B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 55 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $1.29 million. By going through research, B&B will be able to better target potential customers and will increase the probability of success to 70 percent. If successful, the baby powder will bring a present value profit (at time of initial selling) of $19.9 million. If unsuccessful, the present value payoff is $6.9 million. The appropriate discount rate is 15 percent.Calculate the NPV for the firm if it conducts customer segment research and if it goes to market immediately

Answer:

Explanation:

A. Supply stays the same, demand decreases since restaurants are normal goods. As a result, the equilibrium price and the equilibrium quantity will go down.

B. In the short run, the existing firms reduce their output causing Q* to fall. In the long run, as firms exit, Q* falls even further.

C. An individual firm may produce in the short run, but exit from the industry in the long run. As a result, the firm will decrease its quantity produced up to 0. Therefore, in the long run the output of an individual firm may change drastically comparing with the short run.

Answer:

B. obtaining inputs at lower prices and selling the output at higher prices.

Explanation:

Arbitrage refers to the activity of trying to earn a gain, by exploiting the inefficiencies between two markets. The rule of arbitrage is to buy at a low price from one market and sell at a higher price in another market.

When interest rate parity theory exists and fair pricing prevails, arbitrage opportunities are wiped out.  

Entrepreneurial innovation refers to innovation with respect to products and their attributes.  It may also refer to entrepreneur attaining new skill sets and creativity which help in better operations.

Such innovation is also characterized by buying inputs at a lower price and selling the output at a higher price thereby maximizing profits. Buying inputs at a low price indicates innovation in the form of optimal utilization of resources.

Thus, both arbitrage and entrepreneurial innovation are driven by the common factor of buying low and selling high, to maximize gains.

The employer should record a payroll taxes expense of $866.78 for the month of January, derived from calculating and summing up Social Security tax, Medicare tax, FUTA and SUTA taxes for the employee's earnings.

To determine the amount the employer should record as payroll taxes expense for the month of January, one must consider Social Security tax, Medicare tax, federal (FUTA) and state (SUTA) unemployment taxes. The employee's gross earnings for the month of January are $6,350.

The Social Security tax is 6.2% of gross earnings ($6,350 * 0.062 = $393.70) and Medicare tax is 1.45% of all earnings ($6,350 * 0.01450 = $92.08).

The FUTA and SUTA rates are applied to the first $7,000 of employee's pay. Therefore, if this is January and the employee has not yet hit that threshold, calculate FUTA tax (0.6%) as $6,350 * 0.006 = $38.10, and SUTA at 5.4% as $6,350 * 0.054=$342.90.

Now, add all of these totals together to get: $393.70 + $92.08 + $38.10 + $342.90 = $866.78.

So the amount the employer should record as payroll taxes expense for the month is $866.78.

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Answer:

(a) The required journals are:

Debit Note receivable $8,000

Credit Accounts receivable $8,000

(To record note receivable)

(b) Adjustment for interest its earned to its December 31 year-end:

Debit Interest receivable $80

Credit Interest revenue $80

(To record interest receivable on notes as at 31 Dec)

(c) Receipt of interest on the note at maturity

Debit Cash $240

Credit Interest receivable $240

(Being receipt of interest on note at maturity)

(d) Receipt of principal on the note at maturity

Debit Cash $8,000

Credit Note receivable $8,000

(Being receipt of note principal at maturity)

Explanation:

Note is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.

Interest revenue on the note is calculated as: Principal x Interest Rate x Time

The total interest revenue is $8,000 x 6%/12 x 6 months = $240.

Monthly interest revenue is therefore $240 / 6 months = $40.

Total interest as at December 31 (Nov 1 - Dec 31): $40 x 2 months = $80.

Answer:

Explanation:

The process adopted by Kraus steel is process cost. A process cost is used to assign cost when there is a mass production of identical goods with continuous and various stages of production

                                           Input      Conversion%       Output

Opening inventory           3,400             80                 2720

October process               55,900         100                55900

                                            59,300                                58620

Closing Inventory                   2800          50                  1400

Total units                               62100                               60020

The total equivalent units for direct materials for October in the Rolling Department of Kraus Steel Company are 58,700 equivalent units. Since materials are added at the beginning of the process, both completed units and ending work in process inventory are considered 100% for materials cost.

To calculate the total equivalent units for direct materials for October in the Rolling Department of Kraus Steel Company, we consider that materials are added at the beginning of the process, and therefore any tons of steel in process or completed will have 100% of the materials costs applied to them. To find the total equivalent units, we add the following: the tons completed and the ending work in process inventory (considering the completion percentage is irrelevant as the materials are added at the beginning).

