Answer:
On January 1, 2015, Truesdale, Inc., purchased a piece of machinery for use in operations. The total acquisition cost was $33,000. The machine has an estimated useful life of 3 years and a salvage value of $3,000. Using the double-declining-balance method, depreciation for 2015 is approximately $22,000.
At December 31, 2016, using the double-declining-balance method, the book value of the machine is approximately $7,333.33.
Using the double-declining-balance method, depreciation for 2017 is approximately $666.67.
Explanation:
depreciation expense using double declining method 2015 = 2 x 1/3 x $33,000 = $22,000
depreciation expense using double declining method 2016 = 2 x 1/3 x $11,000 = $7,333.33
depreciation expense using double declining method 2017 = $3,666.67 - $3,000 = $666.67
Suppose you bought a bond with an annual coupon rate of 7.4 percent one year ago for $897. The bond sells for $926 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year
Answer:
Total dollar return is $103.00
Explanation:
The total dollar return on the investment comprises of the increase in price as well as the annual coupon of 7.4% of face value received over the holding period of one year.
annual coupon=face value*coupon rate=$1000*7.4%=$74.00
increase in bond's price=$926-$897=$29.00
Total dollar return on investment=$74.00+$29.00
Total dollar return on investment=$103
Use the following demand schedule to determine total and marginal revenues for each possible level of sales.
Product
Price Quantity Demanded Total Revenue Marginal Revenue
$2 0 $ ---
2 $
2 2
2 3
2 4
2 5
What can you conclude about the structure of the industry in which this firm is operating?
The industry is purely monopolistic.
The industry is purely oligopolistic.
The industry is an example of monopolistic competition.
The industry is purely competitive.
Answer:
please check the attached image for the completed table containing the answers
The industry is purely competitive.
Explanation:
please check the attached image for a clear image of the table used in answering this question
Total revenue = product price x quantity demanded
for example, total revenue when quantity demanded is 2 is $ x 2 = $4
Marginal revenue is change in total revenue.
marginal revenue = total revenue - previous total revenue
e.g. marginal revenue when quantity demanded is 2 is = $4 - $2 = $2
the structure of the industry is a purely competitive market because price is equal to marginal revenue.
A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
Free Motion Enterprises just paid an annual dividend of $3.71 per share. Dividends are expected to increase by 3.75 percent annually. What is one share of this stock worth to you today if your required rate of return is 13.7 percent?
Answer:
$38.68
Explanation:
The worth of the stock to a rational investor today can be determined using the below stock price formula:
stock price=Do*(1+g)/Ke-g
Do is the dividend that has just been paid
g is the growth rate of dividend which is 3.75%
Ke is the investor's required rate of return
stock price=3.71*(1+3.75%)/(13.7%-3.75%)
Stock price=$38.68
Which of the following best describes the financial link between stockholders and bondholders?
a. The action of stockholders cannot affect the financial position of bondholders.
b. The action of stockholders can increase the risk of a business which will affect the financial position of bondholders.
c. The action of bondholders can increase the risk of a business which will affect the financial position of stockholders.
d. The actions of stockholders and bondholders are independent.
e. Both a. and c. are correct.
Answer:
The correct answer is the option E: Both a. and c. are the correct.
Explanation:
On the one hand, the stockholders of a company are those who buy a stock or share of the company in order to make money by investing in that stock. When an investor owns that stock he can decide between keeping it in order to obtain dividends later or to sell it by a higher price as well later.
On the other hand, a bondholder of a company is the person who decides to buy a bond from the company and that action focus on the lending of money from the boldholder to the company who agrees to return that money later with interest. In a case of bankrupcy, bondholders are the ones who are paid first. The fact that they choose how much to lend and can pressure the company to return the money is why their actions can affect the stockholders.
Next Friday, you plan to sell cakes at a bake sale to raise money for your school. You plan to charge $30 per cake, and you anticipate that you will sell 10 cakes. You can either purchase cakes to sell or bake them yourself. If you purchase the cakes, they will cost $15 each. If you bake your own cakes, your cost depends upon the number of cakes you bake, as shown in the table below.
