(a) Compare the EUAC for the following plans using a MARR of 8%, and an analysis period of 50 years..

(b)What assumptions were made that should be considered before deciding between Plans A and B?

Data Plan A Plan B Equipment First Cost $50,000 $75,000 Annual Operation & Maintenance Cost $3,000 $2,500 Salvage Value $10,000 $0 Service Life, Years) 25 50

Answer:

Interest Expense $39,600

Cash Flow from Operating Activities $39,600

Explanation:

Payment of Interest Expense is the cash expense paid during the year which is deducted from the operating profit in the calculation of net income which is used to determine the cash flow from operating activities.

Interest on the Bond = $660,000 x 6% = $39,600

At the time of payment Journal Entry will be as follow

Dr. Interest Expense   $39,600

Cr. Cash                       $39,600

As the cash is paid against the operating activities.

Final answer:

The statement given in the question is False. While it is true that saving money early in life and utilizing the power of compound interest can lead to significant accumulation over time, the difference in starting age between Beth and Bill outweighs the difference in the length of time they save.

Explanation:

The statement given in the question is False. While it is true that saving money early in life and utilizing the power of compound interest can lead to significant accumulation over time, the difference in starting age between Beth and Bill outweighs the difference in the length of time they save.

If Beth saves $2,500 a year from age 25 to age 34 at an annual interest rate of 5%, her savings will accumulate to:

$2,500 × (1 + 0.05)⁹ = $2,500 × 1.638 = $4,095

On the other hand, if Bill saves $2,500 a year from age 35 to age 65 at the same interest rate, his savings will accumulate to:

$2,500 × (1 + 0.05)³⁰ = $2,500 × 4.3219 = $10,805

Therefore, Bill will have accumulated significantly more than Beth at age 65. So, the statement is False.

Answer:

The answer is to minimize the reodering cost

Explanation:

We have three motives for holding inventory

1. Transaction motives of holding inventory This is to enable day to day transaction running of inventories.

2. Precautionary motives of holding inventory: Holding inventory to guard against unforeseen circumstances or to meet emergencies. For example, unexpected increase in demand.

3. Speculative motives of holding inventory. This is the holding of inventory in order to take advantage of any potential Investments. For example, to hedge against risk, take advantage of discounts.

All the options EXCEPT 'to minimize reodering cost' option are the reasons holding inventories.

Answer and Explanation:

The journal entries are shown below:

1. Salaries and Wages Expense $65,400

  To  Wages Payable $49,156

  To Federal Withholding Payable $7,664

  To FICA Payable $5,003

  To State Withholding Payable $3,168

  To Union Dues Payable $409

(Being the salaries and wages expense and salaries and wages payable is recorded)

2.

Payroll Tax Expense $5,718

         To FICA Payable $5,003

          To State Unemployment Payable $715

(Being the payroll expense is recorded)

Answer:

The new required rate of return is 14.41%

Explanation:

The required rate of return (r) is the minimum return that investors require to invest in a company's stock. The required rate of return can be calculated using the CAPM approach. The formula for required rate of return  (r) is,

r = rRF + Beta * rpM

Where,

Using the old values, we calculate the beta of stock to be,

0.1175 = 0.055 + Beta * 0.0475

0.1175 - 0.055 = Beta  * 0.0475

0.0625 / 0.0475 = Beta

Beta = 1.3158 rounded off to 1.32

The new risk premium = 4.75% + 2%  =  6.75%

The new required rate of return (r) is,

r = 0.055 + 1.32 * 0.0675

r = 0.1441 or 14.41%

The rounded off figure for beta is used in calculation of new required rate of return so the answer might differ a little if the figure for beta was not rounded off.

To find Mikkelson Corporation's new required rate of return, first calculate the beta using the CAPM formula, then apply the new market risk premium and compute the new rate. The new required rate of return is 14.41%.

To find the company's new required rate of return, we'll use the Capital Asset Pricing Model (CAPM). The CAPM formula is:

CAPM: E(Ri) = Rf + β(E(Rm) – Rf)

First, we'll need to calculate the beta (β) of Mikkelson Corporation.

