Answer:
1) reduce
2) increase
3) a, b
Explanation:
1. This would reduce the demand for steel workers because the steel serves as the company's output. Since low price of output means low profit, which leads to low demand for labor.
2. Increase in the demand for automobile workers would be observed because the cost of materials are now cheaper; Implying more profit for companies and thus more demand for labor.
3. Giving unemployment insurance benefits is one best method to reduce this type of unemployment. Also facilitating a widely used job-search website could help.
Answer:
Suppose the world price of steel falls substantially.
The demand for labor among steel-producing firms in Pennsylvania will DECREASE. The demand for labor among automobile-producing firms in Michigan, for which steel is an input, will INCREASE. The temporary unemployment resulting from such sectoral shifts in the economy is best described as FRICTIONAL UNEMPLOYMENT.
2. A. Improving a widely used job-search website so that it matches workers to job vacancies more effectively.
Explanation:
To tackle frictional unemployment and reduce it, matching of job seekers with job openings of should be carried out.
This can be thoroughly achieved through the transmission of information.
It should be noted tgat frictional unemployment is not related to economic policy and inflation.
What can only erase it is widespread transmission of information among job seekers regarding the availability of jobs.
With such, job seekers in Pennsylvania will get notified of job vacancies in steel-related jobs in Michigan.
Sunland Company expects to have a cash balance of $62,450 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017.
1. Collections from customers: January $87,450, February $162,450.
2. Payments to suppliers: January $56,450, February $91,450.
3. Wages: January $31,370, February $41,370. Wages are paid in the month they are incurred.
4. Administrative expenses: January $22,370, February $25,370. These costs include depreciation of $1,000 per month. All other costs are paid as incurred.
5. Selling expenses: January $16,370, February $21,370. These costs are exclusive of depreciation. They are paid as incurred.
6. Sales of short-term investments in January are expected to realize $13,370 in cash. Sunland Company has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $36,450.
Prepare a cash budget for January and February.
Answer:
Borrowing Amount required (to make ending balance =$36,450) for January is 0 and February is $14.850. Cash Budget prepared in explanation below.
Explanation:
Cash Budget for the month of January and February
Particulars January February
Opening Cash Balance 62,450 37,710
Add: Collections from Customers 87,450 162,450
Add: Sale of Short term Investments 13,370 0
Total Cash Available 163,270 200,160
Less: Payment to Suppliers (56,450) (91,450)
Less: Wages (31,370) (41,370)
Less: Administrative Expenses (21,370) (24,370)
Less: Selling Expenses (16,370) (21,370)
Total Payments Made (125,560) (178,560)
Total Cash after Payments 37,710 21,600
Add: Borrowings 0 14,850
Ending Cash Balance $37,710 $36,450
Please Note the Following:
1. Administrative Expenses have been reduced by $1,000 (as this was depreciation which is non-cash expense)
2. Borrowings in February has been added by $14,850 (in order to maintain company's minimum monthly cash balance of $36,450
3. All the totaling has been marked in Bold Letters
Answer:
CASH BUDGET FOR JANUARY FEBRUARY
Receipts
Cash collected from customers $87,450 $162,450
Sale of short term investment $13,370
Loan Received $14,850
Total Receipts $100,820 $177,300
Payments
Cash Paid to Suppliers $56,450 $91,450
Wages $31,370 $41,370
Admin expenses $21,370 $24,370
Selling Expenses $16,370 $21,370
Total Payments $125,560 $178,560
Cash Surplus/ Deficit -$24,740 -$1,260
opening balance( 01 Jan) $62,450 $37,710
Closing balance (31 Jan) $37,710 $36,450
Explanation:
Cash Budget is a statement used to determine how much cash a business have at the end of a period and is it sufficient or not. Only Cash items are included in the Cash budget.
The Admin expenses include depreciation therefore we minus it as it is not a cash item.
In order to maintain the minimum monthly cash balance the company had to take out a loan in February of $14,850.
On January 1, Year 3, Wayfarer Co.'s assets were $365,000 and its stockholders' equity was $153,000. During the year, assets increased $21,500 and liabilities decreased $23,000. Required: Determine the amount of stockholders' equity at December 31, Year 3.
Final answer:
Stockholders' equity at December 31, Year 3 is determined to be $197,500. This is calculated by adding the initial equity to the net increase in assets and decrease in liabilities over the year.
Explanation:
The calculation of stockholders' equity at the end of Year 3 can be determined using the basic accounting equation: Assets = Liabilities + Stockholders' Equity. We know that at the start of the year, Wayfarer Co. had assets of $365,000 and stockholders' equity of $153,000. During the year, assets increased by $21,500 and liabilities decreased by $23,000.
