Answer:
1a. $28
1b. Income statement for the year Absorption Costing
Sales (15,000 units × $52) $780,000
Less Cost of Sales
Opening Stock $0
Add Cost of Goods Manufactured $924,000
Less Closing Inventory ($504,000) $420,000
Gross Profit $360,000
Less Expenses :
Selling and administrative Expenses :
Variable ($1 × 15,000 units) ($15,000)
Fixed ($ 174,000)
Net Income/ (Loss) $171,000
2a. $20
2b. Income statement for the year Variable Costing
Sales (15,000 units × $52) $780,000
Less Cost of Sales
Opening Stock $0
Add Cost of Goods Manufactured $660,000
Less Closing Inventory ($360,000) ($300,000)
Gross Profit $480,000
Less Expenses :
Selling and administrative Expenses :
Fixed manufacturing overhead ($264,000)
Variable ($1 × 15,000 units) ($15,000)
Fixed ($ 174,000)
Net Income/ (Loss) $27,000
Explanation:
Absorption Costing :
Unit product cost = all manufacturing costs (fixed and variable)
= $14 + $5 + $1 + ($264,000 / 33,000)
= $28
Cost of Goods Manufactured = 33,000 units × $28
= $924,000
Closing Inventory = 18,000 units × $28
= $504,000
Variable Costing :
Unit product cost = variable manufacturing costs
= $14 + $5 + $1
= $20
Cost of Goods Manufactured = 33,000 units × $20
= $660,000
Closing Inventory = 18,000 units × $20
= $360,000
A stock has a beta of 1.28, the expected return on the market is 12%, and the risk-free rate is 4.5%. Using the CAPM, what is the expected return on this stock
Answer:
14.10%
Explanation:
The calculation of expected return on this stock is shown below:-
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4.5% + 1.28 × (12% - 4.5%)
= 4.5% + 1.28 × 7.5%
= 4.5% + 9.6%
= 14.10%
The Market rate of return - Risk-free rate of return) is also called as the market risk premium
hence, the expected rate of return is 14.10%
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $420,000 to its supplier using a 12-month, 12% note.
Required:
1. The loan of $420,000 and acceptance of the note receivable on April 1, 2021
2. The adjustment for accrued interest on December 31, 2021
3. Cash collection of the note and interest on April 1, 2022.
Answer:
1. April 01, 2021
Dr Notes receivable 420,000
Cr Cash 420,000
2. December 31,2021
Dr Interest receivable 37,800
Cr Interest revenue 37,800
3. April 01, 2022
Dr Cash 470,400
Cr Notes receivable 420,000
Cr Interest receivable 37,800
Cr Interest revenue 12,600
Explanation:
Preparation of the Journal entries Shoemaker Corporation
1. Preparation of the Journal entry for loan o amount of $420,000 as well as the acceptance of the note receivable on April 1, 2021
April 01, 2021
Dr Notes receivable 420,000
Cr Cash 420,000
2. Preparation of the Journal entry for the adjustment for accrued interest on December 31, 2021
December 31,2021
Dr Interest receivable 37,800
Cr Interest revenue 37,800
($420,000 × 12% × 9/12=$37,800)
3. Preparation of the Journal entry for the Cash collection of the note and interest on April 1, 2022
April 01, 2022
Dr Cash 470,400
Cr Notes receivable 420,000
Cr Interest receivable 37,800
Cr Interest revenue 12,600
($420,000 × 12% × 3/12=$12,600)
On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:
Answer:
Computation of the interest expense using the equation as shown below:
Interest expense for year 1 = Notes payable * Interest rate
= $100,000 * 10%
= $7,000
Notes payable reduction in Year 1 = $14,238 - $7,000
= $7,238
General journal entry
Item Debit Credit
Notes payable $7,745
Interest expense $6,493
Cash $14,238
Workings
Interest expense = ($100,000 - $7,238) * 7%
= $92,762 * 7%
=$6,493
A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used five workers, who produced an average of 77 carts per hour. Workers receive $11/hour and machine cost was $47 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $14 per hour while output increased by four carts per hour.
a. Compute the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment. (Round to 4 decimal places)
b. Compute the % growth in productivity between the Prior and after buying the new equipment. (Round to 2 decimal places
Answer:
Multifactor productivity MFP before buying new equipment = 0.7549 carts/dollar cost
Growth in productivity between the Prior and after buying the new equipment. = 31.49%
Explanation:
Given that:
the number of workers before buying new equipment = 5
average cart production per hour = 77
worker's wage = $11
Cost of the machine = $47
After buying the new equipment;
number of worker is now = 4 since it is possible to transfer one of their worker to another department
average cart production per hour = $(77 +4) = $81
worker's wage = $11
Cost of the machine = $(47+14) = $61
The objective of this question is to "
a. Compute the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment.
