The book value of the machine at the end of year 3, using the units-of-production depreciation method, is $144,000. This is calculated based on the machine's actual usage of 8,000 hours in year 3.
To calculate the book value at the end of year 3 using the units-of-production depreciation method, we'll follow these steps:
1. Determine the depreciation per machine hour:
[tex]\[\text{Depreciation per Hour} = \frac{\text{Cost} - \text{Residual Value}}{\text{Total Estimated Machine Hours}}\][/tex]
2. Calculate the accumulated depreciation for each year:
[tex]\[\text{Accumulated Depreciation} = \text{Depreciation per Hour} \times \text{Actual Machine Hours}\][/tex]
3. Determine the book value at the end of each year:
[tex]\[\text{Book Value} = \text{Cost} - \text{Accumulated Depreciation}\][/tex]
Let's calculate it:
Given:
- Cost = $192,000
- Residual Value = $24,000
- Estimated Useful Life = 24,000 machine hours
- Actual Machine Hours in Year 1 = 6,000 hours
- Actual Machine Hours in Year 2 = 7,000 hours
- Actual Machine Hours in Year 3 = 8,000 hours
1.
[tex]\[\text{Depreciation per Hour} = \frac{192,000 - 24,000}{24,000 \text{ hours}} = 6[/tex]
2.
[tex]\[\text{Accumulated Depreciation Year 1} = $6 \times 6,000 \text{ hours} = $36,000\\\text{Accumulated Depreciation Year 2} = $6 \times 7,000 \text{ hours} = $42,000\\\text{Accumulated Depreciation Year 3} = $6 \times 8,000 \text{ hours} = $48,000[/tex]
3.
[tex]\text{Book Value Year 1} = $192,000 - $36,000 = $156,000\\\text{Book Value Year 2} = $192,000 - $42,000 = $150,000\\\text{Book Value Year 3} = $192,000 - $48,000 = $144,000[/tex]
Therefore, the book value at the end of year 3 is $144,000.
The complete question is:
A machine that cost $192,000 has an estimated residual value of $24,000 and an estimated useful life of 24,000 machine hours. The company uses units-of-production depreciation and ran the machine 6,000 hours in year 1, 7,000 hours in year 2, and 8,000 hours in year 3.
Calculate its book value at the end of year 3.
Project Manager Mary Ann is not a member of PMI but has applied for PMI certification. She has a meeting with the representative of a potential seller, and gets into an argument with the representative. Mary Ann loses her cool and yells at the representative and tells him to "get out of her office." Which of the following is true about Mary Ann’s conduct? A. It is a violation of PMI’s Code of Ethics and Professional Conduct. B. Since Mary Ann is not a member of PMI, she is not subject to the Code of Ethics and Professional Conduct. C. While not a per se violation of PMI’s Code of Ethics and Professional Conduct, Mary Ann should aspire to a better standard of conduct. D. It is not a violation of the Institute for Supply Management’s Principles and Standards of Ethical Supply Management Conduct.
Answer: A.
Mary Ann's conduct "is a violation of PMI’s Code of Ethics and Professional Conduct."
Explanation:
The Project Management Institute (PMI) expects Project Management Professionals (PMP) and PMP aspirants to abide by the Code of Ethics. An applicant applying for a PMP exam has to sign the PMP candidate agreement and Release form. In signing the agreement, the applicant agrees to abide by the Code.
The Code states that members and aspirants of PMI must;
• Act responsibly,
• Have respect for themselves and for others,
• Act fairly and,
• Be honest in their dealings.
Therefore by yelling at the representative, Mary Ann is in violation of PMI’s Code of Ethics.
You are considering investing in a standard fixed-rate corporate bond with 25 years remaining to maturity. The bond pays annual coupons of 5% and just made its most recent coupon payment. The face value of the bond is $1000.a. What is the current price of coupon bond if its current yield to maturity is 4%?b. In exactly five years the yield to maturity of the coupon bond will have increased to 7% because the Fed has increased interest rates and because the company has become more risky. What is the price of the coupon bond in five years immediately after it made the coupon payment?c. What is the Internal Rate of Return (IRR) if you purchase the bond now at the price given in part (a), hold on to the bond for five years, and sell the bond after five years at the price computed in part (b).
