Answer:b) false
Explanation:
They would not want to stock up on something that the market price will decline significantly on, they would do the opposite
Answer:
False
Explanation:
This is false, they would want to do the opposite, not stock up
An employee earns $6,150 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $127,200 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $208 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $176 and contributes $88 to a retirement plan each month. What is the amount of net pay for the employee for the month of January
Answer:
4931.6
Explanation:
In order to calculate net pay for the month of January, we should deduct all expenses from the employee's gross salary except the current FUTA tax rate and current SUTA tax rate.
Salary $6,150
Federal Income tax withheld ($208)
FICA for social security(w) ($657.2)
FICA for Medicare ($89.175)
Health Insurance ($176)
Retirement Plan ($88)
Net Pay $4,931.6
Working
FICA for social security
Annual Earning = 127,200/12months
Monthly Earning = 10,600 x 6.2% = $657.2
Accounting for trade in goods and services Suppose the following transactions occur during the current year:
1. Dmitri orders 40 bottles of wine from a French distributor at a price of $30.00 per bottle.
2. A U.S. company sells 200 spark plugs to a Korean company at $5.00 per spark plug.
3. Jake, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company). Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year. Hint: Be sure to enter a '0' if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.
Amount
(Dollars)
Consumption
Investment
Government Purchases
Imports Exports
Net ExportsGross Domestic Product (GDP)
Answer:
Accounting for trade in goods and services
Indication of the combined effects of transactions on the U.S. national accounts for the current year:
1. Dmitri orders 40 bottles of wine from a French distributor at a price of $30.00 per bottle.
Amount (Dollars) $1,200
Consumption 0
Investment 0
Government Purchases 0
Imports Exports 0
Net Exports 0
Gross Domestic Product (GDP) 0
2. A U.S. company sells 200 spark plugs to a Korean company at $5.00 per spark plug.
Amount (Dollars) $1,000
Consumption 0
Investment 0
Government Purchases 0
Imports Exports $1,200 Exports
Net Exports $1,200
Gross Domestic Product (GDP) $1,200
3. Jake, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company).
Amount (Dollars) $670
Consumption $670
Investment 0
Government Purchases 0
Imports Exports 0
Net Exports 0
Gross Domestic Product (GDP) $670
Explanation:
The Gross Domestic Product (GDP) is the total market value of goods and services produced within an economy for a given period. It is calculated with this formula: GDP=C+I+G+(X−M) where, C = Consumption of goods and services, I = Investments, G = Government Spending, X = Exports and M = Imports. It is in turn influenced by transactions that take place on a daily basis. Some of the transactions do not really affect a country's GDP. For example, the order of bottles of wine by Dmitri (supposedly a Greek citizen) from a French distributor into (Greece).
Budgeted sales are expected to be: January 200 Units February 300 Units March 400 Units April 300 Units May 400 Units Selling Price $10 Per unit A. Prepare the sales Budget (5 points) Sales Budget January February March Quarter Budgeted sales in units 200 300 400 900 Times selling price per unit $10 $10 $10 $10 Budgeted sells in dollars $2,000 $3,000 $4,000 $9,000 B. Prepare the Production Budget (5 points)
Answer:
Sales Budget for January, February, March and April
January February March April
Budgeted Sales Units 200 300 400 300
Selling Price $10 $10 $10 $10
Budgeted Sales $2,000 $3,000 $4,000 $9,000
Production Budget for January, February, March and April
January February March April
Budgeted Sales Units 200 300 400 300
Budgeted Production Units 200 300 400 300
Explanation:
Sales Budget shows a forecast of the future sales revenues expected by the Company.It is the first budget to be prepared from which all other companies budget are created.
Sales Budget for January, February, March and April
January February March April
Budgeted Sales Units 200 300 400 300
Selling Price $10 $10 $10 $10
Budgeted Sales $2,000 $3,000 $4,000 $9,000
Production Budget for January, February, March and April
Hint : Since there are no targets for beginning or closing inventories, then Sales are equal to production.
January February March April
Budgeted Sales Units 200 300 400 300
Budgeted Production Units 200 300 400 300
The most effective method for finding shopping center tenants is:__________.a. personal contactb. brochuresc. direct maild. use of public relations firms
Answer:
a. personal contact
Explanation:
The most effective method for finding shopping center tenants is personal contact. Personal contact is the only way to actually get to know an individual and understand what they are looking for as well as if they will be a good fit for the specific shopping center unit. Other options only allow you to see a rough description of the individual which may be false and can ultimately waste time.
study five research papers published in 2019-2020 and analyze their conclusion.