To find the stockholders' equity at the end of the year, we adjust the initial equity balance by the change in assets and liabilities. The new value of assets at year-end is $365,000 (beginning assets) + $21,500 (increase in assets) = $386,500. Given that liabilities decreased, this change will directly increase stockholders' equity. So, the change in equity is the increase in assets of $21,500 plus the decrease in liabilities of $23,000, totaling $44,500.
The new stockholders' equity is $153,000 (initial equity) + $44,500 (change in equity) = $197,500 at December 31, Year 3.
Stech Co. is issuing $9 million 12% bonds in a private placement on July 1, 2017. Each $1,000 bond pays interest semi-annually on December 31 and June 30 of each year. The bonds mature in ten years. At the time of issuance, the market interest rate for similar types of bonds was 8%. What is the expected selling price of the bonds
Answer:
Expected selling price =$ 1,271.81
Explanation:
The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.
These cash flows include interest payment and redemption value
The price of the bond can be calculated as follows:
Step 1
PV of interest payment
coupon rate - 12%, yield - 8%, years to maturity- 10 years
Semi-annual coupon rate = 12%/2 = 6%
Semi-annual Interest payment =( 6%×$1000)= $60
Semi annual yield = 8%/2 = 4%
PV of interest payment
= A ×(1- (1+r)^(-n))/r
A- interest payment, r- yield - 4%, n- no of periods- 2 × 10 = 20periods
= 60× (1-(1.04)^(-10×2))/0.04)
= 60× 13.59032634
=$815.41
Step 2
PV of redemption value (RV)
PV = RV × (1+r)^(-n)
RV - redemption value- $1000, n- 2×10 r- 4%
= 1,000 × (1+0.04)^(-2×10)
= $456.38
Step 3
Price of bond = PV of interest payment + PV of RV
= $815.41 + $456.38
= $ 1,271.81
Expected selling price =$ 1,271.81
Final answer:
The expected selling price of the $9 million 12% bonds is $940.62.
Explanation:
To calculate the expected selling price of the bonds, we need to calculate the present value of the future cash flows. The bonds pay semi-annual interest at a rate of 12% per year. The market interest rate for similar bonds is 8%. The bonds have a maturity of ten years. Using these figures, we can calculate the present value of the interest payments and the principal repayment at maturity.
To calculate the present value of the bond, we can use the formula:
PV = (C/2) * (1 - (1/(1+r)^n)) / r + (M/(1+r)^n)
Where PV is the present value of the bond, C is the periodic interest payment, r is the market interest rate, and n is the number of periods or years until maturity. M is the maturity value of the bond.
Substituting the values, we get:
PV = (60/2) * (1 - (1/(1+0.08)^(10*2))) / 0.08 + (1000/(1+0.08)^(10*2)) = $940.62
Livingston Fabrication has created the following aggregate plan for the next 5 months (see PDF): Assume that Livingston will have nothing in inventory at the end of July. Livingston employs 500 production assembly workers and it takes one production assembly worker 3 minutes to assemble one unit of finished good. (The unit is complete at that point.) Each production assembly worker can provide 160 hours of assembly time a month without requiring overtime pay. a. Livingston wants to complete this plan without working any overtime in assembly. How many additional production assembly workers does Livingston need to hire to accomplish this? When should they be hired? b. Using this production plan, how many units will be in inventory at the end of October? c. What will the average inventory level be each month?
Answer:
Explanation:
worker's production rate = 60/3 = 20units per hour
monthly capacity 160 x 20 = 3200 units.
capacity needed to produce 2000000 units
= 2000000/3200
= 625
therefore, since they already have 500 workers, they need to hire 125 more workers.
b) At the end of October they will have 2 million inventory.
c) Average inventory in each of the months has been listed in the attachment below.
A matrix organization for project management has a distinct advantage because:A) Dual hierarchies mean two bosses.B) A significant amount of time is spent negotiating the sharing of critical resources.C) Workers must reconcile competing project and functional demands.D) Project importance is enhanced by setting authority equal to that of functional departments.
Answer:
D) Project importance is enhanced by setting authority equal to that of functional departments.
Explanation:
A matrix organization is characterized by, multiple command system and overlapping of command, control and behavioral pattern.
Here, temporary project groups are created so as to handle short term projects. Personnel are drawn from functional department and their activities are controlled and coordinated by a project manager.
Once a project is completed, the structure is disbanded and the personnel return to their original departments i.e functional department.
During the project duration, a person is responsible and reports to two bosses, one being the project manager and secondly to the functional boss. Thus, under such a structure exists dual reporting.
Under matrix structure for project management, the project manager is not allowed to use resources exclusively for the project i.e like in project management. Rather, such a manager is required to share resources with the organization.
Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $14,250 §1231 loss on the sale. The second is land that will generate a $10,400 §1231 gain on the sale. Aruna’s ordinary marginal tax rate is 32 percent. (Input all amounts as positive values.) a. Assuming she sells both assets in December of year 1 (the current year), what effect will the sales have on Aruna’s tax liability?