Multifactor productivity MFP= Carts produced / (Labor cost + Equipment cost)
where;
Labor Cost = (Number of workers × Worker wage)
Multifactor productivity MFP = Carts produced / ((Number of workers × Worker wage) + Equipment cost)
We are to find just only the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment.
i.e before buying the new equipment.
Multifactor productivity MFP = 77/ (5 × 11) + 47)
Multifactor productivity MFP = 77/ (55+ 47)
Multifactor productivity MFP = 77/ (102)
Multifactor productivity MFP = 77/ (102)
Multifactor productivity MFP = 0.7549 carts/dollar cost
b. Compute the % growth in productivity between the Prior and after buying the new equipment. (Round to 2 decimal places
Growth in productivity = (Labor New productivity - Labor Old productivity) / Labor Old productivity] × 100
where;
Labor Productivity = Number of carts produced per hour / Number of workers
Labor Productivity (before buying new equipment) = 77/5
Labor Productivity (before buying new equipment) = 15.4 carts/worker/hour
Labor Productivity ( after buying the new equipment) = 81/4
Labor Productivity ( after buying the new equipment) = 20.25 carts/worker/hour
Growth in productivity = (20.25 - 15.40 /15.40) × 100
Growth in productivity = (4.85 / 15.40 )× 100
Growth in productivity = 0.3149 × 100
Growth in productivity = 31.49%
You want to have $12,500 in 10 years for a dream vacation. If you can earn an interest rate of .3 percent per month, how much will you have to deposit today?
Answer:
$8,778
Explanation:
To find the amount of money that you will have to deposit today, you have to use the formula to calculate the present value:
PV=FV/(1+i)^n
PV= present value
FV= future value= 12,500
i= interest rate= 0.003*12(to calculate the rate per year)= 0.036
n= number of periods of time= 10
PV=12,500/(1+0.036)^10
PV=12,500/1.424
PV=8,778
According to this, you will have to deposit today $8,778.
In the aftermath of the global economic crisis that started to take hold in 2008, U.S. government budget deficits increased dramatically, yet interest rates on U.S. Treasury debt fell sharply and stayed low for quite some time. Does this make sense? Why or why not
Answer and Explanation:
the supply effect of large deficits should cause interest rates to go up. The economic crisis caused wealth and income to be lower
which brought about a depression inTreasury bond demand, corporate bond supply also fell the more as investment opportunities reduced. A greater leftward shift in the bond
supply curve than the rightward shift in the bond demand curve would bring about a rise in
bond prices and a reduction in interest rates. Because off the seriousness of the global crisis, the United States
treasury debt became safe for forms of investment, with relative risk falling and liquidity
for U.S. treasury debt rising.
This then increased the U.S. treasury bond demand, resulting into higher
bond prices and lower yields.
Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
a. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _ and the level of investment spending to _.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to _______ and the level of investment to ________.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget __________ which ________ national saving. This causes the interest rate to ________ and the level of investment spending to _______
Answer:
a. Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _decrease and the level of investment spending to increase_.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to ___increase____ and the level of investment to ___decrease_____.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget ___surplus_______ which ___increases_____ national saving. This causes the interest rate to ___decrease_____ and the level of investment spending to __increase_____
Explanation:
Interest rate decreases with increased savings and this results to increased investment as funds are available at affordable costs. The situation is reversed when the savings are decreased, since the interest rate will increase as there are less savings for investment purposes.
