Answer:
Rate of interest = 1.07% (Approx)
Explanation:
Given:
Future deposit value (FV) = $2,000
Present deposit value (PV) = $1,000
Total number of period (n) = 65 month
Rate of interest (r) = ?
Computation of Rate of interest :
[tex]Future\ deposit\ value = PV(1+r)^n[/tex]
[tex]2,000=1,000(1+r)^{65}[/tex]
[tex]\frac{2,000}{1,000} =(1+r)^{65}[/tex]
[tex]2 =(1+r)^{65}[/tex]
[tex]1+r = 1.01072086[/tex]
[tex]r = 1.01072086-1\\\\r = 0.01072086[/tex]
r = 1.072086%
Rate of interest = 1.07% (Approx)
Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the $ 11 comma 500 comma 000 River Park Lodge expansion would be a good investment. Assume McKnight Valley's managers developed the following estimates concerning the expansion: LOADING...(Click the icon to view the estimates.) Assume that McKnight Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $ 950 comma 000 at the end of its ten-year life. The average annual net cash inflow from the expansion is expected to be $ 2 comma 779 comma 548. Compute the payback for the expansion project. Round to one decimal place.
Answer:
4.1 years
Explanation:
The payback period is the time it takes the project to recover the initial investment required to carry it out.
We are not given any information about the actual yearly revenues and costs, but you give the average net cash flow per year, so we can use that amount to calculate the payback period:
the payback period = total investment / net cash flow = $11,500,000 / $2,779,548 = 4.137 ≈ 4.1 years
Many demographers predict that the United States will have zero population growth in the twenty-first century, in contrast to average population growth of about 1 percent per year in the twentieth century. Use the Solow model to graphically explain what happens to the steady-state output per person when population growth slows down.
Answer and Explanation:
Different things being constant, a slowdown in population growth will lead to an increase in the availability of capital per worker and output per worker.
At the steady state, output per worker will grow at the rate of g while. Thus, steady state per person output growth will be same, however total output will increase at the rate n+g.
In case of transition between steady states, during the transition phase, output per worker will grow at a rate greater than g. Overtime in the long run with a fall in population growth, total output will fall while output per worker will increase.
Final answer:
According to the Solow model, a slowdown in population growth, such as the projected zero population growth in the United States for the twenty-first century, leads to capital deepening (more capital per worker) resulting in higher output per capita at the new steady state. This implies an increase in economic well-being per person in the long run.
Explanation:
Many demographers predict that the United States will have zero population growth in the twenty-first century, in contrast to average population growth of about 1 percent per year in the twentieth century. According to the Solow model, the slowdown in population growth has significant implications for steady-state output per person, which is a measure of economic well-being on a per capita basis. The Solow model, a fundamental framework in economic growth theory, uses a production function that incorporates labor, capital, and technology to determine the output of an economy.
Graphically, in the Solow model, a decrease in population growth shifts the steady-state condition. Since the model assumes savings, capital accumulation, and output are proportionate to the size of the population, a lower growth rate means that less new capital is needed to equip new workers. Consequently, with a slowing population growth rate, capital deepening occurs (more capital per worker), leading to an increase in output per capita at the new steady state. This suggests that if the United States experiences zero population growth, the Solow model predicts an increase in output per person, assuming other factors remain constant. This outcome reflects improved economic well-being on a per capita basis in the long run due to higher productivity per worker attributed to greater capital intensity.
Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $165,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $31,692. Click here to view PV table. What is its approximate internal rate of return? (Round answer to O decimal place, e.g. 13%.) Internal rate of return %
Answer:
8%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
The IRR can be calculated using a financial calculator.
Cash flow in year zero = $-165,000
Cash flow each year from year one to seven = $31,692
IRR = 8%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
To calculate the Internal Rate of Return (IRR) for a spot-welding machine that costs $165,000 with annual cash flows of $31,692 over 7 years, we compare the initial investment to the present value of the annuity. The IRR is the discount rate that equates the PV of the cash inflows to the cost of the machine. An annuity table is needed to find the precise IRR.
Explanation:The question concerns evaluating the Internal Rate of Return (IRR) for the purchase of a rebuilt spot-welding machine. The machine has a cost of $165,000, a lifespan of 7 years, no salvage value, and it increases net annual cash flows by $31,692.
To approximate the IRR, we need to find the discount rate that makes the net present value (NPV) of the cash inflows equal to the initial investment. This can be done by using the present value (PV) of an annuity table or a financial calculator. Since the machine's cost is $165,000 and it generates uniform annual cash inflows of $31,692, we divide the initial investment by the annual cash flow, which equals approximately 5.21. This factor can then be used to estimate the IRR by matching it against a PV annuity factor for seven years.
Without the exact PV table, we can't find the precise IRR, but it will be the discount rate that corresponds to a factor where the PV of $31,692 annuity over 7 years equals $165,000. If we had the PV table, we would look for the factor closest to 5.21 in the 7-year row and find the corresponding interest rate, which would be our IRR.