Answer:
a. $1,156.22
b. $788.12
c. -2.35%
Explanation:
a. The current price of coupon bond:
It will be equals to the present value discounted at yield to maturity (4% in this case) of 25 coupon payment at the end of each year, $50 each (1,000 x 5%) and repayment of the face value of $1,000 at maturity. Calculation as below:
PV of 25 coupon payment = ( 50 : 4%) x ( 1 - (1+4%)^-25) = $781.10
PV of face value's repayment = 1,000 / (1+4%)^25 = $375.12
Current price = $781.10 + $375.12 = $1,156.22
b. The price of the coupon bond in five years:
It will be equals to the present value discounted at yield to maturity (7% in this case) of 20 coupon payment at the end of each year, $50 each (1,000 x 5%) and repayment of the face value of $1,000 at maturity. Calculation as below:
PV of 20 coupon payment = ( 50 : 7%) x ( 1 - (1+7%)^-20) = $529.70
PV of face value's repayment = 1,000 / (1+7%)^20 =$258.42
Current price = $529.70 + $258.42 = $788.12
c. Internal Rate of Return (IRR):
The transactions described in (c) will generate the following cashflow:
- Innitial investment of bond purchase of $1,156.22
- 5 coupon payments at the end of each year of $50 each;
- Selling proceed of bond at the end of year 5: $788.12
Denote x is IRR needs to be found. We have the NPV of the cashflows will be equal to 0 if the cashflows is discounted at IRR:
-1,156.22 + ( 50 : x) x ( 1 - (1+x)^-5) + 788.12/(1+x)^5 = 0
<=> x = -2.35%
Sunland Company can produce 100 units of a component part with the following costs: Direct Materials$12000 Direct Labor 3500 Variable Overhead 9000 Fixed Overhead 11000 Of Sunland Company can purchase the component part externally for $31000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
Answer:
Best decision is to buy
Explanation:
Sunland Company can save if they decide to buy in the amount of $500. See computation below.
MAKE
Direct materials $12,000
Direct labor 3,500
Variable overhead 9,000
Fixed overhead 11,000
———-
Total cost $35,500
BUY
Purchased cost $31,000
Unavoidable fixed cost 4,000
—————
Total cost $35,000
$35,500 - 35,000 = $500
The actual selling expenses incurred in March 2017 by Fallon Company are as follows.
Variable Expenses Fixed Expenses
Sales commissions $14,178 Sales salaries $35,000
Advertising 10,036 Depreciation 7,200
Travel 8,305 Insurance 1,300
Delivery 3,382
(a) Prepare a flexible budget performance report for March, assuming that March sales were $166,100. Variable costs and their percentage relationship to sales are sales commissions 8%, advertising 6%, traveling 5%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, Depreciation on delivery equipment $7,200, and insurance on delivery equipment $1,300. (List variable costs before fixed costs.)
Answer:
The flexible budget performance report gives Net Income of $87,719 for the month of march 2017.
Explanation:
March 2017
Sales Revenue $166,100
Less: Variable Expenses
Sales Commission $13,288 (=Sales Revenue x 8%)
Advertising $9,966 (=Sales Revenue x 6%)
Travel $8,305 (=Sales Revenue x 5%)
Delivery $3,322 (=Sales Revenue x 2%)
Contribution $131,219 (=Sales Revenue - Variable Expenses)
Less: Fixed Expenses
Sales Salaries $35,000
Depreciation $7,200
Insurance $1,300
Net Income $87,719 (=Contribution - Fixed Expenses)
*Excel file is attached for your reference.
To prepare a flexible budget performance report for March 2017, follow these steps: calculate the flexible budget for variable and fixed expenses, compare it with the actual expenses, and calculate the performance variance. The actual expenses incurred by the Fallon Company can be compared with the flexible budget to determine the performance variance. In this case, the actual expenses were lower than the budgeted expenses, resulting in a negative performance variance.
Explanation:To prepare a flexible budget performance report for the month of March 2017, we need to calculate the flexible budget for variable expenses and fixed expenses, and then compare those with the actual expenses incurred by the Fallon Company. The variable expenses are calculated as a percentage of sales, while the fixed expenses remain the same. Once the flexible budget is prepared, we can compare it with the actual expenses to determine the performance variance.
