Answer:
The partial labor and capital productivity figures for the parent and subsidiary is 5.03 units per hour, 1.37 units per hour and, 1.68 units per hour, 4.20 units per hour
Explanation:
The computation of the partial labor for the parent and subsidiary is calculated by applying the formula which is shown below:
= Sales ÷ Labor (hours)
For U.S = 100,080 units ÷ 19,880 hours = 5.03 units per hour
For LDC = 20,500 units ÷ 14,880 hours = 1.37 units per hour
The computation of the capital productivity for the parent and subsidiary is calculated by applying the formula which is shown below:
= Sales ÷ Capital equipment (hours)
For U.S = 100,080 units ÷ 59,400 hours = 1.68 units per hour
For LDC = 20,500 units ÷ 4,880 hours = 4.20 units per hour
The balance shown in the August bank statement of Colt Company was $22,400. After examining the August bank statement and items included with it, the company's accountant found:
Checks outstanding $4,500
NSF check 140
Note collected by bank for the Colt Company 1,500
Deposits outstanding 2,300
Bank service fees 60
What is the amount of cash that should be reported in the balance sheet as of August 31?
A.$20,200
B.$16,700
C.$23,400
D.$15,700
Answer:
A.$20,200
Explanation:
The computation of the cash amount which should be reported in the balance sheet is shown below:
= August Bank statement balance + Deposits outstanding - Checks outstanding
= $22,400 + $2,300 - $4,500
= $20,200
The other amount which is given in the question is irrelevant. Hence, these items should not be considered in the computation, so they are ignored.
Answer:
the amount of cash that should be reported in balance sheet is $20200
option A is correct
Explanation:
given data
balance shown = $22400
Checks outstanding = $4,500
NSF = 140
Note collected = 1500
Deposits outstanding = 2300
service fees = 60
to find out
What is the amount of cash should be reported
solution
we will find amount of that should reported as given by
amount reported = balance amount + deposit outstanding - check outstanding ..................1
put here all these value in equation 1 we get
amount reported = 22400 + 2300 - 4500
amount reported = 20200
so the amount of cash that should be reported in balance sheet is $20200
option A is correct
Transportation is the most important economic factor for economic development. Do you agree or disagree with this statement? Why or Why not? Start a New Thread
Answer:
Totally agree
Explanation:
At the microeconomic level (the importance of transportation for specific parts of the economy) transportation is linked to the producer, consumer, and production costs. The importance of specific transport activities and infrastructure can thus be assessed for each sector of the economy. Usually, higher income levels are associated with a greater share of transportation in consumption expenses. Transportation accounts on average between 10% and 15% of household expenditures, while it accounts for around 4% of the costs of each unit of output in manufacturing, but this figure varies greatly according to sub-sectors.
Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have a 8% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $908.30. The capital gains yield last year was -9.17%. What is the yield to maturity?
Answer:
9.56
Explanation:
We will calcualte the YTM with an aprroximation method:
[tex]YTM = \frac{C + \frac{F-P}{n }}{\frac{F+P}{2}}[/tex]
Coupon payment= 80 (1,000 face value x 8% bond rate)
Face value= 1000 face value
Market Price= 908.3
n= 9
[tex]YTM = \frac{90 + \frac{1,000 - 908.3}{9}}{\frac{1,000 + 908.3}{2}}[/tex]
quotient 9.4522757%
This will be the aproximate YTM
Another way to solve it is with the Excel
we will write each cah flow and use the IRR function
-908.3
80
80
80
80
80
80
80
80
1080 (1,000 principal + 80 coupon payment)
now we write on any empy cell "=IRR(" and select the cells with the cashflow
The YTM will be 9.56%
Final answer:
To calculate the yield to maturity (YTM) for the bonds, the annual coupon payment is $80, and with a market price of $908.30, the current yield is approximately 8.81%. The YTM will include this current yield plus an adjustment for capital gains or losses, suggesting a rate slightly higher than the current yield due to the bond's decrease in value last year.
Explanation:
Calculating Yield to Maturity (YTM)
To calculate the yield to maturity (YTM) for Hooper Printing Inc.'s bonds, which have fallen to a market price of $908.30 due to changes in interest rates, the following information is used:
Annual coupon rate: 8%Par value: $1,000Years to maturity: 9 yearsCurrent market price: $908.30Capital gains yield last year: -9.17%The bond's annual coupon payment is calculated as 8% of the $1,000 par value, which equals $80. Over the remaining 9 years, the investor will receive these annual payments, plus the par value at maturity.