Step 1: Calculate the Beta (β)

Step 2: Calculate the New Required Rate of Return

To calculate cash sales during 2020, subtract the change in accounts receivable from the revenue.

To calculate cash sales during 2020, we need to consider the change in the Accounts Receivable balance. Cash sales are the portion of revenue that is collected in cash rather than through accounts receivable. We can calculate cash sales by subtracting the change in accounts receivable from the revenue.

Change in Accounts Receivable = Ending Accounts Receivable - Beginning Accounts Receivable
Change in Accounts Receivable = $123.5 million - $95.4 million = $28.1 million

Cash Sales = Revenue - Change in Accounts Receivable
Cash Sales = $121.5 million - $28.1 million = $93.4 million

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Answer and Explanation:

The journal entries are as follows

a. Cash A/c Dr $107,100         (5,100 shares × $21)

    To Common Stock $10,200         (5,100 shares × $2)

    To  Additional Paid-in Capital in excess of par - Common Stock $96,900

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

b.  Cash A/c Dr $26,400         (1,100 shares × $24)

    To Common Stock $2,200        (1,100 shares × $2)

    To  Additional Paid-in Capital in excess of par - Common Stock $24,200

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

It increased the both cash and common stock stock and the additional paid in capital account as well

Answer:

The payback period for even cash flow is 4 years

The payback period for uneven cash flows is 5 years

Explanation:

The payback period is a term used in capital budgeting and is one of the ways of assessing a project. It calculates the time required to recover the total cost invested in the project initially.

Payback period for Even cash flows

Payback period = Number of years till last period + Unrecovered cost at the beginning of the last period for payback / Total cash flows during the last period

The last period here refers to the period in which the cost will be recovered.

The initial cost is $1200000

Recovery till last year of payback = 300000 + 300000 + 300000 = $900000

Payback period = 3 + 300000 / 300000   = 4 years

Payback under uneven cash flows

Initial cost = $1200000

Recovery till last year of payback = 150000 + 150000 + 400000 +400000 = 1100000

Payback period = 4 + 100000 / 100000  =  5 years

Answer:

Buildings = $630,000

Land = $270,000

Explanation:

When a lump purchase price is given on buildings and land, the costs of Building and Land must be determined separately using fair values.

This is because Depreciation on Land and Building is different.

Buildings

Cost = (450,000+250,000)/ 1000,000 × $900,000

        = $630,000

Land

Cost = (300,000)/ 1000,000 × $900,000

        = $270,000

Answer:

1) Identify a wellness speciality - conventional or a claim to fame wellness focus - and its ROI  

2) The capital required and ROI on different areas accessible  

3) Buy versus Lease on supplies  

4) The opposition investigation in the region  

5) demography of the area  

6) promoting methods that are most appropriate to the area - individual or family focused.  

7) Hiring talented staff, and sources for substitution of staff

Answer:

The answer is 9.12%

Explanation:

From the question stated, we calculate for the required return and use it to decide whether you should add the venture capital fund to your portfolio

Now,

For the calculation of  required return

Required return =[(risk free) + (correlation * Volatility venture/Volatility fund) (Expected return - Risk free)]

[ 4.00% + ( 0.20 * 80.00%/ 25.00%) * (12.00% - 4.00%)]

[ 4.00% + (0.20 * 320%) * (8%)]

[4.00% + ( 0.64) * (8%)]

[ 4.00% + 0.0512]

= 0.0912 =9.12

Therefore the required return is = 9.12%

Answer:

$21

Explanation:

As we know that

The inventory should be recorded in the books of accounts by applying the lower value of cost or net realizable value

In the given case

The cost is $23

And, the net realizable value is

= Expected selling price - selling cost

= $36 - $15

= $21

So by comparing the cost and net realizable value, the net realizable value contains the lower value i.e $21 and the same is recorded on the balance sheet for inventory

Answer:

$343.75

Explanation:

The computation of amount of manufacturing overhead is shown below:-

For computing the amount of manufacturing overhead first we need to find out the predetermined overhead rate which is shown below:-

Predetermined overhead rate = Estimated manufacturing overhead costs ÷ Estimated machine hours

= $550,000 ÷ 8,000

= $68.75 per machine hour

Overhead allocated = Predetermined overhead rate × Machine hours

= $68.75 × 5

= $343.75

Answer:

Accept

Explanation:

When the importance of the cost of a project outweighs that of the completion time, such completion date is known as Accepted.

