Answer:
The correct answer is letter "B": there are four phases: peak, recession, trough and expansion.
Explanation:
The business cycle refers to the fluctuations that an economy faces throughout the economic activity. It consists of economic expansions or periods of growth and contractions or periods of economic decline. When the expansion reaches its peak there is usually a downturn followed by a contraction in the economy. The point where the economy starts to recover is called trough after which expansion takes place repeating the cycle.
Suppose Musashi and Rina are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Musashi chooses Right and Rina chooses Right, Musashi will receive a payoff of 4 and Rina will receive a payoff of 4.
Rina Rina
Left Right
Musashi Left 4, 3 6,1
Musashi Right 7,6 4,4
The only dominant strategy in this game is for _____ to choose _____.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Musashi chooses _____and Rina chooses _____.
Rina has a dominant strategy to choose Left. There is a single Nash equilibrium where Musashi chooses Right and Rina chooses Left.
The question provided describes a simultaneous-move game with a payoff matrix, which is a concept from game theory in economics and mathematics. To find the dominant strategy and the Nash equilibrium, we compare the payoffs to each player for their possible moves.
Examining the payoff matrix:
If Musashi chooses Left, Rina has a higher payoff choosing Left (3 vs. 1).If Musashi chooses Right, Rina still has a higher payoff choosing Left (6 vs. 4).This shows that Rina has a dominant strategy: always choose Left, as it gives her a higher payoff regardless of Musashi's choice. Now, let's examine Musashi's best responses:
If Rina chooses Left, Musashi's best response is Right (7 vs. 4).If Rina chooses Right, Musashi's best response is also Right (4 vs. 6).Musashi does not have a dominant strategy since his best response depends on Rina's choice. However, given that Rina's dominant strategy is to choose Left, Musashi's best response to that is to choose Right.
The Nash equilibrium is the outcome where each player's strategy is the best they can do, given the other player's strategy. Since Rina will choose Left, and Musashi's best response to Left is Right, the Nash equilibrium for this game is:
Musashi chooses RightRina chooses LeftThis Nash equilibrium is not unique if we were only considering best responses; however, because Rina has a dominant strategy, this guides Musashi's choice, resulting in a single Nash equilibrium.
A stock is expected to pay a dividend of $0.5 at the end of the year (D1=0.5), and it should continue to grow at a constant rate of 7% a year. If its required return is 12%, what is the stock’s expected price 5 years from today?
Answer:
The stock’s expected price 5 years from today is $14.03
Explanation:
Today's stock price: $0.5 / (12% - 7%) = $10
Because the stock should continue to grow at a constant rate of 7% a year, the stock’s expected price 5 years from today: $10 x (1 + 7%)^5 = $14.03
Answer:
You can Derive the answer like this. Using simple dendritic growth model.
$0.5 / (12% - 7%) = $10
Now to get the expected price 5 years from today, do this: $10 x (1 + 7%)^5 = $14.03
What we did was we used the annual growth rate and calculates the growth over the next 5 years.
Explanation:
Zilly Co. predicts sales of $176,000 for June. Zilly pays a sales manager a monthly salary of $6,900 and a commission of 7% of that month’s sales dollars. Prepare a selling expense budget for the month of June.
Final answer:
The selling expense budget for Zilly Co. for June is $19,220, which includes the sales manager's salary and the commission on predicted sales.
Explanation:
The selling expense budget for Zilly Co. for the month of June can be calculated by adding the fixed salary of the sales manager to the commission that is based on the sales for that month. To calculate the commission, we use the given sales prediction and commission rate. Here's the step-by-step calculation:
First, calculate the commission by multiplying the predicted sales by the commission rate: $176,000 * 0.07 = $12,320.
Add the fixed monthly salary of the sales manager to the commission to get the total selling expenses: $6,900 + $12,320 = $19,220.
Therefore, the selling expense budget for Zilly Co. for the month of June is $19,220.
Contingency questions
a. Questions in a questionnaire that allow the respondent to answer in his or her own words.
b. Sets of questions in a questionnaire that use the same set of response categories.
c. Questions in a questionnaire that force the respondent to select from a list of possible responses.
d. Questions in a survey that depend on the responses to earlier questions or which have questions dependent on them.
Answer: d. Questions in a survey that depend on the responses to earlier questions or which have questions dependent on them.
Explanation: Questions in surveys are chief tools used in the collection of necessary information from the respondents. Contingency questions as a type of survey questions depend on the responses to earlier questions or which have questions dependent on them. They are answered only if the respondent gives a particular response to a previously asked question and this helps to avoid asking questions of people that do not apply to them.
Answer:
The correct answer is letter "D": Questions in a survey that depend on the responses to earlier questions or which have questions dependent on them.
Explanation:
Contingency questions are those that come after another dependent question has been answered. Contingency questions explore more details of the first question asked and can only be answered depending on what previous answers were. The first question typically requires a Yes/No answer such as "Are you over age?" or "Do you have a car?". Contingency questions examples would be "How old are you?" or "What color is your car?".
. From the following list of account balances, calculate the correct amount of current liabilities: Accounts receivable $ 5,000 Accounts payable 5,300 Unearned revenue 900 Rent expense 2,400 Sales revenue 46,300 Sales tax payable 3,700 Estimated warranty payable 900 Note payable, due in 90 days 1,300 Accumulated depreciation 1,400 a. $12,100 d. $13,000 b. $61,200 e. $13,100
Answer:
The answer is A.