Step-by-step:
Calculate the variable expenses using the given percentage relationships to sales:Sales commissions: 8% of $166,100 = $13,288Advertising: 6% of $166,100 = $9,966Travel: 5% of $166,100 = $8,305Delivery: 2% of $166,100 = $3,322Calculate the fixed expenses:Sales salaries: $35,000Depreciation on delivery equipment: $7,200Insurance on delivery equipment: $1,300Prepare the flexible budget by adding up the variable and fixed expenses:Total variable expenses: $13,288 + $9,966 + $8,305 + $3,322 = $34,881Total fixed expenses: $35,000 + $7,200 + $1,300 = $43,500Flexible budget (total expenses): $34,881 + $43,500 = $78,381Compare the flexible budget with the actual expenses, which are given:Actual variable expenses: $14,178Actual fixed expenses: $35,000 + $7,200 + $1,300 = $43,500Actual expenses (total): $14,178 + $43,500 = $57,678Calculate the performance variance:Performance variance = Actual expenses - Flexible budgetPerformance variance = $57,678 - $78,381 = -$20,703The flexible budget performance report for March 2017 shows a negative performance variance of -$20,703, indicating that the actual expenses were significantly lower than the budgeted expenses.
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A quality control activity analysis indicated the following four activity costs of an administrative department: Redesigning a form to reduce errors $15,000 Responding to customer complaints 75,000 Verifying the accuracy of a form 30,000 Correcting errors in forms 60,000 Total $180,000 If sales are $3,000,000, what percentage of total sales are the internal failure costs?
a.33.3%
b.2.0%
c.3.0%
d.1.0%
Answer:
c.3.0%
Explanation:
Please see attachment
Consider an overlapping generation set up with pay-as-you-go social security system in a hypothetical economy. There are 100 old retirees and 103 young workers at the current period. Old retirees earned $1,000 each when they were young. Young workers now earn $1,040 each. Suppose that the population growth is constant and there is a fixed payroll tax of 15%, which is used to finance the pay-as-you-go social security system. (a) what is the population growth rate, n? (b) How much is the total contribution of young workers to the social security system in the current period? (c) How much each retiree can receive from the social security system? (d) How much was the contribution of each old retiree when he or she was young? (e) What is the implicit return on the social security system?
Answer:
a) 3%
b) the new workers contribute 16,068 dollars
c)$160.68 each
d) the old workers contribute 15,000 when they made his contribution
e) rate of return 7.12%
Explanation:
growth rate: the increase in the workforce:
103 new workers / 100 retired - 1 = 0.03 = 3%
103 workers x 1,040 each x 15% = 16,068
assuming no other employee:
$16,068 pension fund / 100 retired persons = 160.68 dollars each
100 workers x 1,000 each x 15% = 15,000
e) the old retire contribute:
1,000 x 15% = 150
they receive 160.68
rate of return:
160.68 / 150 - 1 = 0.0712
The CFO of Twine Enterprises expects sales to increase from $8,000,000 in 2010 to $12,000,000 in 2011. Current assets in 2010 are equal to $5,000,000. Using the percent of sales method, projected current assets for 2011 are equal to A. $7,500,000. B. $7,083,333. C. $5,500,000. D. $9,000,000.
Answer:
$7,500,000
Explanation:
For computing the projected current assets, first we have to determine the percentage of sales which is shown below:
= (2011 sales - 2010 sales) ÷ (2010 sales)
= ($12,000,000 - $8,000,000) ÷ ($8,000,000)
= 50%
Now the current assets would be
= Current assets + current assets × percent of sales
= $5,000,000 + $5,000,000 × 50%
= $5,000,000 + $2,500,000
= $7,500,000
An analysis of the general ledger accounts indicates that delivery equipment, which cost $75,000 and on which accumulated depreciation totaled $58,000 on the date of sale, was sold for $20,200 during the year. Using this information, indicate the items to be reported on the statement of cash flows. Transactions Section of Statement of Cash Flows Added or Deducted $75,000 cost of office equipment $58,000 accumulated depreciation $20,200 sales price $3,200 gain on sale of equipment (assume the indirect method is used)
Answer:
Explanation:
Basically there are three types of activities:
1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.
2. Investing activities: It records those activities which include purchase and sale of the fixed assets
3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.
So, the items reported or not reported is shown below:
1. $75,000 cost of office equipment - not reported
2. $58,000 accumulated depreciation - not reported
3. $20,200 sales price - investing activities - added
4. $3,200 gain on sale of equipment - operating activities - deducted
The sale of the delivery equipment for $20,200 should be recorded as a cash inflow in the statement of cash flows. A gain of $3,200, resulting from the sale, is deducted from net income on the cash flow statement under the indirect method.
