01) A firm faces the following relationship between the real wage it pays and the effort exerted by its workers. The marginal product of labor for this firm is given by MPN = E (100 - N)/9. How many workers will the firm employ? A) 96 B) 92 C) 88 D) 80

Answers

Answer 1

Answer:

A. 96

Explanation:

I just had that question i got it right

Answer 2
Final answer:

The optimal number of workers a firm will employ is determined when the value of the marginal product of labor equals the market wage. Without the market price of the product, we cannot calculate the value of the marginal product to determine the profit-maximizing level of employment with the given marginal product of labor formula.

Explanation:

The subject matter in question involves determining the optimal number of workers a firm should employ based on the relationship between the real wage, worker effort, and the marginal product of labor. A firm will continue to hire workers until the value of the marginal product of labor (VMPL), which is the product of the marginal product of labor and the market price of the output, equals the going market wage.

To find the profit-maximizing level of employment when the market wage is $12, we set the VMPL equal to $12 and solve for the number of workers (N). However, the student's question mentions neither the market price of the product nor any specifics that would allow us to calculate the VMPL. Therefore, based on the given information alone, we cannot determine how many workers the firm will employ.

Assuming the VMPL is available, you would calculate the marginal product of labor for various levels of employment (N), then determine the VMPL (MPN × P) for each level. The firm's profit-maximizing level of employment is reached when the VMPL equals the market wage, which in the supplied reference is $12.

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Related Questions

Marigold Company estimates that annual manufacturing overhead costs will be $865,920. Estimated annual operating activity bases are direct labor cost $492,000, direct labor hours 49,200, and machine hours 98,400. Compute the predetermined overhead rate for each activity base. (Round answers to 2 decimal places, e.g. 10.50% or 10.50.) Overhead rate per direct labor cost enter percentages rounded to 2 decimal places % Overhead rate per direct labor hour $enter a dollar amount rounded to 2 decimal places Overhead rate per machine hour

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Marigold Company estimates that annual manufacturing overhead costs will be $865,920. Estimated annual operating activity bases are direct labor cost $492,000, direct labor hours 49,200, and machine hours 98,400.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Direct labor cost:

Estimated manufacturing overhead rate= 865,920/492,000= $1.76 per direct labor dollar

Direct labor hour:

Estimated manufacturing overhead rate= 865,920/49,200= $17.6 per direct labor hour

Machine-hours:

Estimated manufacturing overhead rate= 865,920/98,400=$8.8 per machine hour

Bramble Corp. recorded operating data for its auto accessories division for the year. Sales $790000 Contribution margin 260000 Total direct fixed costs 90000 Average total operating assets 250000 How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30000, assuming fixed costs are held constant?

Answers

Answer:

80%

Explanation:

For computing the return on investment first we have to need the following calculations

New contribution margin = Old contribution margin + increase  in contribution margin

= $260,000 + $30,000

= $290,000

And,

Net Income = Contribution margin - Total direct fixed costs

= $290,000 - $90,000

= $200,000

ROI = Net income ÷  average operating assets

= $200,000 ÷ $250,000

= 80%

Frank Wesley, project manager for the LOGON project, is concerned about the development time for the robotic transporter. Although the subcontractor, Creative Robotics, has promised a delivery time of 6 weeks, Frank knows that the actual delivery time will be a function of the number of other projects Creative Robotics is working on. As an incentive to speed up delivery of the transporter, Frank has three options: S1: Do nothing S2: Promise Creative Robotics a future contract with Iron Butterfly S3: Threaten to never contract with Creative Robotics again. He estimates the impact of these actions on delivery time would be as follows: Payoffs: Strategy Creative Robotics Workload Low Average Busy S1 4 6 8 S2 3 4 7 S3 3 6 6 What strategy should Frank adopt based upon uncertainty criteria

Answers

Answer:

s3

Explanation:

Adopting s1 will result in delivery time of 8 weeks when Creative Robotics is busy as per maximin criteria and maximax criteria.

Adopting s3 will result in delivery time of 6 weeks when Creative Robotics is busy as per minimax criteria.

In this scenario, minimax criteria must be used to make decision as worst loss is to be estimated.

Residual income is Select one: A. the excess of investment center income over the minimum return set by management. B. income beyond the breakeven point determined by the product's lifecycle. C. excess income earned after budgeted income has been achieved. D. a percentage of income received by an organization for its participation in a joint venture.

Answers

Answer:

Excess of investment center income over the minimum return set by the management.

Explanation:

Residual income can be defined as the continuous flow of cash after a particular work/task has been completed. This means an individual continuous to get payment after a work is done. This includes the amount of money that is acquired from business investments, royalties gotten from a published article or book, renting of an apartment, creating an application, working with different affiliates.

Residual income enables an individual to work on other business opportunities while still earning money from the previous efforts.