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A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days a year that the plant operates. Annual holding cost is $3 per silicon chip. The optimal ordering quantity is 1600 chips per order. a. What is the total annual carrying cost under the optimal inventory management policy?
Answer:
$2,400
Explanation:
The computation of the total annual carrying cost is shown below:
The total Annual Carrying cost = Average Inventory × Holding cost per chip
= (1,600 chips ÷ 2) × $3
= $2,400
First we simply find out the average inventory by dividing the optimal ordering quantity by 2 and then it multiplied with the holding cost per chip so that the correct amount could arrive
rguments for adopting a policy rule include A. discretion avoids the straitjacket that would lock in the wrong policy if the model that was used to derive the policy rule proved to be incorrect. B. discretion enables policy makers to change policy settings when an economy undergoes structural changes. C. discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run. D. all of the above.
Answer:
C. discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run.
Explanation:
Arguments for adopting a policy rule include;
- discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run.
- discretion enables policymakers to change policy settings when an economy undergoes structural changes.
- discretion avoids the straightjacket that would lock in the wrong policy if the model that was used to derive the policy rule proved to be incorrect.
- policy rules can be too rigid because they cannot foresee every contingency.
- policy rules do not easily incorporate the use of judgment.
Samantha just won a settlement with an insurance company, which entitles her to receive payments of $20,000 at the beginning of each year for the next 20 years. Her financial advisor recommended to her that she consider accepting a lump-sum payment now, using a discount rate of 7%. What is the amount that she should accept in this scenario? Identify the following variables: N, I/Y, PV, PMT, FV
Please show how the answer is computed (steps, a formula used, etc.)
Please try to avoid mathematical shorthand or please explain the answer to help me understand.
Answer:
$226,711.90
Explanation:
See attached file
Financial analysts forecast Limited Brands (LTD) growth rate for the future to be 13.5 percent. LTD’s recent dividend was $0.65. What is the value of Limited Brands stock when the required return is 15.5 percent?
Answer:
When the required return is 15.5%, the Limited Brands stock will be at $36.8875
Explanation:
Required return i = 15.5% = 0.155
Future Growth Rate g = 13.5% = 0.135
Dividend D₀ = $ 0.65
so let say the value of stock at that time = X
X = D₀ (1 + g) / (i - g)
X = 0.65 * (1 + 0.135) / (0.155 - 0.135)
= (0.65 * 1.135) / (0.155 - 0.135)
= 0.73775 / 0.02
= $36.8875
Therefore, when the required return is 15.5%, the Limited Brands stock will be at $36.8875
Using the Gordon Growth Model with a dividend of $0.65, a required return of 15.5%, and a growth rate of 13.5%, the value of Limited Brands stock is calculated to be $32.50.
To determine the value of Limited Brands (LTD) stock using the provided financial analysts' growth rate and recent dividends, we can use the Gordon Growth Model (also known as the Dividend Discount Model). This model assumes that dividends will grow at a constant rate indefinitely. The formula for the model is:
P = D / (r - g)
Where:
P is the price of the stockD is the dividendr is the required rate of returng is the growth rate of the dividendIn this case:
D = $0.65 (recent dividend)r = 15.5% (required return)g = 13.5% (growth rate)Using the Gordon Growth Model:
P = $0.65 / (0.155 - 0.135) = $0.65 / 0.02 = $32.50
Therefore, the value of Limited Brands stock when the required return is 15.5 percent is $32.50.
Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,650 client-visits, but its actual level of activity was 3,590 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per monthVariable element per client-visit Revenue - $39.90 Personnel expenses$35,900 $11.10 Medical supplies 1,900 7.90 Occupancy expenses 8,900 1.90 Administrative expenses 5,900 0.10 Total expenses$52,600 $21.00 The activity variance for administrative expenses in July would be closest to: Multiple Choice $66 F $6 U $66 U $6 F
Answer:
$666 Favorable
Explanation:
The computation of Activity variance is shown below:-
For computing the activity variance first we need to compute the Planning budget and flexible budget
Planning budget = $35,900 + $11.10 × 3,650
= $76,415
Flexible budget = $35,900 + $11.10 × 3,590
= $75,749
Activity variable = Activity variance - Flexible budget
= $76,415 - $75,749
= $666 Favorable
John and his wife Martha get a divorce. Per the divorce settlement contract, Martha agrees to pay John alimony in the amount of $5000 per month for his lifetime or until such time as he should remarry. When John remarries three years later his alimony benefits cease because:
Answer:
c) the condition subsequent has occurred;
Explanation:
Since in the question it is given that the John and his wife Martha get a divorce and according to the divorce settlement contract she agrees to pay the alimony to John for $5,000 per month for his lifetime or until that time when he should remarry
If John remarries after three years, so the alimony benefits is ceased because the subsequent condition has occurred due to which he will not get the amount further in the future
Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.90 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3.