Number of cakes Total cost of baked cakes ($) you bake 0 1 2 3 0 10 36 52 70 90 112 136 162 190 5 7 10
a) How many cakes should you bake? How many cakes should you purchase?
b) Given your answer to part a, how much in total will the 10 cakes cost cake(s) and purchasecake(s) you?
c) How much would it have cost you to bake all 10 cakes?
d) How much would it have cost you to purchase all 10 cakes?
Answer:
a) How many cakes should you bake? How many cakes should you purchase?
you should bake 5 cakes and purchase 5.b) Given your answer to part a, how much in total will the 10 cakes cost cake(s) and purchase cake(s) you?
$145c) How much would it have cost you to bake all 10 cakes?
$190d) How much would it have cost you to purchase all 10 cakes?
$150Explanation:
expected sales 10 cakes
price per cake $30
purchase price $15 per cake
Number of cakes Total cost of baked cakes ($) you bake
0 0
1 10
2 22
3 36
4 52
5 70 average price = $14 per cake
6 90 average price = $15 per cake
7 112
8 136
9 162
10 190
If you make 5 cakes your cost will be lower than if you purchase them. But if you want to bake 6 cakes, then the total cost is the same as purchasing them, therefore, it would be better to start purchasing them.
a) you should bake 5 cakes and purchase 5.
b) $145
c) $190
d) $150
The calculation is as follows:expected sales 10 cakes
price per cake $30
purchase price $15 per cake
Number of cakes Total cost of baked cakes ($) you bake
0 0
1 10
2 22
3 36
4 52
5 70 average price = $14 per cake
6 90 average price = $15 per cake
7 112
8 136
9 162
10 190
If you make 5 cakes your cost will be lower than if you purchase them. However, if you want to bake 6 cakes, so the total cost is the same as purchasing them, therefore, it would be better to start purchasing them.
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Alaska Impressions Co. records all cash receipts on the basis of its cash register tapes. Alaska Impressions Co. discovered during October that one of its salesclerks had stolen an undetermined amount of cash receipts while taking the daily deposits to the bank. The following data have been gathered for October:
Cash in bank according to the general ledger $7,030
Cash according to the October 31 bank statement 16,240
Outstanding checks as of October 31 4,640
Bank service charge for October 20
Note receivable, including interest collected by bank in October 7,520
Requied:
a. Determine the amount of cash receipts stolen by the sales clerk.
b. What accounting controls would have prevented or detected this theft?
Answer:
a. Determine the amount of cash receipts stolen by the sales clerk.
$2,930
b. What accounting controls would have prevented or detected this theft?
It is simple, one single person cannot be in charge of collecting cash and making the deposits. At least 2 people must be involved in the process, that way, there will always be someone controlling what the other person does.
Explanation:
Reconciled bank statement:
Bank statement $16,240
- Outstanding checks $4,640
Reconciled bank statement $11,600
Cash account reconciliation:
Cash account balance $7,030
+ Note collected by bank $7,520
- Bank fees $20
Reconciled cash account $14,530
Amount stolen by sales clerk = $14,530 - $11,600 = $2,930
The manager tries to offer overtime as a possible incentive to the employees. In this situation, overtime would be considered an ________ reward.
Answer: B. extrinsic
Explanation:
Extrinsic rewards are rewards that are physical and/or tangible that Employers use as incentives. The goal being that when an Employee reaches a certain target or performs admirably they are awarded these rewards to appreciate them and to keep them working hard.
Extrinsic rewards are usually monetary in value such as bonuses or salary increments.
The manager offering employees with overtime pay is monetary and tangible so is and Extrinsic reward.
A company manufactures two products. For $1.00 worth of product A, the company spends $0.40 on materials, $0.20 on labor, and $0.10 on overhead. For $1.00 worth of product B, the company spends $0.50 on materials, $0.20 on labor, and $0.15 on overhead.
Let
a = (0.40, 0.20, 0.10) b = (0.50, 0.20, 0.15)
Then a and b represent the "costs per dollar of income" for the two products. Suppose the company manufactures x dollars worth of product A and y dollars worth of product B and that its total costs for materials are $260, its total costs for labor are $120, and its total costs for overhead are $70.