Department S had no work in process at the beginning of the period. It added 14,800 units of direct materials during the period at a cost of $103,600; 11,100 units were completed during the period; and 3,700 units were 32% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $58,700 and factory overhead was $8,800. The total cost of units completed during the period was a.$77,700 b.$138,694 c.$130,742 d.$166,433
Answer:
b.$138,694
Explanation:
units started during the period 14,800
total cost for the period $103,600
11,100 units were completed
3,700 were 32% completed with respect to overhead and labor = 1,184 equivalent units
100% of units were completed with respect to materials
direct labor $58,700
cost per equivalent unit = $58,700 / 12,284 units = $4.7786 per unit
overhead $8,800
cost per equivalent unit = $8,800 / 12,284 units = $0.7164 per unit
materials $103,600
cost per equivalent unit = $103,600 / 14,800 = $7 per unit
total cost per equivalent unit = $4.7786 + $0.7164 + $7 = $12.495
total cost of completed units = $12.495 x 11,100 = $138,694.50
Consider the market for caramel and butterscotch ice cream toppings. For each price change, identify the likely effect on the demand curve for caramel topping.
a. The price of caramel topping decreases
b. The price of ice cream increases
c. The price of butterscotch topping increases
Answer:
a, a downward movement along the demand curve
b. a leftward shift in the demand curve
c. a rightward shift in the demand curve
Explanation:
If the price of caramel topping decreases, there would be an increase in the quantity demanded of the topping. so there would be a downward movement along the demand curve for caramel topping
Icecream and caramel toppings can be regarded as complement goods
Complementary goods are goods that are consumed together
If the price of icecream increase, the quantity demanded of icecream would decrease. because of the decrease in the quantity demanded of caramel toppings, there would be a decrease in the demand for caramel toppings. the demand curve for caramel toppings would shift inwards reflecting the decrease in demand.
caramel and butterscotch ice cream toppings are substitutes goods
Substitute goods are goods that can be used in place of each other.
If the price of butterscotch topping increases, butterscotch topping becomes more expensive and there would be a decrease in the quantity demand for butterscotch topping. consumers would shift to caramel topping. as a result there would be an increase in demand for caramel topping and the demand curve would shift outward.
On November 27, the board of directors of Beth Company declared a $.60 per share dividend. The dividend is payable to shareholders of record on December 7 on December 24. Beth has 25,500 shares of $1 par common stock outstanding at November 27. Journalize the entries needed on the declaration and payment dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date Account Titles and Explanation Debit Credit
Nov. 27
Dec. 24
Answer:
November 27, 202x, dividends are declared $0.60 per stock and payable on December 24.
Dr Retained earnings (25,500 x $0.60) 15,300
Cr Dividends payable 15,300
December 24, 202x, dividends are distributed based on the December 7 record.
Dr Dividends payable 15,300
Cr Cash 15,300
As a Cost and Management Consultant in the banking industry in Ghana, one of your highly esteemed clients, a top tier banking institution in Ghana has required of you to advise them as to whether target costing can be applied to the banking industry in Ghana. They further require you to advise them on what products or services can target costing be applied
Answer with its Explanation:
The target costing is a costing technique that helps to reduce the cost of the company operations by setting cost targets for the operations. The first step under target costing is to set a selling price for the product and the second step is to set the target profit margin. Now at this position we are able to derive the target cost by taking the difference of profit margin and the selling price of the product. At this stage the actions and reforms required to achieve this target cost are determined and implemented in the current operating activities. The best part of the target costing is that it says that the pricing though matters but the main aspect of a product success is its cost controls. If the company is able to control the cost of the product then it can control the movement of prices in the market. So target costing specially focuses and stresses upon cost control procedures.
As Target costing is all about cost controlling and can be applied to any sector. In Ghana, target costing will help to control the cost of the services that the banking sector renders to its customers. This reduction in services cost can be achieved by automation, installation of new softwares, Investing in automated teller machines, etc. By gaining efficiencies, the banking sector will substantially reduce its cost thus achieving its target cost.