Y2 First Y2 Second Y2 Third Y2 Fourth Y3 First
Budgeted production, in bottles 96,000 126,000 186,000 136,000 104,000
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Answer and Explanation:
The preparation of Direct material budget is shown below:-
First Second Third Fourth Year
Required production
in units of
Finished Goods $96,000 $126,000 $186,000 $136,000 $544,000
Units of raw material
needed per unit of
Finished Goods 4 4 4 4 4
Units of raw material
needed to meet
production $384,000 $504,000 $744,000 $544,000 $2,176,000
Add: Desired ending
Finished goods $100800 $148,800 $108,800 $84,800 $84,800
Total units of
Raw material
needed $484,800 $652,800 $852,800 $628,800 $2,260,800
Less: Beginning
inventory ($76,800) ($100,800) ($148,800) ($108,800) ($76,800)
Units of raw material
to be purchased $408,000 $552,000 $704,000 $520,000 $2,184,000
Units cost of Raw
Material $1.90 $1.90 $1.90 $1.90 $1.90
Cost of Raw Material
Purchased $775,200 $1,048,800 $1,337,600 $988,000 $4,149,600
In total for Year 2, the direct materials budget for musk oil is:
[tex]\[ \$729,600 + \$957,600 + \$1,411,600 + \$1,035,200 = \$4,133,000 \][/tex]
To prepare a direct materials budget for musk oil for Year 2, we need to calculate the total quantity of musk oil required for each quarter based on the budgeted production of Mink Caress perfume and then multiply it by the cost per gram of musk oil. Let's break it down quarter by quarter:
1. **First Quarter (Y2 First):**
- Budgeted production: 96,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 96,000 \times 4 = 384,000 \)[/tex] grams
2. **Second Quarter (Y2 Second):**
- Budgeted production: 126,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 126,000 \times 4 = 504,000 \)[/tex]grams
3. **Third Quarter (Y2 Third):**
- Budgeted production: 186,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 186,000 \times 4 = 744,000 \)[/tex] grams
4. **Fourth Quarter (Y2 Fourth):**
- Budgeted production: 136,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 136,000 \times 4 = 544,000 \)[/tex] grams
Now, let's calculate the cost of musk oil for each quarter and in total for Year 2:
- Cost per gram of musk oil: $1.90
1. **First Quarter (Y2 First):**
- Total musk oil required: 384,000 grams
- Cost of musk oil: [tex]\( 384,000 \times \$1.90 = \$729,600 \)[/tex]
2. **Second Quarter (Y2 Second):**
- Total musk oil required: 504,000 grams
- Cost of musk oil: [tex]\( 504,000 \times \$1.90 = \$957,600 \)[/tex]
3. **Third Quarter (Y2 Third):**
- Total musk oil required: 744,000 grams
- Cost of musk oil: [tex]\( 744,000 \times \$1.90 = \$1,411,600 \)[/tex]
4. **Fourth Quarter (Y2 Fourth):**
- Total musk oil required: 544,000 grams
- Cost of musk oil:[tex]\( 544,000 \times \$1.90 = \$1,035,200 \)[/tex]
In total for Year 2, the direct materials budget for musk oil is:
[tex]\[ \$729,600 + \$957,600 + \$1,411,600 + \$1,035,200 = \$4,133,000 \][/tex]
Nivan Co. issued $500,000 of 5 percent, 10-year, callable bonds on January 1, Year 1, at their face value. The call premium was 3 percent (bonds are callable at 103). Interest was payable annually on December 31. The bonds were called on December 31, Year 5. Required Prepare the journal entries to record the bond issue on January 1, Year 1, and the bond redemption on December 31, Year 5. Entries for accrual and payment of interest are not required
Answer and Explanation:
The journal entries are shown below:
On Jan 1
Cash $500,000
To Bond Payable $500,000
(Being the issuance of the bond is recorded)
On Dec 31
Bond Payable $500,000
Loss on redemption $15,000 ($500,000 × 3%)
To Cash ($500,000 × 103%) $515,000
(Being the redemption of the bond is recorded and the remaining balance or we can say balancing figure is debited to loss on redemption)
Helix Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Helix is operating at 75% of its capacity of 10,000 units. Identify whether the following costs are relevant to Helix's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order Calculate the operating income from the order Relevant Not Relevant Relevant Revenues Costs Revenue (cost) per unit a. Selling price b. Direct materials cost C. Direct labor cost d. Variable manufacturing overhead e. Fixed manufacturing overhead f. Regular selling expenses g. Additional selling expenses h. Administrative expenses 6.00 (2.00) (0.75) (0.50) (0.60) 2,000 Total operating income(loss) from special order Based on financial considerations alone, should Helix accept this order at the special price?
Answer:
1.)
Selling price - Relevant
Direct materials cost - Relevant
Direct labor cost - Relevant
Variable manufacturing overhead - Relevant
Fixed manufacturing overhead - Not relevant
Regular selling expenses - Not relevant
Additional selling expenses - Relevant
Administrative expenses - Not relevant
2.) Helix should accept the deal, with a net operating income of $2,000
Explanation:
Explanation to Question 2 can be found in the attached picture
The analysis of Helix Company's special order decision shows that accepting the order at a special price of $6 per unit results in a positive operating income of $3,300. Therefore, it is financially advantageous for Helix to accept this order, as the relevant costs are outweighed by the revenue generated.
