet.) For costs that should be included in plant assets. Indicate in which category of plant assets (Equipment. Building. or Land) the related costs should be recorded on the balance Sheet.

a. Invoice cost to purchase Equipment
b. Sales tax on new equipment purchased
c. Cost to lay foundation for a new building
d. Repair costs to fix new equipment damaged by the crew that unpacked it
e. Charges incurred to train employees to use new equipment
f. Construction costs for a new building to be used in operations
g. Attorney fees incurred to complete the purchase documents for a new plant warehouse
h. Freight costs to ship the equipment From the manufacturer to the warehouse

Answers

Answer:

a. Capitalized : Equipment

b. Expensed

c. Capitalized : Building

d. Expensed

e. Capitalized : Equipment

f. Capitalized : Building

g. Capitalized : Building

h. Capitalized : Equipment

Explanation:

The Cost of Property, Plant and Equipment item according to IAS 16 includes, the Purchase Cost and any cost directly incurred in putting the assets in location and condition intended for use by management.

The costs exclude amounts collected in tax on behalf of third parties

Also not Capital expenditures increase the earning ability of the asset whilst revenue expenditure is the maintenance of such asset.

g A constraint to complicated macroeconomic models has been: Group of answer choices that firms do not maximize profits. that agents are not rational. that economists have run out of ideas. a lack of computing power. an insufficient understanding of statistics.

Answers

Answer:

a lack of computing power.

Explanation:

ROI and Residual Income: Basic Computations Watkins Associated Industries is a highly diversified company with three divisions: Trucking, Seafood, and Construction. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 10 percent with a 30 percent tax rate. Selected operating data for three divisions of the company follow.
Trucking Division Seafood Division Construction Division
Sales $ 1,200,000 $ 750,000 $ 900,000
Operating assets 600,000 250,000 350,000
Net operating income 116,000 66,000 63,000
(a) Compute the return on investment for each division. (Round answers to three decimal places.)
Trucking ROI =
Seafood ROI =
Construction ROI =
(b) Compute the residual income for each division.
Residual income Trucking Seafood Construction
Net operating income
Minimum level
Residual income

Answers

Answer:

a) ROI = Net operating income / Operating assets

Computation of ROI of each division

Division Working ROI

Trucking ROI $116,000 / $600,000 0.1933 or 19.33 %

Seafood ROI $66,000 / $250,000 0.264 or 26.40 %

Construction ROI $63,000 / $350,000 0.18 or 18 %

b) Residual Income = Net operating Income - ( Operating Asssts * Desired ROI )

Where , Minimum level = ( Operating Asssts * Desired ROI )

Minimum level for Trucking = ($600,000*10 %) = $60,000

Minimum level for Seafood = ($250,000*10 %) = $25,000

Minimum level for Construction = ($350,000 * 10 %) = $35,000

Computation of Residual Income for each division

Details Trucking($) Seafood($) Construction($)

Net operating income 116,000 66,000 63,000

Minimum level 60,000 25,000 35,000

Residual income 56,000 41,000 28,000

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves determining whether the proposed diversification move Group of answer choices provides the company with additional resource strengths. provides additional ways to build the entrepreneurial skills of the company's senior managers. spreads stockholders' risks across a greater number of lines of business. has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart. has good potential for increasing the company's rate of return on invested capital.

Answers

Answer: Has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart.

Explanation:

The better-off test of diversification is that the company must gain a return that is higher than incremental growth. Incremental growth is usually defined a 1 + 1 = 2 formula and this test argues that Diversification must provide more than this such that the company achieves synergistic growth ( 1 + 1 = 3) which is what happens when different entities work better together than alone.

Diversification should therefore be into an area that will be able to match-up with the company's present businesses such that its businesses can perform better together than apart and produce even greater returns.

In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $7 million, patent; $5 million, trademark considered to have an indefinite useful life; and $9 million, goodwill. Burger Mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life.

Required:
What is the total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items?

Answers

Answer:

$1,400,000 per year

Explanation:

DATA

Patent = 7 million with 5years useful life

Trademark = 5 million with an indefinite life

Goodwill = 9million

Amortization =?

Solution

Amortization of patent = Patent Value/ Useful life

Amortization of patent = $7,000,000/5

Amortization of patent = $1,400,000 per year

NOTE: Trademark and goodwill will not be amortized as they have an indefinite useful life. Both Intangible assets will be tested for impairment instead.

