Answer:
It will purchase three.
Explanation:
the return will be:
income / investment
1ST rug cleaners: 200/500 = 40% return
2 rug cleaners: 150/500 = 30% return
3 rug cleaners: 75/500 = 15% return
4 rug cleaners: 20/500 = 4% return
As the current market rate is 12% if the forth rug cleaner is pruchased it will not turn out profitable.
Woodcarving Co. incurred the following costs during May: Conversion costs $ 476,500 Prime costs 403,750 Manufacturing overhead 320,500 What was the amount of direct materials and direct labor used in May? Direct materials Direct labor A. $ 111,000 $ 292,750 B. $ 116,000 $ 209,500 C. $ 247,750 $ 156,000 D. $ 81,000 $ 86,000
Answer:
The correct answer is C
Explanation:
With the following information, we need to calculate the direct materials and direct labor:
Woodcarving Co. incurred the following costs during May:
Conversion costs $ 476,500
Prime costs 403,750
Manufacturing overhead 320,500
We know that:
Conversion cost= direct labor + Manufacturing overhead
476500= direct labor + 320500
direct labor= $156000
Prime costs= direct materials + direct labor
403750= direct materials + 156000
direct labor= $247750
Final answer:
The amount of direct materials used by Woodcarving Co. in May was $247,750, and the amount of direct labor was $156,000. These were calculated by using the given prime costs and conversion costs, and deducting the value of manufacturing overhead.
Explanation:
The question asks to find the amount of direct materials and direct labor used by Woodcarving Co. in May, given the costs of conversion, prime, and manufacturing overhead. To find these amounts, we need to understand that prime costs consist of direct materials plus direct labor, and conversion costs consist of direct labor plus manufacturing overhead.
If we denote direct materials as DM, direct labor as DL, and manufacturing overhead as MO, then we have the following relationships:
Prime costs (PC) = DM + DLConversion costs (CC) = DL + MOManufacturing Overhead (MO) is given as $320,500Using the provided numbers:
PC = $403,750CC = $476,500MO = $320,500We can calculate direct labor (DL) by rearranging the conversion costs equation:
DL = CC - MO
DL = $476,500 - $320,500
DL = $156,000
Now plug in the value of DL into the prime costs equation to find DM:
DM = PC - DL
DM = $403,750 - $156,000
DM = $247,750
So, the amount of direct materials used in May was $247,750 and the amount of direct labor was $156,000.
Determine the future value of $21,000 under each of the following sets of assumptions (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) (Round your final answers to nearest whole dollar amount.):
Annual Rate Period Invested Interest Compounded Future Value
(a) 10% 8 years Semiannually $ _____
(b) 12% 4 years Quarterly $ _____
(c) 36% 25 months Monthly $ _____
Answer:
(a) $43,656.90
(b) $33,698.70
(c) $43,967.70
Explanation:
Future Value of annuity shall be:
(a) 10% for 8 years, Semiannually compounded
In this since the interest is compounded semiannually, the effective interest rate = 10/2 = 5%
Future Value of $1 in 8 years with 10% interest compounded semiannually = 2.0789
Value of $21,000 = $21,000 [tex]\times[/tex] 2.0789 = $43,656.90
(b) 12% for 4 years, Quarterly Compounded
In this since the interest is compounded quarterly, that is 4 times in a year, effective interest rate = 12/4 = 3%
Future value of $1 in 4 years with 12% interest compounded quarterly = 1.6047
Value of $21,000 = $21,000 [tex]\times[/tex] 1.6047 = $33,698.70
(c) 36% 25 months, Monthly
In this since the interest is compounded monthly effective interest rate = 36/12 = 3%
Therefore, Future Value of $1 in 25 months @36% compounded monthly = $2.0937
Value of $21,000 = $21,000 [tex]\times[/tex] 2.0937 = $43,967.70
The future value of an investment can be calculated using the formula FV = PV * (1 + r/n)^(nt). The terms in the formula stand for present value, annual interest rate, number of compounding periods per year, and time in years. The future value is then computed for scenarios with different rates, time periods and compounding frequencies.
Explanation:To calculate the future value of an investment with semiannual, quarterly, or monthly compounding, we use the future value formula: FV = PV * (1 + r/n)^(nt). Here, FV is future value, PV is present value, r is annual interest rate, n is number of compounding periods per year, and t is time in years.
For (a) 10% annual rate, 8 years invested, semiannually compounded, n is 2. Therefore, the future value is $21000 * (1 + 0.10/2)^(2*8)For (b) 12% annual rate, 4 years invested, quarterly compounded, n is 4. Therefore, the future value is $21000 * (1 + 0.12/4)^(4*4)For (c) 36% annual rate, 25 months invested, monthly compounded, n is 12. Note that t is 25/12, as we need to convert months to years. Therefore, the future value is $21000 * (1 + 0.36/12)^(12*(25/12))You'll need to compute the above calculations and round to the nearest whole dollar amount for your final answers.