The calculation is as follows:

Therefore, the total equivalent units of materials cost for October are:

55,900 (completed) + 2,800 (ending WIP) = 58,700 equivalent units

Answer:

The amount of risk-weighted assets for this bank is $17 million. Assuming that the bank has to hold capital equal to 8% of its risk-weighted assets, the bank must hold $1.36 million in capital.

Explanation:

asset X, $30 million x 30% risk = $9 million weighted risk

asset Y, $10 million x 60% risk = $6 million weighted risk

asset Z, $20 million x 10% risk = $2 million weighted risk

total risk weighted assets = $9 million + $6 million + $2 million = $17 million

since the bank has to 8% capital to risk weighted assets = $17 million x 8% = $1.36 million

The answer is attached in form of text file below giving solution to each of the question parts in detail.

Answer:

a. What is the regular payback period for each of the projects?

b. What is the discounted payback period for each of the projects?

c. If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake?

d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?

e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?

f. What is the crossover rate?

g. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project?

Explanation:

                                             Project A                      Project B

investment required       -$25,000,000              -$25,000,000

cash flow 1                          $5,000,000               $20,000,000

cash flow 2                        $10,000,000                $10,000,000

cash flow 3                        $15,000,000                 $8,000,000

cash flow 4                       $20,000,000                 $6,000,000

a. What is the regular payback period for each of the projects?

project A: 2 years ($15 million) + 10/15 = 2.67 years

project B: 1 year ($20 million) + 5/10 = 1.5 years

b. What is the discounted payback period for each of the projects?

interest rate = 10%

discounted cash flows      Project A                    Project B

                                        5/1.1 = 4.55                20/1.1 = 18.18

                                      10/1.1² = 8.26               10/1.1² = 8.26

                                      15/1.1³ = 11.27                8/1.1³ = 6.01

                                     20/1.1⁴ = 13.66                6/1.1⁴ = 4.1

project A: 3 years ($24.08 million) + 0.92/13.66 = 3.07 years

project B: 1 year ($18.18 million) + 6.82/8.26 = 1.83 years

c. If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake? using excel spread sheet an NPV function:

project A: NPV = $12.74 million

project B: NPV = $11.55 million

both projects have positive NPVs so they should both be chosen

d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?

project A: NPV = $18.24 million (higher NPV, so this project should be selected)

project B: NPV = $14.96 million

e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?

project A: NPV = $8.21 million

project B: NPV = $8.64 million (higher NPV, so this project should be selected)

f. What is the crossover rate?

investment project A - investment project B = 0

cash flow 1 project A - cash flow 1 project B = 5 - 20 = -15

cash flow 2 project A - cash flow 2 project B = 10 - 10 = 0

cash flow 3 project A - cash flow 3 project B = 15 - 8 = 7

cash flow 4 project A - cash flow 4 project B = 20 - 6 = 14

now using excel spreadsheet we determine IRR: 13.53%

g. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project?

MIRR = {ⁿ√ [FV(positive cash flows x cost of capital)] / [PV(initial outlays)]} - 1

future value of positive cash flows project A = (5 x 1.1³) + (10 x 1.1²) + (15 x 1.1) + 20 = 6.655 + 12.1 + 16.5 + 20 = 55.255

future value of positive cash flows project A = (20 x 1.1³) + (10 x 1.1²) + (8 x 1.1) + 6 = 26.62 + 12.1 + 8.8 + 6 = 53.52

PV initial outlays for both projects = -$25,000

n = 4

MIRR project A = {⁴√ [55.255 / -25]} - 1 = 1.2193 - 1 = 0.2193 or 21.93%

MIRR project B = {⁴√ [53.52 / -25]} - 1 = 1.2096 - 1 = 0.2096 or 20.96%

Answer:

See explaination for the details of the answer.

Explanation:

1) Increase

As business is optimistic about its future, such business will start capacity expansion to cater for consumer demand.

2) Decrease

Higher real interest rate simply means borrowing cost is higher for the firms and so that they will reduce the investment in respose to that.

3) Decrease

A lower tax means higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and to the government with tax on profit. However, if the rate of tax itself has been increased then in that case corporates will see higher tax as a dampener in sentiments and they might curtail investment plans.

4) Decrease

A recession means there will be lesser economic activity overall and demand will be lower so as the consumption. In such case, planned investment will be reduced.