Listed below are year-end account balances (in $millions) taken from the records of Symphony Stores. Debit Credit Accounts receivable-trade 694 Building and equipment 924 Cash-checking 38 Interest receivable 40 Inventory 21 Land 166 Notes receivable (long-term) 496 Petty cash fund 8 Prepaid rent 35 Supplies 12 Trademark 45 Accounts payable-trade 642 Accumulated depreciation 77 Additional paid-in capital 468 Allowance for uncollectible accounts 19 Cash dividends payable 24 Common stock, at par 11 Income tax payable 63 Notes payable (long-term) 836 Retained earnings 306 Deferred revenues 33 TOTALS 2,479 2,479 What would Symphony report as total shareholders' equity?

Answers

Answer:

Symphony would report $ 785 million as total shareholders' equity

Explanation:

Use the Balance Sheet to find the total shareholders' equity as Follows :

Assets

Non-Current Assets

Building and equipment 924

Land 166

Notes receivable (long-term) 496

Trademark 45

Accumulated depreciation (77)

Total Non-current assets 1,554

Current Assets

Accounts receivable-trade 694

Allowance for uncollectible accounts (19)

Petty cash fund 8

Prepaid rent 35

Supplies 12

Cash-checking 38

Interest receivable 40

Inventory 21

Total Current Assets 829

Total Assets 2,383

Equity and Liabilities

Equity (Balancing figure) 785

Total Equity 785

Non - Current Liabilities

Notes payable (long-term) 836

Total Non - Current Liabilities 836

Current Liabilities

Accounts payable-trade 642

Cash dividends payable 24

Income tax payable 63

Deferred revenues 33

Total Current Liabilities 762

Total Equity and Liabilities 2,383

Conclusion :

Symphony would report $ 785 million as total shareholders' equity

All of the following items should be considered when setting an export price
except
A. The tariff rate and value-added tax.
B. Transportation costs.
C. Prices of substitutes in foreign markets.
D. Repatriation restrictions

Answers

Answer:

D. Repatriation restrictions should not affect the prices of commodities

Explanation:

Repatriation has to do with the conversion of foreign currency to home based currency. this is done in a bid to carry out international transaction effectively

while these items affects the prices of export

A. The tariff rate and value-added tax.

B. Transportation costs.

C. Prices of substitutes in foreign markets.

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $79,000 and at the end of the month was $72,000. The cost of goods manufactured for the month was $361,600. The actual manufacturing overhead cost incurred was $118,400 and the manufacturing overhead cost applied to jobs was $112,000. The adjusted cost of goods sold that would appear on the income statement for July is:

Answers

Answer:

$375,000

Explanation:

Unadjusted cost of goods sold = Opening stock of finished goods + Cost of goods sold - Closing stock of finished goods

Unadjusted cost of goods sold = $79,000 + $361,600 - $72,000

Unadjusted cost of goods sold = $368,600

The overhead applied is $112,000 and the actual manufacturing overhead is $118,400. As the actual manufacturing overhead is more than the overhead applied, the overhead is under applied as shown below

Under-applied Overhead = Actual manufacturing overhead - Overhead applied

= $118,400 - $112,000

= $6,400

Now, calculation of the adjusted cost of goods sold is as follow

Adjusted cost of goods sold = Unadjusted cost of goods sold + Under-applied Overhead

= $368,600 + $6,400

= $375,000

Thus, the adjusted cost of goods sold is $375,000

Automobile bumpers590 810 Valve covers310 570 Wheels350 620 1,250 2,000 Plating Department Automobile bumpers195 1,150 Valve covers200 700 Wheels195 750 590 2,600 Total1,840 4,600 Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. Direct labor hour overhead rate$ 130 per direct labor hour Machine hour overhead rate$ per machine hour 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Automobile BumpersValve CoversWheels Direct labor hours$ $ $ Machine hours$ $ $

Answers

Answer:

