Answer: c. vertical, which implies that monetary and fiscal policies cannot influence the level of unemployment in the long run.
Explanation:
The Phillip Curve is used to show that unemployment and inflation have an inverse relationship such that when inflation is increasing, unemployment is decreasing. Fiscal and monetary policies can be used to increase or decrease inflation and unemployment.
In the long run however, the Philips Curve is vertical which means that unemployment will no longer be affected by fiscal and monetary policies that aim to impart inflation because the economy will be at the natural rate of unemployment.
You are long 30 gold futures contracts, established at an initial settle price of $1,542 per ounce, where each contract represents 100 troy ounces. Your initial margin to establish the position is $12,000 per contract and the maintenance margin is $11,200 per contract. Over the subsequent four trading days, gold settles at $1,531, $1,527, $1,537, and $1,547, respectively. Compute the balance in your margin account at the end of each of the four trading days, and compute your total profit or loss at the end of the trading period. Assume that a margin call requires you to fund your account back to the initial margin requirement. For days in which a deposit is necessary, give the margin balance after the required deposit
Answer:
The solutions is given in the attached figure
Explanation:
The values are calculated using the appropriate formulas in Excel. The formulas are as indicated in the attached figure.
Oriole Company incurs these expenditures in purchasing a truck: cash price $26,070, accident insurance (during use) $1,910, sales taxes $1,350, motor vehicle license $260, and painting and lettering $1,960. What is the cost of the truck?
Answer:
$29,380
Explanation:
Calculation of cost of truck for Oriole company.
Cost of truck
Cash price
$26,070
Sales taxes
$1,350
Painting and lettering
$1,960
Total cost of truck
$29,380
Please note that insurance cost and motor vehicle license are revenue expenditures and are ignored while computing the cost of the truck.
In its first year of operations, Roma Company reports the following.
Earned revenues of $55,000 ($47,000 cash received from customers).
Incurred expenses of $30,500 ($23,750 cash paid toward them).
Prepaid $9,250 cash for costs that will not be expensed until next year.
Required:
Compute the company’s first-year net income under both the cash basis and the accrual basis of accounting.
Answer:
Cash Basis $14,000
Accrual Basis $24,500
Explanation:
Computation for the company’s first-year net income under both the cash basis and the accrual basis of accounting.
CASH BASIS ACCRUAL BASIS
Revenues $47,000 $55,000
Less Expenses $33,000 $30,500
($23,750+9,250=$33,000)
Net income $14,000 $24,500
Therefore the company’s first-year net income under both the cash basis and the accrual basis of accounting will be :
Cash Basis $14,000
Accrual Basis $24,500
Which situation best describes an oligopoly?
A. A city government selects one company to provide clean water for
its residents.
B. A large oil company buys all of its competitors and shuts them
down permanently.
C. A group of vendors compete to sell the same drinks to fans at a
baseball game.
D. A few large airlines work together to set high prices and eliminate
new competitors.
A series of 10 end-of-year deposits is made that begins with $5,000 at the end of year 1 and decreases at the rate of $300 per year with 12% interest.
a) What amount could be withdrawn at t = 10? $
Round entry to the nearest dollar. Tolerance is ±4.
b) What uniform annual series of deposits (n = 10) would result in the same accumulated balance at the end of year 10? $
Round entry to the nearest dollar. Tolerance is ±4.
Answer:
a) The amount that could be withdrawn at t = 10 is $68,872.
b) The uniform annual series of deposits is $3,925.
Explanation:
a) What amount could be withdrawn at t = 10? $ Round entry to the nearest dollar. Tolerance is ±4.
Note: See the attached excel for the calculation of the future value in year 10.
From the attached excel file, we have:
Future value in year 10 = $68,872
Therefore, the amount that could be withdrawn at t = 10 is $68,872.
b) What uniform annual series of deposits (n = 10) would result in the same accumulated balance at the end of year 10? $ Round entry to the nearest dollar. Tolerance is ±4.