The question involves determining the financial impact of accepting a special order below the regular selling price and identifying which costs are relevant to Helix Company's decision-making process. The analysis should consider only those costs and revenues that change as a result of accepting the order. Here, the relevant costs include the selling price of $6 per unit, direct material, direct labor, variable manufacturing overhead, and the additional selling expense of $0.50 per unit for shipping. Fixed manufacturing overhead and administrative expenses are not relevant since they do not change with the order. The calculation of operating income from this special order involves subtracting the relevant per-unit costs from the special selling price and multiplying by the number of units (2,000).
To calculate the total operating income from the special order:
Relevant revenue: $6.00 x 2,000 units = $12,000Total relevant costs = ($2.00 + $0.75 + $0.50 + $0.60 + $0.50) x 2,000 units = $8,700Total operating income from the order = $12,000 - $8,700 = $3,300Since the special order generates positive operating income without increasing fixed costs or administrative expenses, it is financially beneficial for Helix to accept the order.
Imagine that you are a manager and your company has been realigning to be more competitive. The company just downsized, so everyone is doing more work while missing their former colleagues, and no raises or bonuses will be given out this year. How can you help your employees manage stress? Check all that apply.
a.Work longer hours than anyone else to emphasize the seriousness of the situation and show your commitment.
b.Discourage employees from using all their vacation time or from ever calling in sick to communicate that they are needed at work.
c.Provide opportunities to learn new skills and knowledge.
d.Model an attitude of lighthearted play, telling jokes and bringing toys to work.
To help employees manage stress during company changes, provide learning opportunities, encourage a positive atmosphere, and ensure clear expectations. The correct answer is C
Managing employee stress during company realignment and downsizing is crucial for maintaining productivity and morale. To help employees cope:
Provide opportunities to learn new skills and knowledge to empower employees.
Model an attitude of lighthearted play to promote a positive workplace atmosphere.
Make expectations clear regarding roles, tasks, and support to reduce ambiguity and stress.
At the beginning of the year, manufacturing overhead for the year was estimated to be $285,690. At the end of the year, actual direct labor-hours for the year were 30,500 hours, the actual manufacturing overhead for the year was $373,620, and manufacturing overhead for the year was overapplied by $18,000. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used to calculate the predetermined overhead rate was:
Answer:
the estimated direct labor-hours at the beginning of the year used to calculate the predetermined overhead rate was 22,250 hours
Explanation:
Manufacturing overheads are allocated to production on a predetermined basis as no business can wait to know its profit to properly allocate costs to the products sold.
It is usually based on a certain predetermined activity level (usually direct labour hours) which is then coated into the product material and labor costs to determine its manufacturing costs.
We are told the Actual overhead was over applied by $18,000, and the Actual Manufacturing overhead was $373,620.
This implies the Overhead charged to production was;
$373,620 + $18,000 = $391,620
At an activity level of 30,500 direct labor hours.
The Predetermine direct labour rate is:
$391,620 / 30,500 = $12.84
And this implies the direct labor hours at the beginning of the year is
$285,690 divided by $12.84 = 22,250 hours
Cycle Sporting Goods sells bicycles throughout the northeastern United States. The following data were taken from the most recent quarterly sales forecast: Expected Sales End-of Month Target Inventory July 1,990 units 400 units August 2,140 units 490 units September 2,070 units 460 units On the basis of the information presented, how many bicycles should the company purchase in August?
Answer: 1250 units
Explanation:
GIVEN the following ;
JULY :
Expected sales = 1,990 units
Ending of month target inventory =400 units
AUGUST:
Expected sales = 2,140 units
Ending of month target inventory =490 units
SEPTEMBER:
Expected sales = 2,070 units
Ending of month target inventory =460 units
Ending of month target inventory in July = August beginning inventory = 400units
Expected August unit sales = 2,140 units
AUGUST ending inventory = 490 units
Expected sales = beginning inventory + purchased inventory - ending inventory
2140 = 400 + purchased inventory - 490
2140 = 890 + purchased inventory
Purchased inventory = 2140 - 890
August purchased inventory should be = 1250 units
There are seven main instruments used in trade policy with _____ being the oldest and the simplest. local content requirements tariffs subsidies voluntary export restraints import quotas
There are seven main instruments used in trade policy with tariffs being the oldest and the simplest. local content requirements tariffs subsidies voluntary export restraints import quotas.
Explanation:
Trade policy incorporates seven principal tools: tariffs, subsidies, import quotas, voluntary restrictions on exports, local content needs, administrative policies and anti-dumping duties. Tariffs are the easiest and earliest type of the tools of trade policy.
They have historically been utilized as a reservoir of government revenue but are primarily employed nowadays to shield particular home industries from foreign competition by artificially hiking the local cost of the foreign good.These are also the mechanism most effective in restricting by the GATT and WTO.