When a company sells an asset such as delivery equipment, the items that should be reported on the statement of cash flows involve the recording of cash received from the sale as well as the removal of the asset's cost and accumulated depreciation. In this case, the delivery equipment, which had a cost of $75,000 and accumulated depreciation of $58,000, is sold for $20,200. The cash inflow from the sale of the equipment is $20,200. Therefore, under the indirect method, the sale would result in a gain of $3,200 ($20,200 proceeds minus the book value of $17,000, which is cost minus accumulated depreciation).
Here is how each item is treated on the statement of cash flows:
The cash inflow from the sale of the equipment is $20,200.
The cost of the equipment ($75,000) and the accumulated depreciation ($58,000) are removed from the balance sheet accounts but do not affect the cash flow statement directly.
The gain of $3,200 is deducted from net income on the cash flow statement to reconcile net income to cash provided by operating activities, because it is a non-cash item that increased net income.
Annual demand for the notebook binders at Duncan's Stationery Shop is 10 comma 200 units. Dana Duncan operates her business 300 days per year and finds that deliveries from her supplier generally take 5 working days. Calculate the reorder point for the notebook binders that she stocks. The reorder point for the notebook binders is nothing units
Answer:
170
Explanation:
Assuming no safety stock is used, the reorder point (ROP) can be given by:
ROP = lead time x average daily demand.
The lead time is 5 days.
Average daily demand (ADD) is given by:
[tex]ADD = \frac{10,200}{300} \\ADD = 34[/tex]
Therefore, the reorder point is:
[tex]ROP = 34*5\\ROP = 170[/tex]
This means that Duncan's Stationery Shop should not let inventory fall under 170 binders in order to meet their average daily demand.
Final answer:
The reorder point for Dana's notebook binders is calculated by multiplying the daily demand of 34 units by the 5-day lead time, resulting in a reorder point of 170 units.
Explanation:
The reorder point for notebook binders at Duncan's Stationery Shop can be calculated by considering the daily demand rate and the lead time for deliveries. The daily demand is the annual demand divided by the number of days the business operates annually. With an annual demand of 10,200 units and operating 300 days per year, the daily demand is 10,200 / 300, which equals 34 units per day. Given that the lead time is 5 working days, the reorder point is the daily demand multiplied by the lead time:
Daily demand: 10,200 units / 300 days = 34 units/dayLead time: 5 daysReorder point: 34 units/dayTherefore, Dana should reorder when her inventory reaches 170 units to ensure she doesn't run out of stock while waiting for the new delivery.
The marginal revenue of green ink pads is given as follows: MR = 2500minus5Q The marginal cost of green ink pads is 5Q. Refer to Scenario 7. How many ink pads will be produced to maximize revenue?
A. 0
B. 500
C. 300
D. 250
Answer:
The correct answer is option B.
Explanation:
The marginal revenue of green ink pads is given as,
MR = 2500 - 5Q
The marginal cost of the green ink pads is 5Q.
The total revenue will be maximized at the point where the marginal revenue earned from an additional unit will be zero.
MR = 0
2500 - 5Q = 0
2500 = 5Q
Q = [tex]\frac{2500}{5}[/tex]
Q = 500
So the revenue maximizing level of output will be 500 units.
The yield rate on a one year zero-coupon bond is currently 7% and the yield rate on a 2-year zero coupon bond is currently 8%. The Treasury plans to issue a two year bond with a 9% annual coupon, maturing at $100 par value. Determine the yield to maturity of the two year coupon bond.
Answer:
The Yield to maturity is 7.96%.
Explanation:
The two-year Treasury Bond will generate the cashflow as below:
Year 1: Coupon payment = 9% x 100 = $9
Year 2: Coupon payment + face value repayment = (9% x 100 + $100) = $109
Present value of the two cash flows above is : 9/1.07 + 109/1.08^2 = $101.86
The yield to maturity need to be found is the discounted rate of the two mention-above cash flows which equals the present value of the two cash flows to the present value of $101.86 as calculated above.
=> 9/ (1+YTM) + 109 / (1+YTM)^2 = 101.86 => YTM = 7.96%.