Determine x and y, the dollars worth of each product produced.
Answer:
x = $400, y = $200
Explanation:
[tex]a = \left[\begin{array}{ccc}0.4\\0.2\\0.1\end{array}\right]\\b = \left[\begin{array}{ccc}0.5\\0.2\\0.15\end{array}\right][/tex]
[tex]xa + yb = \left[\begin{array}{ccc}260\\120\\70\end{array}\right] \\x \left[\begin{array}{ccc}0.4\\0.2\\0.1\end{array}\right] + y \left[\begin{array}{ccc}0.5\\0.2\\0.15\end{array}\right] = \left[\begin{array}{ccc}260\\120\\70\end{array}\right][/tex]
[tex]\left[\begin{array}{ccc}0.4&0.5\\0.2&0.2\\0.1&0.15\end{array}\right] \left[\begin{array}{ccc}x\\y\end{array}\right] = \left[\begin{array}{ccc}260\\120\\70\end{array}\right]\\\\\left[\begin{array}{ccc}0.1&0.15\\0.2&0.2\\0.4&0.5\end{array}\right] \left[\begin{array}{ccc}x\\y\end{array}\right] = \left[\begin{array}{ccc}70\\120\\260\end{array}\right]\\[/tex]
Perform the following operation on the matrix equation above:
[tex]R_2 \rightarrow R_2 - 2R_1\\R_3 \rightarrow R_3 - 4R_1[/tex]
The result becomes:
[tex]\left[\begin{array}{ccc}0.1&0.15\\0&-0.1\\0&-0.1\end{array}\right] \left[\begin{array}{ccc}x\\y\end{array}\right] = \left[\begin{array}{ccc}70\\-20\\-20\end{array}\right]\\[/tex]
Perform the following operation on the matrix equation above:
[tex]R_3 \rightarrow R_3 - R_2[/tex]
[tex]\left[\begin{array}{ccc}0.1&0.15\\0&-0.1\\0&0\end{array}\right] \left[\begin{array}{ccc}x\\y\end{array}\right] = \left[\begin{array}{ccc}70\\-20\\0\end{array}\right]\\\left[\begin{array}{ccc}0.1&0.15\\0&-0.1\end{array}\right] \left[\begin{array}{ccc}x\\y\end{array}\right] = \left[\begin{array}{ccc}70\\-20\end{array}\right][/tex]
From the matrix equation above:
0.1x + 0.15y = 70.........(1)
-0.1y = -20.............(2)
From equation (2)
y = (-20)/(-0.1)
y = $200
Put the value of y into equation (1)
0.1x + 0.15(200) = 70
0.1x = 40
x = 40/0.1
x = $400
Your family business uses a secret recipe to produce salsa and distributes it through both smaller specialty stores and chain supermarkets. The chain supermarkets have been demanding sizable discounts, but you do not want to drop your prices to the specialty stores. True or False: One way to offer a lower price while defending yourself against antitrust lawsuits would be to offer a volume discount for larger salsa orders.
Answer:
The correct answer is the option: True.
Explanation:
To begin with, in order to establish a better relationship and also to increase the amount of the company's sales the managers has to establish a discount for larger salsa orders so in that way the big supermarket will buy more and will be satisfy for the discount and with the price they are getting and the specialty stores will understand that the difference in the price is due to the amount of the orders. Moreover, by doing that strategy the company is not breaking the antitrust law because there is no special arrengement between the company and the supermaket but is just a matter of volumen and if the specialty stores increases their orders then they will have the discount as well, and therefore the antitrust law is not been broke in any way.
Which policy will allow a health care institution to achieve cultural competence most effectively?
A) Making all client education materials available in the client's native dialect.
B) Recruiting culturally diversed health care providers to staff the institution.
C) Providing a merit bonus to employees who complete cultural awareness courses.
D) Implementing a closed circuit television system to broadcast multilingual programming.