Which statement below is FALSE? A. Mintzberg's notion of "crafting" strategies embodies the artistic model, which suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination. B. This textbook is framed primarily on the fact that strategic planning is an art rather than a science. C. This textbook is consistent with most of the strategy literature in advocating that strategic management be viewed more as a science than an art. D. The Mintzberg strategic-planning approach insists on informality, whereas strategy scientists (and this text) insist on more formality. E. Firms need to systematically assess their external and internal environments, conduct research, carefully evaluate the pros and cons of various alternatives, perform analyses, and then decide on a particular course of action.
Answer:
D
Explanation:
Anthony's Bees is an Internet e-tailer that sells equipment to aspiring beekeepers. A complete starter kit in this competitive market sells for $900. Anthony's total costs are given by TC -30°, where Q is the number of starter kits he sells each month. The corresponding marginal cost of producing beehives is MC = 90°
a. What is Anthony's marginal revenue from selling another starter kit? MRES
b. How many starter kits should Anthony sell each year in order to maximize his profits? starter kits
c. How much profit will Anthony earn at this output level? Profit=$
d. Suppose Anthony is producing the quantity indicated in part b. If he decides to produce one more starter kit, what will his new profit be? Profit = $
e. The marginal revenue of producing one more starter kit
Answer:
a. $900
b. 10 starter kits
c. $6,000
d. $5,907
e. $900
Explanation:
THE CORRECT QUESTION FORMAT IS AS FOLLOWS;
Anthony's Bees is an Internet e-tailer that sells equipment to aspiring beekeepers. A complete starter kit in this competitive market sells for $900. Anthony's total costs are given by TC =[tex]3Q^{3}[/tex], where Q is the number of starter kits he sells each month. The corresponding marginal cost of producing beehives is MC = [tex]9Q^{2}[/tex]
a. What is Anthony's marginal revenue from selling another starter kit? MRES
b. How many starter kits should Anthony sell each year in order to maximize his profits? starter kits
c. How much profit will Anthony earn at this output level? Profit=$
d. Suppose Anthony is producing the quantity indicated in part b. If he decides to produce one more starter kit, what will his new profit be? Profit = $
e. The marginal revenue of producing one more starter kit
Solution is as follows;
a. From the question, we can identify that Anthony is a price taker and not a price decider. What this means is that he sell at industry determined price. Thus, selling an additional unit will give him a revenue equal to price ,so Marginal Revenue=$900
b. For a perfectly competitive firm, there will be an increase in output as long as Price >Marginal Cost or Price=Marginal Cost to maximize profit.
Thus;
we set
Marginal Cost=Price
[tex]9Q^{2}[/tex]=900
[tex]Q^{2}[/tex]=100
Q=10 starter kits
Hence, for Anthony to maximize his starter kits, he should sell 10 starter kits each year.
c. Total Cost(TC) =[tex]3Q^{3}[/tex]=3*[tex]10^{2}[/tex]=$3000
Total Revenue(TR) =P*Q=900*10=$9000
Profit= Total Revenue(TR) - Total Cost(TC) =9000-3000=$6000
d. If Anthony produces one extra unit of output.
His new quantity becomes Q=11
Total Cost(TC)=[tex]3Q^{3}[/tex]= 3 × [tex]11^{3}[/tex]=$3993
Total Revenue(TR) = P*Q= 900*11=$9900
Profit=TR-TC=9900-3993=$5907
Producing an additional unit of output will lead to a decrease in his output
e. The marginal revenue of producing an additional starter kit will be revenue at Q =11 minus revenue at Q=10
That is 9900-9000 = 900
This is same as the price of the starter kit i.e MR = P
Answer:
e. The marginal revenue of producing one more starter kit is 9900-9000 = 900
Hence, the marginal revenue is equal to the price of the starter kit i.e MR = P
Explanation:
find attached solution
You are evaluating a project that will cost $ 546 comma 000, but is expected to produce cash flows of $ 127 comma 000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11.1 % and your company's preferred payback period is three years or less. a. What is the payback period of this project? b. Should you take the project if you want to increase the value of the company?
Answer:
A 4.3 years
B. The company shouldn't carry out the project because the payback period is greater than the preferred payback period.
Explanation:
Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.
Payback period = amount invested / cash flows
$546,000 / $127,000 = 4.3 years
The company shouldn't carry out the project because the payback period is greater than the preferred payback period.
I hope my answer helps you
On May 7, Juanita Construction provides services on account to Michael Wolfe for $4,000. Michael pays for those services on May 13. Required: For Juanita Construction, record the service on account on May 7 and the collection of cash on May 13.
Explanation:
May 7
Credit sales of $4,000 which means accounts receivable will increase by $4,000 and Sales revenue will also raise b y the same amount
May 13
Collection on account of May 7th sales which means the account receivable will go down by $4,000 and cash will increase by $4,000
Journal entries
DATE Particulars Amount
May 7th Account receivable (+A) Dr. $4,000
to Sales revenue (+Equity) $4,000
( To record the credit sales)
May 13th Cash (+A) Dr. $4,000
to Accounts receivable(-A) $4,000
(To record the receipt of cash)
When Juanita Construction provides services on credit, they increase Accounts Receivable and Service Revenue by the same amount. When the customer pays, they decrease Accounts Receivable by the payment amount and increase Cash by the same amount.