The sales of the assets will result in a §1231 loss for Aruna. The taxable amount will reduce Aruna's tax liability.
Explanation:To determine the effect of selling the assets on Aruna's tax liability, we need to calculate the net §1231 gain/loss. The net §1231 gain/loss is calculated by subtracting the total §1231 losses from the total §1231 gains. In this case, the net §1231 gain/loss is ($10,400 - $14,250) = -$3,850. Since the net gain/loss is negative, Aruna will have a §1231 loss.
Next, we need to calculate the ordinary gain or loss on the sale of the assets. The ordinary gain/loss is calculated by multiplying the net §1231 gain/loss by the ordinary marginal tax rate. In this case, the ordinary loss is (-$3,850 * 0.32) = -$1,232.
Finally, we subtract the ordinary loss from the net §1231 gain/loss to calculate the taxable amount. The taxable amount is ($-3,850 - $-1,232) = -$2,618. Since the taxable amount is negative, it will reduce Aruna's tax liability.
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Malcolm, a dealer in securities, is a 60 percent owner of the Real Partnership which on July 1, 2015, sold to him Acme Securities which it had held as an investment for three years. The basis of the securities to the Real Partnership was $40,000, and the sales price to Malcolm was $100,000.
On his 2015 federal income tax return, Malcolm should report income in the amount and character of:
a. $36,000 long-term capital gain.
b. $36,000 short-term capital gain.
c. $36,000 ordinary income.
d. $18,000 long-term capital gain.
e. $18,100 ordinary income.
Answer:
c. $36,000 ordinary income.
Explanation:
Data provided
Sales price to Malcolm = $100,000
Basis of the securities to the Real Partnership = $40,000
The computation of should report income in the amount and character of is shown below:-
The gain that arose = Sales price to Malcolm - Basis of the securities to the Real Partnership
= $100,000 - $40,000
= $60,000
But because Malcolm is the Real Partnership's 60 percent shareholder, he will declare income in the amount and character of $60,000 × 60% = $36,000 as ordinary income on his federal income tax return for 2015.
Rockville Corporation is going to borrow $250,000 from its bank at an APR of 8.5 percent. The bank requires its customers to maintain a 10 percent compensating balance. What is the effective interest rate on this bank loan? Round to 4 decimal places and enter percentages as a decimal
Answer: 0.0944 ( 4 dp)
Explanation:
To calculate the effective interest rate we will go in stages.
First we calculate the compensated balance deposit of 10%,
= 250,000*10%
= $,25,000
Subtracting it from the loan amount will give us the effective borrowing.
Effective borrowing = 250,000-25,000
= $225,000
Then we find out the interest expense on the original amount which is,
Interest expense = Amount borrowed * Interest rate
= 250,000*8.5%
= $21,250
The reason we calculated the above is because we need that figure in the effective interest rate formula which goes like,
Effective interest rate = Interest expense / Effective borrowing amount
= 21,250/225,000
= 0.094444444
= 0.0944
Effective interest rate is 0.0944 ( 4 dp)
Answer:
9.4%
Explanation:
Compensating balance amount = $250,000 * 10% = $25,000
Interest expenses = $250,000 * 8.5% = 21,250
Effective interest rate = $21,250/($250,000 - $25,000) = 0.0944, or 9.4%
Therefor, the effective interest rate is 9.4%.
Note: The effective interest rate of 9.4% is higher than the APR of 8.5% because of the compensating balance.
Seidman Company manufactures and sells 30,000 units of product X per month. Each unit of product X sells for $16 and has a contribution margin of $7. If product X is discontinued, $85,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Company's other products. If product X is discontinued, Seidman Company's monthly income before taxes should:
Answer:
$125,000
Explanation:
The computation of monthly income before taxes is shown below:-
Loss in contribution margin = 30,000 units × $ 7
= ($210,000)
Saving in fixed monthly overhead = $85,000
Income before taxes would get decreased = Loss in contribution margin - Saving in fixed monthly overhead
= ($210,000) - $85,000
= $125,000
If product X is discontinued,. Seidman Company's monthly income before taxes would get decreased by $125,000
Mixed Costs and Cost Formula Ben Palman owns an art gallery. He accepts paintings and sculpture on consignment and then receives 20% of the price of each piece as his fee. Space is limited, and there are costs involved, so Ben is careful about accepting artists. When he does accept one, he arranges for an opening show (usually for 3 hours on a weekend night) and sends out invitations to his customer list. At the opening, he serves wine, soft drinks, and appetizers to create a comfortable environment for prospective customers to view the new works and to chat with the artist. On average, each opening costs $600. Ben has given as many as 20 opening shows in a year. The total cost of running the gallery, including rent, furniture and fixtures, utilities, and a part-time assistant, amounts to $120,000 per year.Required:
1. Assume that the cost driver is number of opening shows. Develop the cost formula for the gallery's costs for a year.
2. Using the cost formula developed above, what is the total cost for Ben in a year with 12 opening shows?
$
Using the cost formula developed above, what is the total cost for Ben in a year with 14 opening shows?