Explanation:
Current liabilities are the total amount of money due within a period of s year. Current liabilities must be repaid within a year(less than 12 months.
Current liabilities in this question are:
Payable. $5,300
Unearned revenue $900
Sales tax payable. $3,700
Estimated warranty payable $900
Note payable due in 90days $1,300
Total. $12,100
$12,100 is therefore the total current liabilities
There are zero coupon bonds outstanding that have a YTM of 5.73 percent and mature in 23 years. The bonds have a par value of $10,000. If we assume semiannual compounding, what is the price of the bonds?
To calculate the price of the zero coupon bond with a par value of $10,000, a YTM of 5.73%, and semiannual compounding for a 23-year maturity, the present value formula yields a bond price of $2,030.88.
Explanation:To calculate the price of a zero coupon bond, we need to discount the par value of the bond to the present using the yield to maturity (YTM). The formula to find the present value (PV) of a zero coupon bond is PV = F / (1 + r/n)^(n*t), where F is the par value of the bond, r is the YTM, n is the number of times interest is compounded per year, and t is the number of years until maturity.
Given the par value (F) of $10,000, a YTM (r) of 5.73%, semiannual compounding (n = 2), and a maturity of 23 years (t = 23), the calculation is as follows:
PV = $10,000 / (1 + 0.0573/2)^(2*23)
PV = $10,000 / (1.02865)^(46)
PV = $10,000 / (4.9244)
PV = $2,030.88
The price of the bond is $2,030.88 when assuming semiannual compounding at a YTM of 5.73 percent for a 23-year maturity.
The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $56 million on a large-scale, integrated plant that will provide an expected cash flow stream of $9 million per year for 20 years. Plan B calls for the expenditure of $12 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $3.8 million per year for 20 years. The firm's cost of capital is 11%.
Calculate each project's NPV. Round your answers to the nearest dollar.
Calculate each project's IRR. Round your answers to two decimal places.
Set up a Project
Δ
by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant.
Year 0
Years 1-20
What is the NPV for this Project
Δ
? Round your answer to the nearest dollar.
What is the IRR for this Project
Δ
? Round your answer to two decimal places.
Answer:
NPV of Plan A: $15,669,953.
NPV of Plan B: $18.260,647.
For the Plan A, the IRR is r=0.15.
For the Plan B, the IRR is r=0.32.
Explanation:
We have two expansion plans:
Plan A:
- Expenditure: -$56 million
- Cash flow: $9 million/year
- Duration: 20 years
Plan B:
- Expenditure: -$12 million
- Cash flow: $3.8 million/year
- Duration: 20 years
The NPV of plan A can be expressed as:
[tex]NPV_A=-I_0+\sum_{k=1}^{20} (CF_k)(1+i)^{-k}\\\\NPV_A=-I_0+(CF)[\frac{1-(1+i)^{-20}}{i}] \\\\NPV_A=-56+9*[\frac{1-(1.11)^{-20}}{0.11}]=-56+9*\frac{0.876}{0.11}=-56+9*7.963328117 \\\\NPV_A=-56+71.66995306= 15.669953[/tex]
NPV of Plan A: $15,669,953.
The NPV of plan B can be expressed as:
[tex]NPV_B=-I_0+\sum_{k=1}^{20} (CF_k)(1+i)^{-k}\\\\NPV_B=-I_0+(CF)[\frac{1-(1+i)^{-20}}{i}] \\\\NPV_B=-12+3.8*[\frac{1-(1.11)^{-20}}{0.11}]=-12+3.8*\frac{0.876}{0.11}=-12+3.8*7.963328117\\\\NPV_B=-12+30.26064685=18.260647[/tex]
NPV of Plan B: $18.260,647.
To calculate the IRR, we have to clear the discount rate for NPV=0. We can not solve this analitically, but we can do it by iteration (guessing) or by graphing different NPV, with the discount rate as the independent variable.
For the Plan A, the IRR is r=0.15.
For the Plan B, the IRR is r=0.32.
Which of the following organizations is a discrete manufacturer? a. A pharmaceutical company in Arizona that manufactures skin creams b. A detergent and soap manufacturing company in Mexico City c. A glass manufacturing company in Canada that manufactures windshields for buses d. A plane turbine manufacturing company in South Africa
Answer: is Option D. A plane turbine manufacturing company in South Africa
Explanation:
Discrete manufacturing is the production of distinguishable items that can be decayed back into their basic parts. For example: Automobiles, airplanes, furniture, and toys are the examples of discrete manufacturing products.
For industrial purpose the discrete manufacturing contains production of consumer electronics, appliances, computer and related accessories, as well as many other household items. Production of cars and airplanes also falls under discrete manufacturing products. Discrete manufacturing companies manufactures physical items that go straight to the consumers and businesses.
Kent and Craig, who want to start a horse-training business, spoke to an insurance agent about getting insurance to cover potential liabilities, but were told that they could not get liability insurance because of the high risk nature their proposed business. What business entities would you recommend to Kent and Craig? Why?