Explanation:On May 7, Juanita Construction would record a debit (increase) to Accounts Receivable for $4,000 and a credit (increase) to Service Revenue for $4,000. This is because the company has provided a service on account, meaning they have earned revenue but have not yet collected the cash.
On May 13, when Michael Wolfe pays, Juanita Construction would record a debit (increase) to Cash for $4,000 and a credit (decrease) to Accounts Receivable for $4,000. This reflects the collection of cash, reducing the amount outstanding in the accounts receivable.
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Let's assume you are the beneficiary of your great Aunt's life insurance policy. Sadly she passed away yesterday. You elect to receive annual payments from this policy for the next 20 years. The settlement amount is $500,000 and the interest accruing on the policy is an annual 8%. What will be your annual life insurance annuity payments
Answer: The life insurance annuity payment is $50,926.10
Explanation:
GIVEN THE FOLLOWING ;
PRESENT VALUE(PV) = $500,000
INTEREST RATE (r) = 8% = 0.08
PERIOD (n) = 20 years
Recall, formula for ordinary annuity:
Annuity = (Rate × PV) ÷ ( 1 - (1 + r)^-n)
Annuity = (0.08 × $500,000) ÷ (1 - (1 + 0.08)^-n)
Annuity = ($40,000) ÷ (1 - (1.08)^-20)
Annuity = $40,000 ÷ 0.7854517925
Annuity = $50,926.10
Therefore, the life insurance annuity payment for 20 years at 8% interest rate will be $50,926.10
Answer:
The annual insurance annuity payment will be $50,926.10
Explanation:
To calculate the annual life insurance annuity, we use the following formula below.
Annuity = (Rate × PV) ÷ ( 1 - (1 + r)^-n)
We have the values been given in the question
Current (PV) = $500,000
Interest rate (r) = 8% /100= 0.08
Duration (n) = 20 years
Substituting the values in to the formula, we have;
Annuity payment = (0.08 × $500,000) ÷ (1 - (1 + 0.08)^-n)
Annuity payment = ($40,000) ÷ (1 - (1.08)^-20)
Annuity payment = $40,000 ÷ 0.7854517925
Annuity payment = $50,926.10
We have $50,926.10 as the annual insurance annuity payment
A manufacturer has decided to improve its inventory management by maintaining low inventory levels and waiting to purchase materials until right before they are needed in production. This inventory management technique is called _____.
Answer:
Just-in-time (JIT) is the correct answer.
Explanation:
Just-in-time (JIT) is called Just in time manufacturing and also the Toyota production system.Just in time is an inventory management technique aimed to increase efficiency and to reduce the waste by receiving the goods that are required and also designed to raise productivity while reducing expenses.benefits of JIT inventory management strategy is to improve the cash flow and lower the inventory holding costs.Just-in-time inventory management involves maintaining low inventory levels and purchasing materials just before they are needed to reduce costs and align production with demand.
Just-in-time inventory management is a technique where a manufacturer maintains low inventory levels and purchases materials just before they are needed in production. This approach minimizes costs associated with carrying inventory and aligns production closely with demand.
Implementing a just-in-time system requires efficient coordination within the supply chain to ensure timely deliveries and smooth production processes. Companies like Toyota have successfully utilized this inventory management strategy to improve overall operational efficiency.
By adopting a just-in-time inventory approach, companies can reduce waste, enhance flexibility, and optimize resource utilization in their production processes.
Deluxe Ezra Company purchases equipment on January 1, Year 1, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000.
Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years'-digits method.
Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, e.g. 15.84%. Round answers to 0 decimal places, e.g. 45,892.)
Answer:
to calculate depreciation using the sum-of-the-years'-digits method:
n(n+1) divided by 2 = [12(13)] / 2 = 78
depreciable value = cost - salvage value = $469,000 - $40,000 = $429,000
depreciation year 1 = 12/78 x $429,000 = $66,000depreciation year 2 = 11/78 x $429,000 = $60,500depreciation year 3 = 10/78 x $429,000 = $55,000the formula used to calculate depreciation using the double-declining-balance method is:
2 x cost of the asset x depreciation rate
depreciation year 1 = 2 x $469,000 x 1/12 = $78,167depreciation year 2 = 2 x ($469,000 - $78,167) x 1/12 = $65,139depreciation year 3 = 2 x ($390,833 - $65,139) x 1/12 = $54,282Using the sum-of-the-year digits method, the depreciation expense in:
Year 1 = $66,000
Year 2 = $60,500
Year 3 = $55,000
Using the double-declining balance method, the depreciation expense in:
Year 1 = 78,166.67
Year 2 = $65,138.89
Year 3 = $54,282.41
Sum-of-the-year digits = (remaining useful life / sum of the years ) x (Cost of asset - Salvage value)
Sum of the years = 1 +2 +3 +4 + 5 + 6 + 7 + 8 + 9 + 10 + 12 + 11 = 78
Year 1 deprecation
(12 / 78) x ($469,000 - $40,000) = $66,000
Year 2 deprecation
(11 / 78) x ($469,000 - $40,000) = $60,500
Year 3 deprecation
(10 / 78) x ($469,000 - $40,000) = $55,000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
Year 1 deprecation
2/12 x $469,000 = 78,166.67
Book value in year 2 = $469,000 - 78,166.67 = $390,833.33
Year 2 deprecation
2/12 x $390,833.33 = $65,138.89
Book value in year 3 =$390,833.33 - $65,138.89 = $325,694.44
Year 3 deprecation
2/12 x $325,694.44 = $54,282.41
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Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $40,000. Budgeted cash receipts total $121,000 and budgeted cash disbursements total $115,000. The desired ending cash balance is $61,500. To attain its desired ending cash balance for March, the company needs to borrow:
Answer:
Cash borrow = $15,500.