There is a continuous interaction between taxation, savings, government spending, inflation, and investment versus interest rates. This means that interest rates also reflect these factors put together. This why in both fiscal and monetary policies, governments try to strike some balance in order to direct the economy towards desired targets. For example, when the government wants to stimulate the economy, it works to reduce interest rates in order to encourage investments, but this also lowers the propensity to save and encourages the propensity to spend, which trigger inflation and increases interest rate as an aftermath. And this seems to be an endless vicious or virtuous circle, depending on what is achieved by the monetary and fiscal measures in operation.
Fernando Designs is considering a project that has the following cash flows and WACC data. What is the project's discounted payback period? (6 points) What is the project’s modified internal rate of return?
Answer:
Discounted Payback period 3 years
Modified Internal rate of return 4.833%
Explanation:
Fernando Designs has following cash flows ,
year 1 : -$900
Year 2 : $500
Year 3 : $500
Year 4 : $500
Using 10% discount factor the cashflows will be,
discounted values
Year 1 : -900
Year 2 : 454.54
Year 3 : 445.45
Year 4 : 4132231
Payback period is -900 + 454.54 +445.45 = 3 years.
Modified Internal rate of return; [tex]\sqrt[n]{\frac{FV of cash inflows}{PV of cash outflow} }[/tex]
[tex]\sqrt[4]{\frac{1314}{900} }[/tex] = 4.833%
The trial balance for Skysong, Inc. appears as follows: Skysong, Inc. Trial Balance December 31, 2022 Cash $280 Accounts Receivable 480 Prepaid Insurance 75 Supplies 166 Equipment 3680 Accumulated Depreciation, Equipment $550 Accounts Payable 353 Common Stock 1100 Retained Earnings 1290 Service Revenue 2768 Salaries and Wages Expense 920 Rent Expense 460 $6061 $6061 If, on December 31, 2022, the insurance still unexpired amounted to $18, the adjusting entry would contain a:
Answer:
Debit Insurance expenses for $57
Credit Prepaid insurance for $57
Explanation:
From the Trial Balance, Prepaid Insurance is $75. Since on December 31, 2022, the insurance still unexpired amounted to $18, the insurance expenses for the year can therefore be calculated as follows:
Insurance expenses = $75 - $18 = $57
The adjusting entries will therefore be as follows:
Particulars Dr ($) Cr ($)
Insurance expenses 57
Prepaid insurance 57
(To record insurance expenses for the year.)
Note that the amount of $18 unexpired insurance will now be the Prepaid insurance that will appear as an asset under the Current Asset in the balance sheet, while the $57 insurance expenses will be charged as an expense in the income statement.
Wine and Roses, Inc. offers a 7% coupon bond with semiannual payments and a yield to maturity of 7.73%. The bonds mature in 9 years. Blank 1. Fill in the blank, read surrounding text. is the market price of a $1,000 face value bond
Answer:
current market price = $953.29
Explanation:
the market price of the bond = present value of the face value + present value of coupon payments
PV of face value = $1,000 / (1 + 3.865%)¹⁸ = $505.31
PV of coupon payments = $35 x 12.79935 (PV annuity factor, 3.865%, 18 periods) = $447.98
current market price = $505.31 + $447.98 = $953.29
Consider a potential merger between two hypothetical beer companies. Prior to the merger, the first, Ann Hy, is worth $150 billion and the second, Czar Bosch, is worth $100 billion. If they merge, they will gain $30 billion in increased value from reduced costs and additional sales (in present discounted value). Thus the combined value of the new entity (called Ann Hy-Czar Bosch) would be $280 billion. How much more could Czar Bosch hope to get by using the theory of the pie instead of proportional division
Answer:
$3 billion more
Explanation:
Calculation of the amount that Czar Bosch could hope to get by using the theory of the pie instead of proportional division
If we are to use the theory of the pie instead of the proportional division this means that when using the proportional division, their would be likelihood that Czar Bosch would get an amount that is proportional to their market cap, 40% of the $30 billion, or $12 billion and in a situation where the they decide to split the pie this means that Czar Bosch would either get$15 billion or $3 billion more
.
Stellar Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory280$31$ 8,680 April 15 purchase4503716,650 April 23 purchase 270 40 10,800 1,000 $36,130 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
Answer:
inventory - $13,120
cost of goods sold - $23,010
Explanation:
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.
the cost of goods sold would be taken from the cost of the newest purchases.