A company has a minimum required rate of return of 9%. It is considering investing in a project that requires an investment of $210,000 and is expected to generate cash inflows of $90,000 at the end of each year for three years. The present value of future cash inflows for this project is:________
Answer:
$227,816.52
Explanation:
Using the financial calculator to find the present value;
Cash flow for first year = $90,000
Cash flow for second year = $90,000
Cash flow for third year = $90,000
I = 9%
Pv =$227,816.52
A company manufactures mountain bikes. The research department produced the marginal cost function C'(x)=700-(x/3) where 0 is less than or equal to x which is less than or equal to 900. C'(x) is in dollars and x is the number of bikes produced per month. Compute the increase in cost going from a production level of 300 bikes per month to 900 bikes per month. Set up a definite integral and evaluate it.
The increase in cost going from a production level of 300 bikes per month to 900 bikes per month is $315,900.
Explanation:To compute the increase in cost going from a production level of 300 bikes per month to 900 bikes per month, we need to find the total cost for each production level and then subtract the total costs. First, we integrate the marginal cost function C'(x) to get the total cost function C(x). The integral of 700-(x/3) with respect to x is 700x - (x^2)/6. Next, we evaluate the total cost at x=300 and x=900 to find the increase in cost. Plugging in these values into the total cost function, we get C(300) = 63000 and C(900) = 378900. The increase in cost is C(900) - C(300) = 378900 - 63000 = 315900 dollars.
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A service auditor's report on a service center should include a(n) :A. Detailed description of the service center's internal control.B. Statement that the user of the report may assess control risk at the minimum level.C. Indication that no assurance is provided.D. Opinion on the operating effectiveness of the service center's internal control.
Answer:
The answer is letter A.
Explanation:
Detailed description of the service center's internal control.
A subsidiary sells inventory to its parent at a markup of 30% on cost. in 2019, the parent paid $650,000 for merchandise received from the subsidiary. The parent sold $455,000 of the inventory to outside parties and the remaining $195,000 is stored in a warehouse. Write the elimination entries needed for the 2019 consolidation worksheet for the inter company inventory sales
Answer:
Please see attachment
Explanation:
Please see attachment
To correct for the intercompany markup on the inventory, eliminate the markup effect from both sales and the remaining inventory by debiting Sales and Inventory, and crediting Cost of Goods Sold and Intercompany Profit in Inventory.
Explanation:To prepare the consolidation worksheet entries regarding the intercompany inventory sales, we need to eliminate the impact of sales from subsidiary to parent to prevent overstatement of revenues and inventory. Since the inventory was marked up by 30% on cost by the subsidiary, first, we calculate the original cost of the inventory to the subsidiary before the markup was applied to the $650,000 paid by the parent. The cost is calculated as follows:
$650,000 / (1 + 0.30) = $500,000 (original cost)
The markup is the difference between what the parent paid and the cost:
$650,000 - $500,000 = $150,000 (markup)
Of the $650,000 worth of inventory, $455,000 was sold to outside parties, leaving $195,000 in the warehouse, which still contains the subsidiary's markup of 30%. Therefore, we need to eliminate the markup included in the closing inventory. The markup on the closing inventory is calculated as:
$195,000 / (1 + 0.30) = $150,000 (original cost of ending inventory)
$195,000 - $150,000 = $45,000 (markup on ending inventory)
The elimination entries would be:
This adjustment ensures that the consolidated financial statements reflect the correct cost of inventory and eliminate the profits arisen from the intercompany transaction.
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Suppose income increases by 25 percent and, as a result, the quantity of a particular brand of automobile demanded (holding the price for this particular automobile constant) increases by 49 percentThe income elasticity of demand for this brand of car is ____(Enter your response rounded to two decimal places and include a minus sign if appropriate.)This particular brand of automobile is a(n) _____ goodSuppose market research shows that a particular brand of truck is a normal good and a luxury. If so, then the income elasticity of demand for this truck isa.Less than 1 but greater than 0b. Negativec. Greater than 1d. Positivee. Zero
Answer:
The correct answer is: 1.96; Luxury good; option c.
Explanation:
The income of consumers increases by 25%.
The quantity demanded of a particular brand of the automobile as a result increases by 49%.
The income elasticity of demand is
= [tex]\frac{\Delta Q}{\Delta Y}[/tex]
= [tex]\frac{49}{25}[/tex]
= 1.96
A normal good is a good whose demand increases with the increase in the consumer's income. If the income elasticity is greater than 1, it implies that the good is a luxury good.
For a truck to be a normal good, its income elasticity should be positive and for a normal good, it should be greater than 1.
The following data is available for Blaine Corporation at December 31, 2018:
Common stock, par $10 (authorized 30,000 shares) $250,000
Treasury Stock (at cost $15 per share) $ 900
Based on the data, how many shares of common stock have been issued?
