A kidnapper takes a hostage and demands that the hostage pay ransom. They then play the following game in extensive form. The hostage may pay the ransom or not. Following that, the kidnapper may kill the hostage or release him. If the hostage is released, he may report the kidnapping to the police or not report it. The kidnapper has utility +5 for getting paid, -2 for having the kidnapping reported, and -1 for killing the hostage. These utilities are additive (for instance, getting paid but also reported is worth 5-2 = 3). Utilities for the hostage are -10 for getting killed, -2 for paying, +1 for reporting, and these are also additive.
Draw the game tree for this game, labeling choosers, choices and payoffs. Find the natural outcome of the game. [It should be the second worst outcome for both players.)
Suppose the hostage could make a convincing threat or promise. What should it be? What is the new outcome? Who benefits?
Suppose that after the hostage makes the convincing threat or promise in c), the kidnapper can make a threat or promise. What should it be? What is the new outcome? Who benefits?
If the hostage is not able to make a convincing threat or promise, but the kidnapper can, what should it be and what is the result?
Suggest some real-life ways that any or all of the above threats and promises might be made credible.
Answers
Answer:
Explanation:
we would be answering this question by presenting the data in a spreadsheet file (which is a computer program that is used for accounting purposes as well as recording of data using columns and rows which information can be entered in such a useful way for decision making, data analyzing and for record keeping.)
Microsoft Excel would be the spreadsheet application that would be used in answering this question, kindly check the attached image to see the presented solution to the question above.
Related Questions
Why is it better to underestimate your income instead of overestimating when creating a budget?
Answers
Underestimating income in a budget promotes financial prudence, reduces stress, and builds a safety net, encouraging realistic planning, savings, and responsible spending, preventing over commitment, and fostering financial discipline.
Underestimating income when creating a budget offers several advantages. It promotes financial prudence by setting a conservative estimate, helping to avoid stress caused by falling short of budgeted expenses. This approach builds a financial safety net, as unspent funds can be used for emergencies or savings.
By presenting a more realistic financial picture, underestimating income encourages responsible planning. It acknowledges that unforeseen costs can arise and encourages prudent spending decisions. Overestimating income, on the other hand, might lead to financial strain, overcommitment to unsustainable expenses, and a lack of funds for emergencies. In summary, underestimating income fosters financial discipline, encourages savings, and ensures that your budget is adaptable and sustainable.
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A bakery buys sugar in 15-pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. What is the total cost of ordering and holding sugar
Answers
Answer:
the total cost of ordering and holding sugar is $1,000 per year
Explanation:
Step 1 Calculate the Economic Order Quantity(EOQ).
EOQ = √(2×Total Demand×Ordering cost)/ Holding Cost per Unit
= √(2×250×20×5)/20
= 50
Step 2 Calculate the total cost of ordering and holding sugar
Total cost = Ordering Cost + Holding Cost
= (250×20)/50 × $5 + 50/2 × $20
= $500+$500
= $1,000
Therefore, the total cost of ordering and holding sugar is $1,000 per year
The total cost of ordering and holding sugar for the bakery each year is $101,670, including both the carrying costs and ordering costs.
Explanation:The total cost of ordering and holding sugar can be calculated using these provided numbers. First, we calculate the annual carrying cost by multiplying the number of bags by the carrying cost per bag; that gives us, 5000 * $20 = $100,000. Next, to get the annual ordering cost, we must determine the total number of orders made in the year. Since the bakery uses 20 bags a day for 250 days, it means they order 5000 bags a year.
If each order delivers 15 pounds, then the bakery places around 334 orders a year (5000 divided by 15). Therefore, annual ordering costs would be 334 * $5 = $1,670. The total annual cost considering both the carrying costs and ordering costs would then be $100,000 + $1,670 = $101,670.
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PowerBright must decide between two locations on which to build a new power station to provide 60 megawatt hours of electricity a month. Location A would have a variable cost of $1,000 per megawatt hour and Location B would have a variable cost of $1,500 per megawatt hour. A power station at Location A would also require a fixed cost of $70,000 a month, although an estimate of the monthly fixed cost at Location B has not been made available yet, due to ongoing negotiations with a land owner there. At what fixed cost for Location B would PowerBright be indifferent to the choice of either of these two locations?