To calculate the uniform annual series of deposits, we use the formula for calculating the future value of ordinary annuity for as follows:
FV = M * (((1 + r)^n - 1) / r) ................................. (1)
Where,
FV = Future value of the amount deposited in after 10 years = $68,872
M = Uniform annual series of deposits = ?
r = Interest rate = 12%, or 0.12
n = number of year = 10 years
Substituting the values into equation (1) and solve for M , we have:
$68,872 = M * (((1 + 0.12)^10 - 1) / 0.12)
$68,872 = M * 17.5487350695351
M = $68,872 / 17.5487350695351
M = $3,925
Therefore, the uniform annual series of deposits is $3,925.
Liu Zhang operates Lawson Consulting, which began operations on June 1. On June 30, the company’s records show the following accounts and amounts for the month of June.
Cash $ 6,500 Service revenue $ 12,900
Accounts receivable 4,800 Equipment 6,800
Accounts payable 3,800 Rent expense 2,300
L. Zhang, Withdrawals 1,800 Wages expense 8,000
Need an income statement for june
Answer:
Lawson Consulting
LAWSON CONSULTING
Income Statement for the month ended June 30
Service revenue $ 12,900
Rent expense 2,300
Wages expense 8,000 10,300
Net income $2,600
Explanation:
a) Data and Calculations:
Cash $ 6,500
Accounts receivable 4,800
Equipment 6,800
Accounts payable 3,800
L. Zhang, Withdrawals 1,800
Service revenue $ 12,900
Rent expense 2,300
Wages expense 8,000
b) The income statement for the month of June summarizes Lawson's revenue and expenses, giving rise to a net income of $2,600. On the statement, the financial profitability of the business is determined. Only temporary accounts from the list of account balances are used to prepare the statement.
KrAmerica Jewelers sold a necklace to George on a layaway plan. George paid a portion of the price and agreed to make additional payments over six months. The necklace was to remain in the possession of KrAmerica until payment was fully made. A burglary occurred at KrAmerica and the necklace along with other items were stolen. KrAmerica argued that George must bear the risk of loss. George sought recovery of the full value of the necklace. Explain who shall prevail for each claim.
Answer:
- KrAmerica will bear the risk of the loss
- George will not get full recovery for the value of the necklace
Explanation:
George only made some payments for the necklace and he had not taken possession of it yet. So the risk for the loss is with KrAmerica since they are the current owners of the necklace.
George was only to take possession of the necklace when payment was completed.
On the other hand George is seeking full recovery of the value of the necklace.
He has only made a part payment on the necklace, so he is not entitled to get the full value of the necklace.
Only the amount he has paid will be refunded to him.
The normal distribution is an appropriate model of: A. system reliability where components are connected in parallel. B. the full cost view of maintenance. C. the high initial failure rates of product, machine, or processes. D. the MTBF distribution of products, machines, or processes that have "settled in." E. system reliability where components are connected in series.
Answer:
The correct answer is the option D: the MTBF distribution of products, machines, or processes that have "settled in".
Explanation:
To begin with, the term of "normal distribution" refers to statistic model used in the field of probabilities and the most common characteristics are that they have a standard deviation of 1 and are all symmetrical. In the proper graphic the form of a normal distribution will be the one of a curve bell. Therefore that it is regularly seen in as an appropiate model of MTBF distribution regarding maintenance of products, machines or processes. Moreover, this distribution also known as Gaussian is motivated by the Central Limit Theorem.
At the end of the first year of operations, Meacham's balance sheet showed the following account balances: Accounts Receivable, $13,400; Inventory, $9,400; and Accounts Payable, $14,650. The company's income statement reports net income of $37,400, including depreciation expense of $10,400. Using only the given information, compute Meacham's net cash flow from operating activities using the indirect method.
Answer:
$39,650
Explanation:
Compute Meacham's net cash flow from operating activities using the indirect
Using this formula
Net cash flow from operating activities=Net income-Accounts Receivable-Inventory+Accounts Payable+depreciation expense
Let plug in the formula
Net cash flow from operating activities=$37,400 - $13,400 - $9,400 + $14,650 + $10,400
Net cash flow from operating activities= $39,650
Therefore Meacham's net cash flow from operating activities using the indirect is $39,650
As the Consumer Price Index increases, the value of money a. falls, so people hold less money to buy the goods and services they want. b. falls, so people hold more money to buy the goods and services they want. c. rises, so people hold more money to buy the goods and services they want. d. rises, so people hold less money to buy the goods and services they want.