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A person is planning to open a savings account with the intent to buy a house in 5 years. They will invest an equal amount each month for 5 years. This account will earn 6% per year(.5% per month)and will have $300,000 at the end of 5 year term. What is the amount of the monthly investment?
A. 4169
B. 4435
C. 4300
D. 5296
Answer:
The correct answer is C: $4300
Explanation:
Giving the following information:
They will invest an equal amount each month for 5 years.
This account will earn 6% per year(0.5% per month)and will have $300,000 at the end of the 5-year term
We need to use the following formula:
final value= {A[(1+i)^n-1]}/r
A= cuota
i= monthly interest
n= 60 months
Isolating A:
A= (FV*i)/[(1+i)^n-1]
A= (300000*0.005)/[(1.005^60)-1]
A= 1500/0.34885= 4300
Which of the following is NOT one of the strategies incorporated in the Sarbanes-Oxley Act of 2002?
(A) Establish compliance programs
(B) Establish ethics programs
(C) Dictate maximum compensation levels
(D) Attain greater board independence
Answer: Option (C) is correct.
Explanation:
Sarbanes-Oxley Act was ratified under the assumption that it will bring down organization fraud. It is also responsible for creation of PCAOB also known as Public Company Accounting Oversight Board which was created to oversee accounting industry. It also denied organization loans to executive and also gave employment protection to so called whistle-blowers. This Act is thoroughly responsible for strengthening independence and the financial literacy of organizations boards.
Vaughn Manufacturing is a private camping ground near the Mount Miguel Recreation Area. It has compiled the following financial information as of December 31, 2017. Service revenue (from camping fees) $168,960 Dividends $11,520 Sales revenue (from general store) 32,000 Notes payable 64,000 Accounts payable 14,080 Expenses during 2017 161,280 Cash 10,880 Supplies 7,040 Equipment 145,920 Common stock 51,200 Retained earnings (1/1/2017) 6,400 Determine Vaughn Manufacturing’s net income for 2017. Vaughn Manufacturing’s net income for 2017 $enter a net income amount
Answer:
The Vaughn Manufacturing’s net income for 2017 is $39,680
Explanation:
The computation of the net income is shown below:
In simple form, the net income equals to
= Total revenue - total expenditure
= Service revenue (from camping fees) + Sales revenue (from general store) - Expenses during 2017
= $168,960 + $32,000 - $161,280
= $39,680
The other items which are mentioned in the question are irrelevant. Therefore, these are ignored for the computation part
Smith Company reported pretax book income of $417,000. Included in the computation were favorable temporary differences of $53,400, unfavorable temporary differences of $21,700, and favorable permanent differences of $41,700. Smith's deferred income tax expense or benefit would be:
Answer:
deferred income tax expense 31,700
Explanation:
book income 417,000
permanent differences: (41,700)
book taxable income 375,300
temporary difference
favorable (53,400)
unfavorable 21, 700
net (31,700)
Taxable income 343,600
As currently has a favorable difference, when this diffrence balance it will have deferred tax expense in the future for this amounts.
Green Caterpillar Garden Supplies Inc.
Balance sheet for year ending December 31 ($ million)
Current assets: Year 1 Year 2
Cash and equivalent 1384 1107
Account receivable 504 405
Inventories 1485 1188
Total Current assets 3375 2700
Net fixed assets
Net plant & equipment 4125 3300
Total assets 7500 6000
Liabilities and equity
Current liabilities:
Account payable 0 0
Accruals 70 0
Notes payable 399 375
Long term debt 1406 1125
Total debt 1875 1500
Common equity
Common stock 3656 2925
Retained earning 1969 1575
Total common equity 5625 4500
Total liabilities & equity 7500 6000
Statement #2: In Year 2, Green Caterpillar Garden Supplies Inc. was profitable. This statement is ____, because:
(A) Green Caterpillar’s total assets increased between Years 1 and 2.
(B) The cash and equivalents account increased between Years 1 and 2.
(C) Green Caterpillar’s retained earnings account increased between the end of Years 1 and 2.
Answer:
This statement is TRUE, because:
C) Green Caterpillar’s retained earnings account increased between the end of Years 1 and 2.
Explanation:
The only way to determine if a company was profitable is through the Net Profit in the Income Statement , if it was profitable it means that the result were allocated in Retained Earnings in the Balance Sheets because this account only growth with the results of the income statement, in this case the increase in the account was for $394.