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Answer:
Fixed cost of B = $40000
Explanation:
To identify the indifference point,
Fixed cost of A + Variable cost of A = Fixed cost of B + Variable cost of B
$70000 + $1000 x = Fixed cost of B + $1500 X
The value of x is 60
$70000 +$1000(60) = Fixed cost of B +$1500(60)
$70000+$60000 = Fixed cost of B + $90000
Fixed cost of B = $130000 -$90000
Fixed cost of B = $40000
As indicated in the chapter, return on investment (ROI) is well entrenched in business practice. However, its use can have negative incentive effects on managerial behavior. For example, assume you are the manager of an investment center and that your annual bonus is a function of achieved ROI for your division. You have the opportunity to invest in a project that would cost $550,000 and that would increase annual operating income of your division by $50,000. (This level of return is considered acceptable from top management’s standpoint.) Currently, your division generates annual operating profits of approximately $625,000, on an asset base (i.e., level of investment) of $4,150,000.
Required:
1. What is the current return on investment (ROI) being realized by your division (i.e., before considering the new investment)?
2. What would happen to the near-term ROI of your division after adding the effect of the new investment?
3. As manager of this division, given your incentive compensation plan, would you be motivated to make the new investment?
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Answer:
ROI = net profit / total investment
1. What is the current return on investment (ROI) being realized by your division
ROI = $625,000 / $4,150,000 = 15.06%2. What would happen to the near-term ROI of your division after adding the effect of the new investment?
ROI = ($625,000 + $50,000) / ($4,150,000 + $550,000) = 14.36%If you carry out the new project the ROI of your division will decrease.
3. As manager of this division, given your incentive compensation plan, would you be motivated to make the new investment?
Even though the new project's return (9.1%) is considered acceptable by upper management, you will probably reject it since it will decrease your division's total ROI. When managers are assigned bonuses based on certain achievements, reducing your profitability ratio will probably result in no bonus.Final answer:
The current ROI of the division is 15.06%. After considering the new investment, the near-term ROI would decrease to 14.36%. The manager's motivation to invest might be reduced due to the impact on their annual bonus linked to the ROI, despite the investment's acceptability to top management.
Explanation:
To calculate the current return on investment (ROI) for the division before considering the new investment, we use the formula:
ROI = (Operating Income / Asset Base) × 100
So, the current ROI = ($625,000 / $4,150,000) × 100 = 15.06%
Considering the new investment of $550,000 that increases operating income by $50,000, the new operating profit would be $675,000, and the new asset base would be $4,700,000. The new ROI would be ($675,000 / $4,700,000) × 100 = 14.36%. This indicates that the near-term ROI would decrease after making the investment.
Considering the incentive compensation based on ROI, as a manager, you would be less motivated to make the new investment as it would decrease the near-term ROI and potentially your annual bonus, even though the project's return is acceptable to top management.
International Imports (I2) pays an annual dividend rate of 10.20% on its preferred stock that currently returns 13.67% and has a par value of $100.00 per share. What is the value of I2’s preferred stock?
Answers
Answer:
The market price/value of the share of preferred stock is $74.62
Explanation:
The preferred stock pay 10.2% return on $100 per share which comes out to be 100 * 10.2% = $10.2. This dividend will remain constant no matter what the price in the market is. The price in the market is calculated by dividing the ineterest payment by the current price of the share. The formula for the current return of the preferred stock is:
0.1367 = 10.2 / P
P = 10.2 / 0.1367
P = $74.615 rounded off to $74.62
Sally's Gift Baskets sells gift baskets, on average, for $125; each gift basket costs, on average, $60. Debby pays salaries each month of $1, 300 and her store rent is $1,000 per month. She also pays sales commissions of 5% of the sales price. In May, 140 gift baskets were sold.
a. Prepare a traditional income statement for the month of May.
b. Prepare a contribution margin income statement for the month of May.