Answer:
D. falls, so people hold more money to buy the goods and services they want.
Explanation:
In the case when the consumer price index rises, so the value of the money declines as the people would hold more money in order to purchase the goods and services what actually they want
Also it shows an inverse relationship between the consumer price index and the value of money i.e. if one thing is increased the other thing would decrease and vice versa
Therefore the option d is correct
Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. You are currently in a sorting module. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop. Increases natural rate of unemployment reducing workers' collective bargaining rights extra financial benefits for the unemployed a large number of young people entering the labor force an increase in union membership Decreases natural rate of unemployment
Answer:
increases natural rate of unemployment
extra financial benefits for the unemployed
a large number of young people entering the labor force
an increase in union membership
Decreases natural rate of unemployment
reducing workers' collective bargaining rights
Explanation:
natural rate of unemployment is unemployment that exists when there is only structural and frictional unemployment in an economy
structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition . Structural unemployment tends to be permanent.
Frictional unemployment . the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.
If the unemployed are given extra benefits, there would be less incentive to find a job, thus unemployment would increase
An increase in union membership increases bargaining power of employees. this can lead to increase in wages. increase in wages reduces demand for labour and this increases unemployment. reducing collective bargaining right has the opposite effect on unemployment
a large number of people entering the labour force increases frictional unemployment
Determine if there was a percent increase or decrease in the number of trench coats sold, and by how much. (Round your answer to the nearest tenth.)
a.
The percentage of trench coats sold decreased by 0.8%.
b.
The percentage of trench coats sold increased by 0.8%.
c.
The percentage of trench coats sold decreased by 23.3%.
d.
The percentage of trench coats sold increased by 23.3%.
Answer:
D. increase of 23.3%, right on edge
Explanation:
to find the percentage increase, first you need to substract the final from the initial, then divide the difference by the initial, then multiply your answer by 100 to get the percentage
in this case, the final is 127, and the initial is 103
127 - 103 = 24
24 ÷ 103 = 0.233
0.233 x 100 = 23.3%
Answer:
✅ D. The percentage of trench coats sold increased by 23.3%.When the interest rate is above the equilibrium level, a. the quantity of money that people want to hold is less than the quantity of money that the Federal Reserve has supplied. b. people respond by buying interest-bearing bonds or by depositing money in interest-bearing bank accounts. c. bond issuers and banks respond by lowering the interest rates they offer. d. All of the above are correct.
Answer:
D
Explanation:
When interest rate is above the equilibrium level, people would be less willing to hold cash. Instead they would prefer to save or invest in interest-bearing bonds. This is because as a result of the higher interest rate, interest paid on their deposit and investment would be higher.
As a result of the increase in savings, there would be an increase in the supply of loanable funds over demand for loanable funds. This would lead to a reduction in interest rate until equilibrium interest rate is reached.
Principal Printing produces custom labels and stationery for companies. In conducting CVP analysis of its Personalized Package, management decided to determine how many of the packages would need to be sold in order to justify continuing the product line. Management determined that fixed costs direct related to this particular product amounted to $54,000 annually. Principal reported $240,000 of gross sales related to this product and variable product costs of $180,000. Assuming that each Personalized Package sells for $12 per unit, what is the minimum amount of total sales dollars of Personalized Packages that Principal needs in order to justify the product line
Answer:
18,000 personalized packages
Explanation:
Profit-volume ratio = ($240,000 - $180,000) / $240,000
Profit-volume ratio = 0.25
Profit-volume ratio= 25%
Break-Even-Point = $54,000 / 25%
Break-Even-Point = 216,000
The minimum personalized packages that needs to sell to break even:
= Break-Even-Point / Personalized Package sales per unit
= 216,000 / $12
= 18,000 personalized packages
Baker Company, an Ohio company that sells a branded product regionally to retail customers in Midwest. It normally sells its product for $40 per unit; however, it has received a one-time offer from a private-brand company on the West Coast to buy 1,000 units at $25 per unit. Even though the company has excess capacity to produce the units, the president of the company immediately rejected the offer; however, the chief accountant stated that it might be a profitable opportunity for the company, even though $25 is below its unit cost of $28, calculated as follows:
Cost
Direct material $12.00
Direct labor 8.00
Depreciation and other fixed costs 6.00
Total unit cost $26.00
Calculate the net advantage (disadvantage) of accepting the special order:
a. $5,000
b. ($5,000)
c. $25,000
d. ($25,000)
Answer:
Effect on income= $5,000 increase
Explanation:
Giving the following information:
One-time offer:
1,000 units at $25 per unit.