Option A) is not true because the increase in total assets not only means a company´s positive results it could be because of the company increment the Accounts Receivable term and the Inventories which no means a positive result.
Option (B) in the case of cash increases it could be due to an increase in the total debt of the company as it's indicated in the Long Term Debt and because of new stock issues.
Both of this option are complementary to the option selected but this options alone doesn't indicate a profitabilty year.
A cable company spends, on average, $ 600 to acquire a customer. Annual maintenance costs per customer are $ 45. Annual record-keeping and billing costs are $ 30 per customer. While the price of the basic service to customers is $ 30/month, 40% of customers buys the premium package at $ j50/month and 10% buy the superpremium package at $ 80/month. Over time, 80% of all customers remains with the company in the long run. The firm uses a discount rate of 8%. What is the average CLV for all customers?
Answer:
Average customer life value
CLV = 1260
Explanation:
[tex]Gross Margin \times\frac{retention}{1+discount-retention} )= CLV[/tex]
Fis, we will calcualteteh gross margin.
For that we need the revenue:
We will calculate the average revenue per year:
50% 30 dollars per month = 180
40% 50 dollars per month = 240
10% 80 dollars per month = 96
average annual revenue per customer: 516
now we ill calcualte the gross margin:
revenue 516
maintenance (45)
administrative (30)
gross margin 441
[tex]441 \times\frac{0.8}{1+0.08-0.80} )= CLV[/tex]
CLV = 1260
JWS Transport Company’s employees earn vacation time at the rate of 1 hour per 30-hour work period. The vacation pay vests immediately (that is, an employee is entitled to the pay even if employment terminates). During 2018, total wages paid to employees equaled $415,000, including $5,500 for vacations actually taken in 2018 but not including vacations related to 2018 that will be taken in 2019. All vacations earned before 2018 were taken before January 1, 2018. No accrual entries have been made for the vacations. No overtime premium and no bonuses were paid during the period. Required:Prepare the appropriate adjusting entry for vacations earned but not taken in 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Wage Expense ............ $8,150 Dr
Liability ..................................................... $8,150 Cr
Explanation:
If employees earn 1 hour of vacation per 30 hours of work, then vacation earned in 2018 would be 1/30 of wages, that is
($415,000 - $5,500) x 1/30 = $409,500 x 1/30 = $13,650
Of that amount, $5,500 has been paid so
$13,650 - $5,500 = $8,150
The appropriate adjusting entry for vacations earned but not taken in 2018 is
Wage Expense ............ $8,150 Dr
Liability ..................................................... $8,150 Cr
Hope this helps!
To prepare the appropriate adjusting entry for vacations earned but not taken in 2018, calculate the number of vacation hours earned but not taken based on the information provided. Then, prepare the adjusting entry by debiting the Vacation Expense account and crediting the Vacation Pay Liability account.
Explanation:In order to prepare the appropriate adjusting entry for vacations earned but not taken in 2018, you need to calculate the number of vacation hours earned but not taken in 2018 based on the information provided. The employees earn vacation time at the rate of 1 hour per 30-hour work period. Therefore, you need to divide the total wages paid to employees in 2018 ($415,000) by the hourly wage rate ($415,000 / $2.13) to determine the total number of work hours. Then, divide the total work hours by 30 to find the number of vacation hours earned but not taken. Finally, you can prepare the adjusting entry by debiting the Vacation Expense account and crediting the Vacation Pay Liability account for the amount of vacation pay earned but not taken in 2018.
Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Addison deposited $1,000 in a savings account at her bank. Her account will earn an annual simple interest rate of 5.8%. If she makes no additional deposits or withdrawals, how much money will she have in her account in 9 years?
Answer:
FV= $1661
Explanation:
Giving the following information we need to calculate the money at the final:
PV= $1000
i=0,058
n=9 years.
We need to use the following formula:
FV= PV*[(1+i)^n]
In this exercise:
FV= 1000*[(1+0,058)^9]
FV= $1661
At the end of year 9, she will have $1661
What would be the net annual cost of the following checking accounts? (a) Monthly fee, $3.25; processing fee, $0.35 cents per check; checks written, an average of 20 a month. (Do not round intermediate calculations. Input the answer as a positive value. Round your answer to 2 decimal places.)
Answer:
Total annual cost= $123
Explanation:
Giving the following information we need to calculate the annual cost:
Fixed monthly cost= $3.25
Variable cost= $0.35 per check
Q=20 month
Total annual cost= Fixed monthly cost*12+ (Variable cost*20)*12
Total annual cost= (3,25*12)+(0,35*20)*12= $123
Final answer:
The net annual cost of the checking account with a monthly fee of $3.25 and a processing fee of $0.35 per check, with an average of 20 checks written per month, is $123.00.