Explanation:
Given,
The company budgeted ending cash balance is $61,500.
We know,
Budgeted ending cash balance = Budgeted beginning cash balance + Budgeted cash receipts - Budgeted cash disbursements + Budgeted cash borrow
Given,
Budgeted ending cash balance = $61,500.
Budgeted beginning cash balance = $40,000.
Budgeted cash receipts = $121,000
Budgeted cash disbursements = $115,000.
Budgeted cash borrow = ?
Putting the values into the formula, we can get
$61,500 = $40,000 + $121,000 - $115,000 + Cash borrow
Or, $61,500 - ($40,000 + $121,000 - $115,000) = Cash borrow
Or, $61,500 - $40,000 - $121,000 + $115,000 = Cash borrow
Or, $176,500 - $161,000
Or, $15,500 = Cash borrow
Or, Cash borrow = $15,500.
Therefore, cash borrow for March is $15,500.
Addison Co. budgets production of 2,790 units during the second quarter. Other information is as follows: Direct labor Each finished unit requires 5 direct labor hours, at a cost of $10 per hour. Variable overhead Applied at the rate of $12 per direct labor hour. Fixed overhead Budgeted at $580,000 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget.
Answer and Explanation:
1. The preparation of direct labor budget is given below:-
Direct labor budget
Units to be produced 2,790
Hours required per unit 5
Total labor hours needed 13,950
(2,790 × 5)
Labor rate per hour $10
Direct labor budget $139,500
(13,950 × $10)
2. The preparation of factory overhead budget is given below:-
Total labor hours needed 13,950
Variable overhead rate per hour $12
Budgeted variable overheads $167,400
(13,950 × $12)
Budgeted Fixed overheads $580,000
Budgeted total overheads $747,400
Hagos Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.84 direct labor-hours. The direct labor rate is $9.40 per direct labor-hour. The production budget calls for producing 2,100 units in June and 1,900 units in July. If the direct labor work force is fully adjusted to the total direct labor hours needed each month, what would be the total combined direct labor cost for the two months
Answer:
$31584
Explanation:
Solution
The first step is to compute the total direct labor hours required for production:
Now for the month of June,
The total direct cost of labor = The produced Unit * The Hours per unit
= 2100 * 84 hours per unit
It gives us
=1,764 Hours
For the month of July,
The total direct cost of labor = The produced Unit * The Hours per unit
= 1900 * 84 Hours per unit
= 1,596 Hours
Next is to calculate the direct labor cost.
For the month of June
Direct labor cost = Direct labor hours * The rate per direct labor hour.
= 1,764 Hours * $9.40 per hour
= $16581.6
For the month of July
Direct labor cost = Direct labor hours * The rate per direct labor hour.
= 1,596 Hours * $9.40 per hour
= $15002.4
Now,
We will compute pr find the combined direct labor cost for the two months
The combined direct labor * Direct labor cost (June) + Direct labor cost (July)
Which is now,
= $16581.6 + $15002.4 = $31584
Therefore the combined direct labor cost for the two months is $31584
The banking system currently has $50 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time sells $10 billion worth of bonds, then by how much does the money supply change?
Answer:
Total money supply charge is $180billion
Explanation:
See attached files
The money supply decreases by $1.25 billion.
Explanation:The change in money supply can be calculated by considering the change in required reserves. Initially, required reserves are $5 billion (10% of $50 billion). If the reserve requirement is increased to 12.5%, the new required reserves will be $6.25 billion (12.5% of $50 billion). This means that an additional $1.25 billion of reserves must be held, which reduces the excess reserves by the same amount. Since the money supply is equal to the sum of currency in circulation and deposits, and there is no change in currency in this scenario, the money supply will decrease by $1.25 billion.
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Nielson Motors sold 10 million shares of stock in an SEO. The market price of Nielson's stock at the time was $37.50. Of the 10 million shares sold, 4 million shares were primary shares sold by the company, and the remaining 6 million shares were being sold by the venture capital investors. Assume the underwriter charges 4% of the gross proceeds as an underwriting fee which is shared proportionately between the primary and secondary shares.