The current yield is calculated as the annual coupon payment divided by the current market price, which yields:
Current Yield = Coupon Payment / Market Price
Current Yield = $80 / $908.30
Current Yield = 0.0881, or 8.81%
To obtain the YTM, which includes both the current yield and the capital gain or loss upon maturity, we typically use a financial calculator or software, as the calculation involves solving for the rate in the present value of a series of cash flows. But here, we know the bond was purchased at par and lost -9.17% last year. Given its long term to maturity, the YTM would likely be close to the current yield adjusted for this loss in value due to increasing interest rates, implying the YTM is slightly higher than the current yield.
Prior to the 1870s, both gold and silver were used as international means of payment and the exchange rates among currencies were determined by either their gold or silver contents. Suppose that the dollar was pegged to gold at $30 per ounce, the French franc is pegged to gold at 90 francs per ounce and to silver at 9 francs per ounce of silver, and the German mark pegged to silver at 1 mark per ounce of silver. What would the exchange rate between the U.S. dollar and German mark be under this system?
Answer:
the exchange rate between U.S. dollar and German mark be under this system will be of 3 U$D = 1 german mark
Explanation:
We will use gold and silver as a mean to equalize both currencies:
First equivalence between silver and gold:
90 francs = 1 ounce of gold
9 franc = 1 ounce of silver
90/9 = 10 ounce of silver equals 1 ounce of gold.
Now, we convert the german mark to gold:
1 german mark = ounce of silver
10 german mark = ounce of gold.
Finally, we equalize with the US dollars:
30 dollar = ounce of gold = 10 german mark
30 dollars = 10 german mark
3 dollars = 1 german mark
The exchange rate between the U.S. dollar and German mark can be calculated based on the gold and silver pegs of each currency, resulting in an exchange rate of $10 per mark.
Explanation:The exchange rate between the U.S. dollar and German mark can be calculated based on the gold and silver pegs of each currency.
Given that the dollar is pegged to gold at $30 per ounce, the French franc is pegged to gold at 90 francs per ounce, and the German mark is pegged to silver at 1 mark per ounce, we can find that 1 ounce of gold is equivalent to 3 German marks. Therefore, the exchange rate between the U.S. dollar and German mark would be $10 per mark.
Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 50 units of food and 30 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 55 units of food and 30 machines. Which of the following statements is true? a Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 30. b In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies. c Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry. d The technological advance reduced the amount of resources needed to produce 30 machines. These resources could be used to produce more food.
Final answer:
The correct statement is that the technological advance in the machine-making industry reduced the resources needed to produce the same amount of machines, allowing the freed-up resources to be used for increased food production, thus benefiting the overall economy.
Explanation:
The economy in question operated on its production possibilities frontier (PPF) last year, producing 50 units of food and 30 machines. This year, with the technological advance in the machine-making industry, the correct statement is: The technological advance reduced the amount of resources needed to produce 30 machines. These resources could be used to produce more food. This scenario is an illustration of how technological progress in one sector can indirectly benefit other sectors by freeing up resources. It's akin to the economy experiencing growth, where the PPF shifts outward, resulting in the potential for increased production capacity not just in the industry with the technological advance, but economy-wide, as long as the society chooses to utilize the freed-up resources efficiently.
Indicate whether each of the following cost of an automobile manufacturer would be classified as direct materials, direct labor, or manufacturing overhead.
(a) ___ Windshield
(b) ___ Engine
(c) ___ Wages of assembly line worker
(d) ___ Depreciation of factory machinery
(e) ___ Factory Machinery lubricants
(f) ___ Tires
(g) ___ Steering wheel
(h) ___ Salary of painting supervisor
Answer:
a) DM Windshield
(b) DM Engine
(c) DL Wages of assembly line worker
(d) MO Depreciation of factory machinery
(e) MO Factory Machinery lubricants
(f) DM Tires
(g) DL Steering wheel
(h) MO Salary of painting supervisor
Explanation:
Direct materials (DM) are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
Direct labor (DL) is production or services labor that is assigned to a specific product, cost center, or work order.
Manufacturing overhead (MO) is all indirect costs incurred during the production process.