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Answer:
a. Traditional Income Statement
Sales ($125 x 140) $17,500
Cost of Sales ($60 x 140) ($8,400)
Gross Profit $9,100
Salaries ($1,300)
Rent ($1,000)
Sales Commission ($17,500 x 5%) ($875)
Net income $5,925
b. Contribution Margin Income Statement
Sales ($125 x 140) $17,500
Less: variable Costs
Cost of Sales ($60 x 140) ($8,400)
Sales Commission ($17,500 x 5%) ($875)
Contribution Margin $8,225
Less: Fixed Costs
Salaries ($1,300)
Rent ($1,000)
Net income $5,925
Explanation:
a.
Traditional Income statement calculates the gross profit after deducting the cost of goods sold from the revenue. After that it deduct all the operating expenses to calculate the Net Income.
b.
Contribution margin income statement consider all the variable expenses as cost of product cost and calculates the contribution margin, after that the fixed costs are deducted calculate the net income.
Ricardo pays the following taxes during the year: Ricardo's Taxes Taxes Amounts Real estate taxes on his personal residence $2,500 Real estate taxes on rental property 2,000 State sales tax 600 State income taxes 4,000 City income taxes 1,000 Federal income taxes 5,400 What is the amount Ricardo can deduct for taxes as an itemized deduction for the year?
Answers
Ricardo can deduct $15,500 for taxes as itemized deductions for the year.
The amount Ricardo can deduct for taxes as an itemized deduction for the year is $15,500.
To calculate this, we sum up the real estate taxes on his personal residence ($2,500), real estate taxes on rental property ($2,000), state sales tax ($600), state income taxes ($4,000), city income taxes ($1,000), and federal income taxes ($5,400).
Suppose the following transactions occur during the current year:1. Clancy orders 40 bottles of wine from a French distributor at a price of $30 per bottle.2. A U.S. company sells 200 spark plugs to a Korean company at $5.00 per spark plug.3. Hubert, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company).Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year.Hint: Be sure to enter a "0" if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.
Answers
Answer:
a) Consumption = $1,800
b) Imports = $1,200
c) Exports = $1,000
d) Net Export = -$200
e) GDP = $1,670
Explanation:
Consumption is the purchase of a domestic company.
Consumption = 670 + (40 × 30)
= 670 + 1,200
= $1,800
There no investment or government purchases, therefore they are zero "0"
Imports: the amount spent on purchases of foreign goods.
Imports = Quality of orders × Price
= 40 × 30
= $1,200
Exports: the amount spent by foreigners on domestic goods
Exports = Quality exported × Price
= 200 × 5
= $1,000
Net exports = Exports - Imports
= 1,000 - 1,200
= -$200
Gross Domestic Product = C + I + G + (X - M)
GDP = 1,870 + 0 + 0 + (1,000 - 1,200)
= 1,870 + (-200)
= 1,870 - 200
= $1,670
Based on the information given, the imports and exports will be $1200 and $1000 respectively.
The imports for the bottles of wine will be:
= Quality of orders × Price
= 40 × 30 = $1,200
The exports for the bottles of wine will be:
Exports = Quality exported × Price
= 200 × 5 = $1,000
The consumption will be:
= 670 + 1200 = 1870
Net export will be:
= Export - Import
= 1000 - 1200
= -$200
In conclusion, the government purchases and investment will be $0.
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In a small, closed economy, national income (GDP) is $ 600.00 million for the current quarter. Individuals have spent $ 250.00 million on the consumption of goods and services. They have paid a total of $ 100.00 million in taxes, and the government has spent $ 200.00 million on goods and services this quarter. Use this information and the national income identity to answer the questions. How much is spent on investment in this economy
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Answer:
The answer is $150 million
Explanation:
A closed economy is also called autarky. A closed economy is an economy that trades only within its economy. There is no import and there is no export also. The economy (country) is self-sufficient.
The formula for GDP in a closed economy equals C + I + G
where C is the household/individual consumption.
I is the business or firm's investment
G is the government spending.
GDP is $600million
C is $ 250 million
G is $ 200 million
I = ($600 - $ 250 - $200) million
I= $150 million
The Sugar Cookie Company just paid its annual dividend of $.45 a share. The stock has a market price of $21 and a beta of.88. The return on Treasury bills is 4.2 % and the market has an 11.8 % rate of return. What is the cost of equity for the Cookie Company?