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Unitary cost= 12 + 8= $20
Effect on income= 1,000*(25 - 20)
Effect on income= $5,000 increase
You have $100,000 in your retirement fund that is earning 5.5 percent per year, compounded quarterly. a. How many dollars in withdrawals per month would reduce this nest egg to zero in 20 years
Answer:
$680
Explanation:
The computation of the dollars in withdrawals per month that decrease this nest egg to zero in 20 years is shown below;
As we can see in the attached image that the $100,000 would be in the retirement fund so in 20 years, the withdrawals per month is $680 that decrease the nest egg to zero
Therefore the same would be considered
RM Company, a manufacturer, has provided the following information pertaining to its recent year of operation:
Net income $390,000
Accounts payable increased $33,000
Prepaid rent decreased $14,500
Depreciation expense was $44,000
Accounts receivable increased $43,000
Gain on sale of a building was $15,500
Wages payable decreased $30,000
Unearned revenue increased $53,000
Using the indirect method, how much was RM's net cash provided by operating activities?
a. $259,000.
b. $327,000.
c. $347,000.
d. $358,000.
Answer:
RM Company
Using the indirect method, RM's net cash provided by operating activities is:
= $446,000.
Explanation:
a) Data and Calculations:
Net income $390,000
Accounts payable increased $33,000
Prepaid rent decreased $14,500
Depreciation expense was $44,000
Accounts receivable increased $43,000
Gain on sale of a building was $15,500
Wages payable decreased $30,000
Unearned revenue increased $53,000
Operating Activities:
Net income $390,000
Adjustment with non-cash items:
Depreciation expense was 44,000
Gain on sale of a building was (15,500)
Working capital changes:
Accounts payable increased 33,000
Prepaid rent decreased 14,500
Unearned revenue increased 53,000
Accounts receivable increased (43,000)
Wages payable decreased (30,000)
Net cash provided by operating
activities $446,000
Why would you choose a job over a career?
Answer:
A job can be just going to work to earn a paycheck. A career means that each of your jobs, experiences, and training programs is helping you advance in pay or responsibility. The real difference between a job and a career is your attitude. People who want a career are always thinking about their long-term goals.
Explanation:
Sorry if this isn't right love, I tried:(
P Corporation acquires all of S Company's voting stock. At the date of acquisition, the fair value of S Company's long-term debt is $100 greater than its book value. The debt has a 5-year remaining life at the date of acquisition. When consolidating S Company's financial statements for the first year following acquisition, how will eliminating entry (O) affect long-term debt and interest expense
Answer:
$20 debit to long-term debt, $20 credit to interest expense
Explanation:
Based on the information given the eliminating entry that will affect the long-term debt and interest expense is to DEBIT LONG-TERM DEBT with the amount of $20 and CREDIT INTEREST EXPENSE with the amount of $20
Debit long-term debt $20
Credit Interest expense $20
Calculated as:
Fair value of S Company's long-term debt/Remaining life at the date of acquisition
=$100/5years
=$20
Diamond Boot Factory normally sells its specialty boots for $22 a pair. An offer to buy 120 boots for $18 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $8, and special stitching will add another $2 per pair to the cost. Determine the differential income or loss per pair of boots from selling to the organization.