In project management, Scott's completion date would be classified as a constraint. Time, cost, and scope are common project constraints, and in this case, cost takes priority over time, making it the primary constraint.

In the context of project management, which is the scenario for Scott, the completion date he has been given is best classified as a constraint. A project constraint is essentially a factor that can limit the options of the project team and impact the final outcome of the project. Time, cost, and scope are the three most common project constraints, often depicted as a triangle where one side cannot be changed without impacting the others. In Scott's case, the date of completion is flexible to meet cost targets, meaning the cost is the more significant or primary constraint, as stated by the top management.

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Answer:

d. $390 million merits and $110 million merits

Explanation:

The computation of the consumption and the government expenditure is shown below:

As we know that

Budget Surplus = Taxes - government expenditure

$40  = $150 - government expenditure

So, the government expenditure is $110 million

In addition,

Gross domestic product = Consumption + investment + government expenditure + net exports

$600  = Consumption + $100 + $110  + $0

So, the consumption is

= $600  - $100  - $110

= $390 million

We simply applied the above formulas in order to find out the consumption and government expenditure

The consumption in Meditor was $390 million merits, and government expenditures on goods and services were $110 million merits, calculated using national income accounting for a closed economy with given GDP, taxes, investment, and budget surplus figures.

The question is related to the topic of national income accounting, which is a concept within the field of economics. Specifically, it involves calculating the consumption and government expenditures on goods and services for the country of Meditor. To find the answers, we need to understand the following equation that defines Gross Domestic Product (GDP) for a closed economy:

GDP = Consumption (C) + Investment (I) + Government Spending (G) + (Exports (X) - Imports (M))

As Meditor is a closed economy, it does not have exports or imports. Thus, the equation simplifies to:

GDP = C + I + G

We are given that GDP = $600 million merits, Investment (I) = $100 million merits, and we have a budget surplus, which is defined as:

Budget Surplus = Taxes (T) - Government Spending (G)

With Taxes (T) = $150 million merits and the Budget Surplus = $40 million merits, we can find Government Spending (G) as follows:

G = T - Budget Surplus

G = $150 million merits - $40 million merits

G = $110 million merits

Now, to calculate the consumption (C), we use the GDP equation:

C = GDP - I - G

C = $600 million merits - $100 million merits - $110 million merits

C = $390 million merits

So, the consumption in Meditor was $390 million merits, and government expenditures on goods and services were $110 million merits.

Answer:

C) $ 80,000 $ 70,000

Explanation:

R = ($48,000/$120,000) x $200,000

=0.4×$200,000

= $80,000

S = $200,000-$50,000-$80,000

= $70,000

Therefore the sales value at split-off for products R is $80,000 and S $70,000

Answer: Cultural diversity

Explanation:

Cultural diversity this is when a population a group of people with differences are well represented within society or community. These differences include race, age, ethnicity, ability, language, nationality, socioeconomic status, gender, religion, or sexual orientation. The group has a wide range of difference which makes them culturally diverse because a variety of groups are represented. Just like in scenerio in the question the group is well diversed because a wide variety of people or group are represented.

Answer:

Yes, the contract is still valid.

Explanation:

Let us first clarify some terms first.

A contract is referred to as a legally binding agreement that is recognized, known and governs the rights and duties of the parties involved in an agreement. A contract is legally enforceable because it meets the features and approval of the law. An agreement basically involves the exchange of goods, transactions, services, money, or promises. In the case of breach of contract, the law awards the injured party access to legal remedies which include damages and cancellation.