Answers
Answer:
The cost of equity based on the CAPM is 10.888%
Explanation:
The cost of equity of the stock or the required rate of return (r) is the minimum return required by investors to invest in a stock. The CAPM approach provides an equation to calculate the required rate of return (r) based on the risk free rate, stock's beta and the market risk premium. The formula for r is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free rate or rate on T billsrM is the expected return on marketr = 0.042 + 0.88 * (0.118 - 0.042)
r = 0.10888 or 10.888%
Answer:
Cost of equity is 10.9%
Explanation:
Cost Asset Pricing model will be used for the calculations of cost of equity.
Capital asset pricing model measure the expected return on an asset or investment. It is used to make decision for addition of specific investment in a well diversified portfolio.
In this Question the 4.2% of return on Treasury is Risk free rate, market return is 11.8% ans associated beta is 0.88.
Formula for CAPM
Expected return = Risk free rate + beta ( Market return - Risk free rate )
Expected return = 4.2% + 0.88 ( 11.8% - 4.2% )
Expected return = 4.2% + 6.688%
Expected return = 10.888% = 10.9%
The income statement for the Clothing Division of Tom Ron Surf Company is as follows: Sales $445,000 Operating expenses 270,000 Net operating income 175,000 Interest expense 35,000 Earnings before taxes 140,000 Income tax expense (30%) 42,000 Net income $ 98,000 How much is net operating profit after taxes
Answers
Answer:
78000
Explanation:
To find the net operating profit after taxes, subtract the income tax expense from the net operating income, resulting in $133,000.
The net operating profit after taxes can be calculated by subtracting the income tax expense from the net operating income. In this case, it would be:
Net Operating Profit After Taxes = Net Operating Income - Income Tax Expense
Net Operating Profit After Taxes = $175,000 - $42,000
Net Operating Profit After Taxes = $133,000
"Guardino Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000."
Prepare the journal entry to record the flow of cost in department 1 during the period of factory.
Answers
Answer:
See the explanation below.
Explanation:
Guardino Company
Journal Entries
Details Dr ($) Cr ($)
Work in P - Cost flow 375,000
Direct materials 100,000
Direct labor 125,000
Applied factor overhead 150,000
To record the flow of cost in department 1.
Flow of cost 375,000
Beginning work in process 75,000
Ending work in process 60,000
Goods transferred to Dept 2 390,000
To record cost of goods transferred to Department 2
The Horizon Company will invest $65,000 in a temporary project that will generate the following cash inflows for the next three years. Year Cash Flow 1 $ 24,000 2 37,000 3 34,000 The firm will also be required to spend $17,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 12 percent.
Answers
Answer:
NPV = $-1,974.99
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Net present value can be calculated using a financial calculator
Cash flow in year 0 = $-65,000
Cash flow in year 1 = $ 24,000
Cash flow in year 2 = $37,000
Cash flow in year 3 = $34,000 - $17,000 = $17,000
I = 12%
NPV = $-1,974.99
To find the NPV 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 NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
4) Kelsea Co. started 2018 with $107,000 of merchandise inventory on hand. During 2018, $420,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. The company paid freight charges of $8200. Merchandise with an invoice amount of $4900 was returned for credit. Cost of goods sold for the year was $370,000. The company uses a perpetual inventory system. What is ending inventory assuming the company uses the gross method to record purchases
Answers
Answer:
Ending inventory = 156,149
Explanation:
Discount received = ($420,000 - $4900) × 1% = $4,151
Net purchases = Purchases + Freight charges - Merchandise return - Discount received = $420,000 + $8200 - $4900 - $4,151 = $419,149
Cost of good sold = Beginning inventory + Purchases - Ending inventory
Therefore, we have:
$370,000 = $107,000 + $419,149 - Ending inventory
$370,000 - $107,000 - $419,149 = - Ending inventory
- 156,149 = - Ending inventory
Ending inventory = 156,149
What is brand awareness
Answers
Answer:
the extent to which consumers are familiar with the distinctive qualities or image of a particular brand of goods or services.