Answer:

a. $14,700

b. $9,600

Explanation:

Total cost of the equipment = Purchase price + installation costs = $20,000 + $2,500 = $22,500

Salvage value = $4,500

Amount to be depreciated = $22,500 - $4,500 = $18,000

Depreciation rate = 1 ÷ 4 = 0.25, or 25%

Annual depreciation = $18,000 × 25% = $4,500

Equipment book value after 2 years = $22,500 - ($4,500 × 2) = $13,500

(a) What would be the cash flow from salvage if the asset sold after 2 years for​ $15,500

Gross profit on equipment disposal =  Sales amount - Equipment book value = $15,500 - $13,500 = $2,000

Tax = $2,000 × 40% = $800

Net profit on equipment disposal = $2,000 - $800 = $1,200

Cash flow = Equipment book value + Net profit on equipment disposal = $13,500 + $1,200 = $14,700

(b) What would be the cash flow from salvage if the asset sold after 2 years for​ $7,000

Loss on equipment disposal =  Sales amount - Equipment book value = $7,000 - $13,500 = $6,500

Tax shield difference = $6,500 × 40% = $2,600

Cash flow = $7,000 + $2,600 = $9,600

Answer:

See attached file

Explanation:

Answer:

 Options B and C are correct.

Explanation:

At q = 150

R = 80q = 80(150) = 12,000

C = 0.002(150)3 + 22(150) + 750 = 6750 + 3300 + 750 = 10,800

R > C so first is incorrect.

MR = 80

MC = 0.006(150 x 150) + 22 = 135 + 22 = 157

MC > MR so B is correct.

Profit = TR - TC = 80(150) - 0.002(150)3 - 22(150) - 750 = 12000 - 10800 = 1200

Profit is positive.

Marginal profit = MR - MC = 80 - 157 = - 77

MR is Negative

In the case when the firm should be produce 150 units of output so here  Options B and C are correct.

Since At q = 150

R = 80q = 80(150) = 12,000

So,

C = 0.002(150)3 + 22(150) + 750

= 6750 + 3300 + 750

= 10,800

Here Revenue > Cost  so first is incorrect.

Now

MR = 80

MC = 0.006(150 x 150) + 22 = 135 + 22 = 157

MC > MR so B is correct.

Now

Profit = TR - TC

= 80(150) - 0.002(150)3 - 22(150) - 750

= 12000 - 10800

= 1200

Profit is positive.

And,

Marginal profit

= MR - MC

= 80 - 157

= - 77

So, MR is Negative.

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Answer:

The correct answer is number (3): in developing relevant information for management decisions.

Explanation:

Incremental analysis is a study firm makes to allocate resources efficiently. It can be used at the moment of comparing the costs of different products to be manufactured to select the lowest that provides more benefits. Incremental analysis can also be implemented at the moment of identifying how a scarce resource should be used ensuring it brings the highest returns possible.

Incremental analysis, also known as differential or marginal analysis, helps managers to make more informed decisions, then.

Incremental analysis is most useful in developing relevant information for management decisions and in choosing between capital budgeting methods.

Incremental analysis is most useful in developing relevant information for management decisions. It involves analyzing the costs and benefits of different alternatives and making decisions based on the incremental effects of those alternatives. For example, when deciding whether to introduce a new product, a company can use incremental analysis to compare the additional revenue and costs associated with the new product to determine if it is financially feasible.

Incremental analysis can also be useful in choosing between capital budgeting methods. When considering different investment opportunities, a company can use incremental analysis to assess the incremental cash flows and benefits of each option. By comparing the incremental benefits and costs, the company can make an informed decision on which capital budgeting method to pursue.

Overall, incremental analysis is an effective tool in helping businesses make informed decisions, whether it's evaluating management decisions or choosing between capital budgeting methods.

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Deferred taxes should be presented as noncurrent amounts and as reductions of the related asset or liability accounts on the balance sheet.

Deferred taxes should be presented on the balance sheet as a noncurrent amount. This is because deferred taxes represent the future tax impacts of temporary differences between the book value and tax value of assets and liabilities. Therefore, the correct answer to the question is that deferred taxes should be presented on the balance sheet as noncurrent amounts and as reductions of the related asset or liability accounts.

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Deferred taxes should be represented on the balance sheet as a non-current amount. They arise due to the difference in accounting rules used by the tax department and those used by a company for its financial reporting. On a T-account sheet, deferred tax can be found on either side depending on whether it's a deferred tax asset or liability.