Dave and Cindy, who want to start a law firm, each have $1,000 to invest in the business and no personal assets and want limited liability protection and only 1 level of taxation.They want your advice on whether they should form their law firm as: 1) a general partnership; or 2) a limited liability company (LLC). What business entity would you recommend? Why?
Answer:
Solution: the answer in delivered in 2 stages because of the character of dualistic problems:-
Part (1)
As Kent and Craig are concerned during a professional with prospective risk and that they wish to hide their prospective accountability. the character of the industry which can be utmost applicable in corporate against the other variety of industry like individual merchant or partnership company because of the subsequent details:-
Reason I: Unrestricted accountability- just in case of insolvency or industry letdown, Kent and Craig don't seem to be obligated to trade their particular resources.
Reason II: convenience of Business- because of the Supply of additional investment compared to restricted investment in sole profession and partnership company, they're ready to manage with the qualms related to the industry.
Part (2)
Wanting to the purposes of Dave and Cindy, the indebtedness corporation is desirable because of the subsequent details:-
Reason I: No danger to non-public assets because the corporation is proscribed accountability.
Reason II: just one level of tax within the variety of company tax .
Ward and June are in the 32% tax bracket. A bond of Dell Computer Corporation with a face value of $10,000 is included in their assets. The bond pays $1,000 interest annually. Ward and June gift the bond to their son, Wally (age 19), on January 1, 2019. Wally is in the 12% tax bracket. The 2019 net tax savings for the family unit of Ward, June, and Wally related to the transfer of the bond is:
Answer:
at least $200
Explanation:
Currently Ward and June are paying $1,000 x 32% = $320 in taxes for interest yielded Dell's bond.
Assuming Wally (their son) is actually making more than $12,200 per year (standard deduction), then he would pay only $1,000 x 12% = $120 in taxes for the same bond.
Since the gift's value ($10,000) is below the gift tax threshold ($15,000) they will not pay any additional taxes.
So their net savings are at least $320 - $120 = $200, and could be higher, up to $320 depending on Wally's gross income.
By gifting the bond to Wally, the family reduces its overall tax liability by this amount, which represents a significant tax advantage. This strategy allows for income shifting from the higher tax bracket of Ward and June to the lower tax bracket of Wally, resulting in overall tax savings for the family.
The 2019 net tax savings for the family unit of Ward, June, and Wally related to the transfer of the bond can be calculated by considering the tax implications for each family member.
Ward and June (Gift Givers):
Ward and June are in the 32% tax bracket, which means they would have to pay 32% tax on the $1,000 interest income generated by the bond if they kept it.If they gift the bond to Wally, they no longer have to report the interest income on their tax return. This results in tax savings of $1,000 * 32% = $320 for each of them.So, the total tax savings for Ward and June is $320 + $320 = $640.Wally (Recipient):
Wally is in the 12% tax bracket. If he receives the bond as a gift, he will be responsible for reporting and paying taxes on the $1,000 interest income at a 12% rate.His tax liability on this income is $1,000 * 12% = $120.Now, let's calculate the net tax savings for the family unit:
Tax savings for Ward and June: $640Tax liability for Wally: -$120To find the net tax savings, we subtract Wally's tax liability from Ward and June's tax savings:
$640 - $120 = $520Therefore, the 2019 net tax savings for the family unit of Ward, June, and Wally related to the transfer of the bond is $520.
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Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pillowcases, using 27,300 yards of fabric costing $3.05 per yard and incurring direct labor costs of $17,278 for 3,260 hours of direct labor. The standard cost per pillowcase assumes 1.75 yards of fabric at $3.10 per yard, and 0.20 hours of direct labor at $5.95 per hour. a. Compute both the price variance and quantity variance relating to direct materials used in the manufacture of pillowcases in May. b. Compute both the rate variance and efficiency variance for direct labor costs incurred in manufacturing pillowcases in May.
Answer:
direct materials price variance = 1.365 Favourable
direct materials quantity variance =3,255 Adverse
direct labor rate variance = 2,119 Adverse
direct labor efficiency variance = 4,973 Adverse
Explanation:
direct materials price variance = Aq×Ap -Aq×Sp
=(27,300×$3.05)-(27,300×$3.10)
= 1.365 Favourable
direct materials quantity variance = Aq×Sp-Sq×Sp
= (27,300×$3.10)-(26,250×$3.10)
=3,255 Adverse
direct labor rate variance = Aq×Ap -Aq×Sp
=(3,260×$5.95)-(3,260×$5.30)
= 2,119 Adverse
direct labor efficiency variance = Aq×Sp-Sq×Sp
= (3,260×$3.95)-(3,000×$5.95)
= 4,973 Adverse
Ivanhoe's Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Ivanhoe received orders for 4,000 Valentine’s Day banners and 1,300 Easter kites. Because several sewing machines are in the shop for repairs, Ivanhoe has only 1,200 sewing machine hours available for production of these orders. Each Valentine’s Day banner sells for $11. The banners take one hour to sew and have a total variable cost of $9 per banner. The Easter kites sell for $15. They take 15 minutes to sew and have a total variable cost of $14. (a) With only 1,200 sewing machine hours available, how many units should Ivanhoe produce for the below items?