(a) DM Windshield
(b) DM Engine
(c) DL Wages of assembly line worker
(d) MO Depreciation of factory machinery
(e) MO Factory Machinery lubricants
(f) DM Tires
(g) DL Steering wheel
(h) MO Salary of painting supervisor
The Holtzman Corporation has assets of $388,000, current liabilities of $74,000, and long-term liabilities of $95,000. There is $38,800 in preferred stock outstanding; 20,000 shares of common stock have been issued. a. Compute book value (net worth) per share. (Round your answer to 2 decimal places.) b. If there is $31,900 in earnings available to common stockholders, and Holtzman’s stock has a P/E of 23 times earnings per share, what is the current price of the stock? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) c. What is the ratio of market value per share to book value per share? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Answer:
a. $9.01 per share
b. $36.69
c. 4.07 : 1
Explanation:
a. For computing the book value per share, we have to apply the formula which is shown below:
= Common stock balance ÷ issued shares
In the given question, the common stock is not given so, first, we have to compute the common stock value which is shown below:
= Assets - current liabilities - long term liabilities - outstanding preference shares
= $388,000 - $74,000 - $95,000 - $38,800
= $180,200
Now put these values to the above formula
So, the answer would be equal to
= $180,200 ÷ 20,000 shares
= $9.01 per share
b. For computing the current price of the stock, we need to apply the formula which is shown below:
= Earning per share × P/E ratio
where,
Earning per share = Earnings available to common stockholders ÷ issued shares
= $31,900 ÷ 20,000 shares
=$1.595 per share
Now put these values to the above formula
So, the answer would be equal to
= $1.595 × 23
= $36.69
c. The ratio of market value per share to book value per share is shown below:
= Market value per share ÷ book value per share
= $36.69 ÷ $9.01
= 4.07 : 1
At the end of January, Mineral Labs had an inventory of 925 units, which cost $9 per unit to produce. During February the company produced 1,650 units at a cost of $13 per unit. a. If the firm sold 2,350 units in February, what was the cost of goods sold? (Assume LIFO inventory accounting.) b. If the firm sold 2,350 units in February, what was the cost of goods sold? (Assume FIFO inventory accounting.)
Answer:
A) Cost of goods sold= $27750
B) Cost of goods sold= $26850
Explanation:
Giving the following information:
Beginning inventory: 925 units; $9 each
Production: 1650 units; $13 each
A) The firm sold 2,350 units in February, what was the cost of goods sold? (LIFO)
1650 units at $13= $21450
700 unit at $9= $6300
Cost of goods sold= $27750
B) The firm sold 2,350 units in February, what was the cost of goods sold? (FIFO)
925 units at $9= $8325
1425 units at $13= $18525
COGS= $26850
The cost of goods sold using LIFO inventory accounting is $14,175, while the cost of goods sold using FIFO inventory accounting is $11,325.
Explanation:a. To determine the cost of goods sold using LIFO inventory accounting, we need to start with the ending inventory and subtract the units sold. In this case, the ending inventory is 925 units, and the firm sold 2,350 units. The cost per unit for the ending inventory is $9. Using LIFO, we assume that the most recently produced units are sold first. So, we will subtract 925 units at a cost of $9 per unit from the total units sold. The cost of goods sold using LIFO is $(2,350 - 925) * $9 = $14,175.
b. To determine the cost of goods sold using FIFO inventory accounting, we assume that the oldest units are sold first. So, we will subtract 925 units at a cost of $9 per unit from the total units sold. The cost of goods sold using FIFO is $(2,350 - 925) * $13 = $11,325.
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Cheng builds replica miniature cabinets. His costs for each cabinet are $32 each. A consultant tells Cheng that the average margin in his industry is 54%. Cheng currently sells the cabinets for $43, but thinks he should consider using the industry average margin as his target goal.
(a) What is Cheng's current dollar margin per unit?
(b) What should Cheng's Selling Price be to achieve his target margin?
(c) If Cheng decides to sell to a retailer who earns a retail margin of 10%, what would be the final price to consumers if Cheng changes his price to the retailer to reflect his target margin?
(d) If the retailer decides she would rather have a $10 margin what will be the final retail price to the consumer presuming Cheng changes his price to reflect his new target margin?
Answer:
A) Contribution margin= $9
B) P=$69.56
C) P= $35.56
D) P= $42
Explanation:
Giving the following information:
Unitary variable cost= $32 each.
The average margin industry is 54%.
Selling proice= $43
A) Contribution margin= Price - unitary variable cost= 43-32= $9
B) %Margin= (P-CVu)/P
0.54= (P-32)/P
0.54P=P-32
0.46P=32
P=32/0.46= $69.56
C) 0.10=(P-32)/P
P= $35.56
D) P=32+10= $42
Final answer:
Cheng's current dollar margin per unit is $11. To achieve a 54% margin, his selling price should be $69.57. If selling to a retailer who adds a 10% margin, the consumer price would be $77.30, and if the retailer wants a $10 margin, the consumer price would be $79.57.
Explanation:
To calculate Cheng's current dollar margin per unit, we subtract the cost per unit from the selling price: $43 (selling price) - $32 (cost) = $11 margin per unit.
To achieve the target margin of 54%, we calculate the selling price as follows: Cost divided by 1 minus the desired margin percentage. Hence, $32 / (1 - 0.54) = $69.57, which should be Cheng's selling price to achieve his target margin.
If Cheng sells to a retailer with a target margin of 54%, and the retailer wants a 10% retail margin, the final consumer price is calculated by taking Cheng's new selling price and dividing by 1 minus the retailer's margin percentage: $69.57 / (1 - 0.10) = $77.30.
If the retailer desires a $10 margin instead, we add the $10 to Cheng's selling price to find the final consumer price: $69.57 + $10 = $79.57.