Explanation:
Answer:
C. how well a brand is recognized by potential customers
Explanation:
on edmentum
The actual cost of direct materials is $10.50 per pound. The standard cost per pound is $11.75. During the current period, 10,000 pounds were used in production and 11,500 pounds were purchased. The standard quantity for actual units produced is 9,900 pounds. How much is the direct materials price variance, assuming it is recorded at purchase point
Answers
Answer:
$14,375 F
Explanation:
The standard cost per pound $11.75
Less actual cost of direct materials $10.50 per pound
Balance $1.25
Hence;
Purchased pound 11,500 × $1.25
= $14,375 F
Therefore the direct materials price variance, assuming it is recorded at purchase point will be $14,375 F
A decline in foreign demand for the US goods: Suppose the European and Japanese economies succumb to a recession and reduce their demand for the US goods for several years. Using the AS/AD framework, explain the macroeconomic consequences of this shock, both immediately and over time.
Answers
Answer:
A decline in foreign demand for the US goods will result in a reduction in the real GDP
Explanation:
The AD–AS or aggregate demand–aggregate supply model is a macroeconomic model that analyzes price level and output through the relationship between aggregate demand and aggregate supply.
he European and Japanese economies succumb to a recession and reduce their demand for the US goods for several years, the immediate macroeconomic consequence will be a change in the AD-AS slope reflecting a fall in the amount of goods demanded in the presence of surplus supply that was meant for export.
In the long run, it will escalate to a trade deficit and a decline in dollar value.
Answer:
It is important to note that the demand curve is shifted by both foreign and domestic demand. There will be a shift in the demand curve in the short run and a shift in the supply curve in the long run.
Explanation:
The market starts at equilibrium where the long run aggregate supply (LRAS), the short run aggregate supply (AS) and the aggregate demand are in equilibrium at point A.
The recession in both Japan and Europe causes the two countries to decrease their demand for American goods and therefore the AD curve shifts to the left (AD’) and in the short run there is a decrease in both the price and the output/income represented by point B. Consequence: The Us has to sell at a lower price at a lower output . Now in the long run the America market ( the producers, firms and workers) will adjust their expectations leading to a right shift of the AS curve to AS’ and the long run equilibrium is at point C, (consequence)where the output/income is the same at a lower price. Note that the LRAS is fixed because of the fixed supply of the factors of production.
Crane Company is contemplating the production and sale of a new widget. Projected sales are $375000 (or 75000 units) and desired profit is $30000. What is the target cost per unit?
Answers
Answer:
$0.1
Explanation:
Data provided
Projected Sales = $37,500
Desired profit = $30,000
Number of units sold = 75,000
The computation of target cost per unit is shown below:-
Targeted total cost = Projected Sales - Desired profit
= $37,500 - $30,000
= $7,500
Target cost per unit = Targeted total cost ÷ Number of units sold
= $7,500 ÷ 75,000
= $0.1
A dealer in British pounds who thinks that the pound is about to appreciate A. may want to lower his ask price while raising his bid. B. may want to widen his bid-ask spread by raising his ask price and lowering his bid. C. may want to lower both his bid price and his ask price D. may want to raise both his bid price and his ask price
Answers
In anticipation of an appreciation of the British pound, a dealer should raise both the bid and ask prices to align with the expected increase in the pound's value.
If a dealer in British pounds anticipates that the pound is about to appreciate, he or she should ideally want to raise both the bid price and the ask price. The bid price is the rate at which the dealer is willing to buy pounds, and the ask price is the rate at which the dealer is willing to sell pounds. Because an appreciation of the pound means that it will increase in value relative to other currencies, such as the dollar, the dealer would expect that the future supply of pounds might decrease (as British investors choose to keep their investments at home) and the future demand for pounds might increase (as U.S. investors want more pounds to purchase higher-yielding British assets). Therefore, by raising both bid and ask prices, the dealer prepares for the shift in the exchange rate, where the pound becomes more expensive in terms of other currencies, leading to pound appreciation and dollar depreciation.