TL Company has expected earnings of $75 in one year if it does well and $25 if it does poorly. The firm has outstanding debt of $50 that is due in one year. However, given the financial distress costs, the debtholders will only receive $40 in one year if the firm does well and $15 if it does poorly. There is a 60 percent chance the firm will do well and a 40 percent chance that it will do poorly. What is the current value of the debt if the interest rate on bonds is 8 percent

Answers

Answer:$27.78

Explanation:

Expected value of debt after one year = (40* .60)+(15*.40)

= 24 + 6

=$ 30

Current value of debt = Value at 1year / (1+r)^n

= 30/ (1+.08)^1

= 30 / 1.08

=$ 27.78

Final answer:

The current value of the TL Company's outstanding debt, with an 8 percent market interest rate, is calculated to be approximately $27.78, based on expected payoffs and individual probabilities.

Explanation:

The current value of the outstanding debt can be calculated using the expected payoff and the market interest rate. The calculation method involves deriving the expected payoff by multiplying each scenario's payoff by the probability, then adding these up, and finally dividing by the interest rate. The expected payout on the debt that the TL Company has is $40*0.6 (probability firm does well) + $15*0.4 (probability firm does poorly) = $24 + $6 = $30. Given an interest rate of 8 percent, the current value of the debt would be $30 divided by 1.08 (the interest rate expressed as a decimal plus 1), Equalling approximately $27.78.

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On August 1, Ling-Harvey Corporation (a U.S.-based importer) placed an order to purchase merchandise from a foreign supplier at a price of 400,000 ringgits. Ling-Harvey will receive and make payment for the merchandise in three months on October 31. On August 1, Ling-Harvey entered into a forward contract to purchase 400,000 ringgits in three months at a forward rate of $0.60. It properly designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate. Relevant exchange rates for the ringgit are as follows: Date Spot Rate Forward Rate (to October 31) August 1 $ 0.60 $ 0.60 September 30 0.63 0.66 October 31 0.68 N/A Ling-Harvey's incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Ling-Harvey must close its books and prepare its third-quarter financial statements on September 30. Prepare journal entries for the forward contract and firm commitment through October 31. Assuming the inventory is sold in the fourth quarter, what is the impact on net income over the two accounting periods

Answers

Answer:

Detailed workings are in the explanations.

Explanation:

August 1

On August 1, Ling Harvey entered into a forward contract to purchase 400000 ringgits in 3 months at a forward rate of $0.60.

If Ling Harvey has to pay 400000 ringgits now, total outflow would be $ 240000 (400000*0.60) and in forward contract it has to pay $ 240000 also (400000*0.60), so ling harvey has not incurred any loss

So, there is a firm commitment to pay $ 240000 on October, 31

For entering into a forward contract, there will be no entry.

On September, 30

Forward contract rate has increased to 0.66 from 0.60 (august, 1), so there is a increase in the fair value of the Forward Contract. Earlier its value was $240,000 on Aug,1 but now its value is $ 264,000, so there is a increase in fair value by $24,000

Since this $24000 will be realized on Oct, 31, we will book it today at present value

Present value = $24000*0.9901= $23,762.4

Journal entry would be  as follows:

Debit: Forward Contract a/c  $23,762.4

Credit: Gain on Forward Contract $23,762.4

Now, the spot rate determines the fair value of Commitment, so there is an increase in fair value of firm commitment by (0.63 - 0.60) * $400,000 =$12,000.

0.63 is the spot rate on September, 30

Since our Firm commitment value increased by $12,000, we need to book it at present value .

Present Value = $12,000*0.9901=$11,881.2

Journal Entry is as follows:

Debit: Loss on Firm Commitment a/c $11,881.2

Credit: Firm Commitment $11,881.2

So its effect on Net income is as follows:

Debit: Gain on Forward Contract a/c $23,762.4

Credit: Loss on Firm Commitment $11,881.2

Credit: Retained Earnings $11,881.2

On October 31

Today spot rate is 0.68, so the value of the forward contract when compared to its value on Aug 1

= (0.68 - 0.60) *$400,000

= $32,000

So there is an increase in Forward Contract Value by $32,000, since we have already booked $23,762.4, we will book the additional value $82,37.6 as follows:

Debit: Forward Contract a/c $8,237.6

Credit: Gain on Forward Contact $8,237.6

So, the Firm Commitment value has also increased from 0.60(Aug 1) to 0.68

Increase in value = (0.68-0.60) *$400,000 = $32,000

As we have already booked a liability of $11,881.2, we will be book the additional increase in value of $20,118.8 as follows

Debit: Loss on Firm Commitment a/c $20,118.8

Credit: Firm Commitment $20,118.8

So, its effect on Net Income is as follows

Debit: Gain on Forward Contract a/c $8,237.6

Debit: Retained Earnings a/c $11,881.2

Credit: Loss on Firm Commitment $20,118.8

So the total effect on Net income is 0, as on Sept 30 retained earnings has been credited by $11881.2 and on Oct 31, it has been debited by $11881.2... This is due to as there was no difference between spot rate & forward rate on August 1

As on 31st October, there is a debit balance of $32,000 in Forward Contract & credit balance of $32000 in Firm commitment.

Entry for Goods received & payment to foreign supplier is as follows

Debit: Inventory (At spot rate on Aug 1) $240,000

Debit: Firm Commitment (offset) $32,000

Credit: Forward contract (offset) $32,000

Credit: Cash (At forward rate on Aug 1) $240,000

The net cash outflow to foreign supplier is $240,000.