Deferred taxes in a financial context are future tax liabilities or assets that result from timing differences between the recognition of revenue or expense in the financial statements and their recognition in a tax return. They arise due to the difference in accounting rules used by the tax department and those used by a company for its financial reporting.

Given their nature, deferred taxes should be represented on the balance sheet as a non-current amount, meaning they are not expected to be settled within the next 12 months. They should not be shown as reductions of the related asset or liability accounts. On a T-account sheet, which is used to depict the general ledger, deferred tax can be found on either side depending on whether it's a deferred tax asset or liability.

In sum, deferred taxes can be represented as either current or non-current on the balance sheet, but it is more typical and appropriate for them to be presented as non-current.

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Answer:

The correct answer is letter "E": generate all of the above consequences.

Explanation:

Price supports, mostly known as price floors, are set by the government to protect producers of certain goods and services. By doing so, the product prices will have a minimum that cannot be trespassed. This is to make sure producers can continue with their operations at least earning a minimum profit margin.

The counterpart, the demanders, are affected because their purchasing power is decreased by setting the price at a certain level without the option of going down from there. Besides, the higher the price, the more taxes consumers will be paying. The disadvantage of price floors is surplusses in production that are the result of demanders not being able to pay the price set by the government. Eventually, government agencies purchase the surplus quantity in an attempt to keep the equilibrium in the market.

Price supports on agricultural goods provide benefits to suppliers but lead to higher prices for consumers, surpluses that the government must purchase, and a higher tax burden for society. Therefore, the correct answer is e. generate all of the above consequences.

Price supports, such as those placed on agricultural goods, have multiple consequences. These government enforcements are designed to maintain a minimum price by directly purchasing the goods or providing subsidies, which can lead to various effects.

The answer to the student's question would be e. generate all of the above consequences. Price supports benefit suppliers by ensuring they receive a certain minimum price for their goods, thus increasing producer surplus. However, they hurt demanders since they face artificially higher prices than what the market might have offered without such controls.

Also, they create surpluses because when the price is held above the equilibrium, quantity supplied exceeds quantity demanded, and these surpluses are usually purchased by the government. This action, in turn, imposes a higher tax burden on society to finance the government purchases of the surplus, and can lead to a deadweight loss (DWL), reflecting the loss of economic efficiency.

While such interventions aim to stabilize markets and ensure sufficient income for producers, they can lead to distortions in market functioning and carry a cost for society as a whole. Thus, they are a subject of debate since the goal is to balance the benefits of subsidies with the need to minimize negative externalities.

Answer: attached picture.

Answer:

Its B :)

Explanation:

Answer:

$100,000 sales revenue and $5,833 interest revenue

Explanation:

The computation is shown below:

For interest revenue

= (Face value - fair value of the equipment) × number of months ÷ total number of months in a year

= ($110,000 - $100,000) × 7 months ÷ 12 months

= $5,833

The seven months is calculated from June 1 to December 31

And, the fair value of the equipment on the sale date i.e $100,000 is also recognized

Answer and Explanation:

The preparation of differential analysis is shown below:-

                                 Differential Analysis

                                Make Bottles (Alt 1) or Buy Bottles (Alt 2)

                                             31-July

Particulars  Make Bottles  Buy Bottles  Differential effect on income

                                     (Alt 1)                  (Alt 2)                  (Alt 2)

Sales price                   $0.00                $0.00                    $0.00

Unit Costs:    

Purchase price            $0.00                $40.00                $40.00

Freight                         $0.00                 $4.00                      $4.00

Variable costs             $47.00                 $0.00                -$47.00

($75 per unit -$28 per unit)

Fixed factory overhead $28.00             $28.00                 $0.00

Income (Loss)               -$75.00               -$72.00               $3.00

Answer:

Explanation:

The plaintiffs must exhaust their administrative remedies before a court of law  would grant them the opportunity to pursue a legal action against the lottery board because it might a breach in communication or administration from the lottery board or the lottery director and the plaintiffs should  seek to resolve the issues without having to seek a legal action but through administrative remedies and procedures which more swift in resolving such issues

Yes, the plaintiffs must first exhaust their administrative remedies before going to court. This involves filing a complaint with the administrative agency, allowing them to investigate and potentially correct the issue. Only after this step can they seek judicial review.