It costs Waterway Industries $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3600 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Waterway has sufficient unused capacity to produce the 3600 scales. If the special order is accepted, what will be the effect on net income
Answers
Answer:
Effect on income= $7,200 increase
Explanation:
Giving the following information:
It costs Waterway Industries $12 of variable
A foreign wholesaler offers to purchase 3600 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted.
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Effect on income= 3,600*(15 - 13)= $7,200 increase
March 1, 2017, Alpha Company's beginning work in process inventory had 8,000 units. This is its only production department. Beginning WIP units were 50% complete as to conversion costs. Alpha introduces direct materials at the beginning of the production process. During March, a total of 15,000 units were started and a total of 20,000 units were completed. Alpha's ending WIP inventory had 3,000 units which were 70% complete as to conversion costs. Alpha uses the weighted average method. Use this information to determine for March 2017 the equivalent units of production for conversion costs. (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units)
Answers
Answer:see attached file
Explanation:
Answer:
Beginning units 8000 Transferred out 20,000
Started intro production 15000 Ending units 3,000
23000 23000
Equivalent units Material Conversion
Units transferred A 20000 20000
Ending Units 3,000 3,000
Completion 100% 70%
B 3000 2100
Total units 23000 22100
Mary's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work−in−process inventory. What amount of sales revenue will be reported on the 2019 budgeted income statement? Question 4 options: $130,000 $150,000 $110,000 $170,000
Answers
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Mary's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each.
Sales revenue is the result of multiplying the number of units sold for the selling price per unit:
Sales= 30,000*5= $150,000
Answer:
The sales revenue that will be reported is $150000
Explanation:
As the beginning and ending target inventory is the same, the units sold by Mary's Baskets will remain at 30000 baskets.
Sales = Opening inventory in units + Production - Closing Inventory
Sales in units = 4000 + 30000 - 4000 = 30000 units
The revenue is a function of Sales quantity multiplied by the selling price. The selling price is $5 per unit.
Sales revenue = 30000 * 5 = $150000
The International Disc Jockey's Union has a wage contract that stipulates a yearly wage increase based on the Consumer Price Index. If this year's wage is $ 28.00 , the current CPI is 180 , and the contract was first signed in the base year, what was the original salary the first year of the contract? Round your answer to two decimals. original salary: $
Answers
Answer:
Salary in base year = $15.56
Explanation:
Consumer Price Index(CPI ): This is the weighted average price of a basket of goods and services consumed by a typical consumer. It is used to measure the rate of inflation.
The increase in the CPI is taken to be the rate of inflation. For example, if the CPI rose to 110 from 100, this implies an inflation rate of 10% within the time period in focus.
To preserve the purchasing power of workers income, employment contracts usually allow for wages and salaries to be adjusted for inflation.
The wage or salary in the current year is $28, this figure can be adjusted for using the CPI to arrive at the wage in the base year (i.e salary before the inflation). This is done as follows:
Salary in the base year
= Salary in the current year× (CPI base year/ CP1 in current year)
The CPI in the base year is taken to be 100
Salary in base year = 100/180× 28
= $15.56
Final answer:
The original salary of the International Disc Jockey's Union member in the first year of the contract was $15.56, after adjusting the current wage for inflation using the CPI.
Explanation:
The question is asking to calculate the original salary of the International Disc Jockey's Union member at the start of their contract using the current salary, the current CPI, and knowing it was the base year. To do this, we will use the relationship between nominal wage, real wage, and the Consumer Price Index (CPI).
Given:
Current nominal wage = $28.00
Current CPI = 180
Since the contract was signed in the base year, the CPI at that time would be set to 100. Therefore, to find the original salary, also known as the nominal wage in the base year:
Original salary = Current salary \/ (Current CPI \/ Base year CPI) = $28.00 \/ (180 \/ 100) = $28.00 \/ 1.8 = $15.56
Rounded to two decimals, the original salary was $15.56.
Accounts receivable turnover and days’ sales in receivables For two recent years, Robinhood Company reported the following: 20Y9 20Y8 Sales $7,906,000 $6,726,000 Accounts receivable: Beginning of year 600,000 540,000 End of year 580,000 600,000 a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place. 20Y8: 20Y9: b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Use 365 days and round all calculations to one decimal place. 20Y8: days 20Y9: days c. Are the changes in the accounts receivable turnover and days’ sales in receivables from 20Y8 to 20Y9 favorable or unfavorable?