Assume that Bon Temps is expected to experience supernormal growth of 30% for the next 3 years, then to return to its long-run constant growth rate of 6%. What is the stock’s value under these conditions? What are its expected dividend yield and its capital gains yield in Year 1? In Year 4?

Answers

Answer:

Expected value one year from now=D2/(k-g)

=2.25/(16%-6%)

=22.5

Explanation:

Protective Covenants are:

A. restrictions or requirements placed on the borrower in a bond contract designed to protect the lenders

B. may specify that the borrower refrain from doing certain things, or require that they do certain things

C. All of the above

D. None of the above

Answers

Answer:

The correct answer is C. All of the above .

Explanation:

A protective covenant is there to ensure that the lenders interests are protected and that the recollect of the loan is possible.

Both of the answer a and b are expressing this in different ways.

Answer:

The correct answer is letter "C": All of the above.

Explanation:

A Protective Covenant is a term imposed on a loan or other form of debt arrangement that demands that the borrower maintain or even refrain from certain business activities. Covenants protect the borrowers from threats that they did not foresee when calculating the risk of the loan. Most loan agreements include a clause that the lender shall have the power to make the loan due and payable immediately if a covenant is violated.

offers a 6.3 percent bond with a current market price of $767.50. The yield to maturity is 8.49 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures

Answers

Answer:

9.25 years

Explanation:

Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Price of the bond is calculated by following formula:

According to given data

Assuming the Face value of the bond is $1,000

Coupon payment = C = $1,000 x 6.3 = $63 annually = $31.5 semiannually

Current Yield = r = 8.49% / 2  = 4.245% semiannually

Market value = $767.50

Market Value of the Bond = $31.5 x [ ( 1 - ( 1 + 4.425% )^-n ) / 4.425% ] + [ $1,000 / ( 1 + 4.425% )^n ]

Market Value of the Bond = $31.5 x [ ( 1 - ( 1 + 4.425% )^-n ) / 4.425% ] + [ $1,000 / ( 1 + 4.425% )^n ]

n = 18.53 / 2

n = 9.25 years

Answer:

27.85years

Explanation:

Nper = ? (indicates the period)

PV = 767.50 (indicates the price)

FV = 1000 (indicates the face value)

Rate = 8.49%/2 (indicates semi-annual YTM)

PMT = 1000 x 6.30% x 1/2 = 31.50 (indicates the amount of interest payment)

Period = Nper(Rate,PMT,PV,FV)/2 = Nper(8.49%/2,31.50,-767.50,1000)/2 = 27.85 Years

A U.S. company that manufactures home appliances is interested in entering the foreign market of China. The company has many national appliance competitors in the Chinese market with an understanding of the unique needs of Chinese customers. Based on these facts, the U.S. company should consider what strategy for entering the Chinese market?

Answers

Answer: Global strategic alliance

Explanation:

A global strategic alliance is a strategy that is used when a company wants to go into a business and have an edge over others in the business in a new market usually outside the home domain of the company.

A global strategic alliance is also used when a firm is establishing it's branch in another country where the government protects its local industries. Alliances are then formed between two or more firms for a specified period of time.

The purpose of the alliance is to maximize competitive advantage. A global strategic alliance is an arrangement that takes place between two firms to accomplish a mutually beneficial project despite each other retaining their independence. 

Rita Company buys merchandise on account from Linus Company for $590. Rita sells the goods to Ellis for $900 cash. Use a tabular summary to record the transactions for Rita Company using a perpetual inventory system.

Answers

Answer:

Record of transaction is given below

Explanation:

given data

Selling price of goods =  $900

Cost of goods sold = $590

solution

we get here Record of transaction in Rita Company that is

Inventory accounts   Dr   $900

Account payable    Cr      $900

and

Record of transaction in Linus Company is

Account receive able  Dr  $900

Sales revenue              Cr  $900

and

Cost of goods sold    Dr   $590

Inventory                    Cr    $590

Final answer:

To record the purchase and sale in Rita Company’s ledger using a perpetual inventory system, two transactions are made. First is the purchase of merchandise on account from Linus Company, second is the sale of the merchandise to Ellis for cash. This results in a gross profit of $310 for Rita Company.

Explanation:

The subject of the student's question involves recording business transactions using a perpetual inventory system for Rita Company. The example provided to help the student understand how to record transactions is:

Rita Company buys merchandise on account from Linus Company for $590. Then, Rita sells the goods to Ellis for $900 cash. The tabular summary to record these transactions would involve two components: the purchase transaction and the sales transaction.

Transaction 1 (purchase on account):

- Inventory $590

- Accounts Payable $590

Transaction 2 (sale for cash):

- Cash $900

- Sales Revenue $900

- Cost of Goods Sold $590

- Inventory $590

After these entries, Rita Company would see an increase in cash by $900, an increase in cost of goods sold by $590, and a decrease in inventory by $590, resulting in a gross profit of $310 from the sale ($900 - $590).

Option Payoff One Year from Now 1 100% chance of receiving $1,100 2 50% chance of receiving $1,000 50% chance of receiving $1,200 3 50% chance of receiving $200 50% chance of receiving $2,000 If Erik is risk averse, which investment will he prefer?