Answer:
B)
Explanation:
Cultural competence refers to the ability to understand, communicate with, and effectively interact with people across various cultures. Therefore the best policy to achieve this would be recruiting culturally diverse health care providers to staff the institution. Making sure that the staff is culturally diverse will increase the institutions probability of being able to properly interact and understand all cultures that they do business with.
" Some companies have developed creative ways to build communities that match customer lifestyles. This type of marketing has led to higher profits. For the customers, this is part of _________________. Group of answer choices"
Answer:
Relationship marketing
Explanation:
Marketing is a concept of presenting products to customer. There are various ways to market a product. Relationship marketing is a concept in which customer is the main focus, his needs, demands and customization requirements are kept in mind before referring any product to them. Many companies have formed a strategy in which product is designed according to customer lifestyle maintenance requirements. This will lead to higher profit as switching cost for customer is high and also their required product will not be available easily in the market.
intext:"Callie Company received a $700 payment from a customer previously billed for services performed. The journal entry to record this transaction would include a"
Answer:
Debit Cash account $700
Credit Accounts receivable $700
Explanation:
When revenue is earned but cash is yet to be received,
Debit Accounts receivable
Credit Revenue account
When cash is received,
Debit Cash account
Credit Accounts receivable.
As such, when a company received $700 from a customer previously billed for services performed,
Debit Cash account
Credit Accounts receivable
Which were the two major challenges faced by U.S. multinational corporations at the close of the 1960s?
a. The creation of the Soviet Union and the higher tariffs on imports.
b. Growing jingoistic nationalism and a negative population growth rate in major international markets.
c. Resistance to direct investment and increasing competition in export markets
d. Increasing Chinese domination in the manufacturing sector and the falling dollar in global markets
e.The decreased demand for U.S. goods in the global market and the growing influence of consumer rights advocacy in the home market
Answer:
The correct answer is the option C: Resistance to direct investment and increasing competition in export markets.
Explanation:
To begin with, the decade of 1960's was completely full of changes in the american life due to the big events that happened during that time. Moreover, the two most important challenges that the american economy had to face up were the fact that the direct investment was hardly constat and did not increase and the current fight in order to increase the competition in exports markets and all that because of the high expenditures that the government did due to the Vietnam War and the Space Race. Also, while the government spending increased the exports were reduce in the market because of the increase in the China's techonolgy exports.
Suppose that the federal administration plans to fight a deep, ongoing recession with a nationwide plan of increasing infrastructure. Congress approves it and adjusts the budget accordingly to put the plan in motion immediately. Aggregate demand spending components include consumption (C), investment (I), government (G), and exports (X) minus imports (M). Analyze what the aggregate demand and aggregate supply model predicts about the infrastructure plan to answer three questions. Does the level of G increase ( ), decrease (-), or stay constant (0)
Answer: Increase (+)
Explanation:
The Government component of the Aggregate Demand refers to money spent by the Government/ Public sector to provide certain needs for the economy such as Education, Defense and Healthcare.
When the government spends on infrastructural development such as the scenario described in the text, they are engaging in a form of spending known as Government Investment. This will increase the amount of G in the aggregate demand model.
On November 1, 2021, New Morning Bakery signed a $195,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery should record which of the following adjusting entries at December 31, 2021?
A. Debit Interest Expense and credit interest Payable. $1950.
B. Debit Interest Expense and credit Interest Payable, $5850.
C. Debit Interest Expense and credit Cash, $1950.
D. Debit Interest Expense and credit Cash, $5850.
Answer:
Option A is correct
Explanation:
The amount owed and the interest would be paid in six months' time ,hence,prior to that time,any interest incurred would be accrued for.
December 31 2021 is two months after the note payable agreement was reached ,as a result,there is need to record accrued interest for two months,November and December.
Interest accrued=$195,000*6%*2/12=$1950
Interest expense is debited while interest payable is credited
Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 50 billion cases of cola were sold every year at a price of $5 per case. After the tax, 44 billion cases of cola are sold every year; consumers pay $6 per case, and producers receive $2 per case (after paying the tax).
The amount of the tax on a case of cola is $ per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $_________ per case, and the burden that falls on producers is $ _____ per case.