By achieving the target cost the bank will have to sell at the same rate as the bank had invested its time and money in efficiency gaining activities. There are a lot of activities and products that can be automated and that can help to achieve the target cost. For example, promoting internet banking will reduce the cost of ATM management, paper cost, management time, additional branch opening or extension of building, etc. We can see how easily internet banking will assist the banking sector to achieve its target costs.
Simkin Corporation purchased land for $420,000. Later in the year, the company sold a different piece of land with a book value of $155,000 for $110,000.How are the effects of these transactions reported on the statement of cash flows? Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank.
Answer:
Transaction Amount Statement of cash-flow
Purchase of land 420000 Investing activities
Sale of land 110000 Investing activities
Loss on sale of land 45000 Operating activities
Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 11,800 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs $48. The cost of each light is $0.95. The holding cost is $0.10 per light per year.
A) What is the optimal sizeof the production run?
B) What is the average holding cost per year?
C) What is the average setup cot per year?
D) What is the total cost per year, including the cost of the lights?
Answer:
Please see answers below.
Explanation:
Annual demand rep D=11,800
Setting up cost rep S = $48
Holding cost per year rep H=$0.1
Production rate per year = Production facility × Capability of production
=300 × 95
=28,500
Therefore;
a. Optimal size of the production
Q = √2DS/H(1-D/P)
= √2×11,800×48/0.1(1-11,800/28,500)
=√11328000-0.5859649123
=√11328000.586
=$3,366
b. Average holding cost per year
=QH/2(1-D/P)
=3,366×0.1/2(1-3,366/28,500)
=168.3(0.8818947368)
=$148.42
C. Average set up cost
=D/Q × S
=11,800/3,366 × 48
=$168.27
D. Total cost per year = Average set up cost + Average holding cost per year + Cost to purchase 11,800 lights
= $148.42 + $168.27 + 11,800(0.95)
= $11,526.69
Data from the financial statements of Dils Brothers Co. and J. Cox, Inc. are presented below (in millions): Dils Brothers Co. J. Cox, Inc. Total liabilities, 2016 $70,914 $47,422 Total liabilities, 2015 72,208 60,092 Total assets, 2016 100,372 73,744 Total assets, 2015 94,114 70,416 Revenue, 2016 306,932 163,040 Net income, 2016 280 1,572 To the nearest hundredth, what is the 2016 debt-to-total-assets ratio for J. Cox, Inc.
Answer:
0.64
Explanation:
Debts to total asset ratio = Total liabilities / total assets
For J.Cox Inc 2016; Debts to total asset ratio = $47,422 / 73,744
Debts to total asset ratio = 0.64306
Debts to total asset ratio = 0.64
2016 debt-to-total-assets ratio for J. Cox, Inc. is 0.64
Under which conditions, according to the Porter five-forces model, can a supplier group gain power?
a. When there is low differentiation by the supplier
b. When there is a lack of importance of the buyer to the supplier group
c. When there is not a dominance by a few suppliers
d. When the supplier group does not pose a threat of forward integration
Answer:
b. When there is a lack of importance of the buyer to the supplier group
Explanation:
According to Porter there are five forces that can cause rivalry in a production industry. These are supplier power, threat of new entrants, buyer power, threat of substitutes, and degree of rivalry.
Supplier power is when suppliers are able to benefit from the producers by increasing prices of inputs and gaining some industry profit. Since suppliers supply input and labour to the producer they have a greater control of there is lack of importance of the buyer to the supplier group.
This means that the supplier group has more control on price and quality it supplies to the buyer with buyer having little choice but to buy.
If however buyer is more important to the supplier it means they can control price and quality of inputs
To facilitate integrative bargaining and avoid distributive negotiation, managers should:__________
a. change the organization’s structure.
b. allow personalized conflicts.
c. change the organization’s culture.
d. focus on interests, not demands.
e. use permanent transfers.
Answer:
d. focus on interests, not demands.
Explanation:
Integrative Bargaining is a negotiation strategy in which all parties involved in a dispute agree to work together and find a solution that is beneficial to their dispute. The opposite of distributive negotiation which is a competitive bargaining strategy in which one party gains only if the other party loses something. Therefore in order to facilitate integrative bargaining, managers should focus on interests, not demands. Making sure that what is on the table is beneficial to them even if it is beneficial to the other party as well.
John, Jay, and Jeff each have an ownership interest in Three Guys Burgers, Inc. Based on the following information, which of them is/are considered to have materially participated the conduct of the Three Guys Burgers business this year?
-1- John dedicated more than 500 hours this year to Three Guys Burgers.