Answer:
Differential income = $960
Explanation:
In a special order decision , the offer should be accepted if the sales revenue from the order is greater than the relevant costs of the special orders.
The relevant costs of the special order = variable cost + additional cost of special stitching machine
$
Sales revenue (120× $18) 2,160
The relevant costs of the special order
= (120×8) + (120×2) (1,200)
Differential income 960
THESE ARE TRUE OR FALSE!! PLEASE HELP!!
1. A goal in life that is fulfilled through a job is called an occupation.
2. The process of studying careers, assessing yourself, and making decisions about the future
is called career planning.
3. Career planning begins when you make decisions about your interests and the occupation
you want to have someday.
4. Studying careers is continuous because new career opportunities come along regularly.
5. School libraries should be avoided in career planning.
6. Newspaper help wanted ads are interesting but of little value in career planning.
7. In career planning, you should contact both government employment offices and private
employment agencies.
8. Career information interviews can be done naturally without any advance preparation.
9. The willingness and ability of workers to move where jobs are available is called mobility.
10. A natural, in-born aptitude to do certain things is an ability.
Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 765,000 shares of stock outstanding. Under Plan II, there would be 515,000 shares of stock outstanding and $9.25 million in debt outstanding. The interest rate on the debt is 12 percent, and there are no taxes. a. Assume that EBIT is $2.6 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.) EPS Plan I $ Plan II $ b. Assume that EBIT is $3.1 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.) EPS Plan I $ Plan II $ c. What is the break-even EBIT
Solution :
Calculation of the [tex]$\text{EPS}$[/tex] for both [tex]$\text{plan I}$[/tex] and [tex]$\text{plan II}$[/tex] where EBIT is 2.6 million.
[tex]$\text{plan I}$[/tex] [tex]$\text{plan II}$[/tex]
EBIT $ 2.6 million $ 2.6 million
Less : Interest $ 1.1 million
Less
PAT $ 2.6 million $ 1.5 million
Earnings available $ 2.6 million $ 1.5 million
for share holder
No. of shares 765,000 515,00
[tex]$\text{EPS}$[/tex] = earnings available $ 3.40 $ 2.9
for share holder/no. of
shares
Hence [tex]$\text{EPS}$[/tex] under the [tex]$\text{plan I}$[/tex] is $ 3.40 and [tex]$\text{plan II}$[/tex] is $ 2.91
Calculating the [tex]$\text{EPS}$[/tex] for both plan I and [tex]$\text{plan II}$[/tex] where EBIT is $ 3.1 million
[tex]$\text{plan I}$[/tex] [tex]$\text{plan II}$[/tex]
EBIT $ 3.1 million $ 3.1 million
Less : Interest $ 1.1 million
Less
PAT $ 3.1 million $ 2.0 million
Earnings available $3.1 million $ 2.0 million
for share holder
No. of shares 765,000 515,00
[tex]$\text{EPS}$[/tex] = earnings available $ 4.05 $ 3.88
for share holder/no. of
shares
Hence, [tex]$\text{EPS}$[/tex] under the [tex]$\text{plan I}$[/tex] is [tex]$\$4.05$[/tex] and [tex]$\text{plan II}$[/tex] is [tex]$\$ 3.88$[/tex]
Calculating the breakeven EBIT
When [tex]$\text{accessing}$[/tex] the relative effectiveness leverage versus equity financing companies look for the level of the EBIT where [tex]$\text{EPS}$[/tex] remains unaffected, called the EBIT-EPS breakeven point .