A. 30,000
B. 25,000
C. 29,940
D. 24,940
Answer:
B. 25,000
Explanation:
Given important information here is common stock, par $10 authorized, 30,000 shares and $250,000 Treasury Stock.
To calculate how many shares of common stock have been issued we have to divide the total price of common stock/par value which is as follows:
Shares issued = 250,000/10
25,000 shares answer
Therefore the correct answer is 25,000 shares .
To determine the number of shares issued, subtract the treasury stock from the common stock and divide by the par value per share.
Explanation:
To determine the number of shares of common stock that have been issued, we need to subtract the Treasury Stock (at cost $15 per share) from the Common Stock listed. The Common Stock represents the total par value of the authorized shares, while the Treasury Stock represents the shares that the company has repurchased. Subtracting the Treasury Stock from the Common Stock, we get:
Common Stock issued = Common Stock - Treasury Stock
Common Stock issued = $250,000 - $900
Common Stock issued = $249,100
Since the par value of each share is $10, we can divide the total Common Stock issued by the par value per share:
Number of shares issued = Common Stock issued / Par value per share
Number of shares issued = $249,100 / $10
Number of shares issued = 24,910 shares
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The following accounts and balances are taken from Moore Company's adjusted trial balance:
Accounts Payable $8,000
Accounts Receivable 3,400
Accumulated Depreciation 1,400
Depreciation Expense 1,800
Dividends 2,800
Insurance Expense 2,300
Interest Revenue 1,240
Prepaid Insurance 2,220
Retained Earnings 10,600
Salary Expense 23,100
Service Revenue 35,800
Required :
What is the ending balance in Retained Earnings after the closing entries are completed?
Answer:
Retained earnings = Beginning period retained earnings +Net income - Cash dividends - Stock dividends.
We need to find the net income and in order to do that we need to identify all the revenues and expenses.
Interest Revenue= 1,240
Service Revenue = 35,800
Total revenue = 35,800 +1,240 = 37,040
Now we need to find all the expenses
Depreciation expense= 1800
Insurance expense= 2,300
Salary expense = 23,100
Total expense= 1,800 + 2,300 + 23,100= 27,200
Net income = 37,040 -27,200= 9,840
Now we will put all these values in our formula to find the ending balance in retained earnings.
Beginning period retained earnings = 10,600
Net income = 9,840
Cash dividends = 2,800
Stock dividends = 0
Ending retained earning balance = 10,600+ 9,840 -2,800= 17,640
Explanation:
will pay an annual dividend of $2.25 per share next year. The company just announced that future dividends will be increasing by 0.75 percent annually. How much are you willing to pay for one share of this stock if you require a rate of return of 12.25 percent?
Answer:
= $19.57
Explanation:
Price of the stock (P0) = Div1 / (r-g)
Div1 = next year's dividend = $2.25
r = required return = 12.25% or 0.1225 as a decimal
g = growth rate = 0.75% or 0.0075 as a decimal
Next, plug in the numbers to the formula;
Price (P0) = 2.25/ (0.1225 -0.0075)
Price (P0) = 2.25 / 0.115
= $19.57
You sit down with Caffe Gustoso's owners to discuss your online advertising plans. You tell the owners that if they decide to incorporate search marketing into the plan, there are three primary payment options: pay per action, pay per click, and pay per view. Search engines favor pay per view because they earn income each time the ad is displayed to the consumer, whereas pay per click generates income for the search engine only when the ad is actually clicked on. Pay per action generates search engine income based on an action such as a purchase. Search engines often provide preferred placement to ads that generate the most income. Which form of payment would you recommend for Caffè Gustoso's search marketing?
Answer: I recommend a plan in two steps:
Starts with a pay per view. Then in 6 months move to a pay per click.
Explanation: First they need to show their brand. Let the market know them. Once they have viewed the could move to a different and expensive less payment method
Answer and explanation:
The best option for Caffe Gustoso is to choose a pay per action advertising plan. Coffee itself is not like other items people would be interested in just checking on the internet. As we are talking about a drink, people are likely to try it. Thus, Caffe Gustoso would be making revenue only when customers are sure they will place an order for coffee which will generate an expense to the business but a sure income.