-2- Jay devoted 150 hours to Three Guys Burgers this year.
-3- Jeff devoted 115 hours to Three Guys Burgers this year, but also devoted more than 100 hours to several other activities, for a total of 520 hours in all of the activities combined.
Income Tax
Answer and Explanation:
Material participation in the business is when involvement in the business activity exceeds 500 hours during the year. Furthermore, if the activity is a significant activity of participation and the number of aggregate hours worked in all such activities exceeds 500 hours per year, of that kind participation is also construed as material participation.
Therefore, the participation of John and Jeff would be considered as material.
A random sample of 10 parking meters in a beach community showed the following incomes for a day. Assume the incomes are normally distributed. $3.60 $4.50 $2.80 $6.30 $2.60 $5.20 $6.75 $4.25 $8.00 $3.00 Find the 95% confidence interval for the true mean. (Be sure to indicate your calculations for mean and standard deviation)
Answer:
The 95% confidence interval for the true mean would be between 3.39 and 6.01
Explanation:
In order to calculate the 95% confidence interval for the true mean we would have to calculate first the mean and standard deviation as follows:
mean=∑Xi/n
mean=$3.60 $4.50 $2.80 $6.30 $2.60 $5.20 $6.75 $4.25 $8.00 $3.00/10
mean=4.7
standard deviation=√∑(Xi-mean)∧2/n-1
standard deviation=1.83
t critical=2.262
The confidence interval=mean +/- t critical*standard deviation/√10
The confidence interval=4.7 +/- 2.262*1.8338/√10
The confidence interval=(3.39, 6.01)
The 95% confidence interval for the true mean would be between 3.39 and 6.01
Determine which are risks that discourage international investing and which are opportunities.
a. Hot money
b. Interrelated international capital market
c. Financial services outside of regulation
d. Information gap
e. Change in government restrictions
f. Reducing risk reduction
g. Faster and more information
h. Liquidity
Answer:
Opportunities
Faster and more information
When information is bountiful and disseminated speedily, investors are more confident that the financial system is strong and will be more likely to invest.
Liquidity,
Investors love being able to change their assets to physical money as soon as possible. If this is hard in a country, they will not invest.
Change in government restrictions
When Government restrictions that limit opportunities are lifted, investors come in larger numbers to take advantage of these new opportunities.
Risks
Financial services outside of regulation
Investors would prefer that the law is able to protect their assets and so will shun opportunities outside regulation.
Hot money
If there is too much Hot money going in and out of the economy, investors will be worried that too much money could leave the country at the slightest change in interest rates.
Information gap
Information should be widely available. If it is usually concealed from international partners, this can damage portfolios.
Interrelated international capital market
Independent Capital markets are able to withstand problems going on in other capital markets. When a nation's capital market is too interrelated with others this is risky.
Reducing risk reduction
A nation acting to reduce measures that reduce risk is a red flag. Investors want the least risky asset for a certain amount of return.
which one of the following is not of much significance to company managers in deciding whether profitable opportunity exists to install additional new or refurbished production equipment in the upcoming decision round?
A. How branded pairs available for sale in each geographic region in the past year compared with forecasted branded demand in each geographic region in the most recent year--as shown on p. 4 of each year's FIR
B. The growth in branded demand and private-label demand over the next three years (as reported in the Demand Forecast section on p. 4 of each year's FIR)
C. Information in the most recent FIR indicating that more than half of the companies in the industry have expanded their production capacity since Year 10
D. Whether the data on p. 4 of the most recent year's FIR shows that there is already more than enough production capacity worldwide to supply the forecasted demand for branded footwear and private-label footwear worldwide for each of the next three years
E. The size of beginning inventories of branded footwear in each geographic region reported in the most recent FIR
Answer:
The correct answer is C)
Explanation:
Whether or not companies in the industry expanded their capacity is really not of much concern. What should concern management are the other factors:
Forecasted Demand Vs Actual Demand: This tells us what has happened in the marketForecasted Growth in Demand: This tells us what might happen in the marketIndustry-wide capacity to meet demand is critical information: This tell us what other companies are doing and how it is shaping the market. That is, is the market saturated or not.If beginning inventories are very high, in each of the regions reported, installing additional production capacity is not a very sound business decision.Cheers!
Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 160 shares of its common stock on May 1 for $8,000. On July 1, it reissued 80 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2
Answer: $80
Explanation:
From the question, we are informed that prior to May 1, Fortune Company has never had any treasury stock transactions and that a company repurchased 160 shares of its common stock on May 1 for $8,000. The price per share will be:
= $8,000/160
= $50 per share
The balance in paid capital as at May 1 will be 0.
On July 1, it reissued 80 of these shares at $52 per share. This means that there is an increase of ($52 - $50) = $2 per share.
The balance paid on capital as at July 1 will be:
= $2 × 80
= $160
On August 1, it reissued the remaining treasury shares at $49 per share. This mean that there is a reduction of $1 per share.
The balance paid on capital as at August 1 will be:
= -1 × $80
= -$80
The balance in the Paid-in Capital, Treasury Stock account on August 2 will now be:
= $160 - $80
= $80
identify the cultural differences that are likely to arise between costco us employees and local employees are working in australia spain and china
The correct answer to this open question is the following.
Although the question seems to be incomplete because it does not provide any references, we can say that the cultural differences that are likely to arise between Costco US employees and local employees that are working in Australia Spain, and China are the result of totally different cultures, idiosyncrasies, customs, and traditions.
American customers are so different from Australian, Chinese, or Spanish consumers. What works in one country would not work in another. What is success in the US could be a failure in Spain. We are talking about different preferences, tastes, likes, and traditions.
That is why it is so important that Costco branches in other countries survey and understand local people's minds and tastes, so employees in each country can be trained in customer services, local preferences, assertiveness, human and business orientation, and many others.
If the beginning Cash account balance of Moonbeam, Inc. was $40,000, the ending balance was $67,200, and the total cash paid out during the period was $128,000, what amount of cash was received during the period
Answer:
Cash Received during the period = $155200
Explanation:
The amount of receipts or cash received during the period can be calculated using the following formula.
Cash Received = Closing Balance + Cash Disbursements - Opening Balance
Cash Received = 67200 + 128000 - 40000
Cash Received = $155200
So, the cash receipts during the period are $155200.
"Salina is working to create greater brand awareness for her company's new line of personal digital assistants. To create greater brand awareness Salina will make sure that promotion features the brand: Group of answer choices"
Complete Question:
Salina is working to create greater brand awareness for her company's new line of personal digital
assistants. To create greater brand awareness, Salina will make sure that promotion features the brand:
Group of answer choices.
A. name.
B. logo.
C. packaging.
D. slogan.
E. any or all of these
Answer:
E. any or all of these.
Explanation:
Salina is working to create greater brand awareness for her company's new line of personal digital
assistants. To create greater brand awareness, Salina will make sure that promotion features the brand:
A. Name: this is arguably the most important aspect of a brand. It is one of the identity of a product and it helps to create a memorable impression on consumers. An example is brainly.
B. Logo: this is also an identity of a company’s product, as it helps to distinguish your products from that of rival products in the market. It is a symbol, emblem or graphical identity of the product and mainly connects with consumer's psych.
C. Packaging: this is also very important in creating brand awareness. It is the process of presenting a company's product nicely and attractively through the use of wrappers, packs, or covers.
D. Slogan: this involves the use of small number of words or short phrases that are memorable, catchy and clever to potential customers. Examples are "Just do it", "I'm loving it", "Think about it" etc.
Quan operates an illegal game room in Houston. He files a tax return claiming deductions as follows: Rent $10,000, Supplies $5,000, Fines paid to the city $12,000, Bribes paid to police officers $8,000. The IRS should allow Quan to deductA. $0B. $10,000C. $15,000D. $33,000E. $35,000
Answer: $15,000
Explanation:
From the question, we are told that Quan operates an illegal game room in Houston and that he files a tax return claiming deductions as follows: Rent $10,000, Supplies $5,000, Fines paid to the city $12,000, Bribes paid to police officers $8,000.
From the above analysis, it should be noted that the brine paid to the police and fines that was paid to the city will not be part of the deduction.
Therefore, the IRS should allow Quan to deduct :
Rent = $10,000,
Supplies = $5,000
Total = $15,000
Bob owns a rental property that he bought several years ago for $260,000. He has taken depreciation on the house of $37,000 since buying it. He sells it in 2019 for $290,000. His selling expenses were $12,000 for the year. What was Bob’s realized gain on the sale?
Answer:
Bob’s realized gain on the sale is $55,000,
Explanation:
The first step is to find the Book Value of the Rental Property Sold.