Explanation:
To calculate the net annual cost of a checking account with a monthly fee and a per-check processing fee, we need to consider both the fixed monthly cost and the variable cost dependent on the number of checks written. The question specifies a monthly fee of $3.25 and a processing fee of $0.35 per check, with an average of 20 checks written per month.
Calculating the Annual Cost
Monthly Fee: Since the monthly fee is consistent, we multiply it by 12 to find the annual cost from this portion. Monthly fee = $3.25, so Annual fee from monthly charges = $3.25 * 12 months = $39.00.Processing Fee: To find the annual cost from processing fees, we calculate the cost per month and then multiply by 12. The processing fee per check is $0.35, and with 20 checks per month, the monthly cost from processing fees is $0.35 * 20 = $7.00. Therefore, the Annual fee from processing charges = $7.00 * 12 months = $84.00.Total Annual Cost: We sum the annual cost from monthly fees with the annual cost from processing fees to find the net annual cost. Total Annual Cost = $39.00 (from monthly fees) + $84.00 (from processing fees) = $123.00.The net annual cost of the checking account is $123.00.
he cost for producing a certain product is $37 each. The fixed costs are $70,000. The selling price for each product is $72. 1. What is the revenue function? a. R(x) = 37x – 70,000 b. R(x) = 37x c. R(x) = 72x + 70,000 d. R(x) = 72x – 70,000 e. R(x) = 72x 2. What is the profit function? a. P(x) = 72x – 70,000 b. P(x) = 35x – 70,000 c. P(x) = 37x + 70,000 d. P(x) = 35x + 70,000 e. P(x) = 72x + 70,000 . 3. What is the break-even quantity? a. 2,500 b. 4,800 c. 1,846 d. 2,000 e. 4,500 4. What is the break-even point
Answer:
Instructions are listed below
Explanation:
Giving the following information:
The Variable unitary cost= $37 each.
The fixed costs are $70,000.
The selling price for each product is $72.
1) revenue function= P*X
Revenue function= 72*x
Option E
2) Profit function= (P-Vc)*X-Fc
Profit function= 35*x-70000
Option B
3) break-even quantity= fixed costs/contribution margin
break-even quantity= 70000/35= 2000 units
Option D
4) break-even point ($)=fixed costs/contribution margin ratio
Contribution margin ratio= contribution margin/P= 0,49
break-even point ($)=70000/0,4861111= $144000
The revenue function is R(x) = 72x, the profit function is P(x) = (72x - 70,000) - (37x), the break-even quantity is 2,000 units, and the break-even point is $144,000.
Explanation:1. What is the revenue function?
The revenue function can be calculated by multiplying the selling price per product by the quantity sold. In this case, the selling price is $72, so the revenue function is R(x) = 72x, where x represents the quantity sold.
2. What is the profit function?
The profit function is calculated by subtracting the total cost from the total revenue. The total cost includes both the fixed cost and the variable cost per product. In this case, the profit function is P(x) = (72x - 70,000) - (37x).
3. What is the break-even quantity?
The break-even quantity is the point at which the total revenue equals the total cost, resulting in zero profit. To calculate the break-even quantity, set the profit function equal to zero and solve for x. In this case, the break-even quantity is 2,000 units.
4. What is the break-even point?
The break-even point is the value of total revenue and total cost at the break-even quantity. At this point, the firm is neither making a profit nor incurring a loss. In this case, the break-even point is $144,000.
The Computer Store had the following revenue and expenses during the month ended July 31. Fees for computer repairs $ 41,600 Advertising expense 5,700 Salaries expense 18,500 Telephone expense 850 Fees for printer repairs 5,950 Utilities expense 1,300 Did the firm earn a net income or incur a net loss for the period? What was the amount?
The firm earned a net income of $21,200 for the period.
Explanation:The firm earned a net income for the period. To determine the net income, we need to calculate the total revenue and total expenses. The total revenue is obtained by adding the fees for computer repairs and fees for printer repairs, which gives us -
= $41,600 + $5,950
= $47,550.
The total expenses are obtained by adding the advertising expense, salaries expense, telephone expense, and utility expense, which gives us -
$5,700 + $18,500 + $850 + $1,300 = $26,350.
Net income is calculated by subtracting total expenses from total revenue, so -
= $47,550 - $26,350
= $21,200.