Based on the provided information, it can be inferred that the plaintiffs would need to exhaust their administrative remedies before proceeding to legal litigation. This is because the state lottery law provides for administrative hearings for complaints alleging violations of the lottery law. Essentially, the plaintiffs must first file a complaint with the administrative agency responsible for the lottery and allow them to investigate and possibly remedy the situation. Only if the plaintiffs are unsatisfied with the final order of the administrative agency may they seek judicial review. This process is known as 'exhausting administrative remedies' and is generally a prerequisite before court proceedings. It helps to ensure that administrative agencies have the opportunity to correct their own errors and applies their expertise where appropriate.

The requirement to exhaust administrative remedies is also part of the rule of law that respects the separation of powers. In this context, the disputes would first have to be directed at the administrative level, which is the branch of government responsible for implementing and managing state programs such as lotteries. Turning to the administrative system allows for potential errors to be corrected without the immediate need for judicial intervention.

However, it's important to notate that exhaust administrative remedies rules vary by jurisdiction, and exceptions may exist depending on the specifics of the case.

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Answer:

Incremental Analysis for special order

units                                                                   10,000

offer price                                                          $290,000

Variable cost:

Cost of goods sold($22.5 *10,000)     225,000

Selling and Administrative expenses

($2.05*10,000)                                       20,500

shipping cost (0.77*10,000)                  7,700       (253,200)

Additional contribution                                            36,800

Explanation:

variable cost goods sold per unit  =  ( 3,633,000 - 960,000)/118800 = $22.5

Variable selling and admin expense per unit = ( 517,540 - 274,000)/118800                  

                                                                         = $ 2.05

Answer:

$2.22 per moves

Explanation:

Activity rate for moving =expected cost/Expected no of moves =$200000/90000 =$2.22 per mover

Answer:

im pretty sure a Fad

Explanation:

Heavy sales of umbrellas during a rain storm is an example of a trend.

Heavy sales of umbrellas during a rain storm is an example of a trend. A trend refers to a general direction or pattern of behavior that can be observed over a period of time. In this case, the increase in umbrella sales during a rainstorm is a consistent and predictable phenomenon, indicating a trend. Other examples of trends could be the popularity of certain fashion styles or the increase in sales of ice cream during the summer months.

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Answer:

National will prevail with regards in recovering the damages, but not for all the damages that it looks for. Overland's inability to perform quickly is a break of agreement for which National can recover damages. Although, the late delivery of pump by the Overland's, National is qualified for recover the cost of renting the pump for the five days that Overland delayed. Costs that are caused legitimately by a breach of agreement.

Answer: Nominal GDP 2016 = $7,100

REAL GDP 2016 = $3,700

Nominal GDP 2017 = $4,500

Real GDP 2017 = $4,500

Explanation:

To calculate the Nominal and Real GDPs we use the following formulas,

Nominal GDP = Sum of (Current Year Price x Current Year Quantity)

Real GDP = Sum of (Base Year Price x Current Year Quantity)

We make the assumption that 2017 is the base year so calculating would be,

Nominal GDP, 2016 = [(7 x 600) + (70 x 20) + (300 x 5)]

= $(4200 + 1400 + 1500)

= $7,100

Remember for this we will use 2017 as the base year so we will use 2017 prices

Real GDP, 2016 = [(3 x 600) + (20 x 20) + (300 x 5)]

= $(1800 + 400 + 1500)

= $3,700

Nominal GDP, 2017 = [(3 x 400) + (20 x 90) + (300 x 5)]

= $(1200 + 1800 + 1500)

= $4,500

Now seeing as 2017 is the base year, it's nominal and real GDPs will be the same.

Real GDP, 2017 = $[(3 x 400) + (20 x 90) + (300 x 5)]

= $(1200 + 1800 + 1500)

= $4,500

I included the details part of question so it is clearer.

If you have need any clarification do react or comment.

Answer:

False Pretenses

Explanation:

From the question given, jack is involved in the crime called false pretenses. He receives money by which he mentions things that are not true.

He brings out a false annual reports of profitable returns for a a non existing company or organisation. This representation is false with actual facts.

Answer:

$3,093

Explanation:

Hensley, Inc.

Bank Reconciliation Statement

Month Ended June 30

Balance as Hensley, Inc. record $3,100

Less: Service Charges $7

Adjusted Cash Balance $3,093

Cash Balance as per Bank Statement $3,900

Add: Deposit in Transit $700

Less: Outstanding checks* $1,507

Adjusted Cash Balance $3,093

*Outstanding Checks = Balance as per Bank Statement + Deposit in Transit - Adjusted Cash Balance

Outstanding Checks = $3,900 + $700 - $3,093

Outstanding Checks = $1,507

The adjusted cash balance at June 30 can be calculated by adding the deposit in transit, deducting the bank service charge, and deducting the outstanding checks.