OVERHEAD APPLIED USING DIRECT LABOR

Stamping // Labor Hours // Applied Overhead

bumpers 590 $ 76,700

Valve 310 $ 40,300

Wheels 350 $ 45,500

1250 $ 162,500

Planting // Labor Hours // Applied Overhead

bumpers 195 $25,350

Valve 200 $26,000

Wheels 195 $25,350

590 $76,700

OVERHEAD APPLIED USING MACHINE HOURS

Stamping // Machine Hours // Applied Overhead

bumpers 810 $42,120

Valve 570 $29,640

Wheels 620 $32,240

2000 $104,000

Planting // Machine Hours // Applied Overhead

bumpers 1150 $59,800

Valve 700 $36,400

Wheels 750 $39,000

2600 $135,200

Explanation:

As the overhead rate using labor hours is $130 Then:

Total expected overhead: $130 x 1,840 labor hours = $239,200

Machine Hours overhead rate:

$ 239,200 / 4,600 hours = $52

To get the amount of overhead applied on each product we multiply their use of the cost drive by the overhead rate.

Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $197,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,000,000 in total. Seida's January 1, 2018 book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an 8-year remaining life. During 2018, Seida reported income of $300,000 and declared and paid dividends of $110,000. Prepare the 2018 journal entries for Milani related to its investment in Seida.

Answers

Answer:

Milani, Inc.

January 1, 2018:

Debit Investment in Seida $600,000

Credit Cash Account $600,000

To record the purchase of an additional 30% of Seida.

December 31, 2018:

Debit Investment in Seida $120,000

Credit Net Income $120,000

To record the share in the net income of Seida.

Debit Cash Account $44,000

Credit Cash Dividend Received $44,000

To record the company's share in the dividend paid by Seida.

Debit Cash Dividend Received $44,000

Credit Investment in Seida $44,000

To record the dividend received from Seida.

Explanation:

The cash dividend received from Seida will reduce Milani, Inc.'s investment value in Seida, just as the 40% share in the net income increased the investment value.

These journal entries have been used to debit and credit accounts as transactions occur. A journal plays an important role in recording transactions in the accounting system as it is usually the initial record of any transaction. It also shows the accounts debited or credited with a short narration that explains each transaction.

__________________ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products.

Answers

Answer: Nontariff barriers

Explanation:

Nontariff barriers are trade barriers that are used whereby the import and export of goods and services are restricted. It should be noted that the restriction is not by tariffs but can include include embargoeds, quotas, sanctions, and levies.

The main reason for trade barriers are to generate revenue for the government and also to protect the local industries.

Harpeth Valley Water District has a bond outstanding with a coupon rate of 3.63 percent and semiannual payments. The bond matures in 23 years, with a yield to maturity of 4.17 percent, and a par value of $5,000. What is the market price of the bond

Answers

Answer:

Market price of Bond = $4603.116669 rounded off to $4603.12

Explanation:

To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = 5000 * 0.0363 * 1/2 = $90.75

Total periods (n)= 23 * 2 = 46

r = 4.17% * 1/2 = 2.085% or 0.02085

The formula to calculate the price of the bonds today is attached.

Bond Price = 90.75 * [( 1 - (1+0.02085)^-46) / 0.02085] + 5000 / (1+0.02085)^46

Bond Price = $4603.116669 rounded off to $4603.12

Paulo owns a few shares of stock in a large and diversified firm. He realizes that the CEO of the company is responsible for a multi-billion dollar business, but is upset with what he feels is excessive compensation for the chief executive officer, particularly since the firm has reported losses for the past two years. Paulo's concerns are:

Answers

Answer: likely to be well-founded since CEO compensation at many U.S. companies has actually increased even when the company performed poorly

Explanation:

The options to the question are:

A. unfounded, since laws in the United States prevent firms from paying large salaries or bonuses to executives when a firm reports a loss.

B. based on an erroneous conclusion, because CEO pay is always based on a formula tied to the company's profits and losses.

C.likely to be well-founded since CEO compensation at many U.S. companies has actually increased even when the company performed poorly.

D. not entirely unfounded, but he needs to realize that the pay received by most chief executives must be reinvested in the company if it's unprofitable for three years in a row.

From the question, we are informed that Paulo owns a few shares of stock in a large and diversified firm na that he noticed that the CEO of the company is responsible for a multi-billion dollar business, but is upset with what he feels is excessive compensation for the CEO particularly since the firm has reported losses for the past two years.

Paulo's concerns are likely to be well-founded since CEO compensation at many U.S. companies has actually increased even when the company performed poorly.