Answer:
1300 Easter kites and 875 Valentine's banners
Explanation:
Contribution per unit of Valentines day banner=11-9 =$2
Hours required for a unit of Valentines day banner = 1 hour
Contribution per unit of Easter kites = 15 -14 = $1
Hours required to sew Easter kite = 0.25
Contribution per hour for Easter Kite = 1*4 = $4
To maximize profit , Ivanhoe should produce
1300 Easter Kite.
Hours required for 1300 Easter Kite = 1300*.25=325 hours
The he can used the remaining hours (1200-325= 875) to produce 875 Valentines day banner
Over all contribution = (325 * 4) + (875*2)= 1300+1750=3050.
This is better than using all the available hours to produce 1200 Valentine's days banners and have an overall contribution =f 1200*2 = $2,400
Final answer:
Ivanhoe's Wind Toys should produce 1,200 Valentine's Day banners to maximize profit within the limit of 1,200 sewing machine hours, resulting in $2 contribution margin per unit. No Easter kites will be produced as they offer lower contribution margin and the available hours would be entirely used for banner production.
Explanation:
Ivanhoe's Wind Toys must decide how many Valentine's Day banners and Easter kites to produce within the constraint of 1,200 sewing machine hours available for production. To calculate the optimal production mix, let's consider the contribution margin per unit for each product, which is the sale price minus the variable cost per unit.
For Valentine's Day banners:
Selling price: $11Variable cost: $9Contribution margin per banner: $11 - $9 = $2 per bannerSewing time: 1 hour per bannerFor Easter kites:
Selling price: $15Variable cost: $14Contribution margin per kite: $15 - $14 = $1 per kiteSewing time: 0.25 hours (15 minutes) per kiteGiven the higher contribution margin for banners, Ivanhoe should maximize the production of banners. With 1,200 hours, all hours can be dedicated to producing banners, yielding:
1,200 hours × 1 banner/hour = 1,200 banners.
No hours would remain to produce any kites, making the production number for kites 0 Easter kites.
It's important to note that Ivanhoe will not meet the entire demand for banners and will not start the production of kites due to amount of sewing time required and the contribution margin comparison. If other considerations such as fulfilling a minimum quantity of orders for kites or customer satisfaction over meeting demand for the Easter season are significant, Ivanhoe may need to adjust this straightforward profit-maximizing decision.
Quill Manufacturing Business makes two models of marking pens. The requirements for each lot of pens in the three manufacturing departments are given below. All three departments are necessary in the production of both types of pens. The profit for both types of pen is $1000 per lot. What is the optimal production quantity for the Tiptop model pen?
Fliptop Model Tiptop Model Available production hours
Ink Assembly 3 4 36
Molding Time 5 4 40
Plastic 5 2 30
Answer:
Optimal production quantity for the Tiptop model pen is 7.5 lot
Explanation:
Say, X and Y is the is the fliptop and tiptop quantity respectively, then
Profit = 1000*(X + Y)
Objective function: Maximize 1000*(X+Y) subject to;
Eq:1 3X+4Y=< 36
Eq:2 5X+4Y=< 40
Eq:3 5X+2Y=< 30
Using Excel Solver, we get:
Optimal production quantity for the Tiptop model pen is 7.5 lot
The optimal production quantity for the Tiptop model pen is 9 lots.
Explanation:To find the optimal production quantity for the Tiptop model pen, we need to determine how many lots of pens can be produced given the constraints of the available production hours in each department. We can start by calculating the maximum number of lots that can be produced based on the available production hours in each department.
In the Ink Assembly department, the Tiptop model pen requires 4 hours per lot. With 36 available production hours, the maximum number of lots that can be produced is 36 / 4 = 9 lots.In the Molding Time department, the Tiptop model pen requires 4 hours per lot. With 40 available production hours, the maximum number of lots that can be produced is 40 / 4 = 10 lots.In the Plastic department, the Tiptop model pen requires 2 hours per lot. With 30 available production hours, the maximum number of lots that can be produced is 30 / 2 = 15 lots.The maximum number of lots that can be produced in the Tiptop model pen is 9 lots, as it is limited by the Ink Assembly department. Therefore, the optimal production quantity for the Tiptop model pen is 9 lots.
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At the end of the current year, Accounts Receivable has a balance of $590,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,660,000. Bad debt expense is estimated at 1/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable.
Answer and Explanation:
a. The computation of uncollectible accounts and Journal entry is shown below:-
Bad Debt expenses Dr, $6,650
($2,660,000 × 1 ÷ 4× 1%)
To Allowance for doubtful accounts $6,650
(Being uncollectible accounts is recorded)
b. The computation of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense is shown below:-
Accounts receivable = $590,000
Allowance for Doubtful Accounts = (Sales of the year × 1 ÷ 4 × 1%) - Credit balance
= ($2,660,000 × 1 ÷ 4 × 1%) - $5,500
= $6,650 - $5,500
= $1,150
Bad debt expenses = Sales of the year × 1 ÷ 4 × 1%
= $2,660,000 × 1 ÷ 4 × 1%
= $6,650
c. The computation of net realizable value of accounts receivable is shown below:-
Net realizable value = Accounts receivable - Allowance for Doubtful Accounts
= $590,000 - $1,150
= $588,850
Hilary had an outside basis in LTL General Partnership of $15,000 at the beginning of the year. LTL reported the following items on Hilary's K-1 for the year: ordinary business income of $10,000, a $15,000 reduction in Hilary's share of partnership debt, a cash distribution of $25,000, and tax-exempt income of $8,000. What is Hilary's adjusted basis at the end of the year
Answer:
$0
Explanation:
$15,000 (Hillary's partnership basis at the beginning of the year) + $10,000 (ordinary business income) + $8,000 (tax exempt income) - $15,000 (reduction in share of partnership's debt) - $25,000 (cash distribution) = -$7,000. Since the basis cannot be negative, it is $0.