To calculate the EBIT-EPS breakeven point, rearranging the [tex]$\text{EPS}$[/tex] formula:
[tex]$\text{EBIT}=\text{(EPS }\times \text{no. of common shares outstanding )}+\frac{\text{preferred share dividends}}{1-\text{tax rate}}+ \text {debt interest}$[/tex]
[tex]$=(\$4.05 \times 515,000)+0+\$1,100,000 = \$3,185,750$[/tex]
Therefore, the break even EBIT is $ 3,185,750
Expected cash flows: FireRock Wheel Corp is evaluating a project in which there is a 40 percent probability of revenues totaling $4 million and a 60 percent probability of revenues totaling $2 million per year. Its cash expenses will be $1.0 million while depreciation expense will be $300,000. What is the expected free cash flow from taking the project if the marginal tax rate for the firm is 25 percent
Answer:
$1,425,000
Explanation:
Calculation to determine the expected free cash flow
Expected revenue$2,800,000
[(40%*$4 million)+(60%*$2 million)]
Less Cash Expenses $1,000,000
Less Depreciation Expense $300,000
EBIT$1,500,000
($2,800,000-$1,000,000-$300,000)
Tax $375,000
(25%*$1,500,000)
Net Income $1,125,000
($1,500,000-$375,000)
Add Depreciation Expense $300,000
Free Cash Flow $1,425,000
($1,125,000+$300,000)
Therefore the expected free cash flow is $1,425,000
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.70. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $3.6 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return.
Required:
a. Find the price at which Analog stock should sell.
b. Calculate the P/E ratio.
c. Calculate the present value of growth opportunities.
d. Suppose your research convinces you Analog will announce momentarily that it will immediately reduce its plowback ratio to 1/3. Find the intrinsic value of the stock.
Answer:
a $7.95
b. $2.21
c $16.36
d, $13.01
Explanation:
according to the constant dividend growth model
price = [d0 (1+g)] / (r - g)
d0 = recently paid dividend
Dividend = payout ratio x earnings
payout ratio = 1 - plowback rate
1 - 2/3 = 1/3
1/3 x 3.6 = $1.2
r = cost of equity
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
5% + 1.7(15 - 5) = 22%
g = growth rate
g = plowback rate x ROE
2/3 X 9 = 6%
1. [1.2 x 1.06] / (0.22 - 0.06) = 1.272/ 0.16 = $7.95
2.
The price to earning ratio is a financial metric used to value a company. it compares the price of a stock to the earnings of the stock. the lower the metric is, the higher the valuation of the firm
price to earning ratio = market value per share / earnings
$7.95 / $3.6 = $2.21
c. present value of growth opportunities = earnings / cost of equity
3.6 / 0.22 = $16.36
d.
price = [d0 (1+g)] / (r - g)
d0 = recently paid dividend
Dividend = payout ratio x earnings
payout ratio = 1 - plowback rate
1 - 1/3 = 2/3
2/3 x 3.6 = $2.40
r = cost of equity = 22%
g = plowback rate x ROE
1/3 X 9 = 3%
[2.4 x 1.03] / (0.22 - 0.03) = 2.472/ 0.19 = $13.01
The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted sales in total dollars for next year are $720,000. The sales information needed for preparing the July budget follows:
Month Sales Revenue
May $30,000
June 42,000
July 51,000
August 54,000
Account balances at July 1 include these:
Cash $20,000
Merchandise inventory 18,000
Accounts receivable (sales) 23,000
Accounts payable (purchases) 12,000
The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $180,000 , of which one-half is fixed expense (inclusive of a $20,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred.
Required:
a. Prepare a schedule of estimated cash collections for July.
b. Prepare a schedule of estimated July cash payments for purchases.
c. Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.