Products is considering acquiring a manufacturing plant. The purchase price is $1,860,000. The owners believe the plant will generate net cash inflows of $310,000 annually. It will have to be replaced in five years. To be profitable, the investment payback must occur before the investment's replacement date. Use the payback method to determine whether Cato Products should purchase this plant.
Answer:
not profitable
payback period > project life
Explanation:
to determinatethe payback we will divide the investment amount over the cashflow per year generated for the project:
[tex]\frac{investment}{cash \: flow} = $payback period[/tex]
1,860,000 / 310,000 = 6 years
As the cash flow are generated per year this give us how many years the project needs to continue to payback the investment. If we use a monthly income the answer will be expressed in month.
Because, the project life is 5 years and payback occurs at 6 years the project is not profitable. The company do not recover his initial investment.
Megan Newell is the owner and operator of Ultima LLC, a motivational consulting business.
At the end of its accounting period, December 31, 2013, Ultima has assets of $942,000 and
liabilities of $584,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets increased by $113,000
and liabilities increased by $44,000 during 2014.
Final answer:
The owner's equity for Ultima LLC as of December 31, 2013, was $358,000. By the end of 2014, after accounting for increases in assets and liabilities, the owner's equity amounted to $427,000.
Explanation:
Calculation of Owner's Equity
In accounting, owner's equity is calculated as the difference between a company's total assets and its total liabilities. Using the accounting equation Assets = Liabilities + Owner's Equity, we can determine the owner's equity for Ultima LLC:
a. Owner's Equity as of December 31, 2013
Owner's Equity = Assets - Liabilities
Owner's Equity = $942,000 - $584,000
Owner's Equity = $358,000
b. Owner's Equity as of December 31, 2014
After the increase in assets and liabilities during 2014:
Assets (end of 2014) = Initial Assets + Increase in Assets
Assets (end of 2014) = $942,000 + $113,000
Assets (end of 2014) = $1,055,000
Liabilities (end of 2014) = Initial Liabilities + Increase in Liabilities
Liabilities (end of 2014) = $584,000 + $44,000
Liabilities (end of 2014) = $628,000
Owner's Equity (end of 2014) = Assets (end of 2014) - Liabilities (end of 2014)
Owner's Equity (end of 2014) = $1,055,000 - $628,000
Owner's Equity (end of 2014) = $427,000
Fast Eddie’s Used Cars will sell you a 1989 Mazda Miata for $5,000 with no money down. You agree to make weekly payments for 2 years, beginning one week after you buy the car. The stated rate on the loan is 13%. How much is each payment? (A) $99.65 (B) $42.96 (C) $54.66 (D) $68.19 (E) $75.90
Answer:
C
Explanation:
We calculate the amount of each payment (constant payments; the same amount each period) with the formula attached: PV is present value, i is the interest rate and n is the number of periods.
The problem gives the following information:
PV= $5,000 (The amount you would pay if you had all the money today)
i= 13% (This rate is normally an annual rate, then we must convert it into a periodic (weekly) rate in order to calculate each weekly payment)
n= 1 year have approximately 52 weeks, 2 year have 104 weeks.
To transform the interest rate we use this formula:
Weekly rate= ((1+annual rate)^(1/# periods))-1
Weekly rate= ((1+0,13)^(1/52))-1
Weekly rate= 0,00235= 0.23%
Then we replace the values in the formula attached:
PV= $5,000
i=0,235%
n=104
A= $54,30 (It is almost equal to option C, maybe you must use more decimal places to obtain exactly $54,66)
Each payment will be approximately $54,66 each week for 2 years.
To calculate the weekly payment, we use the present value of an annuity formula. Plugging in the values, we find that each weekly payment is approximately $68.19.
Explanation:To calculate the weekly payment, we need to use the formula for the present value of an annuity:
PV = C * ((1 - (1 + r)^-n) / r)
Where:
PV = Present value (the loan amount)C = Weekly paymentr = Interest rate per period (in this case, weekly)n = Total number of periodsIn this case, the loan amount is $5,000, the interest rate is 13% per year (which converts to approximately 0.25% per week), and the total number of periods is 104 (2 years x 52 weeks/year). Plugging these values into the formula, we get:
$5,000 = C * ((1 - (1 + 0.0025)^-104) / 0.0025)
Solving for C, we find that each weekly payment is approximately $68.19. Therefore, the answer is (D) $68.19.
You run a school in Florida. Fixed monthly cost is $5000 for rent and utilities, $3000 is spent in salaries and $500 in insurance. Also each student adds up to $90 expense per month for stationary, food etc. You charge $1000 per month from every student. You are considering moving the school to another neighborhood where the rent and utilities will increase to $8000, salaries to $5000 and insurance to $1000 per month. Variable cost per student will increase up to $150 per month. However, you can charge $1500 per student. At what point will you be indifferent between your current mode of operation and the new option?