Also, since Hillary's adjusted basis resulted in a negative value, she must report a capital gain of $7,000. That way her basis = -$7,000 + $7,000 = $0
Answer:
$7,000 Gain and $0 Adjusted basis
Explanation:
Hilary adjusted basis is calculation below.
Hilary outside basis in LTL General Partnership of $15,000
Add:Ordinary business income $10,000
Tax-exempt income $8,000
Less: reduction in Hilary's share of partnership debt $15,000
Cash distribution of $25,000
Adjusted basis loss $7,000
Hence;
= ( $ 7,000 ) + $ 7,000 ( gain )
= $ 0
Therefore Hilary's adjusted basis at the end of the year will be adjusted basis of $ 0 because
Hilary's basis increased by her share of ordinary business income and tax exempt income and then decreased by her actual cash distribution as well as her deemed cash distribution from the reduction in her share of debt which makes her actual and deemed cash distribution exceed her basis which is Hilary must report $ 7,000 of capital gain leaving her with a $0 basis in her partnership interest.
What can be done to soften unexpected bad news? It can be followed by reasons for the bad news. It can be written using "you" language. It can be implied, allowing the receiver to guess at the bad news. It can be placed later in the message. It can be apologized for.
Answer:
The correct answer is letter "D": It can be placed later in the message.
Explanation:
The indirect method of writing messages involves first giving details of the speech and ending with the conclusion of the matter. This is achieved by using passive voice and subordinate phrases. This strategy is more often used while providing bad news to give the audience the reasons why the bad news is taking place. Otherwise, if it is given at the start of the message, it is more likely that people will be discouraged from seeking information on the reasons for the bad news.
Caroline has several options for how to spend her Saturday night, listed in order of descending preference: 1. Go to a folk music concert with a friend. 2. Get dinner with several of her sorority sisters. 3. Go shopping with her mom. Caroline can only do one activity. Match each activity (on the left) with its opportunity cost (on the right).
Answer:
Please go through the explanation and then the attached fine for the answer.
Explanation:
Opportunity cost is defined as what you have to sacrifice to get something. It is the lose of other alternatives when one alternative is chosen.
For further insight to the answer please go through the attached file.
The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a laptop computer and phone. The fixed cost to launch this new product is $900,000. The variable cost, which includes material, labor, and shipping costs, is uncertain. The Normal Probability Distribution with an average of $200 and a standard deviation of $12 is assumed to be a good description of the variable cost. The demand for the product is expected to be between 20,000 units and 30,000 units (Integer Uniform Distribution). The product will sell for $250 per unit.
Required:
A) Develop a what-if spreadsheet model computing profit for this product in the base case, worst-case, and best-case scenarios.
Best-case profit: $ ________
Worst-case profit: $ _______
Base case profit: $ ________
Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2018. Power Drive has the following transactions affecting stockholders' equity in 2018. March 1 Issues 59,000 additional shares of $1 par value common stock for $56 per share. May 10 Purchases 5,400 shares of treasury stock for $59 per share. June 1 Declares a cash dividend of $1.70 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Reissues 2,700 shares of treasury stock purchased on May 10 for $64 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)
Solution:
Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2012:
Common Stock, $100,000;
Additional Paid-in Capital - common stock $4,830,000;
Retained Earnings, $2,520,000.
March 1 Issues 55,500 additional shares of $1 par value common stock for $67 per share.
Dr Cash 3,718,500
Cr Common stock 55,500
Cr Paid-in Capital 3,663,000
At this point there are 175,500 common shares outstanding
May 10 Repurchases 11,000 shares of treasury stock for $89 per share.
Dr Treasury stock 979,000
Cr Cash 979,000
At this point there are 164,500 common shares outstanding
June 1 Declares a cash dividend of $1.50 per share to all stockholders of record on June 15.
Dr Cash dividend 246,750 (164,500 x $1.50)
Cr Dividend payable 246,750
July 1 Pays the cash dividend declared on June 1.
Dr Dividend payable 246,750
Cr CAsh 246,750
October 21 Reissues 3,000 shares of treasury stock purchased on May 10 for $95 per share.
Dr Cash 285,000
Cr Treasury stock 267,000 (3,000 x cost of $89)
Cr Additional paid-in capital - treasury stock 18,000
At this point there are 167,500 common shares outstanding Stockholders' equity
Common stock - 175,500 shares of $1 par issued, 167,500 outstanding $175,500
Additional paid-in capital - common stock $8,493,000
Additional paid-in capital - treasury stock $18,000
retained earnings $2,803,250
less Treasury stock (8,000 shares) $712,000
Stockholders' equity $10,777,750
Answer:
The first stage in the accounting cycle is to make a journal entry. A sort of securities, common stock is a form of company or firm equity ownership.