Answer:
The Peoria Supply Company
a. Schedule of Estimated Cash Collections:
Cash collections: July
50% sales month $25,500
less 2% cash discount (510)
40% following month 16,800
8% second month 2,400
Total collections $44,190
b. A Schedule of Estimated July Cash Payments for Purchases
June July
Sales $42,000 $51,000
Ending inventory 18,000* 27,000
Beginning inventory 21,000 18,000*
Estimated Purchases 39,000 60,000
Payment for purchases:
50% purchase month $30,000
50% following month 19,500
Total payment for purchases $49,500
c. Selling and administrative expenses
Non-Cash expenses:
Depreciation expense $1,667
Cash disbursements:
Other fixed costs 5,333
Variable costs 6,375
Total costs $13,375
Explanation:
a) Data and Calculations:
Selling price per product = $30
Purchase cost per product = $20
Total sales dollars for next year = $720,000
Month Sales Revenue
May $30,000
June 42,000
July 51,000
August 54,000
July 1:
Cash balance = $20,000
Merchandise inventory $18,000
Accounts receivable (sales) 23,000
Accounts payable (purchases) 12,000
Ending inventory = $27,000 ($54,000 * 50%)
Ending inventory = 50% of next month's budgeted sales
Selling and administrative expenses (excluding bad debts) for the year = $180,000
Fixed costs = $90,000
Depreciation 20,000
Cash fixed costs = $70,000
Monthly fixed costs = $5,833
Variable costs = $90,000
Variable costs per sales dollars = $90,000/$720,000 = $0.125
Cash variable cost for July $0.125 * $51,000 = $6,375
a. Schedule of Estimated Cash Collections:
Cash collections: May June July August
$30,000 $42,000 $51,000 $54,000
50% sales month 15,000 21,000 25,500 27,000
less 2% cash discount (300) (420) (510) (540)
40% following month 16,800 20,400
8% second month 2,400 3,360
2% Uncollectible
SAP Inc. received a $1.5 million grant under its Small Business Innovation program. SAP invested the grant money and developed a system to remove metal contaminants from storm water in shipyards. The firm estimates that each shipyard spends $500,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards in the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 14% per year
Answer: $12,785,714
Explanation:
Present value of project:
= Revenue / Cost of capital
= (500,000 * 4 shipyards) / 14%
= $14,285,714
Net of investment:
= 14,285,714 - 1,500,000
= $12,785,714
The price of a dozen eggs falls from $3 to $2.70. In response to this price change, the quantity supplied of eggs falls from 150,000 dozen eggs to 125,000 dozen eggs. What is the price elasticity of supply for eggs
Answer:
Price elasticity of supply=1.67
Explanation:
Price elasticity of supply is a measure of the degree of responsive of supply to a change in price . It is computed using the formula below:
% change in Quantity supply/% change in price
% change in Quantity supply= 125,000-150,000/150,000× 100=16.67%
% change in price = (2.70-3.00)/3.00× 100= 10.00%
Price elasticity of supply = 16.67/10.00=1.67
Price elasticity of supply=1.67
Which one of the following bank accounts will you choose for a savings account? Bank A: An account that pays 8% nominal interest (APR) with daily (365-day) compounding. Bank B: An account that pays 8% nominal interest (APR) with annual compounding. Bank C: An account that pays 7% nominal interest (APR) with daily (365-day) compounding. Bank D: An account that pays 7% nominal interest (APR) with monthly compounding.
Answer:
bank a
Explanation:
to determine the appropriate bank to choose for a savings account, we have to calculate the effective annual interest rate. the bank with the highest effective annual interest rate would be chosen
Effective annual rate = (1 + APR / m ) ^m - 1
M = number of compounding
Bank A = [ 1 + (0.08/365)^365 - 1 = 8.32%
Bank B = 8%
Bank C = [ 1 + (0.07/365)^365 - 1 = 7.25%
Bank D = [ 1 + (0.07/12)^365 - 1 =7.23%
Bank A has the highest effective annual rate and would be chosen
Torino Company has 1,500 shares of $10 par value, 7.0% cumulative and nonparticipating preferred stock and 15,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:________.
a. $1,600.
b. $550.
c. $1,050.
d. $2,100.
e. $500.
Answer:
a. $1,600.
Explanation:
The computation of the amount of the dividend that should be paid to the preference shareholder in the second year is shown below:
Annual dividend is
= 1,500 shares × 7% × $10
= $1,050
Now the dividend that should be paid to the next year
= $1,050 + $1,050 - $500
= $1,600
Hence, the mount of the dividend that should be paid to the preference shareholder in the second year is $1,600
Which of the following best describes the purpose of INSURANCE?
Group of answer choices
Insurance prevents accident and injury to insured individuals
Insurance protects individuals from financial loss.
Insurance helps pay your car payments.
Insurance is an emergency savings plan
Answer:
I think B
Explanation:
Insurance in short term is something that helps people protect themselves from losing money. So financial losses can be money.