Book Value of the Rental Property Sold.
Cost $260,000
Less Accumulated Depreciation ($37,000)
Book Value $223,000
Gain or Loss on Sale = Selling Price - Cost of Sale (Book Value) - Other Selling Expenses
= $290,000 - $223,000 - $12,000
= $55,000
Conclusion :
Bob’s realized gain on the sale is $55,000,
A resident of California sells Nevada real estate in an installment sale. In the current year he receives a return of principal of $10,000, taxable gain of $2,000 and interest of $1,000. What is his California taxable income
Answer:
The taxable income is $13000
Explanation:
The sell by California resident = $10000
The taxable gains = $2000
Given interest rate = $1000
Since during the year total amount received is the return of principal, gains, and interest rate. Therefore total amount = 10000 + 2000 + 1000 = $13000
Thus, the total amount received during the years is California taxable income.
Windswept, Inc. 2011 Income Statement ($ in milions)
Net sales $8,450
Less: Cost of goods sold 7,240
Less: Depreciation 400
---
Earnings before interest and taxes 810
Less: Interest paid 70
---
Taxable Incomne $740
Less: Taxes 259
---
Net income $481
Windswept, Inc 2010 and 2011 Balance Sheets ($ in mlions)
2010 2011 2010 2011
Cash $ 120 $140 Accounts payable $1,110 $1,120
Account rec. 930 780 Long-term debt 840 1,210
Inventory 1480 1520 Common Stock 3,200 3,000
--- --- --- ---
Total $2,530 $2,440 Retained Earnings 530 710
Net fixed assets 3,150 3,600
--- --- --- ---
Total assets $5,680 $6,040 Total Liabilities & equity $5,680 $6,040
2011
Equity multiplier Retention ration ROA ROE
Internal Growth Rate Sustainable Growth Rate
Calculate the above items
Answer:
Windswept, Inc.2011:
1. Equity multiplier = Total Assets / Stockholders' Equity
= $6,040/$3,710 = 1.628
2. Retention Ratio = Retained Earnings for the current period / Net Income = ($710 - $530)/$481 = 0.374 or 37%
3. ROA (Return on Assets): ROA = Net Income / Total Assets
= $481 /$6,040 = 0.0796 or 7.96%
4. ROE (Return on Equity) = Net Income / Average Equity
= $481 / $3,720 = 0.1293 or 12.9%
Average Equity = ($3,730 + 3,710) / 2 = $3,720
5. Internal Growth Rate = Retained Earnings / Total Assets
= $710 / $6,040 = 0.1175 or 11.75%
6. Sustainable Growth Rate = Earnings Retention Rate x Return on Equity
= 37% x 12.9% = 0.0477 or 4.77%
Explanation:
a) Windswept, Inc. 2011 Income Statement ($ in millions)
Net sales $8,450
Less: Cost of goods sold 7,240
Less: Depreciation 400
Earnings before interest and taxes 810
Less: Interest paid 70
Taxable Income $740
Less: Taxes 259
Net income $481
b) Windswept, Inc 2010 and 2011 Balance Sheets ($ in millions)
2010 2011 2010 2011
Cash $ 120 $140 Accounts payable $1,110 $1,120
Account rec. 930 780 Long-term debt 840 1,210
Inventory 1480 1520 Common Stock 3,200 3,000
Total $2,530 $2,440 Retained Earnings 530 710
Net fixed assets 3,150 3,600 Total Liabilities &
Total assets $5,680 $6,040 equity $5,680 $6,040
c) Equity Multiplier is a financial leverage ratio that determines the percentage of a company's assets that is financed by stockholders' equity or debt. The formula for equity multiplier is total assets divided by stockholders' equity.
d) Retention ratio is the percentage of current period's retained earnings to the net income. It shows how much the business has retained from income to grow the business further. It is the opposite of the payout ratio, which measures the percentage of profit paid out to shareholders as dividends.
e) ROA (Return on Assets) measures the profitability of the business in relation to its assets.
f) ROE (Return on Equity) measures the profitability of the business in relation to its equity or net assets.
g) The internal growth rate (g) for a public company is calculated by taking the firm's retained earnings and dividing by total assets, or by using return on assets formula (net income / total assets).
h) The Sustainable growth rate is calculated by multiplying a company's earnings retention rate by its return on equity.