The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.
a. True
b. False
Answer:
U.S. Tax Burden on Cola:
The amount of the tax on a case of cola is $4 per case. Of this amount, the burden that falls on consumers is $1 per case, and the burden that falls on producers is ___$3______ per case.
The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.
a. True
b. False
Explanation:
The tax burden on consumers, which is represented by the difference in the price of cola from $5 to $6 per unit is $1 ($6 - $5). However, the cash received by producers reduced by $3 from $5 to $2. This shows that the total tax burden on both consumers and producers is $4 ($1 + $3).
This represents a total tax burden of $4 or about 67% based on the new selling price of cola or 80% based on the old selling price of cola.
"The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers alone. This because the price of cola would have increased to $9 per unit. Since the demand for cola in this instance is elastic, this change in price would have caused a more than 80% change in the quantity demanded.
The amount of the tax on a case of cola is $4 per case. Of this amount, the tax burden that falls on consumers is $1 per case, and the burden that falls on producers is $3 per case.
What do you mean by tax burden?Tax Burden is a measure of the tax liability imposed by the government on the citizens of a country.
The tax burden on consumers, represented by the price difference of cola from $ 5 to $ 6 per unit is $ 1 ($ 6 - $ 5).
However, producers' revenue has been reduced by $3 from $ 5 to $2.
This indicates that the total tax burden on both buyers and producers is $4 ($ 1 + $ 3).
This represents a total tax burden of $4 or approximately 67% based on the new sales value of cola or 80% based on the old sales value of cola.
Therefore, The statement is true; "The impact of taxes on the sale price would be huge if the tax was levied on consumers alone. This is because the price of cola would increase to $ 9 per unit.
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Salvia Company recently purchased a truck. The price negotiated with the dealer was $44,500. Salvia also paid sales tax of $2,900 on the purchase, shipping and preparation costs of $3,900, and insurance for the first year of operation of $4,900. At what amount should the truck be recorded on the balance sheet prior to recording depreciation expense
Answer:
$51,300
Explanation:
The computation of the amount of the truck to be recorded before recording the depreciation is shown below:
= Price negotiated + sales tax paid on the purchase + shipping and other cost
= $44,500 + $2,900 + $3,900
= $51,300
We simply added the three items so that the amount of the truck could arrive
Knowledge Check 01 As of December 31, Marr, Inc., has accrued benefits to its employees for medical insurance (in the amount of $12,000) and a contribution to a retirement program (at 10% of the employees' $200,000 gross salary). Prepare the December 31 entry for Marr by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Journal Entry to record the employee benefit expense
Dr. Employee Benefits Expense $32,000
Cr. Employee Medical Insurance Payable $12,000
Cr. Employee retirement program payable $20,000
Explanation:
Employee benefits expense is the sum of medical insurance and retirement program expenses. As these payments are accrued and not yet been paid, so these will be classified as liabilities.
Employee Medical Insurance expense = $12,000
Employee retirement expense = $200,000 x 10% = $20,000
Employee benefits expense = Employee Medical Insurance + Employee retirement program
Employee benefits expense = $20,000 + $12,000
Employee benefits expense = $32,000
Investigations of large multinationals In manufacturing and service sectors reveal that Group of answer choices the 500 largest multinationals are responsible for about half of the global stock of foreign direct investment. a majority of them use a global strategy. for most companies, the world's marketplace is triad-based rather than global. most of these firms have achieved broad and deep penetration of international markets as a whole. a majority of these firms generate an average of about half of their worldwide revenues within their home region.
Answer:
for most companies, the world's marketplace is triad-based rather than global
Explanation:
Based on investigations of large multinationals in manufacturing and service sectors, it was revealed that most of these companies generate the majority of their revenues within a single region rather than achieving broad and deep penetration of international markets as a whole.
Also, it was concluded that about 80 percent of these firms, generate their worldwide revenues within their home region considered to be a TRIAD of the three largest economic regions of North America, the European Union, and Asia.