April 23 purchase 270 x 40 = $ 10,800
600 - 270 = 330
April 15 purchase ; 330 x $37 = $12,210
cost of goods sold = $12,210 + $ 10,800 = $23,010
Inventory = the remaining part of the April 15 purchase and beginning inventory
450 - 330 = 120 x $37 = $4440
$4440 + 8,680 = $13,120
Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Yield to Maturity A 1 6.00 % B 2 7.00 % C 3 7.99 % D 4 9.41 % E 5 10.70 % The expected 1-year interest rate 4 years from now should be _________.
Answer:
16.01%
Explanation:
The expected 1-year interest rate 4 years from now is determined using the below formula:
The expected 1-year interest rate 4 years=(1+YTM5)^5/(1+YTM4)^4-1
YTM5 is the yield to maturity in year 5 i.e 10.70%
YTM4 is the yield to maturity in year 4 i.e 9.41%
The expected 1-year interest rate 4 years=(1+10.70%)^5/(1+9.41%)^4-1
The expected 1-year interest rate 4 years=16.01%
Gabriele enterprises has bonds on the market making annual payments, with seven years to maturity, a par value of 1000, and selling for 962. At this price, this price, the bonds yield 6.6 percent.
What must the coupon rate be on the bonds?
Answer:
The answer is =5.91%
Explanation:
N(Number of periods) = 7 years
I/Y(Yield to maturity) = 6.6percent
PV(present value or market price) = $962
PMT( coupon payment) = ?
FV( Future value or par value) = $1,000.
We are using a Financial calculator for this.
N= 7; I/Y = 6.6; PV = -962; FV= $1,000; CPT PMT= $59.05
Therefore, the coupon rate of the bond is of the bond is $59.05/1000
=5.91%
Planning, implementing and controlling the physical flow of materials, final goods and related information from points of origin to points of consumption to meet customer requirements at a profit is called
Answer:
Marketing Logistics
Explanation:
The term that is being described in the question is known as Marketing Logistics. Like mentioned, this is various aspects/processes that need to take place when moving products from producer to market all in order to meet customer demands while making a satisfactory profit at the same time. This is a big part of every business since a business with a good marketing logistics department can easily keep track of product shipments and move products or information quickly to the correct locations thus making everything much more efficient.
"If a member firm routes a customer market order for an NYSE listed issue to the NYSE's automated trading system, the order will be sent to:"
Answer:
Super display book
Explanation:
Super display book is the NYSE's automated execution system for dealing listed issues. It is a programme installed in a computer, which display information like timing, record, quantity, price and execute orders for securities on the stock exchange market. Super display book ensures that orders are routed directly and correctly to a specialist for quick resolution.
Large and complex orders usually placed on the NYSE are handled by floor brokers hence does not execute most orders placed by individual investors. These order placed by individual investors are directed by super display book to a specialist for quick resolution.
You have just recieved notification that you have won the $2 million first prize in the centennial lottery. However, the prize will be awarded on your 100th birthday, 76 years from now.
Requried:
What is the present value of your windfall if the appropriate discount rate is 8%?
Answer:
$5,765.35
Explanation:
Preparation of the present value of your windfall if the appropriate discount rate is 8%
To find the present value we are going to use this formula
PV = FV / (1 + r)^t
Where,
FV=$2,000,000
r=8%
t=76
Let plug in the formula
PV = 2,000,000 / (1 + .08)^⁷⁶
PV = $2,000,000 / (1.98)^⁷⁶
PV=$2,000,000/346.90
PV=$5,765.35
Therefore the present value will be $5,765.35
Sheridan Company had a 40 percent tax rate. Given the following pre-tax amounts, what would be the income tax expense reported on the face of the income statement?