Letter of revocation is an act by which a person having authority, calls back or in other words annuls a power, gift, or benefit, which had been bestowed upon another.

Yes, the contract still holds. This is due to the reason that the letter had a date mentioned on it which is August 4, a day before the contract was accepted even though the revocation letter arrived late.

Therefore, as regards to the date on the letter, the contract is still valid.

Final answer:

A binding contract appears to have been formed between Ernie and Elsie for the sale of Ernie's car because Elsie accepted the offer via email before receiving Ernie's revocation letter. According to the mailbox rule, the acceptance is effective when dispatched, making Elsie's acceptance on August 5 effective and the contract valid.

Explanation:

The situation described involves contractual obligations and whether an agreement has been formed between Ernie and Elsie. Under contract law, an offer can typically be revoked before it has been accepted. In this case, Ernie made an offer to sell his car to Elsie for $7,600 and agreed to keep the offer open for ten days. However, Ernie changed his mind and attempted to revoke the offer on August 4, sending Elsie a letter of revocation. Elsie sent an email accepting the offer on August 5, before receiving the letter of revocation which arrived on August 6.

As per the mailbox rule, which is widely accepted in contract law, an acceptance is effective when dispatched, as long as the communication is by an expressly or impliedly authorized means of communication. Since Elsie's acceptance via email was sent before Ernie's revocation was received, the acceptance would generally be considered effective on August 5, resulting in a binding contract. Ernie's revocation would only be effective upon receipt, which happened after the acceptance was already sent. Therefore, based on the given information, it appears that a contract was formed when Elsie emailed her acceptance on August 5.

Answer:

1) Key Performance Indicators (KPIs)

2) Covers per hour

Explanation:

Critical success factors (CSFs) are fundamental requirements for competitive success. They represent what a business must excel at to make it very competitive and successful.

For example, customer satisfaction, quality product, employee satisfaction, productivity

Key Performance Indicators (KPI) are metrics  which are used to measure whether or a business is achieving its CSFs

For example, a measure (KPI) of employee productivity would be amount of covers achieved per hour of labour

Answer:

Your answer is all of the above.

Explanation:

Each one of these options is generally profitable for most corporations. Sometimes there are recessions (like right now on our 5th week of the coronavirus outbreak) where Real Estate and Stocks can lose value but for the most part these are ways a business makes money.

Corporations can generate revenue beyond product or service sales through licensing, stocks, and real estate investments.

An additional source of revenue for a corporation beyond product or service sales is:

Corporations can generate revenue through licensing agreements, issuing stocks, and investing in real estate properties. These additional sources of income can diversify a corporation's revenue streams and enhance financial stability.

The scenario with Nate and the start-up company is an example of adverse selection, where the employer faces imperfect information regarding the candidate's abilities and hires based on misrepresented qualifications.

The scenario described in the question best exemplifies adverse selection, which is a situation where one party in a transaction has more or better information compared to another party. In this case, the employer (the start-up) has imperfect information about the qualifications and abilities of Nate. Nate misrepresented his skills and experience to obtain the job, and after hiring him based on those false credentials, his inability to perform as expected becomes clear. Adverse selection occurs in various markets, including labor and financial capital markets, where information asymmetry can lead to sub-optimal outcomes, such as hiring a poor-quality employee or acquiring a "lemon." To mitigate this, employers may use various mechanisms like requiring degrees from certain institutions, reviewing past work history, seeking references, and looking for other indicators of ability and character to screen potential employees more effectively.