Explanation:
The journal entries of Power Drive Corporation have been recorded from March 1 to October 21. The snipshot of the journal entries of the Power Drive corporation is attached below:
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University Car Wash built a deluxe car wash across the street from campus. The new machines cost $213,000 including installation. The company estimates that the equipment will have a residual value of $19,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows:
Year Hours Used
1 3,000
2 1,200
3 1,300
4 2,700
5 2,500
6 1,800
2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.)
Depreciation Accumulated Depreciation Book Value
3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.)
Same criteria as above
Answer:
Please refer explanation and tables attached
Explanation:
1. Double-declining balance Method:
This is where the asset's value is depreciated at twice the rate than the straight line method. The depreciation amounts would be higher in the early years of the asset's life and gradually reduce towards the end. Hence, it does not mean that the depreciation amount would be higher than the straight line basis.
Straight Line depreciation per year = 1/6* x 100 = 16.67%
*as it is useful for six years
Hence double-depreciation value = 16.67% x 2 = 33.34%
It is calculated as depreciation rate x book value of asset at the beginning of the period.
Please refer attached table one for all years depreciation.
2. Activity based depreciation is whereby an asset is depreciated based on the asset’s activity such as the number of hours worked or the number of units produced, during a particular period of time. Activity based depreciation per year is calculated as:
[(Cost - Salvage value) x activity performed during the period] / Total estimated life activity of the asset
Please refer attached table two for all years depreciation.
To prepare a depreciation schedule for six years using the double-declining-balance method, calculate the straight-line depreciation rate, the double-declining-balance depreciation rate, depreciation expense, accumulated depreciation, and book value for each year. To prepare a depreciation schedule using the activity-based method, calculate the depreciation rate, depreciation expense, accumulated depreciation, and book value.
Explanation:Double-declining-balance method:
Calculate the straight-line depreciation rate: (Cost - Residual Value) / Useful Life in hours => (213,000 - 19,500) / 12,500 = 15.76 per hourCalculate the double-declining-balance depreciation rate: 2 * straight-line depreciation rate => 2 * 15.76 = 31.52 per hourCalculate depreciation expense for each year: hours used * double-declining-balance depreciation rateCalculate accumulated depreciation for each yearCalculate book value for each year: Cost - accumulated depreciationActivity-based method:
Calculate the depreciation rate: (Cost - Residual Value) / Total hours of expected use => (213,000 - 19,500) / 12,500 = 15.08 per hourCalculate the depreciation expense for each year: hours used * depreciation rateCalculate accumulated depreciation for each yearCalculate book value for each year: Cost - accumulated depreciationLearn more about the Depreciation Schedule here:https://brainly.com/question/33760311
Which one of the following is NOT a reason why logistics management is important?A. Customers are less demanding of quick delivery and mass customization.B. It is an integral part of the company strategy.C. Logistics adds additional values to the products.D. Logistics costs account for a high percent of sales.
Answer:
The correct answer is letter "A": Customers are less demanding of quick delivery and mass customization.
Explanation:
Logistics management refers to the administration of each of the processes involved in the supply chain of a company. Logistic management aims to monitor the efficient inflow and outflow of inventory of the manufacturing plant, being in charge of providing a system that allows having raw materials on time, enough workforce for production and a delivery system that sends the end-goods on time to distributors and retailers. Effective logistic management techniques help businesses to generate more revenue.
Therefore, it is less likely to implement logistics management if consumers would take any product that is offered to them with minimum to no customization.
Suppose that call options on ExxonMobil stock with time to expiration 3 months and strike price $104 are selling at an implied volatility of 28%. ExxonMobil stock currently is $104 per share, and the risk-free rate is 6%. If you believe the true volatility of the stock is 30%. a. If you believe the true volatility of the stock is 30%, would you want to buy or sell call options? Buy call options Sell call options b. Now you need to hedge your option position against changes in the stock price. How many shares of stock will you hold for each option contract purchased or sold? (Round your answer to 4 decimal places.)
Final answer:
Buy call options if you believe the true volatility is higher than the implied volatility, and to hedge your position, hold a number of shares equal to the Delta of the option for each contract purchased.
Explanation:
If the implied volatility of ExxonMobil stock call options is 28% and you believe the true volatility is 30%, you would want to buy call options. This is because options with a higher volatility are undervalued; hence, if the stock's volatility increases to the true volatility that you expect, the price of the options will rise, leading to a potential profit.
To hedge your option position, you would use the Delta of the option, which measures the rate of change of the option price with respect to the price of the underlying asset. The Delta can be found using option pricing models like the Black-Scholes model. You would hold a fraction of a share for each option contract equivalent to the Delta to be Delta-neutral. For example, if the Delta was 0.5000, you would hold 0.5000 shares for each call option purchased to maintain a hedged position.
Brief Exercise 11-8 Calculate net cash flows from investing activities (LO11-4) Creative Sound Systems sold investments, land, and its own common stock for $40 million, $16 million, and $42 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $22 million, $26 million, and $13 million, respectively. What amount should the company report as net cash flows from investing activities?
Answer: $17,000,000
Explanation:
Investing Activities in the Cash Flow Statement refers to any cash inflows or outflow that is related to investments as well as the fixed assets and securities of other companies and patents.
In the above question the following are considered investment activities,
Sale of investment and Land
Purchase of Equipment and Patents.