$
Answer:
$136,200 is the total costs for 14 opening shows
Explanation:
See attached file
ABC manufacturing co has estimated breakeven volume of 50,000 units for its new widget. If $unit variable cost is $23.00 and unit selling price is $25.00, what is the total fixed cost?
Answer:
$100,000
Explanation:
Data provided
Break-even volume = 50,000 units
Variable cost = $23.00
Unit selling price = $25.00
The computation of fixed cost is shown below:-
Contribution margin per unit = Selling price per unit - Variable expense per unit
= ($25 - $23)
= $2
Break even point = Fixed cost ÷ Contribution margin per unit
Fixed cost = Break even point × Contribution margin per unit
= 50,000 × 2
= $100,000
The budgeted production of Capricorn, Inc. is 10,000 units per month. Each unit requires 20 minutes of direct labor to complete. The direct labor rate is $100 per hour. Calculate the budgeted cost of direct labor for the month. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)
Answer:
The budgeted cost of direct labor for the month is $333,333.
Explanation:
This question can be solved using rules of three.
The direct labor rate is $100 per hour.
Each unit requires 20 minutes of direct labor to complete.
An hour has 60 minutes, so in an hour, 60/20 = 3 units can be made.
This means that the cost of 3 units is $100.
10,000 units per month.
How much do 10,000 units cost?
3 units - 100
10,000 units - $x
[tex]3x = 10000*100[/tex]
[tex]x = \frac{10000*100}{3}[/tex]
[tex]x = 333333[/tex]
The budgeted cost of direct labor for the month is $333,333.
Fees in 1st year Suppose Adrian and Clemens each Invest $10,000. Adrian Invests in an actively managed mutual fund that has an annual expense ratio (a fee charged by the investment manager of 1.3% Clemens Invests in a passively managed index fund linked to the S&P 500 that has an expense ratio of 0.2%. Both Investments earn a 7% rate of return
1. How much does each investor make on his investment with the 7% rate of return?
2. How much does Adrian pay in fees for his actively managed mutual fund? .
3. How much does Clemens pay in fees for the index fund?
4. At the end of the year, what's the total value (AFTER FEES) of Adrian's mutual fund?
5. What's the total value (AFTER FEES) of Clemens's index fund?
6. How much more value does Clemens's investment generate than Adrian's in one year's time?
Answer:
Task 1:
The answer is $700.
Task 2:
The answer is $130.
Task 3:
The answer is $20.
Task 4:
The answer is $10,570.
Task 5:
The answer is $110.
Explanation:
Task 1:How much does each investor make on his investment with the 7% rate of return?Solution:Adrian & Clemens makes [$10,000*0.07] on their investment = $700.
Task 2:How much does Adrian pay in fees for his actively managed mutual fund?Solution:Adrian owes to his broker = (10000*.013) = $130
Task 3:How much does Clemens pay in fees for the index fund?Solution:Clemens owes to his broker= ($10000*.002) = $20
Task 4:At the end of the year, what's the total value (AFTER FEES) of Adrian's mutual fund?Solution:Value of Adrian's stock = $10000+$570 (net of brokerage) = $10,570
Task 5:What's the total value (AFTER FEES) of Clemens's index fund?Solution:Value of clemens' stock = $10000+$680 (net of brokerage) = $10,680
Task 6:How much more value does Clemens' investment generate than Adrian's in one year's time?Solution:Clemens investment makes ($680-$570) than adrian's investment = $110
1. The amount each investor make on the investment is $700.
2 The amount paid in fees should be $130.
3. The amount paid in fees for the index fund is $20
4. The total value after fees should be $10,570
5. The total value after fees should be $10,680
6. The more value should be $110.
Calculation of the amount of each part:
1. The amount that each investor make should be
= 7% of $10,000
= $700
2. The amount paid in fees should be
= 1.3% of $10,000
= $130
3. The amount paid in fees for the index fund is
= 0.2% of $10,000
= $20
4. The total value after fees should be
= $10,000 + $570
= $10,570
5. The total value after fees should be
= $10,000 + $680
= $10,680
6. The more value should be
= $680 - $570
= $110
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What are the equilibrium price and the equilibrium quantity? b. Suppose the price is currently $5. Explain what problem would exist in the market and calculate the size of that problem. What would you expect to happen to price? c. Suppose the price is currently $2. Explain what problem would exist in the market and calculate the size of the problem. What would you expect to happen to price?
The question is incomplete. See the attached image for the missing table showing the demand and supply schedule.