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Answer:

Explanation:

December 31, 2018 Amount. Interest Rate Total Interest expense $944,646 x 5.0% = $47,232.3 Cash. $870,000 x 5.5% = $47,850 of premium on bonds $618

June 30, 2019AmountInterest Rate

Total Interest expense $944,646 x 5.0% = $47,232.3

Cash$870,000 x 5.5% = $47,850

of premium on bonds $ 464 No Date General Journal Debit Credit 1 June 30, 2018 Cash 944,646 Bonds payable 870,000 Premium on bonds payable 74,646 December 31,2018 Interest expense 47,232.3 Premium on bonds payable 618 Cash 47,850 June 30, 2019 Interest expense 47,232.2 Premium on bonds payable 618 Cash 47,850 Record the issuance of the bond on June 30, 2018.Record the interest on December 31, 2018 (at the effective rate). Record the interest on June 30, 2019 (at the effective rate). Explanation 2. December 31, 2018 Interest expense (5% × $944,646) = $47,232.3 Cash (5.5% × $870,000) = $47,850 3.June 30, 2019Interest expense (5% × [$944,646 – $618]) = $47,201.4

Cash (5.5% × $870,000) = $47,850

Answer:

b. $340,000

Explanation:

Given

Selling price per unit $ 59

Manufacturing costs:

Variable manufacturing cost per unit produced:

Direct materials $ 11

Direct labor $ 6

Variable manufacturing overhead $ 4

Fixed manufacturing overhead per year $ 88,000

Selling and administrative expenses:

Variable selling and administrative expense per unit sold $ 4

Fixed selling and administrative expense per year $ 80,000

We calculate the Variable Cost of Goods sold by the variable costs allocated to the units sold.For this we deduct the ending inventory costs from the unit produced costs.

Year 1

Units sold during the year 10,000    

Sales Price                              $59

Sales                                  $ 590,000

Units in beginning inventory 0  

Units produced during the year 11,000

Manufacturing Variable Costs per unit  (11+6+4)= $ 21

Variable Manufacturing Costs= $231,000

Less Ending Inventory (1,000 *21)= 21,000

Variable Cost of Goods Sold = $210,000

Add Variable selling and administrative expenses ( 4*10,000)= 40,000

Total Variable Costs = $250,000

Contribution Margin $340,000

Answer:

The correct answer is D. $ 172,000

Explanation:

Variable costing Year 1

Sales (10,000 * $ 59)     (A)                      $ 590,000

Variable manufacturing costs

Direct materials (11,00 * $ 11)                    $ 121,000

Direct labor (11,000 * $ 6)                         $ 66,000

Variable overhead $ 4 (11,000 * $ 4)        $ 44,000

******************************************************************

Cost of goods available for sale  (B)         $ 231,000

Ending inventory (1,000 * $ 21)  (C)            $  21,000

*******************************************************************

Gross contribution margin  (A - B + C)       $ 380,000

Variable selling & admin expense             $   40,000

********************************************************************

Contribution margin                                    $ 340,000    

Less fixed costs

Fixed manufacturing overhead                  $  88,000

Fixed selling and administrative expense $  80,000

***********************************************************************

Net operating income                                 $ 172,000

Answer: Since the acquirer gains the full amount of the value improvement on the shares acquired as a​ toehold, a toehold provides an incentive to undertake the​ acquisition, even if the acquirer must pay a price equal to the​ with-improvement value for the rest of the shares (C)

Explanation:

When an offer for a firm is made by a bidder, the target shareholders will benefit by keeping their shares and allowing other shareholders to sell their shares at a low price.

However, because every shareholders have the incentive of keeping their shares, none of the shareholders will sell. This situation is referred to as the free rider problem. In order o overcome the free rider problem, the bidders can attempt a buyout, acquire a toehold in the target, or in cases wheeby the acquirer is a corporation, they offer a freezeout merger.

Final answer:

Toehold ownership provides an incentive for acquisition and helps overcome the free rider problem by allowing an acquirer to gain control of a company.

Explanation:

Toehold ownership can help overcome the free rider problem by providing an incentive for an acquirer to take over the remainder of the company. A toehold allows the acquirer to gain a foothold in the company by purchasing a small percentage of shares, which can then lead to full acquisition and value-added improvements.

Answer:

$8,565

Explanation:

Sales revenue of the year 2015 = $30,010

Accrued royalty revenue on December 31, 2015 = 30,010 x 10%

= $3,001

Evan received royalties of $2,613 on April 1, 2016.