Ovate, Inc., earns $140,000 in book income before tax and is subject to a 35% marginal Federal income tax rate. Ovate records a single temporary' difference. Warranty expenses deducted for book purposes are $8,000 of which only $2,000 are deductible for tax purposes. Determine the amount of Onate's deferred tax asset or liability.
Answer:
Deferred tax asset = $2100
Explanation:
Deferred tax asset will be created since deduction allowable for tax purposes in current year is in less amount, the other $6000 deduction for warranty expenses will be allowable in future years. Hence, it has deferred tax asset of [(8000-2000)x35%] $2100.
Iz, Lauren, Odd, and Ralph started a T‑shirt company. They can produce any number of T‑shirts at a cost of $ 2 per T‑shirt, both marginal and average. They are the only producers of T‑shirts. As monopolists, they charge $ 20 per T‑shirt and obtain total profits of $ 10,000 . Now assume there are creative differences and they split the company in two. Lauren and Ralph join together and compete against Iz and Odd. If they compete on quantity, each company would produce 50 T‑shirts and charge $ 12 a T‑shirt. For technical reasons, assume that the quantity demanded is greater than zero for all prices greater than $0.
If, however, Ralph and Lauren compete directly against Iz and Odd in prices, the market price for T‑shirts will be________?
Answer:
$2
Explanation:
Please see attachment
Answer:
Please see attachment
Explanation:
Please see attachment
Classify each statement as either true or false.
A. If two short-term assets offer different interest rates, then investors will move their wealth towards the asset with the lower return.
B. There is no practical difference between long-term interest rates and short-term interest rates.
C. Money demand is affected by short-term interest rates and not long-term interest rates.
D. Interest rates on financial assets that mature in ten months or less are long-term interest rates.
E. The opportunity cost of holding money falls when short-term interest rates fall.
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.
Direct materials (15 lbs. @ $3 per lb.) $45
Direct labor (2 hrs. @ $15 per hr.) 30
During May the company incurred the following actual costs to produce 9,000 units.
Direct materials (137,100 lbs. @ $2.80 per lb.) $ 383,880
Direct labor (21,600 hrs. @ $15.10 per hr.). 326,160
Required :
(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
The direct materials price variance is $(45,900) and it's unfavorable. The direct materials quantity variance is $2,100 and it's favorable.
Explanation:To compute the direct materials price variance, we need to calculate the difference between the actual price per pound and the standard price per pound, and then multiply the difference by the actual pounds used. In this case, the actual price is $2.80 per pound and the standard price is $3.00 per pound. The actual pounds used is 137,100 pounds. Therefore, the direct materials price variance is $(45,900) and it's unfavorable.
To calculate the direct materials quantity variance, we subtract the standard pounds allowed (which is the standard pounds per unit multiplied by the actual units produced) from the actual pounds used. In this case, the standard pounds allowed is 9,000 units multiplied by 15 pounds per unit, which equals 135,000 pounds. The actual pounds used is 137,100 pounds. Therefore, the direct materials quantity variance is $2,100 and it's favorable.
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A $63,000 machine with a 7-year class life was purchased 2 years ago. The machine will now be sold for $50,000 and replaced with a new machine costing $75,000, with a 5-year class life. The new machine will not increase sales, but will decrease operating costs by $16,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the incremental annual cash flow associated with the project?
The incremental annual cash flow associated with the project is $14,300.
To calculate the incremental annual cash flow associated with the project, we need to consider several factors including the sale of the old machine, the purchase of the new machine, changes in operating costs, and the impact of taxes. Let's break down each component step by step:
1. **Sale of Old Machine:**
- Original cost of old machine: $63,000
- Accumulated depreciation (2 years out of 7-year life): 2/7 * $63,000 = $18,000
- Book value of old machine at sale: $63,000 - $18,000 = $45,000
- Sale price of old machine: $50,000
- Gain on sale of old machine: $50,000 - $45,000 = $5,000
2. **Purchase of New Machine:**
- Cost of new machine: $75,000
3. **Operating Cost Savings:**
- Operating cost savings per year due to new machine: $16,000
4. **Tax Impact:**
- Marginal corporate tax rate: 34%
- Tax impact of gain on sale of old machine: $5,000 * 34% = $1,700
Now, let's calculate the incremental annual cash flow:
[tex]\[ \text{Incremental Cash Flow} = \text{Operating Cost Savings} - \text{Tax Impact on Gain} - \text{Cost of New Machine} \][/tex]
[tex]\[ \text{Incremental Cash Flow} = $16,000 - $1,700 - $75,000 \][/tex]
[tex]\[ \text{Incremental Cash Flow} = $14,300 \][/tex]
Therefore, the incremental annual cash flow associated with the project is $14,300.