Answers

Answer:

First one

Explanation:

1) $1100

2) 0.5(1000) + 0.5(1200)

= $1100

3) 0.5(200) + 0.5(2000)

= $1100

Since all expected values are equal.

He should go for the first one, to avoid risks

Assume the market basket for the consumer price index has two​ products, bread and​ milk, with the following values in 2013 and 2018 for price and​ quantity: Base Year​ (2013) 2018 Product Quantity Price Price Milk 50 ​$1.20 ​$1.50 Bread 100 1.00 1.10 The Consumer Price Index for 2018 equals A. 116. B. 85. C. 86. D. 118.

Answers

The market basket for the consumer price index has two​ products, bread and​ milk, with the following values in 2013 and 2018 for price and​ quantity: Base Year​ (2013) 2018 Product Quantity Price Price Milk 50 ​$1.20 ​$1.50 Bread 100 1.00 1.10 The Consumer Price Index for 2018 equals (A) 116

Explanation:

The market basket for the consumer price index has two​ products, bread and​ milk, with the following values in 2013 and 2018 for price and​ quantity: Base Year​ (2013) 2018 Product Quantity Price Price Milk 50 ​$1.20 ​$1.50 Bread 100 1.00 1.10 The Consumer Price Index for 2018 equals (A) 116

The CPI is a statistical technique that  estimate or make use of the prices of a sample of representative items and these prices are collected periodically.

The Consumer Price Index (CPI) is index which is used to  examine the weighted average price of  consumer goods and services  basket , which includes transportation, food, and medical care and  is calculated by taking price changes for each item in the predetermined basket of goods and averaging them out

What action lead to the eventual implementation of Brown vs. Board of Education in the South?

A. The Supreme Court ordering Arkansas to implement their previous decisions.

B. Dwight Eisenhower sending federal troops to escort African American students to their new schools.

C. Congress passing new regulations forcing southern states to comply.

D. Virginia bowing to public pressure and implementing the decision.

Answers

Answer:

Dwight Eisenhower sending federal troops to escort African American students to their new schools

Explanation:

Based on an 1879 law, the board of Education in Topeka, Kansas operated separate elementary schools for white and African-American students in Communities with more than 15,000 residents.

The Equal Protection Clause of the Fourteenth Amendment to the United states  constitution prohibits states from segregation public school students on the basis of race.

This marked a reversal of the "separate but equal" doctrine from Plessy v, Fergusson that had permitted separate schools for white and coloured children provided that the facilities were equal.

Answer:

The answer is option B. Dwight Eisenhower sending federal troops to escort African American students to their new schools was the action that lead to the eventual implementation of Brown vs. Board of Education in the South.

Explanation:

The U.S. Supreme Court ruled unanimously that racial segregation in public schools violated the Fourteenth Amendment to the Constitution, which prohibits the states from denying equal protection of the laws to any person within their jurisdictions on may 17, 1954.

But this decision was not implemented. Over three years later on on September 4, 1957,  the Arkansas National Guard was directed by Governor Orval Faubus to block the black students' entry into the high school.

Then, Eisenhower sent in federal troops to escort the Little Rock Nine into the school ans it drew national attention to the civil rights movement which eventually led to the implementation of  Brown vs. Board of Education in the South?

Sarah just received an invoice for $12,000 with terms of 2/10, n/30. The invoice date was June 1. Her contract with the vendor indicates a charge of 1.5 percent per month on late payments. If Sarah pays this bill on June 15, she will send the vendor a check forA) $11,760.

B) $12,000.

C) $12,180.

D) Cannot answer without more information

Answers

Answer:

B. $12,000

Explanation:

Since it is given that

The invoice received for $12,000 with terms of 2/10, n/30 i.e 2 % discount is given if payment is made within 10 days and the net credit period allowed is 30 days

Plus if there is any delay then it would charge 1.5% per month

Now if Sarah pays this bill on June 15, so she sends the check for $12,000 as neither she is eligible for a discount as the payment is 5 days exceeded nor she paid any charged as she paid within 30 days  

Therefore, she sends the check for $12,000 only

The average ticket price for a concert at the opera house was ​$50. The average attendance was 2500. When the ticket price was raised to ​$54​, attendance declined to an average of 2100 persons per performance. What should the ticket price be to maximize revenue for the opera​ house?

Answers

Answer:

The price per ticket should be $37.5

Explanation:

First we need to determine the change in demand (attendance) as a result of every $1 increase in the price of ticket.

The ticket price increased by $4 (from 50 to 54) and the demand fell by 400 (from 2500 to 2100). The change per dollar is,  400 / 4 = 100.

So, for every $1 increase in price, demand falls by 100.

The revenue is calculated by multiplying price by quantity demanded. Revenue equation will be,

Let x be the change in price from $50.

Revenue = (50 + x)  * (2500 - 100x)

Revenue = 125000 - 5000x + 2500x - 100x²

Revenue = 125000 - 2500x - 100x²

To calculate the price that maximizes the revenue, we need to take the derivative of this equation.

d/dx = 0 - 1 * 2500x° - 2 * 100x

0 = -2500  -  200x

2500 = -200x

2500 / -200 = x

-12.5 = x

Price should be 50 - 12.5 = 37.5

At price $37.5 the revenue of the Opera House is maximized.