The adjusted cash balance at June 30 can be calculated by adjusting the Cash account balance in the ledger to reconcile it with the bank statement balance.

By applying these adjustments, we can calculate the adjusted cash balance at June 30.

Answer:

Using paired sample t test for means in attached file

Explanation:

In the given options, advertising expenditures to introduce a new product line is not considered a capital expenditure because it doesn't involve purchasing or upgrading productive assets. Instead, it's an operational expense.

A capital expenditure is an amount spent to acquire or upgrade productive assets, like buildings, machinery, and technology, to increase the capacity or efficiency of a company for more than one accounting period. Advertising expenditures to introduce a new product line is not a capital expenditure, but an operational expense. Other options in the multiple choice such as Sales tax paid in conjunction with the purchase of new machinery, installation of elevators to replace escalators, and an amount paid to acquire a patent (even with a remaining life of 3 years), are all examples of capital expenditures because they are investments improving the company’s performance in the long run.

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Among the options, 'Advertising expenditures to introduce a new product line' is not a capital expenditure. While this is spending by the firm, it does not contribute to future profits in the way that capital expenditures (like machinery purchases or patent acquisitions) do.

The question here is to identify which among the given options is not a capital expenditure. Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, an industrial plant, technology, or equipment. This caters to investments that affect the company’s future operating capacity and income. In the provided options, the 'Advertising expenditures to introduce a new product line' is not a capital expenditure. Advertising is considered as a revenue expenditure that is used for promoting a firm's goods and services, and its effect is short-term.

However, other options like paying sales tax for new machinery, installing elevators to replace escalators, and paying to acquire a patent (even if its life is only three years remaining), are examples of capital expenditures, as they contribute to future profits and are thus capitalized and depreciated over time.

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Answer:

20

Explanation:

The marginal cost refers to the cost a company has when an additional unit is manufactured and it is calculated using the formula:

Marginal Cost= change in costs / change in quantity

Change in cost in this case is 20 as the last unit of labor hired costs an additional 20 per hour.

Change is quantity is 1 as the hourly production increases from 250 to 251 units.

Marginal Cost=20/1

Marginal Cost= 20

The marginal cost of the 251st unit of​ output was 20.

Final answer:

The level of required new funds for BHS Inc. is calculated by finding the differences between the increases in assets, increases in liabilities, and the dividends paid out from profits. For BHS Inc., this results in required new funds of $60,000.

Explanation:

The student is seeking to understand the level of required new funds for BHS Inc., given its projected increase in sales, asset and liability structure, profit margin, and dividend payout ratio. To calculate this, we must follow several steps.

Calculate the projected increase in assets and liabilities based on the new sales figure.

Determine the profits based on the new sales and profit margin.

Calculate the dividends to be paid out based on the profit and dividend payout ratio.

Finally, deduce the required new funds by subtracting both the increase in liabilities and dividends from the increase in assets. The remaining balance reflects the new funds required.

Let's break this down:

Projected increase in assets: $500,000 x 0.70 = $350,000 (new asset level) - $300,000 x 0.70 = $210,000 (current asset level) = $140,000 increase.

Projected increase in liabilities: $500,000 x 0.30 = $150,000 (new liability level) - $300,000 x 0.30 = $90,000 (current liability level) = $60,000 increase.

Projected profits: $500,000 x 0.10 = $50,000.

Dividends paid: $50,000 x 0.40 = $20,000.

Required new funds: $140,000 (increase in assets) - $60,000 (increase in liabilities) - $20,000 (dividends paid) = $60,000.

Answer:

The answer is:

1. When the consumer's preferred product is sold out or not in the market again.

2. When a consumer is deriving a disutility from a product and the producer of the product fails to address the situation

Explanation:

Consumers are believed to be rational when it comes to taking consumption decisions. Consumers' consumption is not always constant or the same sometimes there are deviations from the norms and the following reason could be some of the reasons.

1. When the consumer's preferred product is sold out or not in the market again. Consumers in this category will need to go for alternative or substitute goods after evaluating his choices.

2. When a consumer is deriving a disutility from a product and the producer of the product fails to address the situation. The rational consumer will have to abadon this product and go for the alternative.

These two reasons can make consumers to change their preference.