Answer:
Management by objectives(MBO).
Explanation:
Management by objectives is a management model whose aim is to improve the performance of an organization by directing eack worker on things that should be done in the workplace. It helps the employees to understand their various duties and roles in the organization as it clearly defines the responsibility of each worker.
Management by objectives ensure proper communication between each and every one of the employees in the organization thereby leading to commited and inspired workers who are willing to work together for the success and growth of the company.
Answer: The answer is B.
Explanation: Management by objectives (MBO) is a strategic management model or a personnel management technique which aims to improve the performance of an organization by clearly outlining the objectives which are agreed to by both the management and the employees.
According to this theory, for each member of the organization to have a say in goal setting and action to be taken will encourage participation and commitment among employees, as well as aligning with objectives stated by the organization.
Dylan regularly buys the Rolling Stone magazine. The store from where he purchases the magazine informs him that it would not sell any Rolling Stone magazines for a couple of months. Dylan assumed that the magazine was shutting down. This scenario illustrates the concept of _____.
Answer:
Concept of business closure
Explanation:
Business Closure means shutting down a business, or going out of business. It is an action taken when a business or organization does not see any reason to continue operating. Business closure can be because of insufficient funds to continue operation, Death of the business owner, bankruptcy, or the business has been bought by another organization.
Answer:
Closure
Explanation:
Closure is a act of seeing an incomplete action as if is the whole in an attempt to find an answer to a situation demanding such. A mental puzzle is formed based on the available information , and an answer if derived when the puzzle appears to have satisfied one's curiosity.
Dylan's assumption that the machine was shutting down based on the information he received is a typical illustration of the concept of closure
Janis starts a small quilting and embroidery business. She purchases a technologically advanced quilting machine and an embroidery machine for a combined $25,000. Her monthly payments on the equipment are $500, but she has only one client at this time. Janis is facing a potential:_________
A) inventory flow problem.
B) cash-flow problem.
C) competitive advantage.
D) overexpansion problem.
E) advertising issue.
Answer:
B. Cash Flow problem
Explanation:
Cash flow problem occurs in a business when the business struggles to pay back debts. It happens when a business cannot longer cover its debt payments and operational expenses. It is very common in new and growing business, because during growth period in a business, expenses are larger than receivables.
Janis in this case is facing cash flow problems as she is not getting enough clients and receivables to pay back the expenses her equipment is bringing in. The major solution to cash flow problem for short term/temporary issues is Financing.
Final answer:
Janis is likely experiencing a cash-flow problem since she has significant monthly expenses with only one client providing revenue.
Explanation:
Janis is facing a potential cash-flow problem. When starting a new business, it's important to manage expenses against revenue. Janis has invested significantly in equipment for her quilting and embroidery business but currently has only one client. With monthly payments of $500 for the equipment and limited revenue stream, there is a risk that Janis will not have enough funds to cover her expenses and business operations in the short term. This scenario is a classic example of a cash-flow problem, which means that although a business may be viable in the long term, it struggles to cover short-term liabilities.
Given the pay rate, hours worked, tax deductions, and social security deduction, determine the gross earnings, group health insurance (assuming 15% of gross earnings), pension deduction (assuming 6.5% of gross earnings), total deductions, and net pay. This person worked 40 hours at a $7.50 rate.
Answer:
$235.5
Explanation:
Total Earnings= 40 hours X $7.50 = $300 (Gross earnings)
Health insurance sum = Health insurance % X Gross earnings=15/100 X $300= $45
Pension Deduction Sum= Pension % X Gross earnings = 6.5 /100 X $300 = $19.5
From above calculation, the total deduction is $45 + $19.5 = $64.5
From the above calculation, the new pay is = $300 - $64.5 = $235.5
A company issues $5,000.00 bonuses at the end of the year to all employees who earn less than $100,000. Salary and bonus are both defined as double data types. Which of the following selection statements would assign the correct amount to bonus?
a. if (salary bonus == $5000;b. if (salary bonus = 5000; --- Correctc. if (salary bonus = 5000;d. if (salary bonus = $5000;
Answer: C.
If (salary < 100000)
Bonus = 5000;
Explanation:
Salaries attached to each employee are already in the data. Since only workers earns salary less than 100000 are eligible for the bonus, the if statement checks the salary amount assigned to each worker, if the salary is greater than or equal to 100,000 , the loop terminates and the second line isn't executed. However, if the worker's salary is less than 100,000, the second line is executed which is to assign a 5000 bonus to the worker's earning. The dollar sign should be excluded as it could alter the data type. And the == sign is used to test for equality and not assignment.
Just before the close of its fiscal year, a city government issues $2 million of bonds to finance the acquisition of capital assets. However, no part of the debt is repaid by year-end and no part of the debt is used to purchase capital assets. What adjusting entry is needed to prepare the city's government-wide financial statements from its fund-level financial statements
Answer:
Dr Other financing sources and uses - bonds issued 2,000,000
Cr Bonds payable - 2,000,000
Explanation:
The other financing sources and uses account includes all the transactions involving non-operating revenues/receipts and expenditures/disbursements, e.g. issuance of bonds.