Net Cash = ( Cash Inflows) - (Cash Outflows)
Net Cash = ( 40 million (investment sale) + 16 million ( land sale) ) - ( 26 million (equipment purchase) + 13 million (patent purchase) )
Net Cash = 56,000,000 - 39,000,000
Net Cash = $17,000,000
Net cash flows from investing activities is $17,000,000
Suppose Keyboard estimates it will use 125 comma 000 comma 000 parts per month and ship products with a total volume of 27 comma 500 comma 000 cubic feet per month. Assume that each desktop computer requires 175 parts and has a volume of 9 cubic feet. What are the predetermined overhead allocation rates
Answer:
a)
Kitting: $0.072 per part and Boxing: $0.764 per cubic feet
b)
Kitting: $12.6 and Boxing: $6.9
Explanation:
Given that Keyboard spends $9,000,000 per month on kitting and $21,000,000 per month on boxing.
Keyboard estimates it will use 125,000,000 parts per month and ship products with a total volume of 27,500,000 cubic feet per month.
a) Since Kitting costs based on the number of parts used in the computer:
The predetermined overhead allocation rate for kitting = Money spent on kitting / number of parts used per month = $9000000 / 125000000 = $0.072 per part
Since Boxing costs based on the cubic feet of space the computer required:
The predetermined overhead allocation rate for Boxing = Money spent on Boxing / total = $21000000 / 27500000 = $0.764 per cubic feet.
a) each desktop computer requires 175 parts and has a volume of 9 cubic feet
For kitting, Activity cost per desktop = Predetermined overhead allocation rate x quantity per desktop = $0.072 × 175 = $12.6
For Boxing, Activity cost per desktop = Predetermined overhead allocation rate x quantity per desktop = $0.764 × 9 = $6.9
As of December 31, 2020, Gill Co. reported accounts receivable of $230,000 and an allowance for uncollectible accounts of $9,000. During 2021, accounts receivable increased by $22,400, (that change includes $7,300 of bad debts that were written off). An analysis of Gill Co.'s December 31, 2021, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2021 would be:
Answer:
$3,348
Explanation:
At the year end
Account Receivable Balance = $230,000 + $22,400 = $252,400
Allowance for uncollectible accounts = $9,000 - $7,300 = $1,700
Bad debt Expense will be calculated using the percentage of debt loss. The expense will be calculated using the account receivable balance.
Closing Value of the Allowance for Doubtful Accounts will be as follow
Closing Balance = $252,400 x 2% = $5,048
As Allowance for Doubtful Accounts already have credit balance of $1,700, we need to adjust the remainder to make the closing balance of Allowance for Doubtful Accounts $5,048 at the year end.
Adjustment Value = $5,048 - $1,700 = $3,348
Johann, a well-known musician, agrees to give ten guitar lessons to Elton for $2,000. Nothing in the contract itself prohibits a delegation. If Johann delegates his obligation to Eugene, a second-year musical student and enthusiastic guitar player, then the delegation will probably be ___________.
A. permitted because contracts may be freely delegated.
B. permitted because the contract is just for music lessons.
C. prohibited because the contract is for service from a specific person.
D. prohibited by the UCC because this is a sale of services.
Answer:
The correct answer is (b)permitted because the contract is just for music lessons.
Explanation:
Recall that,
Johann, a well known musician agrees to give out ten lessons of guitar to Elton for an amount of $ 2000. this contract forbids delegation.
Since Johann delegates his obligation to Eugene who is a second year student in music, then his delegation is only allowed because the contract is to take music lessons and nothing more.
Boulder, Inc., obtained 90 percent of Rock Corporation on January 1, 2016. Annual amortization of $24,300 is applicable on the allocations of Rock's acquisition-date business fair value. On January 1, 2017, Rock acquired 75 percent of Stone Company's voting stock. Excess business fair-value amortization on this second acquisition amounted to $11,000 per year. For 2018, each of the three companies reported the following information accumulated by its separate accounting system. Separate operating income figures do not include any investment or dividend income. Separate Operating Income Dividends Declared Boulder $336,500 $124,000 Rock 116,500 30,000 Stone 180,000 41,000 What is consolidated net income for 2018?
Answer: $597,700
Explanation:
To find the Consolidated Net Income, one must sum up all the Separate Operating Incomes and then account for Amortization expense by deducting it.
In this scenario it will look like this,
= Operating Income of Boulder Inc + Operating Income of Rock Corporation + Operating Income of Stone Company - Amortization expense (Boulder's investment in Rock Corporation) - Amortization Expense (Rock's investment in Stone Company)
= 336,500 + 116,500 + 180,000 - 24,300 - 11,000
= $597,700
The Consolidated Net Income for the year 2018 was $597,700.
Answer:
A. Consolidated net income $597,700
B.Noncontrolling interest in Stone's income $42,250
Noncontrolling interest in Rock's net income $21,895
Total net income attributable to noncontrolling interests $64,145
Reconciliation:
Controlling interest in consolidated net income$533,555
Net income attributable to noncontrolling interest $64,145
Consolidated net income$597,700
Explanation:
a.