Answer/Explanation:
a. Equilibrium price is the price at which Qd = Qs. Hence, equilibrium price = $4, while equilibrium quantity is the quantity demanded at the equilibrium price, i.e. where quantity demanded = quantity supplied. Therefore equilibrium quantity = 8,000
b. At $5, there would be excess quantity supplied, i.e. Qs · Qd = 10,000 · 6,000 = 4,000. Hence, there would be wastage of resources as a result of surplus. This would lead to decrease in price in order to avoid the wastage of resources.
c. At $2, there would be excess quantity demanded, i.e. Qd · Qs = 12,000 · 4,000 = 8,000. This would lead to increase in price as a result of acute shortage in quantity supplied.
Ahngram Corp. has 1,000 defective units of a product that cost $2.70 per unit in direct costs and $6.20 per unit in indirect cost when produced last year. The units can be sold as scrap for $3.70 per unit or reworked at an additional cost of $2.20 and sold at full price of $11.10. The incremental net income (loss) from the choice of reworking the units would be: Multiple Choice $2,200. $0. $8,900. $3,700. ($2,200).
Answer:
the incremental net income from reworking the units would be $8,900
Explanation:
Consider the incremental costs and revenues arising on reworking the units
Note : Manufacturing costs already incurred on the defective units are sunk costs and are therefore irrelevant for this decision.
Sales (1,000×$11.10) $11,100
Less Costs to of reworking (1,000×$2.20) ($2,200)
Net Income $8,900
Therefore, the incremental net income from reworking the units would be $8,900
What two explanations of productivity growth does endogenous growth theory offer? A. population growth and increased saving B. population growth and technological innovation C. increased saving and technological innovation D. accumulation of human capital and technological innovation
Answer: D. Accumulation of human capital and technological innovation.
Explanation:
Endogenous growth theory is the belief that to achieve economic growth, there must be an incorporation of technological innovation, human capital, and knowledge or education. These factors are endogenous or internal.
Human capital encompasses all unseen qualities of people such as knowledge and skills that can be harnessed during labor to further economic growth.
The theory also stresses that investment into these internal factors would yield long-run or continuous returns. For example, new advances in technology would lead to new opportunities for economic growth.
Cody Enterprises purchased equipment for $64,000. In addition, shipping charges of $800 were incurred to obtain the equipment. The company paid $5,000 to construct a foundation and install the equipment. The equipment is estimated to have a residual value of $6,000 at the end of its 5-year useful life. Use the information above to answer the following question. Using the straight-line method, what is the book value of the equipment at the end of the third full year of use
Answer:
$12,760
Explanation:
The calculation of book value of the equipment at the end is shown below:-
Depreciation expense each year = Cost - Salvage ÷ Life
= ($64,000 + $800 + 5,000) - $6,000 ÷ 5
= $69,800 - $6,000 ÷ 5
= $63,800 - $1,200
= $12,760
Therefore for computing the depreciation each year we simply applied the above formula.
Ace Hardware is adding a new product line that will require an investment of $ 1 comma 418 comma 000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $ 330 comma 000 the first year, $ 290 comma 000 the second year, and $ 230 comma 000 each year thereafter for eight years. Compute the payback period. Round to one decimal place.
Answer:
5.47 years
Explanation:
The computation of the payback period is shown below:
In year 0 = $1,418,000
In year 1 = $330,000
In year 2 = $290,000
In year 3 = $230,000
In year 4 = $230,000
In year 5 = $230,000
In year 6 = $230,000
In year 7 = $230,000
In year 8 = $230,000
In year 9 = $230,000
In year 10 = $230,000
If we add the first 5-year cash inflows, that will be $1,310,000 So we subtract the $1,310,000 from the $1,418,000, then the balance will be $108,000 as though we applied the six-year cash inflow to the original investment, and the cumulative sum exceeds. So, we subtract it And the cash inflow next year is $230,000
So, the payback period equal to
= 5 years + $108,000 ÷ $230,000
= 5.47 years
In order to compare the efficiencies of media, Derek calculates the CPM for each. For Golf Digest, the circulation is 500,000 and the cost for a full page ad is $40,000. The CPM for Golf Digest is:
Answer:
$80
Explanation:
CPM is the short form for 'cost per a thousand impressions.' Cost per thousand is a marketing expression used to refer to the cost of reaching 1000 readers, viewers, listeners, or webpage visitors. CPM is, therefore, the cost of advertising to an audience of 1000 people.
The Golf Digest has a circulation of 500,000. The cost of advertising is $40,000, which means the cost of reaching 500,000 people $40,000.
To get CPM, we first divide 500,000 by 1,000
=500,000 / 1,000
=500
CPM will be
= $40,000/500
=$80
Suppose your company needs $12 million to build a new assembly line. Your target debt−equity ratio is .5. The flotation cost for new equity is 12 percent, but the flotation cost for debt is only 9 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.
a. What is your company’s weighted average flotation cost, assuming all equity is raised externally? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Weighed average flotation cost %
b. What is the true cost of building the new assembly line after taking flotation costs into account? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations and round your answer to the nearest whole dollar, e.g. 1,234,567.)