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Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a 6% interest rate to invest in the stock market. You invest the entire $20,000 in an exchange-traded fund (ETF) with a 12% expected return and a 20% volatility. The volatility of your investment is closest to:
Answer:
0.40
Explanation:
(2) SD( Rxp) = βSD(Rp)= 2(0.20) = 0.40
Lori borrows 10,000 for 10 years at an annual e ective interest rate of 9%. At the end of each year, she pays the interest on the loan and deposits the level amount necessary to repay the principal to a sinking fund earning an annual e ective interest rate of 8%. The total payments made by Lori over the 10-year period is X: Calculate X:
Answer: $15,903
Explanation:
Given that,
Lori borrows = 10,000
Time period = 10 years
Interest rate = 9%
Sinking fund (Interest rate) = 8%
Two payments are involved;
(i) the interest payment on the loan
(ii) the payment to the sinking fund
Annual interest payment = 10000 × 9%
= $900
Payment to the sinking fund:
Amount to be accumulated by the end of the 10th year along with interest = $10000
Amount to be deposited at the end of each year:
= [tex]10,000\times\frac{0.08}{(1.08^{10}-1) }[/tex]
= $690.29
Total payment per annum = $1,590.29
Total payment for the 10 year period = 1590.29 × 10
= $15,903
For each account, identify whether the changes would be recorded as a debit (DR) or credit (CR). a. Increase to Accounts Receivable b. Decrease to Unearned Revenue c. Decrease to Cash d. Increase to Interest Expense e. Increase to Salaries Payable f. Decrease to Prepaid Rent g. Increase to Proudfoot, Capital h. Increase to Notes Receivable i. Decrease to Accounts Payable j. Increase to Interest Revenue
Answer:
(a) DR ,(b) DR ,(c) CR ,(d) DR, (e) CR, (f) CR, (g) CR, (h) DR ,(i) DR, (j) CR
Explanation:
(a) DR-This is an increase in current asset.
(b) DR-This is a decrease in deferred income i.e currently a liability.
(c) CR -This is an outflow of cash
(d) DR-
(e) CR-This represents increase in current liabilities.
(f) CR-Prepaid rent is a current asset item. This represents decrease in current assets.
(g) CR-
(h) DR-Notes Receivable is a current asset item. Increase represents increase in current asset.
(i) DR-Account payable is a current liability item.This represents decrease in current liability.
(j) CR-Interest revenue is an income item. This represents increase increase in income
In accounting, increases in Accounts Receivable, Unearned Revenue, Interest Expense, Prepaid Rent, Notes Receivable and Accounts Payable are recorded as debits (DR), while decreases in Cash, Salaries Payable, Proudfoot, Capital, and increases in Interest Revenue are recorded as credits (CR).
Explanation:In the field of accounting, certain rules are followed while recording changes in different accounts. These changes are usually recorded in the form of debits (DR) and credits (CR).
a. An increase to Accounts Receivable would be a Debit (DR).
b. A decrease to Unearned Revenue would be a Debit (DR).
c. A decrease to Cash would be a Credit (CR).
d. An increase to Interest Expense would be a Debit (DR).
e. An increase to Salaries Payable would be a Credit (CR).
f. A decrease to Prepaid Rent would be a Debit (DR).
g. An increase to Proudfoot, Capital would be a Credit (CR).
h. An increase to Notes Receivable would be a Debit (DR).
i. A decrease to Accounts Payable would be a Debit (DR).
j. An increase to Interest Revenue would be a Credit (CR).
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Marcie frequently requests meetings between her team and counterparts in Portland. She often spots issues that will affect both groups and wants to work openly on coordination so there are no surprises for anyone. Marci plays a ______ role for her team.-maintenance-leadership-task-cohesiveness-relationship
Answer:
leadership role
Explanation:
Leadership -
It is the action of the leading people of the organization for achieving goals .
The leaders influence and motivates and build up the morale of the other employees to attain a goal and success .
In the question , Marcie plays a role of a Team Leader , and motivates her team to work hard for the organization .
Andrew, a poor college student, drinks coffee late at night. He has no income and is buying cheap coffee, such as Beanlightened, that he grinds and then brews. The coffee tastes bad but its enough caffeine. He goes to Starbucks occasionally. After he graduates, he gets a job at a database firm as a prgrammer. His income is $75,000 a year. He ends up buying coffee daily at SB. This helps him get a Gold Star Reward Card, which allows him to get free refills. In economic terms, SB coffee is a(n) ____, while Beanlightened coffee is a(n) _____.
Andrew's demand for SB changed as a result of....
Answer:
According to the situation,
Starbucks coffee is a normal good and Bean-lightened coffee is an inferior good.
A normal good refers to a good whose demand is directly related with the income of an individual. So, an increase in the income of an individual will results in more demand for normal good.
A inferior good refers to a good whose demand is inversely related with the level of income of an individual. So, an increase in the income of an individual will results in less demand for inferior good.
Therefore, when Andrew was a college student, there is no income sources, so he prefer to drink Bean-lightened coffee that is an inferior good. But once he started earning then he prefer Starbucks coffee that is a normal good.