Task-oriented leaders: Group of answer choices
A. establish a personal relationship with employees.
B. do personal favors for employees.
C. develop mutual trust and respect for subordinates.
D. listen to employees' suggestions.
E. establish challenging goals.
Answer:
Letter E is correct. Estabilish Challenging goals.
Explanation:
Task-oriented leadership is leadership whose primary focus is to coordinate task performance, regardless of subordinates' abilities and possibilities.
It is a model of autocratic leadership related to Classical Management Theory, where work is mechanized and there is no room for focus on the individual, their motivations and creativity, the focus is only on compliance with the rules and the execution of the imposed tasks.
You own a portfolio that has a total value of $215,000 and it is invested in Stock D with a beta of .86 and Stock E with a beta of 1.39. The beta of your portfolio is equal to the market beta. What is the dollar amount of your investment in Stock D?
Answer: BP = BD(WD) + BE(WE)
1 = 0.86(1-WE) + 1.39WE
1 = 0.86-0.86WE + 1.39WE
1 = 0.86 + 0.53WE
-0.53WE = -0.14
0.53WE = 0.14
WE = 0.14/0.53
WE = 0.2641509434
WD = 1 - WE
WD = 1 - 0.2641509434
WD = 0.7358490566
The dollar amount of investment in stock D = 0.7358490566 x $215,000
= $158,207.54
Explanation: The beta of the portfolio is 1, which corresponds to the beta of the market. The beta of the portfolio equals beta of each stock multiplied by the percentage of fund invested in each stock(weight). The weight of stock D is equal to 1 - weight of stock E. Therefore, we need to make weight of stock E the subject of the formula by solving the problem mathematically and collecting the like terms. The weight of stock E is 0.2641509434. The weight of stock E will be subtracted from 1 so as to obtain the weight of stock D, which is 0.7358490566. The dollar amount of stock D equal to $215,000 multiplied by 0.7358490566, which is $158,207.54.
Say that the average worker in the U.S. economy is eight times as productive as an average worker in Mexico. If the productivity of U.S. workers grows at 2% for 25 years and the productivity of Mexico’s workers grows at 6% for 25 years, which country will have higher worker productivity at that point?
Answer:
U.S. workers will have higher worker productivity at that point.
Explanation:
Pleas see attachment
Jacob went to the grocery store to buy breakfast cereal. He picked up a few cereal boxes to look up their ingredients. However, after going through a few boxes, he gave up and picked two different cereal boxes at random. He did not think that collecting information about his options was worth his time. Jacob's decision is an example of _____.a. an affect-based decision
b. an attribute-based decision
c. bounded rationality
d. instrumental rationality.
Answer: The correct answer is "c. bounded rationality".
Explanation: Jacob's decision is an example of bounded rationality, because according to the theory of limited rationality, people make decisions only partially in a rational way because of our cognitive, information and time constraints.
Edinburgh Exports has two divisions, L and H. Division L is the company’s low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division H is considering a project with an expected return of 12%.
Should Edinburgh Co. accept or reject the prject?
A. Accept
B. Reject
On what grounds do you base your accept-reject decision?
A. Division H's project should be accepted, because its return is greater than the risk-based cost of capital for the divison.
B. Division H's project should be rejected, because its return is less than the risk-based cost of capital for the division.
Answer:
Part 1. B Reject
Part 2. Division H's project should be rejected, because its return is less than the risk-based cost of capital for the division.
Explanation:
Division H's project should be rejected, because its return is less than the risk-based cost of capital for the division.
Edinburgh Co. should reject the project because the expected return, 12%, is less than Division H's cost of capital, 14%. This indicates that the project is unlikely to generate a return above the required rate, meaning it won't bring value to the company.
Explanation:The decision to accept or reject a project should be based on whether the expected return is greater than or less than the cost of capital. In this case, Division H of Edinburgh Co. is considering a project with an expected return of 12%, while its weighted average cost of capital is 14%.
Because the expected return is less than the cost of capital, the project is unlikely to generate return above the required rate, hence it should be rejected. This method of deciding is used in companies to ensure they undertake projects that will bring value. Therefore, the correct answer is option B: the project should be rejected because its return is less than the risk-based cost of capital for the division.
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