True cost $
Answer: Weighted average floatation curve is 11.00%
True cost is $14,483,146.
Explanation:
Weighted average floatation cost is equal to weighted average of the floatation costs for debt and equity.
Let the equity be 1%
Given that debt to equity ratio is equal to 0.5%
Debt/Equity is 0.5
Debt/1= 0.5
Debt= 0.50 × 1.00 = 0.50
Assumed value:
For debt= 0.50
For equity = 1.00
Totals= 1.50
For weight (a):
Debt= 0.33
Equity= 0.67
Totals= 1.00
For costs(b)
Debt= 9%
Equity= 12%
Weighted cost (a) × (b)
Debt= 0.33 × 9= 2.97 appr= 3.00
Equity= 0.67 ×12= 8.04 appr= 8.00
Totals = 3. 00 + 8.00= 11.00%
B.
True cost is the defined as the difference between the market price of a product and the comprehensive cost of that product to society. The term is normally used to draw attention to missing or hidden or minute costs that are not found in the market price, even though it could theoretically apply to hidden benefits as well.
True cost is equal to total cost of new assembly line including floatation cost.
True cost × (1 - 11%) = $12,000,000
True cost × (1- 0.11)= $12,000,000
True cost × (0.89) = $12,000,000
True cost = $12,000,000/ 0.89
True cost= $13,483,146.
Final answer:
The weighted average flotation cost would be 12%, which is the flotation cost for new equity, since all funds are being raised through equity. The true cost of building the new assembly line, after accounting for flotation costs, is $13,636,364.
Explanation:
To calculate the weighted average flotation cost when all equity is raised externally, we first need to understand the proportion of funding that would come from equity and from debt based on the target debt-equity ratio of 0.5. This ratio indicates that for every dollar of equity, there is $0.5 of debt. However, because the company has decided to raise all of the $12 million through equity, the weight of the debt is 0 and the weight of the equity is 1. Therefore, the weighted average flotation cost would be the flotation cost for equity, which is 12%, since no debt will be issued.
Next, to calculate the true cost of building the new assembly line after taking into account flotation costs, we can use the following formula: True Cost = Required funds / (1 - Flotation Cost). Since the company is using only equity financing and the flotation cost is 12%, the true cost would be $12 million / (1 - 0.12) = $13.63636364 million. We need to round this to the nearest whole dollar, resulting in a true cost of $13,636,364.
Ballard Company uses the perpetual inventory system. The company purchased $9,700 of merchandise from Andes Company under the terms 3/10, net/30. Ballard paid for the merchandise within 10 days and also paid $420 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $18,400 cash. The amount of gross margin for this merchandise is:
Answer:
$8,571
Explanation:
The computation of amount of gross margin is shown below:-
Total Purchase = Purchase - Purchase discount + Freight paid
= $9,700 - ($9,700 × 3%) + $420
= $9,700 - $291 + $420
= $9,829
Gross Margin = Sales - Total Purchase
= $18,400 - $9,829
= $8,571
Therefore for computing the Gross Margin we simply appied the above formula.
In its fiscal 2018 annual report, Nike, Inc. reported cash of $4,000 million at the beginning of the year. The statement of cash flows reports the following (in millions): Net cash from operating activities $3,027 Net cash from investing activities (1,067) Net cash from financing activities (940) What was the balance in Nike’s cash account at the end of fiscal 2018? A) $3,027 million B) $1,020 million C) $5,020 million D) $4,350million E) None of the above
Answer:
Option C, $5,020 million is correct
Explanation:
The below is the statement of cash flow for Nike Inc 2018:
Net cash from operating activities $3,027
Net cash from investing activities ($1,067)
Net cash from financing activities ($940)
Net increase in cash and cash equivalent in 2018 $1,020
Beginning Cash and cash equivalent $4,000'
Balance in cash account at the end of fiscal year $5,020
The correct option then is C.$5,020 million.
Option A is wrong because it only takes into consideration net cash from operations,option B is also as it considered only the increase in cash in the year without the opening balance of cash,while option D and E are obviously irrelevant
If a bond is currently trading at its face (par) value, then it must be the case that: A. the bond's yield to maturity is equal to its coupon rate. B. the bond's yield to maturity is greater than its coupon rate.
Answer:
A) the bond's yield to maturity is equal to its coupon rate
Explanation:
If the bonds yield to maturity is equal to its coupon rate it means that the interest paid by the buyers on the face value of the bond is equal to the internal rate of return for the present value of future cash flow. Only in this scenario, a bond is traded at its face or par value.
ordan Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows. Unit-level materials $ 5,800 Unit-level labor 6,400 Unit-level overhead 3,900 Product-level costs* 9,600 Allocated facility-level costs 26,600 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Jordan for $2.80 each. Required Calculate the total relevant cost. Should Jordan continue to make the containers
Final answer:
Jordan Electronics should continue to make the containers, as the total relevant cost of making them ($19,300) is less than buying them from Russo Container Company ($25,760).