Answer the question on the basis o the amounts of all nonlabor resources are fixed.
No. of workers Units of output
0 0
1 40
2 90
3 126
4 150
5 165
6 180
Assume that Number of Us Out Diminishing marginal returns become evident with the addition of the:________,
A) sixth worker.
B) fourth worker.
C) third worker.
D) second worker

Answers

Answer:

Explanation:

Dinmishing marginal returns occurs when as more units of labour is added, marginal output declines.

marginal output is change in total output as more units of labour are employed.

Marginal output = total output 2 - total output 1

total output = number of workers x units of output

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.56 per batch Processing customer orders $ 72.96 per customer order Assembling products $ 4.25 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 89 60 Number of customer orders 39 53 Number of assembly hours 493 900 How much overhead cost would be assigned to Product K91B using the activity-based costing system?

Answers

Answer:

$10,241.53

Explanation:

Using the activity-based costing system, Overhead cost for Product K91B would be?

Setting up batches 89 batches x $59.56= $5300.84

Processing customer orders 39 orders x $72.96= $2,845.44

Assembling products 493 hours x $4.25= $2,095.25

Total Overhead cost $10,241.53

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $240,000, and the following quantities of product and sales revenues were produced.

Product Pounds Price per Pound
Feed 100,000 $0.70
Flour 50,000 2.20
Starch 20,000 1.00

How much of the $240,000 cost should be allocated to feed?

a. $24,500.
b. $84,000.
c. $90,000.
d. $70,000.
e. $200,000.

Answers

Answer:

$84,000

Explanation:

A granny allocates the costs of unprocessed wheat to production of feed, flour and starch

The unprocessed wheat was bought at the price of $240,000

The first step is to calculate the total amount of the products(feed, flour and starch)

Feed= 100,000×0.70= 70,000

Flour= 50,000×2.0= 110,000

Starch= 20,000×1.0= 20,000

Total cost= 70,000+110,000+20,000

= $200,000

Therefore, the amount that should be allocated to the feed can be calculated as follows

= $70,000/$200,000×$240,000

= 0.35×$240,000

= $84,000

Hence the cost that should be allocated to the feed is $84,000

Consider Figure 9.2 on page 205 of our textbook. Suppose P0 is $10 and P1 is $11. Suppose a new firm with the same LRAC curve as the incumbent tries to break into the market by selling 4,000 units of output. Estimate from the graph what the new firm's average cost of producing output would be. If the incumbent continues to produce 6,000 units, how much output would be supplied to the market by the two firms? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn ?

Answers

Answer:

The 10,000 units of output that will be supplied by the two firms to the market.

Profit that each firm would earn will be higher than previous.

Explanation:

The firm selling 4,000 units at the price of $10 per unit. If the output is increased to 6,000 units the price will increase to $11 per unit. If the new 6,000 units are produced along with the previous 4,000 units then the total output supplied by the two firms will be 10,000 units (6,000 + 4,000). The supply of goods in the market will increase so price will fall and the revenue for the firms will decline but they can benefit with sales volume and their profit can increase.

The 10,000 units of output will be supplied by the two firms to the market.

The profit that each firm would earn will be higher than the previous.

Calculation of the number of units and profits:

Here the firm sells 4,000 units at the price of $10 per unit. And, in the case when the output is increased to 6,000 units the price will increase to $11 per unit.

And, In the case when the new 6,000 units are produced along with the previous 4,000 units so the total output supplied by the two firms will be 10,000 units.

The supply of goods in the market should increase due to which the price will fall and the revenue for the firms will decline however they can benefit with sales volume and their profit can increase.

learn more about profit here: https://brainly.com/question/18476577

Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows.

Sales 80,000 units x 45 per unit $3,600,000
Cost of goods sold
- Beginning inventory $__________0
- Cost of goods manufactured (100,000 units x $25 per unit) $2,500,000
- Cost of good available for sale $2,500,000
Ending inventory (20,000 x 25) $500,000
Cost of goods sold $2,000,000
Gross margin $1,600,000
Selling and administrative expenses $580,000
Net income %1,020,000

a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses.
b. The company's product cost of $25 per unit is computed as follows:

Direct materials $4 per unit
Direct labor $11 per unit
Variable overhead $4 per unit
Fixed overhead ($600,000/ $100,000 units) $6 per unit

Required:
Prepare an income statement for the company under variable costing.