Hence, Andrew's demand for SB changed as a result of Increase in income.
A track dozer cost $165,500 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $35.00 per operating hour. A major engine repair costing $26,000 will probably be required after 7,200 hr of use. The expected resale price (salvage value) is 21% of the original purchase price. The machine is expected to have a useful life of 10,800 hr. How much should the owner of the machine charge per hour of use, if it is expected that the machine will operate 1,800 hr per year? The company's cost- of-capital rate is 7.3%.
Answer:
It will charge 54.22 per hour to obtain a yield of 7.3% on the track dozer.
Explanation:
purchase cost 165,500
repair costing 26,000 at year 4
annual cost: 1,800 x 35 = 63,000
salvage value at end of useful life:
21% of purchase cost :
21% of 165,500 = 34,755
We will calculate the present value of the salvage value and the overhaul, to know how much does the company need to generate per year:
165,000 + pv of overhaul + pv of salvage value = present value of the cash inflow
pv of the overhaul
[tex]\frac{overhaul}{(1 + rate)^{time} } = PV[/tex]
overhaul: 26,000
time 4
rate 0.073
[tex]\frac{26000}{(1 + 0.073)^{4} } = PV[/tex]
PV $19,614.3744
Then, the PV of the salvage value:
[tex]\frac{salvage}{(1 + rate)^{time} } = PV[/tex]
salvage 34,755
time 6
rate 0.073
[tex]\frac{34755}{(1 + 0.073)^{6} } = PV[/tex]
PV $22,772.9326
165,500 + 19,614.3744-22,772.9326 = 163,341.4418
The present value of the contribution per hour at 7.3% discount rate should equal this amount
So we will set up the formula for the cuota of an annuity:
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV $163,341.44
time 6
rate 0.073
[tex]-34586.3538411519 \div \frac{1-(1+0.073)^{-6} }{0.073} = PV\\[/tex]
C 34,586.35
The contribution per year should be 34,586.35
each hour contribution should be: 34,586.35/1,800 = 19.2146
After the operating cost it should net 19.2146
hourly rate - 35 = 19.2146
hourly rate = 19.2146 + 35 = 54.2146 = 54.22
The owner of the track dozer should charge about $49.5 per hour to cover all associated costs and maintain the company's cost of capital rate of 7.3%.
Explanation:First, you need to calculate the total costs associated with the dozer over its expected life. The initial cost is $165,500. The ongoing costs are $35/hour for 10,800 hours, which equals $378,000. Now, the major maintenance cost of $26,000 should be included. So, the total cost at this point is $569,500 ($165,500 + $378,000 + $26,000).
However, at the end of its life, expect to be able to sell (salvage) the dozer for 21% of its original value, which is $34,755. So, subtract the salvage value from the total costs, producing a figure of $534,745. The owner needs to recover this cost over the life of the dozer.
The machine is expected to operate 1,800 hr per year. Then, divide the total cost ($534,745) by the total number of operating hours (10,800 hours). Thus, the owner should charge about $49.5 per hour to cover the total costs and maintain the company's cost of capital rate of 7.3%.
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Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division’s return on investment (ROI), which has been above 24% each of the last three years. Casey is considering a capital budgeting project that would require a $6,100,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company’s discount rate is 20%. The project would provide net operating income each year for five years as follows:
Sales $ 5,400,000
Variable expenses 2,400,000
Contribution margin 3,000,000
Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $900,000
Depreciation 1,220,000
Total fixed expenses 2,120,000
Net operating income $ 880,000
Required: 1. What is the project’s net present value? (Round discount factor(s) to 3 decimal places.)
2. What is the project’s internal rate of return to the nearest whole percent?
3. What is the project’s simple rate of return? (Round percentage answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.)
The question involves computing financial metrics for a capital budgeting project: NPV, IRR, and simple rate of return. NPV and IRR require discounting future cash flows, while the simple rate of return is the incremental net operating income divided by initial investment, which results in 14.4% for this project.
The question asks for an analysis of a capital budgeting project using multiple financial metrics such as net present value (NPV), internal rate of return (IRR), and simple rate of return to determine the project's viability. To compute NPV, we must discount the project's net operating income for each year at the given discount rate of 20% and subtract the initial investment. However, calculating IRR would require trying different rates until the NPV equals zero, which is typically done using financial calculators or software. The simple rate of return can be found by dividing the annual incremental net operating income by the initial investment.
NPV is a valuable tool for assessing the profitability of a project by comparing the value of money today with the value of that same money in the future, taking inflation and returns into account. Given Pigeon Company's discount rate and the provided cash flows, calculating NPV would help Casey determine if the project's earnings exceed anticipated costs. Unfortunately, without being able to perform that calculation here, we cannot provide the exact NPV or IRR values. Still, the simple rate of return is the project's incremental net operating income excluding depreciation, divided by the initial investment, resulting in 14.4%.