Answer:
the indifference point is at 12.5
as there can't be 12.5 student it will be between 12 and 13 student per month.
Explanation:
the indifference point will be when the two alternatives yield the same result
(sales price - variable cost)Q - fixed cost = operating income
current scenario:
(1,000 - 90) Q - 8,500
proposed scenario:
(1,500 - 150)Q - 14,000
We equalize each other and solve for Q
(1,000 - 90) Q - 8,500 = (1,500 - 150)Q - 14,000
910Q - 8,500 = 1,350Q - 14,000
14,000 - 8,500 = (1,350 - 910)Q
5,500 = 440Q
5,500/440 = Q
12.5 = Q
During the last year, Len Corp. generated $1,170.00 million in cash flow from operating activities and had negative cash flow generated from investing activities (-640.00 million). At the end of the first year, Len Corp. had $200 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm’s cash flow (CF) due to financing activities in the second year?
The firm’s cash flow due to financing activities in the second year was calculated to be - $450 million, using the given change in cash balance, cash flow from operating and investing activities.
Explanation:To determine the cash flow due to financing activities for Len Corp. in the second year, we utilize the formula that the change in a company's cash balance is equal to the net cash flow from operating activities plus net cash flow from investing activities plus net cash flow from financing activities. In this case, the change in cash balance from the end of the first year to the end of the second year is an increase of $80 million (from $200 million to $280 million).
The net cash flow from operating activities was $1,170 million, and the net cash flow from investing activities was - $640 million. Therefore, the equation we can use is:
Change in cash = Cash flow from operations + Cash flow from investing + Cash flow from financing
Which simplifies to:
$80 million = $1,170 million - $640 million + Cash flow from financing
By rearranging and solving for Cash flow from financing, we get:
Cash flow from financing = $80 million - $1,170 million + $640 million
Cash flow from financing = - $450 million.
Therefore, the firm’s cash flow due to financing activities in the second year was - $450 million.
In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in...
a. foreign indirect investment.
b. foreign portfolio investment.
c. indirect domestic investment.
d. foreign direct investment.
Answer:
Option b
Explanation:
Technically when a foreign investor decides to invest into shares of a company located in other company (in this case European invested in American company) is making a portfolio investment.
You notice that your grocery store always has day-old bakery products at a reduced price. Why might that be?
A. At the original price, the quantity demanded was greater than the quantity supplied.
B. At the original price, there was a shortage of bakery products.
C. The original price was an equilibrium price because it was established in a free market.
D. At the original price, quantity supplied was greater than quantity demanded.
D. At the original price, quantity supplied was greater than quantity demanded.
Answer:
D. At the original price, quantity supplied was greater than quantity demanded.
Explanation:
The supply the first day was greater than quantity demanded. That is because, the price wasn't in equilibrium, it should be lower to increase the demanded quantity.
Because it was higher, this excess are sales the next day at reduce-price to find demand.
C.- if this was equilibrium, then it would not be excess of products neither shortage
B.- if there was a shortage, there will be no left-over of day-old bakery products.
A.- If quantity demanded exceed the supply offered it will be no left-over
The costs were taken from the accounting records of the Barnwell Manufacturing Company. Classify each item as either a product cost or a period cost. Also, classify all product costs as direct or indirect, assuming that the cost object is each unit of product manufactured. (If not applicable then select NA.)
(1) State income taxes
(2) Insurance on the manufacturing facilities
(3) Supplies used in manufacturing
(4) Wages for employees in the assembly department
(5) Wages for employees who deliver the product
(6) Interest on notes payable
(7) Materials used in the production process
(8) Rent for the sales outlet in Sacramento
(10) Depreciation expense on delivery trucks
(11) Wages for the sales staff
(12) Factory supervisors' salaries
(13) Company president's salary
(14) Advertising expense
Final answer:
In accounting, costs are categorized into product and period costs. Product costs directly related to the manufacturing process are classified further as either direct or indirect costs. Period costs are expensed in the period they are incurred and are not directly tied to the production process.
Explanation:
In distinguishing between product costs and period costs, product costs are those that are directly associated with the manufacturing process and include direct materials, direct labor, and manufacturing overhead. Period costs are not directly tied to the production process and are expensed in the period in which they are incurred.