Explanation:
To calculate the total relevant cost for Jordan Electronics to decide whether to make or buy the shipping containers, we need to consider only the costs that will change based on the decision. The costs provided are as follows:
Unit-level materials: $5,800
Unit-level labor: $6,400
Unit-level overhead: $3,900
Product-level costs: $9,600 (only one-third is avoidable if buying, so the relevant portion is $3,200)
Allocated facility-level costs: $26,600 (non-relevant as they are likely fixed and allocated broadly across the company's products)
If Jordan Electronics buys the containers from Russo Container Company at $2.80 each for 9,200 containers, the total cost would be 9,200 containers × $2.80 = $25,760. Therefore, the relevant cost of buying is $25,760.
Now, let's calculate the relevant cost of making the containers:
Unit-level materials: $5,800
Unit-level labor: $6,400
Unit-level overhead: $3,900
Relevant product-level costs: $3,200
The total relevant cost of making the containers is $5,800 + $6,400 + $3,900 + $3,200 = $19,300. Since the cost of making ($19,300) is less than buying ($25,760), Jordan Electronics should continue to produce the containers in-house.
Jordan Electronics should purchase the containers from Russo Container Company as the total cost of purchasing ($25,760) is lower than the total relevant cost of making ($45,900).
1. Calculate the total unit-level costs for producing 9,200 containers:
Unit-level materials + Unit-level labor + Unit-level overhead = $5,800 + $6,400 + $3,900 = $16,100
2. Calculate the avoidable product-level costs:
One-third of product-level costs = $9,600 × (1/3) = $3,200
3. Calculate the total relevant cost of making the containers:
Total relevant cost = Unit-level costs + Avoidable product-level costs + Allocated facility-level costs
Total relevant cost = $16,100 + $3,200 + $26,600 = $45,900
4. Calculate the cost of purchasing containers from Russo Container Company:
Cost per container = $2.80
Total cost of purchasing 9,200 containers = Cost per container * Number of containers
Total cost of purchasing containers = $2.80 ×9,200 = $25,760
5. Compare the total relevant cost of making with the cost of purchasing:
Total relevant cost of making = $45,900
Total cost of purchasing = $25,760
Since the total cost of purchasing ($25,760) is lower than the total relevant cost of making ($45,900), Jordan Electronics should purchase the containers from Russo Container Company instead of continuing to make them.
ash Flows from Investing Activities During the year, Murray Company sold equipment with a book value of $125,000 for $175,000 (original purchase cost of $225,000). New equipment was purchased. Murray provided the following comparative balance sheets: Murray Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Long-Term Assets Plant and equipment $1,000,000 $1,025,000 Accumulated depreciation (500,000) (525,000) Land 500,000 725,750 Required: Calculate the investing cash flows for the current year. Use a minus sign to indicate a cash outflow.
To calculate the cash flows from investing activities for Murray Company, we calculate the gain from the sale of equipment and the cash spent on new equipment purchases. The net cash inflow from investing activities is $150,000, resulting from a $175,000 inflow from the sale and a $25,000 outflow for purchases.
Calculating Investing Cash Flows
Calculating the cash flows from investing activities involves determining the cash spent on new investments and the proceeds from the sale of existing assets. The book value and sale price of the equipment provide a gain, influencing net cash flow. Moreover, changes in balance sheet items point to the purchase of new assets.
Sale of Equipment
Murray Company sold equipment with a book value of $125,000 for $175,000, which would result in a gain of $50,000 ($175,000 - $125,000). This gain impacts the net cash provided by investing activities.
Purchase of New Equipment
Comparing the balance sheets for two consecutive years, we see an increase in plant and equipment from $1,000,000 to $1,025,000, indicating a purchase of $25,000 ($1,025,000 - $1,000,000). Additionally, the accumulated depreciation increased by $25,000 ($525,000 - $500,000), which does not impact cash flows.
Investing Cash Flow Summary
The net cash used for investing activities is therefore calculated as the cash outflow for new equipment purchases minus the cash inflow from the sale of equipment. This is $25,000 (purchase) - $175,000 (sale proceeds), resulting in a net cash inflow from investing activities of $150,000.
Crane WaterWorks manufactures snorkel gear. During the past month, Washington purchased 4,130 pounds of plastic to use in its dive masks, at a cost of $5,972. The standard price for the plastic is $1.433 per pound. The company actually used 4,060 pounds of the plastic to produce 18,500 dive masks.
a.Calculate crane waterworks direct materials price variance for the month.
Answer:
Direct material price variance= $53.69 unfavorable
Explanation:
Giving the following information:
Actual purchase= 4,130 pounds of plastic
Actual cost= $5,972 (total)
The standard price for the plastic is $1.433 per pound.