Sales revenue $ 500,000
Cost of goods sold 300,000
Salaries and wages expense 40,000
Depreciation expense 55,000
Dividend revenue 45,000
Utilities expense 5,000
Extraordinary loss 50,000
Interest expense 10,000
a. $54,000
b. $34,000
c. $36,000
d. $16,000
Answer:
a. $54,000
Explanation:
The computation of income tax expense reported on the face of the income statement is shown below:-
Income before tax = Sales revenue + Dividend revenue - Cost of goods sold - Salaries and wages expenses - Depreciation expenses - Utilities expenses - Interest expenses
= $500,000 + $45,000 - $300,000 - $40,000 - $55,000 - $5,000 - $10,000
= $135,000
Income tax expenses = Before Income tax × Income tax rate
= $135,000 × 40%
= $54,000
Lynda Jones College Plan On her 10th birthday Linda Jone's parents decide to deposit $4,000 in a 529 account for their daughter to go to college. They intend to put an additional $4,000 in the account each year on her 11th, 12th, ..., 17yh birthdays. Assume all account balances will earn 8% per year. On Lynda's 18th, 19th, 20th, and 21st birthdays, her parents will withdraw $20,000 to pay for Linda's college education. Questions: Is the $4,000 savings per year sufficient to cover the anticipated college expenses? Is Linda's 529 account underfunded? What should be the annual deposit in Lynda's 529 account to cover entirely her tuition and fees? What will be the PV of Lynda's college tuition on her 18th birthday? Summarize the results of your analysis and provide your recommendation in this quizz. Create a spreadsheet and submit it in you Drop Box.
Answer:
Is the $4,000 savings per year sufficient to cover the anticipated college expenses?
No, since the maximum withdrawal per year (for 4 years) earning an 8% interest rate is $12,846.23. Her parents will be $7,153.77 short every year.Is Linda's 529 account underfunded?
Yes, her account will have $42,548 when she turns 18 and that isn't enough to cover her college expenses.What should be the annual deposit in Lynda's 529 account to cover entirely her tuition and fees?
$6,227.51What will be the PV of Lynda's college tuition on her 18th birthday?
If Lynda's parents want to cover her college expenses, they need to have $66,242 on her 529 account.Explanation:
Lynda's 529 account will have the following balance when she is 18:
future value = annual payment x annuity factor (FV annuity factor, 8%, 8 periods) = $4,000 x 10.637 = $42,548
her parents will make 4 withdrawals:
present value = annual withdrawal x annuity factor (PV annuity factor, 8%, 4 periods)
maximum annual withdrawal = $42,548 / 3.3121 = $12,846.23
required balance = $20,000 x 3.3121 = $66,242
annual payment = $66,242 / 10.637 = $6,227.51
The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of outstanding shares is:
Answer:
12,000
Explanation:
The following data was reported for an organisation
Authorized shares is 20,000
Issued shares is 15,000
Treasury shares is 3,000
Therefore, the number of outstanding shares can be calculated as follows
Number of outstanding shares= Issued stock-Treasury stock
= 15,000-3,000
= 12,000
Hence the number of outstanding shares is 12,000
Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.82 percent, a par value of $1,000 per bond, matures in 6 years, has a total face value of $5.2 million, and is quoted at 103 percent of face value. The second issue has a coupon rate of 6.59 percent, a par value of $1,000 per bond, matures in 14 years, has a total face value of $9.5 million, and is quoted at 107 percent of face value. Both bonds pay interest semiannually. The company's tax rate is 35 percent. What is the firm's weighted average aftertax cost of debt
Answer:
3.22%
Explanation:
we must first determine the yield to maturity of both bonds in order to determine their before tax cost of debt:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM Bond₁ = {19.10 + [(1,000 - 1,030)/12]} / [(1,000 + 1,030)/2] = 16.6 / 1,015 = 0.01635 x 2 = 3.27%
YTM Bond₂ = {32.95 + [(1,000 - 1,070)/28]} / [(1,000 + 1,070)/2] = 0.0294 x 2 = 5.88%
firm's weighted after tax cost of debt = {[($5.2 / $14.7) x 3.27%] x (1 - 0.35)} + {[($9.5 / $14.7) x 5.88%] x (1 - 0.35)} = 0.75% + 2.47% = 3.22%
Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $40,000 at the beginning of the month and $26,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $58,600 and direct labor cost of $33,400. The actual manufacturing overhead cost incurred was $54,800. The manufacturing overhead cost applied to Work in Process was $54,600. The cost of goods manufactured for June was:
Answer:
$160,600
Explanation:
The computation of the cost of goods manufactured is shown below:
= Direct material cost + direct labor cost + manufacturing cost applied + beginning work in process - ending work in process
= $58,600 + $33,400 + $54,600 + $40,000 - $26,000
= $160,600
Hence, the cost of goods manufactured for June is $160,600
he ability to hire, motivate, and retain human capital is an example of ________ capabilities in the resource-based view of the firm.