State income taxes (1) - Period cost (NA)Insurance on the manufacturing facilities (2) - Product cost (Indirect)Supplies used in manufacturing (3) - Product cost (Indirect)Wages for employees in the assembly department (4) - Product cost (Direct)Wages for employees who deliver the product (5) - Period cost (NA)Interest on notes payable (6) - Period cost (NA)Materials used in the production process (7) - Product cost (Direct)Rent for the sales outlet in Sacramento (8) - Period cost (NA)Depreciation expense on delivery trucks (10) - Period cost (NA)Wages for the sales staff (11) - Period cost (NA)Factory supervisors' salaries (12) - Product cost (Indirect)Company president's salary (13) - Period cost (NA)Advertising expense (14) - Period cost (NA)A partnership is formed by two individuals who were previously sole proprietors. Property other than cash that is part of the initial investment in the partnership would be recorded for financial reporting purposes at the ___________________________ .
A)Proprietor's book values or the fair value of the property at the date of the investment, whichever is higher.
B)Proprietor's book values or the fair value of the property at the date of the investment, whichever is lower.
C)Proprietor's book values of the property at the date of the investment.
D)None of the above.
E)Fair value of the property at the date of the investment
Answer: A partnership is formed by two individuals who were previously sole proprietors. Property other than cash that is part of the initial investment in the partnership would be recorded for financial reporting purposes at the "E)Fair value of the property at the date of the investment".
Explanation: In the constitution of a company the assets contributed must be measured at their market value.
Which one of these was a contributing factor to the need for many foreign banks to seek aid from their governments as a result of the financial crisis of 2007-2009?
A. Decrease in their exchange rates
B. Investments in U.S. subprime mortgages
C. Interest rate spikes
D. Currency controls
Answer:
B. Investments in U.S. subprime mortgages
Explanation:
This was an special mortgage with a higher risk for default. This mortage had a higher premium risk which, made them more expensive than other mortage.
This mortage were traded in the global market and ended being rated as AAA (low risk). This contaminate the entire financial system with uncertainty. When this mortages started to default the bubble explode and the market fell.
The agencies mantain their mistkae in secret and aduce surprise, while there are was indication of the underlying risk in the mortage and the CDO.
Crowding out occurs when...
a. investment declines because a budget deficit makes interest rates rise.
b. investment increases because a budget surplus makes interest rates rise.
c. investment increases because a budget surplus makes interest rates fall.
d. investment declines because a budget deficit makes interest rates fall.
Answer: Option A
Explanation: Crowding effect refers to the situation when due to over involvement of government in a sector of economy heavily affects the other sectors of the economy.
In such a case, government spends on a sector more than it needs. This leads to lack of funding from government on other sectors and thus reduced investment and higher interest rates.
From the above we can conclude that the correct option is A.
Crowding out occurs when a budget deficit increases government borrowing, raising interest rates and limiting the financial capital available for private investment.
Explanation:Crowding out occurs when government borrowing increases due to a budget deficit, leading to a higher demand for financial capital. If private saving and the trade balance do not change to offset this, there will be less financial capital available for private investment in physical capital. This is due to the fact that as the government absorbs more financial capital through borrowing, less is left for the private sector. The correct answer is option a: crowding out occurs when investment declines because a budget deficit makes interest rates rise. An increase in budget deficit can lead to a rise in interest rates, partly because the increased demand for financial capital must be met with higher interest rates to attract lenders.
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Foreign currencies are traded:
A. only by banks in New York and London.
B. over the counter.
C. on both the NYSE and NASDAQ.
D. on the Intercontinental Exchange.
Answer: over the counter
Explanation: In simple words, over the counter markets are the platform in which the securities like foreign exchange are traded without any supervision. There is no monitoring authority in such markets as opposed to the structure of stock exchanges.
Foreign currencies are traded in over the current markets as these are highly fluctuating in values and the margins are very low in trading such securities. Therefore, to pay a mediator is not feasible while dealing in foreign currencies.
Hence from the above we can conclude that the correct answer is option B.
Consider a mutual fund with $260 million in assets at the start of the year and 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of $2.5 million. The stocks included in the fund's portfolio increase in price by 9%, but no securities are sold and there are no capital gains distributions. The fund charges 12b-1 fees of 1.00%, which are deducted from portfolio assets at year-end. What is the net asset value at the start and end of the year?
Answer: $26; $28.057
Explanation:
Total value = $260 million in assets
Shares outstanding = 10 million
Dividends = $2.5 million
Fund value at the start of the year = [tex]\frac{Total\ value}{No.\ of\ shares\ outstanding}[/tex]
= [tex]\frac{260}{10}[/tex]
= $26
Fund value at the end of the year:
Dividend per share = [tex]\frac{Dividends}{No\ of\ shares}[/tex]
= [tex]\frac{2.5}{10}[/tex]
= $0.25
Price gain at 9% with deduction of 1% of 12b-1
Fund value at the end of the year = $26 × 1.09 × (1 - 0.01)
= $28.057
What are the determinants of demand?
Income
Price of related goods
A good's own price
Technology
Tastes and preferences
Resource prices
Number of consumers
Final answer:
The determinants of demand include income, price of related goods, a good's own price, tastes and preferences, and the number of consumers. These factors influence how much of a product consumers are willing and able to purchase, causing the demand curve to shift right for an increase or left for a decrease in demand.