Boulder's operating income$336,500
Rock's operating income $116,500
Stone's operating income $180,000
Amortization expense–Boulder's investment in Rock( $24,300)
Amortization expense–Rock's investment in Stone($11,000)
Consolidated net income $597,700
b.Stone's operating income$180,000
Amortization expense (on Rock's investment) (11,000)
Stone's accrual-based net income$169,000
Outside ownership 25%
Noncontrolling interest in Stone's income $42,250
Rock's operating income $116,500
Amortization expense (on Boulder's investment) ($24,300)
Equity accrual from ownership of Stone ($169,000 × 75%) $126,750
Rock's accrual-based net income$218,950
Outside ownership 10%
Noncontrolling interest in Rock's net income $21,895
Total net income attributable to noncontrolling interests $64,145
($42,250+ $21,895 )
Reconciliation:
Boulder’s operating income $336,500
Boulder’s share of Rock’s operating income (90% × $116,500) $104,850
Boulder’s share of Stone’s operating income (90% × 75% × $180,000)$121,500
Boulder’s share of Rock’s excess amortization (90% × $24,300) ($21,870)
Boulder’s share of Stone’s excess amortization (90% × 75% × $11,000)($7,425)
Controlling interest in consolidated net income$533,555
Net income attributable to noncontrolling interest $64,145
Consolidated net income$597,700
Tom Klem is the controller of Watson Manufacturing, Inc. He estimates that the company’s breakeven point in sales dollars is $2 million. However, he recently told all of the regional sales managers that sales of $3 million were needed to break even. He also told them that if the company failed to break even, the sales force would be reduced in size by 40 percent. Klem believes that his tactics will motivate the sales force to generate record profits for the upcoming year. Is his approach to motivating employees ethical
Answer: NO. His approach to motivating employees is NOT ETHICAL.
Ethical is relating to the accepted principles of right and wrong, especially those of some organization or profession.
In any Organisation or morally, lying is wrong. Being ethical means conforming to accepted moral standards. Morally, lying is wrong. That's exactly what Tom Klem has done here.
Robert Gillman, an equity research analyst at Gillman Advisors, believes in efficient markets. He has been following the mining industry for the past 10 years and needs to determine the constant growth rate that he should use while valuing Pan Asia Mining Co. Robert has the following information available: • Pan Asia Mining Co.’s stock (Ticker: PAMC) is trading at $15.00. • The company’s stock is expected to pay a year-end dividend of $0.72 that is expected to grow at a certain rate. • The stock’s expected rate of return is 7.20%. Based on the information just given, what will be Robert’s forecast of PAMC’s growth rate?
Answer:
Growth rate 2.4%
Explanation:
MV=D1/(Ke-g)
Where MV=share market value=$15
D1=Dividend at year end=$.72
Ke=stock's expected rate of return=7.2%
By putting above values in formula, we get;
MV=D1/(Ke-g)
15=.72/(7.2%-g)
15*7.2%-15g=.72
1.08-15g=.72
.72-1.08=-15g
g= -.36/-15
g=2.4%
Answer:
Growth rate = g = 7.152%
Explanation:
To calculate the Robert forecast of the PAMC's growth rate in the question, we are give the following values
Share market value(MV)=$15
The stock's expected rate of return(Ke)=7.2%
Dividend at end of the year (D)=$0.72
Using the this formula, we can find the growth rate by making g the subject of formula in this formula
MV=D1/(Ke-g)
Substituting the values we have
15 = 0.72/(7.2-g)
15(7.2-g) = 0.72
108 - 15g = 0.72
Rearranging and collecting like terms, we have
108 - 0.72 = 15g
107.28 = 15g
Making g the subject of formula by dividing both sides by 15 we have
g= 7.152%
1. Pane Corp. manufactures and sells a nutrition drink for children. It wants to develop a standard cost per gallon. The following are required for production of one gallon: Ingredient Lime Kool-Drink Sugar Protein Tablets Water Amount per Gallon 24.0 oz. .72 lb. 2 50 oz. Standard Waste 4% 10% 0% 0% Standard Price $0.15 per oz $0.65 per lb $0.40 per tablet $0.01 per oz Compute the standard usage (quantity) and standard cost of the ingredients for one gallon of the nutrition drink.
Final answer:
The standard cost for one gallon of Pane Corp.'s nutrition drink is calculated by adjusting each ingredient's required amount for standard waste, then multiplying by the standard price, resulting in a total cost of $5.57.
Explanation:
To calculate the standard cost for one gallon of the nutrition drink, we need to determine the standard usage (quantity) of each ingredient that accounts for the standard waste and then compute the cost by multiplying this adjusted quantity by the standard price.
For Lime Kool-Drink: The amount required is 24.0 oz with a 4% waste, thus the standard usage is 24.0 oz / (1 - 0.04) = 25 oz. Multiplying the standard usage by the standard price gives us $0.15 per oz × 25 oz = $3.75.
For Sugar: The amount needed is 0.72 lb with a 10% waste, so the standard usage is 0.72 lb / (1 - 0.10) = 0.8 lb. Therefore, the cost is $0.65 per lb × 0.8 lb = $0.52.
For Protein Tablets: No waste is considered, hence the standard usage is 2 tablets. The cost is $0.40 per tablet × 2 tablets = $0.80.
For Water: The quantity required is 50 oz with no waste, hence the standard usage remains 50 oz. The cost is $0.01 per oz × 50 oz = $0.50.
Adding up the cost of each ingredient, we get the total standard cost for one gallon of the nutrition drink which is $3.75 + $0.52 + $0.80 + $0.50 = $5.57.