The company used 4,060 pounds of the plastic to produce 18,500 dive masks.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 5,972/4,130= $1.446
Direct material price variance= (1.433 - 1.446)*4,130= $53.69 unfavorable
Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,700. Budgeted cash receipts total $186,500 and budgeted cash disbursements total $189,400. The desired ending cash balance is $30,700. To attain its desired ending cash balance for January, the company should borrow:
Answer:
Cash borrow = $14,900.
Explanation:
Given,
The company budgeted ending cash balance is $30,700.
We know,
Budgeted ending cash balance = Budgeted beginning cash balance + Budgeted cash receipts - Budgeted cash disbursements + Budgeted cash borrow
Given,
Budgeted ending cash balance = $30,700.
Budgeted beginning cash balance = $18,700
Budgeted cash receipts = $186,500
Budgeted cash disbursements = $189,400
Budgeted cash borrow = ?
Putting the values into the formula, we can get
$30,700 = $18,700 + $186,500 - $189,400 + Cash borrow
Or, $30,700 - ($18,700 + $186,500 - $189,400) = Cash borrow
Or, $30,700 - $18,700 - $186,500 + $189,400 = Cash borrow
Or, $220,100 - $205,200 = Cash borrow
Or, $14,900 = Cash borrow
Or, Cash borrow = $14,900.
Therefore, cash borrow is $14,900.
If three workers are assigned to a task lasting four days, two workers are assigned a task lasting three days, and one worker is assigned to a task lasting three days. The tasks can be completed independently of each other. If you are to schedule with a resource-limit, what is the minimum resource limit for the project
Three workers per day is minimum resource limit.
Explanation:
Every day he needs maximum of 3 workers, so this can be set of the minimum resource limit for the project.
Thus, the minimum resource limit for the project is - Three workers per day
All asset make and change demands are assessed against each LimitRange object in the task. In the event that the asset abuses any of the listed requirements, at that point the asset is dismissed. In the event that the asset doesn't set an express worth, and on the off chance that the imperative backings a default esteem, at that point the default esteem is applied to as far as possible is an edge for an asset the executives and helps control asset use. A procedure for overseeing limits takes into consideration the reallocation of assets to various clients or activities as necessities change.
The minimum resource limit for the project would be:
- 3 workers every day.
In the given scenario, each day requires at least three workers to accomplish the required task. The given descriptions suggest that a total of three workers are assigned, the first two for the initial three days and the latter for the last three days, and each one can finish it on themselves only.This implies that the lowest limit of human resources for the project would be 3 workers irrespective of the challenges or problems that might occur.
Learn more about 'Resource Limit' here:
brainly.com/question/439768
Sammy's is the hot new lunch spot among the hipsters, who flock there at noon for their artisanal peanut butter and jelly sandwiches, which sell for $12.95. The sandwiches are made from two slices of their own artisanal bread, which they bake continuously throughout the day at a rate of seven loaves an hour (each loaf contains twenty slices). The actual cost of a loaf of bread is $1 and the cost to hold a loaf is 80%, since freshness is important in baking as well as to hipsters. The cost to run a new batch of a dough is $3 per loaf. Sammy's sells their sandwiches at a rate of fifty per hour.
What is the optimal batch size to produce?
Answer:
Optimal batch size to produce= 5.56 slices
Explanation:
Selling rate of sandwich = 50 / hour
No of slices used per hour = 50* 2 =100 ( each sandwich use 2 slices)
No of loafs which gets baked in an hour = 7
No of sandwich slices which get produuced in an hour = 7*20 =140
No of sandwich which can be produce = 10/2 =70
So every hour no of slices to be hold = 40
No fo loaf to be hold = 40/20 =2
Cost of holding = 0.8* 1 =0.8
Cost of running a new batch = $3*2 = $6
Selling each sandwich = $12.95
Saving = $12.95 - $6 =$6.95
Optimal batch size = saving * ( Holding cost) = 6.95 *0.8 = 5.56 slices
disadvantages of using the option of hiring additional personnel during periods of increasing demand and conducting layoffs during lower-demand periods for managing operating costs?
Answer:
The critical analysis of temporary staff hiring & firing, depending on demand is given below :
Explanation:
Hiring & firing personnel, during periods of peak demand & periods of lower demand respectively - can have many undermentioned advantages & disadvantages :
Advantages :
Fulfilment of consumer's demand in high demand periods. Cost saving during low demand periods Highly suitable for seasonal industries, with highly fluctuating demand. Temporary staff is cheaper for companies, it is to be availed with less perks, social security etcDisadvantages :
Incurring high temporary recruitment cost again & againConsistency & Quality of product or service might be compromised, as the labour indulged is fluctuating so muchEmployees might feel lack of job security & hence not associate belongingness with their job, company. It can reduce their incentive to work hard towards organisation objectives Prospective employees & hiring intermediaries might build a bad image of the company as an employer. It might create staff finding difficulties, when needed later.