Explanation:
The determinants of demand are factors that influence the quantity of a product that consumers are willing and able to purchase at different prices. These determinants include:
Income: Higher income levels typically increase the ability to purchase goods, leading to a rise in demand, while lower income reduces demand.
Price of related goods: The demand for a product can be influenced by the prices of substitutes and complements. If a substitute good becomes cheaper, demand for the original product may decrease, and vice versa.
A good's own price: Generally, as the price of a good increases, its demand decreases, and as the price decreases, its demand increases. This is known as the law of demand.
Tastes and preferences: Changes in consumer tastes and preferences can shift demand. For example, if there's a new health trend favoring a particular food, demand for that food may increase.
Number of consumers: An increase in the number of consumers generally leads to an increase in demand for products.
Each of these factors can cause the demand curve to shift either to the right (an increase in demand) or to the left (a decrease in demand).
Given the following cash flows for a capital project, calculate its payback period and discounted payback period. The required rate of return is 8%. The discounted payback period is: Year 0 1 2 3 4 5 Cash flow –50,000 15,000 15,000 20,000 10,000 5,000 A. 0.16 years longer than the payback period. B. 0.51 years longer than the payback period. C. 1.01 years longer than the payback period.
Answer:
Ans. c) Discounted period is 1.01 years longer than payback period.
Explanation:
Hi, the payback period is the time that takes for the initial invesment to return to the investor (regardless of the time value of money), so we add the cash flow for every period until the result is zero.
The discounted payback period is almost the same, here we do take into account the time value of money. let´s check out the math to this.
Payback period
Period Cash Flow Adding cash flows Coefficient Payback
0 -$50,000.00 -$50,000.00 3
1 $15,000.00 -$35,000.00 1
2 $15,000.00 -$20,000.00 1
3 $20,000.00 $- 1
4 $10,000.00
5 $5,000.00
Payback period = 3
Discount rate 8%
Period Cash Flow Present Value Adding Cash Coefficient
0 -$50,000.00 -$50,000.00 -$50,000.00
1 $15,000.00 $13,888.88 -$36,111.11 1
2 $15,000.00 $12,860.08 -$23,251.03 1
3 $20,000.00 $15,876.64 -$7,374.38 1
4 $10,000.00 $7,350.29 -$24.09 1
5 $5,000.00 $3,402.91 0.01
Discounted payback period = 4.01
The only thing here that needs some further explanation is the 0.01, this is by doing the following calculation.
[tex]Coefficient=\frac{24.09}{3402.91} =0.01[/tex]
This is the fraction of the year that will turn those $24.09 in zero (taking into account the cash flow of period 5 which is 3402.91)
So, discounted payback period - Payback period= 4.01 - 3 = 1.01
Best of luck.
Randy and Frank are both landscapers. Randy can mow 8 lawns per day or prune 24 trees. Frank can mow 6 lawns per day or prune 12 trees. What is each man’s opportunity cost of mowing lawns? Who has a comparative advantage in each task, and who, if anyone, has an absolute advantage at each task?
Answer:
(a) Randy's opportunity cost of mowing lawns = [tex]\frac{24}{8}[/tex]
= 3
Therefore, 3 trees have to be foregone for mowing 1 lawn.
Randy's opportunity cost of pruning trees = [tex]\frac{8}{24}[/tex]
= 0.33
Therefore, 0.33 lawns have to be foregone for pruning 1 tree.
(b) Frank's opportunity cost of mowing lawns = [tex]\frac{12}{6}[/tex]
= 2
Therefore, 2 trees have to be foregone for mowing 1 lawn.
Frank's opportunity cost of pruning trees = [tex]\frac{6}{12}[/tex]
= 0.50
Therefore, 0.50 lawns have to be foregone for pruning 1 tree.
(c) Frank has a comparative advantage in mowing lawns and Randy has a comparative advantage in pruning trees.
(d) Randy has a absolute advantage in both, mowing lawns and pruning trees.
The seventh glass of soda that Tim consumes will produce an extra benefit of 10 cents and has an extra cost of zero (Tim is eating at the cafeteria). The cost-benefit principle predicts that Tim will:
A. realize he has had too much soda to drink and go home.
B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.
C. volunteer to empty out the fountain.
D. not drink the seventh glass.
Answer:
B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.
Explanation:
The consumer will drink soda until the benefit from consuming matches the cost of consuming.
In this case the cost is zero. So it will consume until the marginal benefit equalt zero.
As a capital budgeting director for ABC company, you are evaluating the construction of a new plant. The plant has a net cost of $5 million in year 0, and it will provide net cash inflows of $1 million in year 1, $1.5 million in year 2, and $2 million ib years 3 through 5. As a first approximation, you may assume that all cash flows occur at year-end. Within what range is the plant’s IRR?