When a firm uses K units of capital and L units of labor, it can produce Q units of output with the production function Q = K√L. Each unit of capital costs 20, and each unit of labor costs 25. The level of K is fixed at 5 units. Find the equation of the firm’s short-run total cost curve?

Answers

Answer:

[tex] STC = 20K + 25L = 20*5 + 25*[\frac{Q^2}{25}] = 100 + Q^2 [/tex]

Explanation:

We are given:

K units of capital and L units of labor.

•Each unit of capital cost = 20

• Each unit of labor cost =25

• Level K is fixed at 5 units

We are told production function Q = K√L

Using the production functions and the values given, we can get that Q=5√L.

To find Q, the amount of labor will be given as:

[tex]L = \frac{Q^2}{25} [/tex]

Therefore, the Short run total cost function (STC) will be:

[tex] 20K + 25L = 20*5 + 25[\frac{Q^2}{25}] = 100 + Q^2 [/tex]

Final answer:

The short-run total cost curve of a firm with a fixed capital of 5 units and variable labor is given by[tex]TC = 100 + 5Q^2.[/tex]

Explanation:

When a firm utilizes a production function Q = K√L, where K units of capital are fixed, and L units of labor are variable, we can determine the short-run total cost curve by incorporating the cost of labor and capital. Given that the firm has fixed capital at 5 units, with each unit of capital costing 20, and each unit of labor costing 25, the short-run total cost (TC) of producing Q units of output can be expressed as:


TC = Cost of Capital (K) + Cost of Labor (L)

Since capital is fixed, the cost of capital is constant at 5 units * 20 cost/unit = 100. The firm will alter L, depending on the output level desired. Since Q = 5√L, to find the cost as a function of Q, we solve for L: [tex]L = (Q/5)^2[/tex]. The cost for labor will then be 25 * L.

Substituting L into the total cost equation we get:


[tex]TC = 100 + 25 * (Q/5)^2[/tex]


[tex]TC = 100 + 5Q^2[/tex]

This equation represents the short-run total cost curve for the firm with a fixed capital level and variable labor costs.

Seneca Hill Winery recently purchased land for the purpose of establishing a new vineyard. Management is considering two varieties of white grapes for the new vineyard: Chardonnay and Riesling. The Chardonnay grapes would be used to produce a dry Chardonnay wine, and the Riesling grapes would be used to produce a semidry Riesling wine. It takes approximately four years from the time of planting before new grapes can be harvested. This length of time creates a great deal of uncertainty concerning future demand and makes the decision about the type of grapes to plant difficult. Three possibilities are being considered: Chardonnay grapes only; Riesling grapes only; and both Chardonnay and Riesling grapes. Seneca management decided that for planning purposes it would be adequate to consider only two demand possibilities for each type of wine: strong or weak. With two possibilities for each type of wine, it was necessary to assess four probabilities. With the help of some forecasts in industry publications, management made the following probability assessments:

Riesling Demand

Chardonnay Demand Weak Strong
Weak 0.05 0.50
Strong 0.25 0.20

Revenue projections show an annual contribution to profit of $20,000 if Seneca Hill only plants Chardonnay grapes and demand is weak for Chardonnay wine, and $70,000 if they only plant Chardonnay grapes and demand is strong for Chardonnay wine. If they only plant Riesling grapes, the annual profit projection is $25,000 if demand is weak for Riesling grapes and $45,000 if demand is strong for Riesling grapes. If Seneca plants both types of grapes, the annual profit projections are shown in the following table:

Riesling Demand

Chardonnay Demand Weak Strong
Weak $22,000 $40,000
Strong $26,000 $60,000

a. What is the decision to be made, what is the chance event, and what is the consequence? Identify the alternatives for the decisions and the possible outcomes for the chance events.
b. Develop a decision tree.
c. Use the expected value approach to recommend which alternative Seneca Hill Winery should follow in order to maximize expected annual profit.
d. Suppose management is concerned about the probability assessments when demand for Chardonnay wine is strong. Some believe it is likely for Riesling demand to also be strong in this case. Suppose the probability of strong demand for Chardonnay and weak demand for Riesling is 0.05 and that the probability of strong demand for Chardonnay and strong demand for Riesling is 0.40. How does this change the recommended decision? Assume that the probabilities when Chardonnay demand is weak are still 0.05 and 0.50.
e. Other members of the management team expect the Chardonnay market to become saturated at some point in the future, causing a fall in prices. Suppose that the annual profit projections fall to $50,000 when demand for Chardonnay is strong and Chardonnay grapes only are planted. Using the original probability assessments, determine how this change would affect the optimal decision.

Answers

Right you are correct bout that answer

Seneca Hill Winery must decide on grape varieties to plant based on probability assessments of future demand. A decision tree and expected value calculations can aid in making a profit-maximizing decision. Changes in probabilities and profit projections affect the decision, as seen with adjustments to the likelihood of demand scenarios and revenue from Chardonnay.

Decision Making, Chance Events, and Consequences

The decision to be made by Seneca Hill Winery involves choosing which variety or combination of grape varieties to plant: Chardonnay only, Riesling only, or both. The chance event is the future market demand for each type of wine, which could be strong or weak. The consequences are the financial outcomes or annual profits that result from the combination of these decisions and chance events.