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number of Units Unit Cost
Apr. 1 Beginning inventory 410 $2.33
Apr. 20 Purchase 380 2.74
Dunbar sold 640 units of inventory during the month. Ending inventory assuming FIFO would be (Do not round your intermediate calculations. Round your answer to the nearest dollar amount):
A. $349.
B. $955.
C. $411.
D. $1,123.
Answer:
Ending inventory assuming FIFO would be $411
Explanation:
Date Q U.cost Cost Sold Inventory Cost
april 1 410 2,33 955,3 410 0 0
apri 20 380 2,74 1041,2 230 150 411
640
How should a "gain" from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions?
a. As ordinary earnings shown on the income statement.
b. As paid-in capital from treasury stock transactions.
c. As an increase in the amount shown for common stock.
d. As an extraordinary item shown on the income statement.
Answer:
b. As paid-in capital from treasury stock transactions.
Explanation:
No gain is recognize when selling stock, as this represent contribution to the company from the stockholders. This is not a gain for the company is just a contribution.
The treasury stock will be write-off, cash will be debited for the amount received and then, any difference will be settle by debiting or crediting the paid-in capital from Treasury Stock.
The labor force is comprised of those who are working for any number of hours (the employed) and those who are out of work but actively looking for a job (the unemployed). Calculate the size of the labor force. The size of the adult population is 30,000. The number working is 17,700 and the number of unemployed actively looking for work is 1,600. a. Labor Force: people A commonly reported labor statistic is the Labor Force Participation Rate 'LFPR':
Answer:
Labor force 19,300
Labor Force participation Rate: 64.33%
Explanation:
working population 17,700
unemployed actively looking for work 1,600
Total Labor Force 19,300
Labor Force Participation Rate (LFPR):
It is the quotient between the Labor force and the total number of people eligible for a job
19,300/30,000 = 0.6433 = 64.33%
This will be the percentage of the population over 16 year which, are actively looking for a job or are already hired in one.
Which of the following is an example of physical capital?
a. bulldozers, backhoes and other construction equipment
b. a taxi-cab driver's knowledge of the fastest routes to take
c. the available knowledge on how to make semiconductors
d. All of the above are correct.
Which of the following statements is true? Free trade causes contraction of the export-oriented sector. Free trade causes contraction in the import-competing sector. Free trade restricts consumption choices of the domestic consumers. All the domestic producers benefit when a country engages in free trade.
Answer:
The correct answer is: Free trade causes contraction in the import-competing sector.
Explanation:
Free trade implies no or very low restrictions on trade between countries. These restrictions may be tariffs, quotas, permits, licenses, etc.
Free trade means that foreign producers will be able to sell their products in the domestic market easily. So it will increase competition in the sector that is competing with foreign producers. Or in other words, we can say that it will lead to a contraction in the import-competing sector.
This happens because domestic producers have to face competition from foreign producers. We are aware that a country exports the good it specializes in producing. So obviously foreign producers specialize in that product. This will lead to a contraction in the domestic market for the good.
The stated purposed of NAFTA is to A. gain membership in the WTO. B. reduce the outsourcing of jobs to foreign countries. C. phase out all trade and tariff barriers among Canada, Mexico, and the U.S. D. increase product innovation in the wireless communication sector.
Answer:
C. phase out all trade and tariff barriers among Canada, Mexico, and the U.S
Explanation:
The North American Free Trade Agreement (NAFTA)
This agreement creates a bloc of trade for the region, Canada, Mexico and the US.
As state on "C" It result in the elimination or reduction of barriers to trade and investment between the countries.
It will be replaced in the following year by the United States–Mexico–Canada Agreement (USMCA)
But NAFTA will keep working until this new agreement is finished.
Some persons are counted as out of the labor force because they have made no serious or recent effort to look for work. However, some of these individuals may want to work even though they are too discouraged to make a serious effort to look for work. If these individuals were counted as unemployed instead of out of the labor force, then
a. both the unemployment rate and labor-force participation rate would be higher.
b. the unemployment rate would be higher ,and the labor-force participation rate would be lower.
c. the unemployment rate would be lower, and the labor-force participation rate would be higher.
d. both the unemployment rate and labor-force participation rate would be lower.
Answer:
The correct answer is A: both the unemployment rate and labor-force participation rate would be higher.
Explanation:
The unemployment rate is the share of the labor force that is jobless, expressed as a percentage. To calculate the unemployment rate, the number of unemployed people is divided by the number of people in the labor force, which consists of all employed and unemployed people. It defines unemployed people as those who are willing and available to work, and who have actively sought work.