Hence, it can be concluded that, Investigations of large multinationals In manufacturing and service sectors reveal that for most companies, the world's marketplace is triad-based rather than global, and this due to factors such as increasing capital intensity, soaring Research & Developmemt costs, converging worldwide consumer tastes and intensifying protectionism
In a world with no taxes, Modigliani and Miller (MM) show that a firm's capital structure does not affect its value. However, when taxes are considered, MM show a positive relationship between debt and value, i.e., the firm's value rises as it uses more and more debt, other things held constant.
A. True
B. False
Answer:
true
Explanation:
with taxes, the value of a company increases as more debt is used. the value of a company with debt is greater than the value of the company without debt for the same level of operating income.
according to the MM proposition, the value of the company with tax = Vu + tD
Where Vu is value of unlevered company and tD is tax rate multiplied by debt . tD is known as tax shield. As debt increases, the value of the tax shield increases and the value of the company increases
Last year Mason Inc. had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $320,000 and its net income was $10,549. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $5,250 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income in this amount, by how much would the ROE have changed? Select the correct answer. a. 4.38% b. 2.14% c. 3.26% d. 3.82% e. 2.70%
Answer: d. 3.82%
Explanation:
ROE = Net Income / Equity so Equity need to be ascertained.
1.75 = Total Assets/ Total Equity
Total Equity = Total Assets/ 1.75
1.33 = Revenue / Total Assets
Total Assets = Revenue / 1.33
= 320,000/1.33
= $240,601.50
Total Equity = 240,601.50/1.75
= $137,486.57
Old ROE = 10,549/ 137,489.57
= 0.07672582
= 7.67%
New ROE = (10,549 + 5,250) / 137,489.57
= 0.11491053466
= 11.49%
Difference = 11.49 - 7.67
= 3.82%
The cost of capital: Multiple Choice for risky investments is normally higher than the firm's borrowing rate. is the expected rate of return on a capital investment. is the interest rate that the firm pays on a loan from a bank or insurance company.
Answer:
for risky investments is normally higher than the firm's borrowing rate.
Explanation:
The cost of capital refers to the return i.e expected by the investors. It is the required return for making the capital budgeting project. It comprises of debt and equity. It analysis the business opportunities
Therefore in the given case the cost of capital is normally higher as compared to the firm borrowing rate in the case of riskier investment
Hence, the first option is correct
Bank A pays 2% interest compounded annually on deposits, while Bank B pays 1.75% compounded daily.
a. Based on the EAR (or EFF%), which bank should you use?
b. Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year?Assume that your funds must be left on deposit during an entire compounding period in order to receive any interest.
Answer:
Bank A
Yes
Explanation:
Effective annual rate = ( 1 + periodic interest rate)^m - 1
periodic interest rate = interest rate / number of compounding per year
m = number of compounding per year
Bank A = (1 + 0.02) - 1 = 2%
Bank B = (1 + 0.0175 / 365)^365 - 1 = 1.7654%
Bank A should be chosen because the EAR is higher
Yes, it should. if one plans to withdraw during the year, Bank B would be a better option because the amount invested would earn interest when withdrawn.
if one plans to withdraw within the year, and he invests in Bank A, if withdrawal is made within the year, all interest would be forfeited.
a. Bank A should be selected.
b. Yes
Calculation of the EAR:Since we know that
Effective annual rate = ( 1 + periodic interest rate)^m - 1
Here,
periodic interest rate = interest rate / number of compounding per year
m = number of compounding per year
Now
Bank A = (1 + 0.02) - 1 = 2%
Bank B = (1 + 0.0175 / 365)^365 - 1 = 1.7654%
Bank A should be selected since the EAR is higher
b.
Yes, it should. In the case, one plans should be withdrawn at the time of year so here bank B should be a better option since the amount invested earned interest at the time of withdrawn.