Answer:
IRR is within range (17.48%, 22.99%)
Explanation:
[tex]NPV = -5,000,000+\frac{1,000,000}{(1+IRR)^{1} }+\frac{1,500,000}{(1+IRR)^{2} }+\frac{2,000,000}{(1+IRR)^{3} }+\frac{2,000,000}{(1+IRR)^{4} }+\frac{2,000,000}{(1+IRR)^{5} }[/tex]
Approximation by defect:
Be
[tex]CF = 1,000,000 + 1,500,000 + 2,000,000 + 2,000,000 + 2,000,000 = 8,500,000[/tex]
[tex]INV = 5,000,000[/tex]
[tex]XCF = 1x1,000,000+2x1,500,000+3x2,000,000+4x2,000,000+5x2,000,000=1,000,000 + 3,000,000+6,000,000+8,000,000+10,000,000=28,000,000[/tex]
[tex]IRR = (\frac{CF}{INV})^{\frac{CF}{XCF} } -1[/tex]
[tex]IRR = (\frac{8,500,000}{5,000,000})^{\frac{8,500,000}{28,000,000} }-1[/tex]
[tex]IRR = (1.7)^{0.30357 }-1= 1.17478-1 = 0.17478[/tex]
IRR = 17.48%
Approximation by excess:
Be
[tex]CF = 1,000,000 + 1,500,000 + 2,000,000 + 2,000,000 + 2,000,000 = 8,500,000[/tex]
[tex]INV = 5,000,000[/tex]
[tex]YCF = 1,000,000/1+1,500,000/2+2,000,000/3+2,000,000/4+2,000,000/5=1,000,000+750,000+666,667+500,000+400,000=3,316,667[/tex]
[tex]IRR = (\frac{CF}{INV})^{\frac{YFC}{CF} } -1[/tex]
[tex]IRR = (\frac{8,500,000}{5,000,000})^{\frac{3,316,667}{8,500,000} } -1[/tex]
[tex]IRR = (1.7)^{0.39} -1=1.2299-1=0.2299[/tex]
IRR = 22.99%
Then,
17.48%<IRR<22.99%
Hope this helps!
Are budgets part of the performance measurement system or the performance reward system? a. Part of neither the performance measurement system nor the performance reward system b. Part of both the performance measurement system and the performance reward system c. Part of the performance reward system only d. Part of the performance measurement system only
Answer:
b. Part of both the performance measurement system and the performance reward system
Explanation:
Both are linked according to the objectives and golas.
Performance measure is a quantifiable expression of the amount, cost, or result of activities that indicate how much, how well, and at what level, products or services are provided to customers during a given time period.
Performance and reward strategies are driven by the concept that employees are not inherently born with the desire to come to work and put in their maximum effort every day for no reason at all. ... An effective performance and reward strategy aligns with organizational goals and objectives
Answer:
b. Part of both the performance measurement system and the performance reward system
Explanation:
Which of the following are differences between a bond and a common stock? (Select all that apply.) A. A corporation has to pay all bondholders before paying stockholders. B. A corporation has to pay all stockholders before paying bondholders. C. A bond is a debt instrument that entitles the owner to receive periodic amounts of money until its maturity date, whereas a common stock represents a share of ownership of the institution that has issued the stock. D. A bond is a claim on the earnings and assets of a corporation, whereas a common stock promises to make periodic payments for a specified period of time.
Answer:
A. A corporation has to pay all bondholders before paying stockholders.
C. A bond is a debt instrument that entitles the owner to receive periodic amounts of money until its maturity date, whereas a common stock represents a share of ownership of the institution that has issued the stock.
Explanation:
(A) The distribution of dividends has solvency requirement. So it cannot pay dividends if will default teh payment of the business debts.
(C) The bond will have predeterminate periodic payment and a maturity payment at the end of his life.
While the stock is the title of ownership of the company and it do not have any future cashflow associate with it. The company can decide to do not pay dividends. Also it won't warrant the return of the cost of the stock.
Which of the following techniques are utilized by leaders to stay informed on how well strategy execution process is progressing?A. Managing by walking around (MBWA).B. Managing business with action (MBWA).C. Multi-business warning actions (MBWA).D. Managers being well-advised (MBWA).E. None of these.
Answer:
A. Managing by walking around (MBWA)
Explanation:
Managing by walking around (MBWA) is a term defined by Tom Peters after studyng the most succesdfull companies and their practices. Its means that managers should spend part of their time listening to problems and ideas of their staff, while wandering around an office or plant instead of having only "formal" meetings to check the progress of the company's strategy execution.
If the team is used to this kind of interactioon is more likely thet they will see in their boss some kind of a "peer" and they'll be more confident to talk about their ideas os work problems