Answer:
Organizational capabilities
Explanation:
The ability to hire, motivate, and retain human capital is an example of organizational capabilities in the resource-based view of the firm.
An organizational capability is the ability of a firm to manage resources, such as it's employees, effectively which will give them an edge over competitors. Organizational capabilities differntiates a firm from competitors.
A newspaper advertisement for Cashmere Closet states "This Saturday 9 a.m., 1 Red Cashmere Scarf, worth $299.95… $10.00 First Come First Served." Which of the following statements is false?
A. The ad is clear and specific about what was being offered and asked for in exchange.
B. The ad lacks intent to constitute an offer.
C. The number of people who have the power of acceptance is limited.
Answer:
Option B
Explanation:
In simple words, The seller must have intention of making the offer. These are determined first from offeree 's place that there is intention to make an bid. When a fair person in the offerer 's position assumes that the terms or acts of the offeror represent an offer, that is an bid. It is an empirical, and not a moral, criterion for deciding that there is an desire to accept an bid.
Thus, from the above we can conclude that the correct option is B .
Assume the MPC is 0.8. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the:__________
a. left by $180 billion.
b. left by $500 billion.
c. right by $180 billion.
d. right by $400 billion.
Answer:
b. left by $500 billion.
Explanation:
Given marginal propensity to consume, MPC = 0.8
Marginal propensity to consume + Marginal propensity to save = 1
MPC + MPS = 1
0.8 + MPS = 1
MPS = 1-0.8
MPS = 0.2
Now, the government multiplier = 1/MPS
The government multiplier = 1 / 0.2 = 5
Total fall in aggregate demand = Government multiplier × Government purchases
= 5 ×100
= $500
Since there is a fall in spending so the aggregate demand curve will shift leftwards.
Therefore, the correct option is b. left by $500 billion.
The closing entries show a debit to retained earnings of $350, and a credit to retained earnings of $750. There was also a credit to dividends payable of $100. This company had a:
Answer:
net income = $400
Explanation:
closing entries:
Dr Retained earnings 350
Cr Income summary 350
Dr Income summary 750
Cr Retained earnings 750
Dr Retained earnings 100
Cr Dividends 100
net income = $750 - $350 = $400
Dividends reduce retained earnings, but net income must exist before any dividends can be distributed.
Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as _____________.
Answer:
competitive dynamics
Explanation:
The term that is being described in this question is known as competitive dynamics. Like mentioned, this is the study of the rivalry between various firms that is made up of their competitive actions/responses, their micro/macro level context, and even their antecedents and consequences. Which all-in-all add up to their effort on acquiring the same customers as their client.
Marin Inc. issues $2, 084, 300 of 10% bonds due in 13 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 11%. What amount will Marin receive when it issues the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458, 581.) Amount received by Marin when bonds were issued $________________
Answer:
$1,943,618.62
Explanation:
the current market price of the bond = present value of the face value + present value of coupon payments
present value of face value = $2,084,300 / (1 + 11%)¹³ = $536,736.96
present value of coupon payments = $208,430 x 6.7499 (annuity factor, 11%, 13 years) = $1,406.881.66
market value of the bonds = $1,943,618.62
the journal entry to record the issuance of the bonds:
Dr Cash 1,943,618.62
Dr Discount on bonds payable 140,681.38
Cr Bonds payable 2,084,300
A corporation has 50,000 shares of $25 par stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be a.50,000 shares b.100,000 shares c.150,000 shares d.16,666 shares
Answer:
Option C
Number of shares outstanding after split = 150,000 units
Explanation:
A stock split occurs where a company creates additional shares in units such the total nominal value of the outstanding shares remains the same. With a stock split, the total outstanding shares increases without a change in the total nominal value while the nominal value per share reduces.
Total shares before the split = 50,000
Total outstanding shares after split
= 50,000 × 3 = 150,000
Number of shares outstanding after split = 150,000 units
Money can be many things, but it is NOT Group of answer choices a financial liability liguid illiguid a financial asset
Answer:
illiquid
Explanation:
Liquidity refers to how fast an asset can be converted to cash. Money is already cash, so it is the most liquid financial asset