Decision Tree Development

A decision tree is a visual representation that starts with the decision node (the choice of grape variety), followed by chance nodes (representing the strong or weak demand for each wine), and the ends with terminal nodes indicating the profits.

Expected Value Analysis

To maximize expected annual profit, we calculate the expected value for each strategy:

Chardonnay only: 0.05*20,000 + 0.25*70,000 = 14,500Riesling only: 0.50*25,000 + 0.20*45,000 = 16,000Both: 0.05*22,000 + 0.50*40,000 + 0.25*26,000 + 0.20*60,000 = 33,500

Both grapes offer the highest expected annual profit, so Seneca should plant both Chardonnay and Riesling grapes.

Revised Probabilities and Profit Projections

Changing the probability assessments affects the expected value calculations. With a higher likelihood of strong demand for both varieties when Chardonnay demand is strong, the expected profit changes, potentially altering the optimal decision. If Chardonnay profits decrease to $50,000 under strong demand, this also affects the expected values and might influence Seneca to reconsider the decision to plant Chardonnay only.

Bridgeport Inc. had pretax financial income of $139,400 in 2020. Included in the computation of that amount is insurance expense of $4,400 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $10,000.Prepare Bridgeport’s journal entry to record 2020 taxes, assuming a tax rate of 25%.

Answers

Answer:

Dr   income expense($33450 +$2500)  $35950

Cr  income tax payable                                              $33450

Cr deferred income tax                                               $2500

Explanation:

The adjusted taxable income adjusted for disallowed insurance expense of $4,400 as well as the excess depreciation(timing difference) of $10,000

Pretax  financial income       $139,400

add:

disallowed expense             $4,400

less:

additional depreciation       ($10,000)

Adjusted taxable income    $133,800

income tax expense is $133800 *25%=$33450

deferred tax liability =$10,000*25%=$2500

total tax expense for the year is 35950 ($33450+$2500)

The time value of a call option is I) the difference between the option's price and the value it would have if it were expiring immediately. II) the same as the present value of the option's expected future cash flows. III) the difference between the option's price and its expected future value. IV) different from the usual time value of money concept.

Answers

Answer:

I) The difference between the option's price and the value it would have if it were expiring immediately

Explanation:

Time value in options trading simply refers to the part of an option's premium (cost or price) which is attributed to the amount of the time remaining until expiration.

An addition of the option's time value and intrinsic value equals the total premium of an option.

Therefore, we can mathematically state that:

Time Value = Option Premuim(Price) - Intrinsic Value.

The Option Premuim is an amount of money known as the price or cost.

In an exchange for the right granted by the option, an option buyer pays for the premium to an option seller.

Generally, it is seen that the more time that remains until the expiration, the greater the time value of the option. This happens as a result of investors willing to pay a higher premium for more time since the longer time taken to execute contract will be profitable due to a favorable move in the underlying asset.

Also, the lesser time remaining on an option will result in lesser willingness of investors to pay because the probability for profitability is slim.

Answer:

I) The difference between the option's price and the value it would have if it were expiring immediately

Explanation:

Time value simply means the option's premium portion that is accountable to the amount of time remaining until the option contract expires.

These is the difference between the option's price and the value it would have if it were expiring immediately.

Time value is the premium amount that the those investing is desire to pay more than the intrinsic value.

Time value can be calculated using below formula;

Time Value = Options Premium - Intrinsic Value.

Call options helps to purchase shares of stock at a stable price until the expiration date.

The intrinsic value and the time value are the two areas of call option. These intrinsic value and time value helps to know when to buy the underlying stock.

However time value of the option increases with with the time remains untill expiration

Tobias is a 50% member in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $130,000, and his at-risk amount is $105,000. His share of losses from Solomon for the current year is $150,000, all of which is passive. Tobias owns another investment that produced $90,000 of passive activity income during the year. (Assume that Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and that the Solomon loss is Tobias's only loss for the year from any activity.) How much of Solomon's losses may Tobias deduct on his Form 1040

Answers

Answer:

Tobias may deduct $90,000 of his Solomon loss because he has passive activity income.$20,000 of his basis is suspended under Section 704(d).$25,000 of his loss is suspended under Section 465.

Explanation:

A company purchased factory equipment on April 1, 2013 for $80,000. It is estimated that the equipment will have an $10,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2013 is A. $5,250. B. $8,000. C. $7,000. D. $6,000.

Answers

Answer:

A.$5,250

Explanation:

=(80,000-10,000)/10=7,000*9/12=$5,250

The depreciation have been worked out on pro rata basis for 9 months starting from April 1st to 31 December 2013.

Answer:

A.$5,250

Explanation:

=(80,000-10,000)/10=7,000*9/12=$5,250

The depreciation for 9 months starting from April 1st to 31 December 2013.recoded as depreciation expense $5,250

Quinlan has ample E & P to cover any distributions made during the year. One distribution made to a shareholder consists of property with an adjusted basis of $536,200 and a fair market value of $321,720. What are the tax consequences of this distribution to Quinlan? If an amount is zero, enter "0". As a result of the distribution, Quinlan Corporation has a realized of $ of which $ is recognized. The shareholder received property with a basis of $

Answers

Answer:

1.Quinlan distribution has realized a loss of

$214,480 of which $0 is recognized.