Online Store is considering a project with an initial cost of $500,000. The project will not produce any cash flows for the first two years. Starting in Year 3, the project will produce cash inflows of $95,000, Year 4 of 150,000, Year 5 of 150,000, Year 6 of $200,000, Year 7 of $225,000 and year 8 of $175,000. This project is risky, so the firm has assigned it a discount rate of 12.5 percent. What is the project's net present value
Answer:
$9,118.48
Explanation:
The calculation of the project's net present value is shown below:-
Year Cash flows Discount rate 12.5% PV of cash inflows
(in $) (in $)
0 -500,000 1 -500,000 (A)
1 0 0.8888888889 0.00
2 0 0.7901234568 0.00
3 95,000 0.7023319616 66,721.54
4 150,000 0.624295077 93,644.26
5 150,000 0.5549289573 83,239.34
6 200,000 0.4932701843 98,654.04
7 225,000 0.438462386 98,654.04
8 175,000 0.3897443431 68,205.26
Present value 509,118.48 (B)
Net present value 9,118.48 (B - A)
Therefore to reach the net present value we simply deduct the present value from the initial cost.
Telegraphic Solution's completed worksheet at November 30, 2018 is as follows:
Revenues:
Service Revenue $9,600
Expenses:
Salaries Expense $2,750
Rent Expense 700
Depreciation Expense-Equipment $350
Supplies Expense 550
Utilities Expense $700
Total Expenses $5,050
Net Income $4,550
Required:
a. Complete the income statement for the month ended November 30, 2018.
b. Complete the statement of owner's equity for the month ended November 30, 2018. Assume there were no contributions made by the owner during the month.
c. Complete the classified balance sheet as of November 30, 2018
Answer:
a. Complete the income statement for the month ended November 30, 2018.
Telegraphic Solution's
Income Statement
For the month ended November 30, 2018
Service Revenue $9,600
Expenses:
Salaries Expense $2,750 Rent Expense 700 Depreciation Expense-Equipment $350 Supplies Expense 550 Utilities Expense $700 ($5,050)Net Income $4,550
b. Complete the statement of owner's equity for the month ended November 30, 2018. Assume there were no contributions made by the owner during the month.
Telegraphic Solution's
Statement of Owner's Equity
For the month ended November 30, 2018
Pryor, capital, November 1, 2018 $32,900
Investments during the month $0
Net income $4,550
Subtotal $37,450
Withdrawals during the month ($2,900)
Pryor, capital, November 30, 2018 $34,550
c. Complete the classified balance sheet as of November 30, 2018
Assets:
Current assets
Cash $4,400
Accounts receivable $3,900
Prepaid rent $1,100
Office supplies $2,550
Total current assets $11,950
Non-current assets
Equipment net $28,350
Total non-current assets $28,350
Total assets: $40,300
Liabilities and equity:
Liabilities:
Current liabilities
Accounts payable $5,100
Salaries payable $650
Total current liabilities $5,750
Equity:
Pryor, capital $34,550
Total liabilities and equity: $40,300
Yeats Corporation's sales in Year 1 were $396,000 and in Year 2 were $380,000. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is
Answer:
Yeats Corporation
The percent change for Year 2 compared to the base year is -4.04%
Explanation:
a) Calculations:
Year 1 Sales = $396,000
Year 2 Sales = $380,000
Reduction = $16,000
Percentage reduction = $16,000/$396,000 x 100 = 4.04%
This is a reduction, and it is negative.
b) The change in sales is calculated as the difference between year 1 and year 2 sales over the sales in year 1 multiplied by 100. This is expressed as a percentage by the multiplication by 100. The percent change describes the relationship between the sales figure in year 1 and the sales figure in 2. When calculated as above, it shows that sales reduced in year 2 by 4.04% from the sales in year 1.
Select the most appropriate answer about bringing components from other continents.
A. It never affects innovation of the final product.
B. It potentially results in better products for the customer.
C. It always increases the cost of the final product.
D. It always lowers the quality of the final product.
E. It has no impact on the production lines in the home country.
Answer: B. It potentially results in better products for the customer.
Explanation:
Importation of components for the production of a good might lead to a potentially better product for consumers because the knowledge base of a superior country in manufacturing the said component would be utilized.
One benefit of Globalization is that better products than can be made locally can be sourced from outside countries so that products are better and stronger.
If a company imports components it could be because they are trying to save costs or it could be that they found Superior products than they did at home. Should the latter be the case then there is a chance that they will make better products because of these better components.