Hence, royalty receivable for the year ended December 31, 2015 = 3,001- 2,613

= $388

On October 1, 2016, Evan received royalties of $4,631.

Thus, royalty received for the first half of the year 2016 = 4,631 - 388

= $4,243

The 2nd half of 2016 sales were estimated to be $43,220

Hence, royalty for the second half of the year 2016 = 43,220 x 10%

= $4,322

Evan's 2016 royalty revenue = Royalty revenue for the first half + Royalty revenue for the second half

= 4,243 + 4,322

= $8,565

Answer:

a. 2/3

Explanation:

The best response for second vendor is to locate at (1/3) position only because this way, it will be maximizing it's payoff .

Because first vendor serves all customers to left of (1/3) , It's market share is (1/3).

Now if second vendor locates at (1/3) , then it will get the entire market share to right hand side of (1/3) , which is (2/3) share.

Therefore, The best response for the second vendor is 2/3

Answer:

Step 1

a) The exchange rate is $2.80=3.70 pounds. Divide both sides by 2.8

$1= 1.32 pounds

STEP 2

b) The exchange rate is $3.10=4.65 pounds. Divide both sides by 3.1

$1=1.5 pounds

STEP 3

(S₁-S₂/S₂)  * 100 = i(s) - i(w)

S1 is the original exchange rate or 1.32 pounds per dollar. S2 is the end exchange rate or 1.5. i$ is listed as 10%, solve for iW.

[(1.32-1.5)/1.5] * 100 = 10 - i(w)

22%

Answer:

Manufacturing overhead rate variance= $490 favorable

Explanation:

Giving the following information:

Variable overhead:

Standard Quantity= 0.4 hours

Standard rate= $5.6 per hour

Budgeted production= 5,000 units

Actual production= 5,100 units

The company used 2,450 direct labor-hours.

The actual variable overhead cost was $13,231.

To calculate the variable overhead rate variance, we need to use the following formula:

Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity

Actual rate= 13,231/2,450= $5.4

Manufacturing overhead rate variance= (5.6 - 5.4)*2,450

Manufacturing overhead rate variance= $490 favorable

Answer:

The answer is given below;

Explanation:

EPS=Net income-preferred dividends/Weighted average shares outstanding

a.Net income=$300,000*(1-30%)=$210,000

Common stocks  100,000

Bonds assumed to be converted into common stocks =$2,000,000/$1,000=2,000*15=30,000

Total common stocks=100,000+30,000=130,000

Diluted EPS=$210,000/130,000=$1.615

b.

*Net income=210,000-(1,000,000*6%)=$150,000

Common stocks=100,000

Bonds   =$1,000,000/$1,000=1,000*15=15,000

Preferred stocks=$1,000,000/$100=10,000*5=50,000

Total weighted average shares=100,000+15,000+50,000=165,000

Diluted EPS=Net income-preferred dividends/Weighted average shares

EPS=*$150,000/165,000=$.909

Answer to Question 1: What does this tell us about people?

The experiment shows us that people always associate higher prices with higher quality. But this is not always the case.

According to a research in 2008 by Goldstein and his team it was established that people do not derive more satisfaction or utility from more expensive wine when they don’t know much the wine cost.

In a more recent but similar study,  results showed that there is a clear correlation between price and perceived value.

When participants were told that a wine had a high price, participants gave that wine higher ratings.

So in summary:

Answer to Question 2: Can you think of other areas where that may be the case?

A similar research was carried out by Dan Ariely.

This scenario was tested on drugs and how people reported to have felt when they were given an information about the drug they are taking.

It was discovered that students who paid more for cold medicine said they felt better than students who purchased the same medicine at a discounted price.

Answer to Question 3: What does this suggest about pricing?

Pricing goes beyond numbers. Its all about how clients perceive your product in relation to the problem they are trying to solve or the pain point, or pleasure point they are trying to satisfy.

Cheers!