2. The shareholder received property with a basis of $321,720

Explanation:

1.

When property is been said to be distributed to shareholders the amount of dividend equal to the fair value of the said property which is $321,720 on the date of the distribution. Therefore the amount of taxable dividend is $321,720 which is before the dividends received deduction.

Therefore;

Net loss which shall not be allowed ($536,200-$321,720)

=$214,480

Quinlan distribution has realized a loss of

$214,480 which is not allowed to be recognized

2. Adjusted basis of the property distributed is $321,720

Sunland Company purchased $1200000 of 11% bonds of Scott Company on January 1, 2021, paying $1122375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $77625 provides an effective yield of 12%. Sunland Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021, Sunland Company should increase its Debt Investments account for the Scott Company bonds by:________

Answers

Answer:

Sunderland Company should increase debt investment by $2,685.00  

Explanation:

Sunderland Company needs to increase its debt investments account for Scott Company bonds with the difference between effective interest earned on July 1 2021 minus the actual coupon interest received as shown below:

The actual interest revenue earned = $1122375*12%

                                                           =$ 134,685.00  

The coupon interest received=$1,200,000*11%

                                                 =$ 132,000.00  

In a nutshell,the investment in bonds earned interest of $134,685 but only $132,000 was received in cash,hence the difference of $2,685 is added to the bonds investment figure($134,685-$132,000)

The Lords' University uses automated presentations during education fairs to help prospective students get an idea about the different subjects offered and the facilities available on campus. In the context of sales communication, it can be said that the university most likely uses _____.




a.




written sales presentations




b.




directed sales presentations




c.




canned sales presentations




d.




organized sales dialogues




e.




adaptive sales presentations

Answers

Answer: c. Canned sales presentations

Explanation:

Canned Sales presentations are the "ONE SIZE FITS ALL" of Sales presentations. They are organised and structured to ensure that they can give information to multiple types of people.

Canned Sales Presentations are not very flexible. They are generally used when information has to be repeated over and over to the same.or different types of people and usually already have all information that will be needed.

The Lords' University uses this type of presentations as they used an Automated Presentation that is mostly the same period in, period out but that is built to have all the information that is needed and can be repeated to multiple people (prospective students).

Final answer:

The Lords' University most likely uses canned sales presentations for their automated presentations at education fairs. These are pre-designed to be used repeatedly and fit well with the use of computer-based media like PowerPoint in business settings.

Explanation:

The Lords' University employs automated presentations during education fairs, which are likely to be canned sales presentations. These are pre-recorded or pre-designed presentations that can be used repeatedly without alteration for numerous audiences. Given that these presentations are automated and are not likely to change based on the audience's reactions or questions, they align with the definition of canned sales presentations rather than adaptive sales presentations, which are tailored to the audience's responses.

Computer-based media tools such as PowerPoint are commonly used to create such presentations, making them both accessible and easy to distribute across different settings, from small conference rooms to large amphitheaters. Effective presentation aids are integral to conveying information clearly and keeping the audience engaged, which is crucial in business settings where oral communication is the most common method yet susceptible to listeners' minds wandering.

One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____. Do not maintain sufficient inventory to serve customers Lack product knowledge resulting in low sales volume Have little loyalty to their vendors Tend to slow down distribution to extract higher commissions Do not have sufficient knowledge of the target market

Answers

Answer:

Have little loyalty to their vendors.

Explanation:

Middlemen are intermediaries that buy goods from the producers and sell directly to the consumers. They assist the producers to get different feedbacks about the products from the consumer. Middlemen include wholesalers, retailers, brokers.

In some situations, middlemen increase the prices of various products thereby making it difficult for consumers to purchase, they also have little loyalty to the producers of a particular product they tend to purchase the product when there is high productivity but reject it when productivity reduces.

A customer has requested that Lewelling Corporation fill a special order for 2,600 units of product S47 for $31 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $20.70: Direct materials $ 6.20 Direct labor 3.00 Variable manufacturing overhead 3.30 Fixed manufacturing overhead 8.20 Unit product cost $ 20.70 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $1.80 per unit and that would require an investment of $16,000.00 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:

Answers

Answer:

$27,420

Explanation:

The computation of the annual financial advantage or disadvantage for the company is shown below:

Incremental revenue (2,600 units × $31) $80,600

Incremental cost  

Direct material (2,600 units × $6.20) $16,120

Direct labor  (2,600 units × $3) $7,800

Variable manufacturing overhead  (2,600 units × $3.30) $8,580

Additional variable cost  (2,600 units × $1.80) $4,680

Special molds  $16,000

Total incremental cost $53,180

Incremental profit (loss)     $27,420

We simply deduct the all incremental cost from the incremental revenue so that the incremental profit or loss could come

Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%.What are the Reserves, Required Reserves, and Excess Reserves?