Answers
The accounts receivable turnover for Robinhood Company increased from 11.8 in 20Y8 to 13.4 in 20Y9, while the days' sales in receivables decreased from 30.9 days in 20Y8 to 27.2 days in 20Y9. This indicates an improvement in the company's ability to collect receivables and convert them into cash quickly.
To determine the accounts receivable turnover for Robinhood Company for the years 20Y8 and 20Y9, we use the formula Accounts Receivable Turnover = Sales / Average Accounts Receivable. The average accounts receivable is calculated by summing the beginning and end of year receivables, then dividing by two.
For 20Y8: (540,000 + 600,000) / 2 = 570,000
For 20Y9: (600,000 + 580,000) / 2 = 590,000
Now, we can calculate the turnover:
20Y8 turnover: 6,726,000 / 570,000 = 11.8
20Y9 turnover: 7,906,000 / 590,000 = 13.4
For the days' sales in receivables, we use the formula Days' Sales in Receivables = (365 days / Accounts Receivable Turnover).
For 20Y8 days: 365 / 11.8 = 30.9 days
For 20Y9 days: 365 / 13.4 = 27.2 days
The changes from 20Y8 to 20Y9 are favorable as the accounts receivable turnover increased, indicating that the company is collecting receivables more quickly, and the days' sales in receivables decreased, indicating that the company is taking fewer days to turn receivables into cash.
Salvia Company recently purchased a truck. The price negotiated with the dealer was $40,500. Salvia also paid sales tax of $2,100 on the purchase, shipping and preparation costs of $3,100, and insurance for the first year of operation of $4,100. At what amount should the truck be recorded on the balance sheet prior to recording depreciation expense?
Answers
Answer:
The cost at which the truck will be recorded is $45700
Explanation:
The cost at which an asset should be recorded in the books of a business includes the all the costs that are incurred to purchase the asset and bring it to the location and condition necessary for use at it was intended. These costs are usually non recurring in nature.
The truck should be recorded at,
Purchase price 40500
Sales tax paid 2100
Shipping & Preparation 3100
Total cost 45700
The sales tax will be capitalized if it is not refundable.
The shipping and preparation cost are necessary for the truck to bring it to the location and condition necessary for it to use.
The insurance is a recurring expense and is not necessary cost to bring the truck to the location and condition necessary for it to use.
Answer:
Cost of truck = $45,700
Explanation:
According to International Accounting Standards (IAS) 16, property plants and equipment, the cost of an assets includes all of the cost necessary to bring and make it ready for the intended use.
These costs include purchase cost, fees and commission associated with the purchase of the asset.
Cost of the truck for record =40,500 + 2,100 + 3,100
= $45,700
The insurance cost was incurred after the purchase and is not a cost necessary to bring the truck to for its intended use
What business structure automatically reinvests profits in the corporation?
Question 1 options:
An S corporation
A nonprofit corporation
A sole proprietorship
A limited partnership
Answers
Answer:
A sole proprietorship
Explanation:
Santana Corporation has 400,000 shares of common stock outstanding throughout 2021. In addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2019. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/22. During the year 2021, the corporation earned $900,000 after deducting all expenses. The tax rate was 30%.
Answers
Answer:
Required: Compute the Basic and Diluted Earning per share for 2021
Explanation:
The answer are attached for easy understanding
Which of the following generate the type of externality previously described? Check all that apply. Your roommate Crystal has bought a puppy that barks all day while you are trying to study economics. Tim has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season. A microbiology lab has published its breakthrough in swine flu research. The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.
Answers
The situations involving Tim's trees and the microbiology lab's research are examples of positive externalities, as they provide benefits to others. On the other hand, Crystal's barking puppy and the local airport's noise pollution are examples of negative externalities, as they impose costs on others without compensation. Externalities justify government intervention to correct market outcomes.