Answers

Answer:

Income statement for the company under variable costing

Sales (80,000 units x $45) $3,600,000

Less Cost of Sales

Beginning inventory $0

Cost of goods manufactured (100,000 units x $19) $1,900,000

Cost of good available for sale $1,900,000

Less Ending inventory (20,000 x $19) ($380,000) ($1,520,000)

Contribution $2,080,000

Less Period Costs

Fixed Manufacturing Overhead ($600,000)

Selling and administrative expenses - Fixed ($400,000)

Selling and administrative expenses - Variable ($180,000)

Net Income / (loss) $900,000

Explanation:

Under Variable Costing.

1.Product cost = Variable Manufacturing Costs Only

Therefore, Product cost = $4 + $11 + $ 4

= $19

2.Period Cost = Fixed Manufacturing Overheads + Non - Manufacturing Costs

Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose to open a hair salon, a babysitting service, a record store, or many other things. This can be the same type of company you chose in assignment 8, or it can be different.
a. Describe the type of company you chose.
b. If you needed to get funding for your company, would you prefer to get debt funding or equity funding? Explain why you would prefer this type.

Answers

Answer:

Find the explanation below.

Explanation:

1. The company I chose to operate would be Celebrity Hair Salon. The Celebrity Hair Salon is a standard salon with comfortable furnishings and state-of-the-art equipment intended to tend to the needs of celebrities. Clients are expected to make appointments for their services which the salon strictly adheres to.

2. I would prefer to fund this new business through debt financing. Debt funding entails borrowing funds from Creditors with the intention of paying back at a later time with the attached interest. Equity funding entails giving an investor a certain percentage of the company's returns thus making him a co-owner of the company. This affords him the right to make decisions for the business. Detaching the investor from this business is difficult because it requires buying him out.

I would prefer debt financing because I wish to retain sole ownership of the business. I can also go through some government agencies to obtain funds at lower interest rates. Moreso, there is a fixed debt repayment plan that I can set a target to meet until the debt is paid. Finally, I can regain my freedom after the payment is completed, thus regaining my business and not entitling me to anyone.

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $70,000. The entry to record this exchange is:

Answers

Answer:

Entry to Record this exchange is :

Land $70,000 (debit)

Common Stocks $50,000 (credit)

Share Premium $20,000 (credit)

Explanation:

The Value of the Common Stocks used to settle the land purchase is equivalent to the market value of the land of $70,000.

The Common Stocks have a par value of $10, this means that any amount that is paid in excess of this par value is accounted for in the Share Premium Reserve.

Entry to Record this exchange is :

Land $70,000 (debit)

Common Stocks $50,000 (credit)

Share Premium $20,000 (credit)

Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect: Multiple Choice Jackie's income, as she now needs to buy Converse and will have less to spend on other goods. Jackie's preferences for shoes, since she feels as though she needs them now. Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular. the prices of related goods, since other shoes will be less popular and cost less now.

Answers

Answer:

Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.

Explanation:

Jackie is a fashionista and so she would respond to trends. Since everyone around her is wearing converse, she would want to wear converses too. so her income would be affected as it would be reduced as she would buy the converse.

You purchase a bond with an invoice price of $1,410. The bond has a coupon rate of 6.8 percent, and there are 3 months to the next semiannual coupon date. What is the clean price of the bond? Assume a par value of $1,000.

Answers

Answer:

clean price = $1,393

Explanation:

The clean price of the bond does not include any accrued interests. The invoice price = clean price + accrued interests

invoice price = $1,410accrued interests = $1,000 x 0.068 x 3/12 = $17

clean price = invoice price - accrued interests = $1,410 - $17 = $1,393

On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $66,000 and $900, respectively. During 2022, Larry's wrote off $2,275 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,500 at December 31, 2022. Bad debt expense for 2022 would be:

Answers

Answer:Bad debts expense = $6,875

Explanation:

A bad debt expense is recognized when a customer cannot pay its financial obligations therefore the account receivable will no longer be collectible

Beginning uncollectible accounts= $900

Ending allowance for uncollectible accounts = $5,500

Amounts written off = $2,275

Ending allowance for uncollectible accounts =Begining uncollectible accounts + current bad debts expense - amounts written off in 2022

$5,500= $900 + bad debts expense - $2,275

current bad debts expense for 2022= $5,500 - $900 + $2,275 = $6,875

Can also be illustrated as

ACCOUNTS

Begining uncollectible accounts $900

Amounts written off (less) - $2,275

Bad debts expense(add) + $6,875

Ending allowance for uncollectible accounts $5,500

Since stock prices will shift in response to unpredictable future news, these prices will tend to follow what mathematicians call _________________.