By increasing the number of people unemployed, the number of employed people is now divided by a larger base. Meaning that the unemployment rate increases.
The labor force participation rate measures an economy's active labor force and is the sum of all employed workers divided by the working-age population. It refers to the number of people who are either employed or are actively looking for work. The number of people who are no longer actively searching for work would not be included in the participation rate.
By increasing the number of people of unemployed people, they will be considered as people that are actively looking for work. Meaning that labor force participation increases.
All discouraged workers are counted as unemployed, both the unemployment rate and the labor-force participation rate would increase because these individuals are added both to the unemployed count and the total labor force count.
Explanation:The correct answer to this question is (a). If individuals who are too discouraged to make a serious effort to look for work were counted as unemployed instead of out of the labor force, both the unemployment rate and the labor-force participation rate would be higher. This is because the unemployment rate is a ratio that compares the number of unemployed individuals to the total labor force. Meanwhile, the labor-force participation rate measures the total number of individuals who are either employed or actively looking for work, as a percentage of the working-age population. Therefore, counting these discouraged workers as unemployed would add to both the number of people counted as unemployed and those considered as part of the labor force, raising both rates.
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Ambrin Corp. expects to receive $2,000 at the end of each year for 10 years. Then the corporation expects to receive $3,500 per year for the following 10 years, at the end of each year. What is the approximate present value of this 20-year cash flow? Use an 8% discount rate.
(A) $2.547
(B) $24,294
(C) $27,870
(D) $32,389
Answer:
B) $24294
Explanation:
PVIFA = (1 - (1 + r)^-n)/r
= (1 - (1 + 8%)^-10)/8%
= 6.710
PVIF = 0.4632
present value = (amount expected to receive for the first 10 years)×(PVIFA) + (amount expected to receive for the second 10 years)×(PVIFA)×(PVIF)
= (2000)×(6.710) + (3500)×(6.710)×(0.463)
= $24293.6
≈ $ 24294
You want to endow a scholarship that will pay $ 11 comma 000 per year forever, starting one year from now. If the school's endowment discount rate is 9 %, what amount must you donate to endow the scholarship? How would your answer change if you endow it now, but it makes the first award to a student 10 years from today?
Answer:
You must donate $ 123455.5556 to endow the scholarship.
If the endow it now but it makes the first award to a student 10 years from today, then the amount to donate will be $ 56842.36731.
Explanation:
if the scholarship one year from now, the donation amount would be:
present fund amount = (scholarship amount)/(discount rate)
= $11,000/9%
= $ 123455.5556
Therefore, you must donate $ 123455.5556 to endow the scholarship.
if the scholarship start in 10 years from today, the amount is:
scholarship amount in 10 years = (amount of scholarship today)/[(1+9%)^9]
= $ 123455.5556/(1+9%)^9
= $ 56842.36731
Therefore, if the endow it now but it makes the first award to a student 10 years from today, then the amount to donate will be $ 56842.36731.
Which of the following is an example of frictional unemployment? A. Dora lost her job when the textile mill closed. She does not have skills to work in another industry and has been unemployed for over a year. B. Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel. She expects to get her job back when the economy picks up. C. George is an unskilled worker who mows lawns in the summer, but is unemployed the rest of the year. D. Hector looked for a job for five weeks after finishing college. He turned down several jobs that didn't use his skills, but now has a job requiring the expertise he gained in college.
Answer:
The correct answer is D
Explanation:
Frictional unemployment is the time period between jobs when a worker is searching for or transitioning from one job to another. It can be voluntary based on the circumstances of the unemployed individual. Frictional unemployment exists because both jobs and workers are heterogeneous, and a mismatch can result between the characteristics of supply and demand. Such a mismatch can be related to skills, payment, work-time, location, seasonal industries, attitude, taste, and a multitude of other factors.
Answers A, B, C are examples of structural unemployment. Hector is unemployed because the jobs offering doesn't satisfy his requirements.
George is an unskilled worker who mows lawns in the summer but is unemployed the rest of the year. This is an example of frictional unemployment, which occurs when individuals are temporarily unemployed while transitioning between jobs or searching for new employment opportunities. Therefore, option C is correct.
Frictional unemployment refers to the temporary unemployment that occurs when individuals are between jobs or actively seeking new employment. It is a natural part of the labor market as workers transition and search for better job opportunities that match their skills and preferences.
Frictional unemployment can arise due to various factors such as job changes, layoffs, voluntary job separations, or recent entry into the labor force. It is considered relatively short-term and often occurs in a healthy and dynamic labor market where individuals have mobility and opportunities for job transitions.
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