Required:
1. The amount of money raised by Nielson Motors is closest to ____________.
Group of answer choices:a. $144 millionb. $150 millionc. $216 milliond. $219 million
Answer:
a. $144 million
Explanation:
The computation of the amount of money raised is shown below:
But before that we have to find out the amount raised and underwriting fees which is given below:
Amount raised by company is
= 4 million × $37.5
= $150 million
And,
underwriting fees is
= $150 million × 4%
= $6 million
So, amount raised by the company is
= $150 million - $6 million
= $144 million
We deduct the underwriting fees from the raised amount
Final answer:
Nelson Motors raised approximately $144 million after deducting underwriting fees. The company sold 4 million primary shares at $37.50 each, generating $150 million. A 4% underwriting fee of $6 million was subtracted to arrive at the final amount.
Explanation:
To calculate the amount of money raised by Nielson Motors, we need to determine the gross proceeds from the sale of both primary and secondary shares before underwriting fees are deducted. Then, we will calculate the underwriting fees and subtract them from the gross proceeds to find the net amount raised by the company.
The gross proceeds from the primary shares can be calculated as follows:
Number of primary shares sold: 4 millionMarket price per share: $37.50Gross proceeds from primary shares = (4 million shares) x ($37.50 per share) = $150 millionThe gross proceeds from the secondary shares, which are sold by the venture capital investors, are not part of the company's raised capital and are not needed for this calculation.
Next, we calculate the underwriting fee:
Underwriting fee rate: 4%Underwriting fee for primary shares = (4% of $150 million) = $6 millionHence, the net amount raised by Nielson Motors is:
Gross proceeds from primary shares - Underwriting fee = ($150 million - $6 million) = $144 millionTherefore, the answer is closest to $144 million, which is option (a).
We have the following data for a hypothetical open economy: GNP = $9,0009,000 Consumption (C) = $7,5007,500 Investment (I) = $1,4001,400 Government Purchases (G) = $1,6001,600 Tax Collections (T) = $1,200what is the value of total savings S?what is the value of current account balance CA?
Answer:
-$100 and -$1,500
Explanation:
The computation is shown below:
As we know that
Total saving = Private saving + public saving
where,
Private saving is
= Y - T - C
= $9,000 - $1,200 - $7,500
= $300
And, public saving is
= T - G
= $1,200 - $1,600
= -$400
So, the total saving is
= $300 - $400
= -$100
And, the value of current account balance is
= GNP - C - I - G
= $9,000 - $7,500 - $1,400 - $1,600
= -$1,500
Final answer:
To calculate Country A's GDP, sum up Consumption, Investment, Government Purchases, and net Exports, resulting in a GDP of $3,030 billion.
Explanation:
The Gross Domestic Product (GDP) of a country can be calculated using the formula: GDP = Consumption (C) + Investment (I) + Government Purchases (G) + (Exports (X) - Imports (M)). For Country A, given the data: Consumption (C) is $2,000 billion, Investment (I) is $50 billion, Government Purchases (G) are $1,000 billion, Exports (X) are $20 billion, and Imports (M) are $40 billion, the GDP calculation would be:
GDP = C + I + G + (X - M) = $2,000 billion + $50 billion + $1,000 billion + ($20 billion - $40 billion) = $3,030 billion.
Thus, the dollar value of GDP for Country A would be $3,030 billion.
A message using the indirect writing strategy ________. provides the explanation before the bad news is usually shorter than one using the direct method uses ambiguous language to cushion the effect of the bad news restates company policy
Answer:
The correct answer is letter "A": provides the explanation before the bad new.
Explanation:
The indirect method of writing messages imply providing details of speech first and end with the conclusion of the matter. This is achieved using passive voice and subordinate sentences. This strategy is more often used while providing bad news to give the audience the reasons why the bad news is taking place. Otherwise, it is more likely that people will be discouraged to find information on the reasons for bad news if it is provided at the beginning of the message.
An indirect writing strategy provides the context before the bad news, often using language that is clear but softened to consider the reader's feelings and potentially to reduce backlash. It includes an explanation and could contain modal verbs and rhetorical strategies.
Explanation:A message using the indirect writing strategy typically provides the explanation before delivering any bad news. This approach is taken to prepare the reader for the upcoming negative information and often includes an explanation of the context or reasoning behind the decision. Indirect strategies can involve subtly downplaying the bad news or presenting it after a detailed explanation.
When crafting an indirect message, it is essential to maintain a balance in communication. One should fairly represent uncertainty while conveying credible concern, avoiding language that may appear to 'boss' the reader. It can be helpful to include modal verbs such as 'may,' 'might,' 'could,' which introduce a degree of uncertainty and soften the impact of the message.
An indirect writing strategy is characterized by a clear, but sometimes carefully phrased, language that considers the reader's feelings. The use of rhetorical strategies such as parallelism and repetition may be observed, although they must be used more judiciously compared to other forms of writing. This method is also likely to be longer than the direct method because it includes more background and justification before getting to the point.