When analyzing various situations and determining whether they generate negative or positive externalities, we must consider how these situations affect third parties who are not directly involved in the initial activity or transaction. An externality is an effect on individuals that are neither the buyer nor the seller of the goods or services causing the effect. The potential externalities in the scenarios provided are as follows:
Positive externality: Tim has planted several trees in his backyard, which increase the beauty of the neighborhood. This has a beneficial effect on his neighbors by enhancing the local environment.
Negative externality: Your roommate Crystal's puppy that barks all day disrupts your study and can be considered a negative externality because it imposes a cost (distraction and potential stress) on you without compensation.
Positive externality: A microbiology lab's breakthrough in swine flu research benefits the entire society by potentially reducing the prevalence of the disease or its impact on public health.
Negative externality: The local airport's increase in runways leading to additional noise pollution is a negative externality as the surrounding residents are subjected to increased noise without a direct benefit or compensation.
Understanding these externalities is critical in economics because they often justify government intervention, such as regulation or taxes, to correct market outcomes.
Wesimann Co. issued 10-year bonds a year ago at a coupon rate of 8.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.5 percent, what is the current bond price?
Answers
Answer:
Current Bond Price = $1,114.46
Explanation:
Coupon rate = 8.2/ 2
= 4.1 %
YTM = 6.5 / 2
= 3.25%
Bond is issued one year ago,
Periods = (10 - 1) *2
= 18
Interest = $1,000 * 4.1%
= $41
Current Bond price = Present value of Bond
Present value of bond = $41 * PVIFA(3.25%, 18) + $1,000 * PVIF(3.25%, 18)
= $41 * 13.4673 + $1,000 * 0.5623
= $552.16 + $562.30
= $1,114.46
Current Bond Price = $1,114.46
Final answer:
To find the current price of Wesimann Co.'s bond, discount the semiannual coupon payments and the face value at maturity at the semiannual YTM rate of 3.25% and sum their present values. The bond makes $41 semiannual payments, has a $1,000 face value, and 19 periods remain until maturity. Use the present value formulas for the annuity of coupon payments and the single payment of the face value.
Explanation:
To calculate the current price of Wesimann Co.'s bond, we must discount the future cash flows of the bond (coupon payments and the face value at maturity) to the present value using the current yield to maturity (YTM) of 6.5 percent. As the bonds make semiannual payments, the coupon rate per period is 4.1 percent (half of 8.2 percent), and the YTM per period is 3.25 percent (half of 6.5 percent).
The bond has 19 periods remaining since it was issued a year ago and it is a 10-year bond. For each period, the investor will receive a semiannual coupon payment of $41 (4.1% of $1,000). At the end of the bond's term, the investor will also receive the face value of $1,000. These payments should be discounted at the semiannual YTM rate to calculate the present value, which is the current price of the bond.
Using the present value formula for annuities and a single payment, the bond's current price is the sum of the present value of the annuity of coupon payments and the present value of the face value received at maturity. The formula is expressed as:
Current Price = (C * [1 - (1 + r)^-n]/r) + (F / (1 + r)^n)
Where:
C is the semiannual coupon payment ($41)
r is the semiannual YTM rate (3.25%)
n is the total number of semiannual periods remaining (19)
F is the face value of the bond ($1,000)
By plugging in the numbers:
Current Price = ($41 * [1 - (1 + 0.0325)^-19]/0.0325) + ($1,000 / (1 + 0.0325)^19)
Once you carry out these calculations, you will get the current price of Wesimann Co.'s bonds.
Matthew owns a warehouse that is used in business while Pamela owns land. Matthew exchanges the warehouse for the land, which will be held for investment. The FMV of the warehouse is $200,000 (basis $120,000) and the warehouse is subjected to a mortgage of $40,000, which is assumed by Pamela. Matthew receives $10,000 cash and the land, which has a FMV of $150,000 (basis of $130,000 to Pamela). What is the amount of Pamela's recognized gain or loss?
Answers
Answer:
Paloma gains $80,000
Explanation:
From the question,
Property received :
Land = 150,000
Cash = 10,000
Debt assumed by Pamela = 40,000
Total = 200,000
From the Warehouse she give out
= 120,000
Therefore 200,000 - 120, 000 = 80,000.
Hence $80,000 is the gain she realised.