Answers

Answer:

a random walk with a trend

Explanation:

This model assumes that in each period the stock prices would take a random step away from what was its previous value.

Stock prices cannot be predicted therefore they are a random walk. Future prices cannot be predicted by what used to be the prices in the past. Stock prices change in response to unpredictable future news, hence they follow a random walk with a trend.

Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?

Answers

ANSWER:

Take down his/her suggestions. The first thing is to show respect. Accept thoughts and contributions towards that project. Most times a project "sponsor" is not someone who is a professional in the field or discipline that the project is about.

If your direct supervisor has the idea of increasing the scope of the project, take note of his/her reasons and if they will truly bring the achievement of more departmental goals, then relay the idea of expansion to the project sponsor.

Answer:

At this point, the important thing is to remain calm and in control. Your supervisor, like everyone else, is likely to get confused and blame people for things that are not their fault, or even find fault that does not exist.

In that case, you should wait for him to finish speaking, ask for permission to speak and explain how you did your job and show how your supervisor is wrong about the conclusion he made. This must be done calmly and politely, always maintaining respect.

Explanation:

International trade promotes economic growth when it allows any two countries to grow (in their combined production) beyond (above) their pre-trade production possibilities curve (PPC).

a. True
b. False

Answers

Answer: True

Explanation:

The Production Possibilities Curve (PPC) is meant to illustrate how a country produces goods and services given the limited resources it has. The curve represents the various amounts that have to be traded off of 2 goods to produce more or less of one good.

The Curve shows that it is best that a country produces those goods that is good at producing so that it can produce more of it and then trade with the rest of the world for the goods it isn't too efficient at producing. If both countries involved in the trade are able to grow beyond (above) their pre-trade production possibilities curve then the trade would have promoted economic growth.

Suppose that Best National Bank currently has $150,000 in demand deposits and $97,500 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%.
Reserves=
Required Reserves=
Excess Reserves=

Answers

Answer:

Reserves = $52,500

Required Reserves = $15,000

Excess Reserves = $37,500

Explanation:

Reserves of a bank refers to deposits held by the bank that have not be given out as loan. It is deposits minus loan. Reserves of the Best National Bank can therefore be calculated as follows:

Reserves = Demand deposits - Outstanding loans = $150,000 - $97,500 = $52,500

Required Reserves refers to the portion of the deposits of a bank that is legally required by the regulatory to be kept as reserves that cannot be loaned out by the bank. Required Reserves of Best National Bank can be calculated as follows:

Required Reserves = Demand deposits * Reserve requirement = $150,000 * 10% = $15,000

Excess Reserves refers to the reserves held by a bank in excess of its required required reserves. Therefore, excess reserves can be given out as loan by the bank. It is can be calculated as reserve minus required reserve for Best National Bank as follows:

Excess Reserves = Reserves - Required Reserves = $52,500 - $15,000 = $37,500

Based on the above, we have the following for Best National Bank:

Reserves = $52,500

Required Reserves = $15,000

Excess Reserves = $37,500

Periodic interest rates. You have a savings account in which you leave the funds for one year without adding to or withdrawing from the account. Which would you rather have: a daily compounded rate of 0.050%, a weekly compounded rate of 0.355%, a monthly compounded rate of 1.15%, a quarterly compounded rater of 4.25%, a semiannually compounded rate of 7.5%, or an annually compounded rate of 18%? What is the effective annual rate (EAR) of a daily compounded rate of 0.050%?

Answers

Answer:

Choose an annually compounded rate of 18%

The effective annual rate (EAR) of a daily compounded rate of 0.050% is 0.05001%.

Explanation:

We need to find the effective annual rate of interest for each nominal interest and compare this for the different alternatives.

The effective annual rate of interest is the annual rate that if compounded once a year would give us the same result as the same result as the interest per period compounded a number of times a year.

Conversion of Nominal to Effective Interest Rate.

1. A daily compounded rate of 0.050%