Answers

Answer:

Reserves = $70,000

Required reserves = $20,000

Excess Reserves = $50,000

Explanation:

The data given from the question:

Demand deposits = $200,000

Outstanding loans = $130,000

Reserve requirement = 10%

And we are solving for:

Reserves, Required Reserves and Excess Reserves

For these we will look at 3 balance sheet

Assets = Total liabilities + capital

Reserves + Outstanding Loan = Demand Deposits

Reserves + $130,000 = $200,000

Reserves = $70,000

Since reserve ratio =10%, Out of total $200,000 deposits, required reserves = $200,000 x 10% = $20,000

Excess Reserves = Total Reserves - Required Reserves = $(70,000 - 20,000) = $50,000.

Final answer:

Second Republic Bank has total Reserves of $70,000, Required Reserves of $20,000, and Excess Reserves of $50,000, with each calculated based on the given demand deposit of $200,000 and a 10% Federal Reserve requirement.

Explanation:

The question asks us to calculate the Reserves, Required Reserves, and Excess Reserves for Second Republic Bank given its demand deposits and outstanding loans, with the Federal Reserve setting the reserve requirement at 10%. To clarify these terms:

Reserves are the amount of funds a bank has on hand to cover any withdrawals made by clients.

Required Reserves is the amount that a bank must hold by regulation, which in this case is 10% of demand deposits.

Excess Reserves is any amount of money that a bank holds over the required minimum.

Assuming that Second Republic Bank must maintain 10% of demand deposits as reserves, we calculate the Required Reserves as 10% of $200,000, equaling $20,000.

Given that the bank has $130,000 in loans and loans and reserves together should equal total deposits, the total Reserves would equal demand deposits minus outstanding loans, which is $200,000 - $130,000 = $70,000. Therefore, the Excess Reserves would be the total Reserves minus the Required Reserves, which is $70,000 - $20,000 = $50,000.

Liquid Sleeve, Inc. is a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pressures, or inadequate lubrication. The manager is considering adding a metal-based nanoparticle (Type Al or Fe) to its solution to increase the product's performance at high temperatures.

The costs associated with each type are estimated. If the company's MARR is 30% per year, which nanoparticle type should the company select? Utilize an NPV analysis.

Type FE Type Al
First cost, $ -150,000 -280,000
Annual operating cost, $/year -92,000 -74,000
Salvage value, $ 30,000 70,000
Life, years 2 4

Answers

Answer:

Liquid Sleeve should select the  Type FE because it has a lower Present Value cost of $257,455.62

Explanation:

The preferred metal-based would be the one with owner a present value  cost.

So we will compute the present value of the the cost the two options.

Type FE =

Initiall cost = -150,000

PV of operating cost = -92,000× (1- (1.3)^(-2))/0.3

                                =  92,000 × 1.360946746

                                  = $(125,207.10)

PV of salvage value = 30,000 × (1.3)^(-3)=  17,751.48

Total PV =  (125,207.10) + (150,000) - 17,751.48 = $(257,455.62 )

Type A1

initial cost = -$280,000

PV of operating cost = 74,000 × (1- (1.3)^(-4))/0.3 =  160,301.81

PV of salvage value = 70,000 × (1.3)^(-4)=    24,508.95

Total Cost = (280,000) + -(160,301.81) + 24,508.95 = $(415,792.86)

                                   

                                     

Given the following history, use a three-quarter moving average to forecast the demand for the third quarter of this year. Note, the 1st quarter is Jan, Feb, and Mar; 2nd quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov, Dec.

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Last year 100 125 135 175 185 200 150 140 130 200 225 250
This year 125 135 135 190 200 190
Forecast for the third quarter:

Answers

The forecast for the third quarter of this year (Jul, Aug, Sep) is 193.33 units using a three-quarter moving average.

To forecast the demand for the third quarter of this year using a three-quarter moving average, we'll calculate the average demand for the first and second quarters and use that average as the forecast for the third quarter.

First, calculate the moving averages for the last year's data and this year's data:

For last year (LY), the moving averages are:

- Q1 (Jan, Feb, Mar): (100 + 125 + 135) / 3 = 120

- Q2 (Apr, May, Jun): (175 + 185 + 200) / 3 = 186.67

- Q3 (Jul, Aug, Sep): (150 + 140 + 130) / 3 = 140

- Q4 (Oct, Nov, Dec): (200 + 225 + 250) / 3 = 225

For this year (TY), the moving averages for the available data are:

- Q1 (Jan, Feb, Mar): (125 + 135 + 135) / 3 = 131.67

- Q2 (Apr, May, Jun): (190 + 200 + 190) / 3 = 193.33

Now, we'll use the moving average of this year's Q2 (193.33) as the forecast for Q3 since it's the most recent data available.

So, the forecast for the third quarter (Jul, Aug, Sep) of this year is 193.33 units. This moving average method provides a simple forecast based on historical patterns, assuming that the recent trend in demand will continue into the next quarter.

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To forecast the demand for the third quarter, use the 3/4 moving average formula applied to the given history data

Given data:

The 3/4 moving average for the third quarter this year can be calculated using the following steps:

Calculate the moving average for the first two quarters of this year.Then, apply the 3/4 moving average formula: ((Last year Q1 + Q2 + Q3 + This year Q1 + Q2 + Q3 + Q4) + (This year Q1 + Q2 + Q3))/3.Finally, substitute the actual values and calculate the forecast for the third quarter.
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