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Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Assume a target income of 10% of average invested assets. Compute residual income for the division:
Answer:
$193,000
Explanation:
Carter Company
Sales 4,525,000
Cost of goods sold -2,550,000
1,975,000
Operating expenses -1,372,000
Net Income 603,000
Average invested assets 4,100,000
Target income 10% 410,000 410,000
Residual income $193,000
Assume that Swiss investors have francs available to invest in securities, and they initially view U.S. and British interest rates as equally attractive. Now assume that U.S. interest rates increase while British interest rates stay the same. This would likely cause:__________
Answer:
the swiss demand for dollars to increase and the dollar will
Explanation:
Economists readily admit that in settings that involve a monopoly or negative externalities, a potential role exists for _______________________. Group of answer choices
Answer:
Government intervention
Explanation:
In settings that involves monopoly or negative externalities, the government has to intervene. Government intervenes in market when resources are not allocated fairly. The reasons for government intervention is to maximize social welfare and they do this by breaking up monopolies and regulating negative externalities such as pollution. Without government intervention businesses would produce negative externalities with facing any consequences. And some organization would have monopolistic powers and this would lead to reduces innovation, lower trades and reduced resources.
Exercise 9-1 Classifying liabilities LO C1 The following items appear on the balance sheet of a company with a one year operating cycle. Identify the proper classification of each item as follows: C if it is a current liability, L if it is a long-term liability, or Nif it is not a liability.
Item Classification
1. Notes payable (due in 13 to 24 months)
2. Notes payable (due in 6 to 11 months).
3. Notes payable (mature in five years).
4. Current portion of long-term debt.
5. Notes payable (due in 120 days).
6. FUTA taxes payable
7. Accounts receivable
8. Sales taxes payable.
9. Salaries payable.
10. Wages payable
Answer:
1. Notes payable (due in 13 to 24 months) - L
Long term because period of payment is over a year.
2. Notes payable (due in 6 to 11 months). - C
Current because period of payment is under a year.
3. Notes payable (mature in five years). - L
Long term because it will mature after a period of a year.
4. Current portion of long-term debt. - C
Current because it deals with payment for the year.
5. Notes payable (due in 120 days). - C
Current as it matures in less than a year.
6. FUTA taxes payable - C
Taxes are for a single period making them current.
7. Accounts receivable - N
This is an asset not a liability
8. Sales taxes payable. - C
As this is this for the year, it is current.
9. Salaries payable. - C
For the period so they are a current liability.
10. Wages payable - C
Concern one period so are a current liability.
Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements Depletion Expense, indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:
A. Added to Net Income
B. Deduct from Net Income
1. Increase in accounts receivable
2. Increase in inventory
3. Decrease in prepaid expenses
4. Decrease in accounts payable
5. Increase in accrued liabilities
6. Increase in income taxes payable
7. Depreciation expense
8. Loss on sale of investment
9. Gain on disposal of equipment
10. Amortization expense
Answer:
1.B
2.B
3.A
4.B
5.A
6.A
7.A
8.A
9.B
10.A
Explanation:
The Net Income is adjusted with non-cash items and changes in working capital to reach Net Cash Flow from Operating Activities.
The Non Cash Expenses previously deducted must be added back whilst the Incomes previously included must be deducted from it.
The items that increase Working Capital must be deducted whilst items that decrease working capital must be added back.
Webster preferred stock pays an annual dividend of $6.20 a share. What is the maximum price you should pay today to purchase this stock if you desire a rate of return of 14.25 percent
Answer:
Maximum price = $43.50
Explanation:
According to the dividend valuation model , the current price of a stock is the present value of the expected future dividends discounted at the required rate of return
This principle can be applied as follows:
The value of cash flow the stock today is the present value of the future cash flow discounted at the required rate of return
The Di
P= D/ke
P= price of the stock today,- ?
D- annual dividend- 6.20
Ke- Cost of equity-14.25%
Price = 6.20/0/14.25=43.50
Maximum price = $43.50
A promissory note: Multiple Choice Is a short-term investment for the maker. Cannot be used in payment of an account receivable. Is another name for an installment receivable. Is a liability to the payee. Is a written promise to pay a specified amount of money at a certain date.
Answer:
A promissory note Is a written promise to pay a specified amount of money at a certain date
Explanation:
A promissory note is a financial documents containing a written promise by one party, that is the issuer of the document or note to pay another party a particular amount of money, when it is demanded or at a particular date in the future. Such a note contains all the terms that has to do with the indebtedness, like the principal, interest rate, maturity date, the date the note was issued and signatures.