Since the bonds were issued and the money was received, the city government must record the liability.
Manufacturing overhead was estimated to be $562,800 for the year along with 20,100 direct labor hours. Actual manufacturing overhead was $543,705, and actual labor hours were 21,600. The amount of manufacturing overhead applied to production would be:
Answer:
$604,800
Explanation:
Applied manufacturing overhead is the manufacturing overhead that has been applied to production in a period.
it is calculated with the formula "budgeted overhead rate * actual labor hr"
Budgeted manufacturing overhead = $562,800
Budgeted Direct labor hours = 20,100
Budgeted Overhead rate = 562800/20100 =$28/hr
Actual manufacturing overhead = $543,705
Actual direct labor hours = 21600
Amount of manufacturing overhead applied = predetermined overhead rate * actual hr =28*21600
=$604,800
Final answer:
To find the amount of manufacturing overhead applied to production, first calculate the predetermined overhead rate using the estimated figures, then multiply by the actual labor hours.
Explanation:
To calculate the amount of manufacturing overhead applied to production, we need to determine the predetermined overhead rate (POR) and then apply that rate to the actual labor hours. The POR is calculated based on the estimated figures given at the beginning of the year. In this case, we divide the estimated manufacturing overhead ($562,800) by the estimated direct labor hours (20,100 hours) to get the POR.
Manufacturing Overhead Applied = POR x Actual Labor Hours
Now, apply this POR to the actual labor hours worked (21,600) to find the amount of manufacturing overhead applied to production.
What was the result in Scott v. Mid-Carolina Homes, Inc., the case referenced in the textbook in which the defendant attempted to rescind a contract to sell a mobile home because its salesperson was acting under a mistake of fact when he gave the plaintiff the sales price?
Answer:
E) The seller was not allowed to rescind the contract.
Explanation:
In this case, Mary Scott was interested in purchasing a mobile home from Mid-Carolina Homes. They saw a mobile home that they liked and paid $2,913.71 in advance for it. Then next week the seller told them that they couldn't sell them the home because it was broken and instead sold it to another buyer for a higher amount. Even though they were not willing to sell the home to the Scotts, the company still cashed their check.
The Supreme Court of South Carolina ruled in favor of the Scotts and upheld the $10,000 awarded for breach of contract accompanied by a fraudulent act. But the court also reversed $4,800 in other damages related to unfair trade practices.
LPM’s weighted average cost of capital (WACC) is 13 percent if the firm does not have to issue new common equity; if new common equity is needed, its WACC is 16 percent. If LPM expects to generate $80,000 in retained earnings this year, which project(s) should be purchased? Assume that the projects are independent and indivisible.
Answer:
Projects D and E should be purchased.
Explanation:
since the firm's capital structure is 60% debt and 40% equity, it can pursue up to 2 projects. Only projects D, E and F have an internal rate of return higher than the company's WACC, so project G is discarded immediately.
Since projects D and E have a higher IRR, they should be selected.
project D: $70,000, IRR = 18%, debt = $42,000, equity = $28,000project E: $85,000, IRR = 15%, debt = $51,000, equity = $34,000total equity invested = $62,000Which argument forces a writer to return to and change the input before resolving a “UnicodeError”?
errors= “strict”
errors= “fix”
errors= “ignore”
errors= “replace”
Answer:
i think its b
Explanation:
Answer:
errors= “fix” should be the right answer
Explanation:
Suppose there are two independent economic factors, m1 and m2. the risk-free rate is 7%, and all stocks have independent firm-specific components with a standard deviation of 47%. portfolios a and b are both well diversified. portfolio beta on m1 beta on m2 expected return (%) a 1.6 2.2 37 b 2.1 -0.6 15
Check the file attached below for the complete question
Answer:
[tex]E_{rp} = 5\% + 5.12\% \beta_{p1} + 9.68\% \beta_{p2}[/tex]
Explanation:
Expected return on the portfolio = (Risk free rate) + Beta of portfolio 1 * (expected return on portfolio 1 - Risk free rate) + Beta of portfolio 2 * (expected return on portfolio 2 - Risk free rate)
35% = 5% + 1.7 * (Risk premium for portfolio 1) + 2.2 * (Risk premium for portfolio 2).................(1)
8% = 5% + 2.1 * (Risk premium for portfolio 1 - 0.8) * (Risk premium for portfolio 2).................(2)
Multiply eq. by 2.75 and add in eqn. 1
35% + 22% = 5% + 2.75 * 5% + 1.7 * Risk premium for portfolio 1 + 5.775 * (Risk premium for portfolio 1) + 0
57% = 18.75% + 7.475 * (Risk premium for portfolio 1 )
Risk premium for portfolio 1 = 5.12%
Put value of( risk premium for portfolio 1 ) in equation 1
35% = 5% + 1.7 * 5.12% + 2.2 * (Risk premium for portfolio 2 )
35% = 13.70% + 2.2 * (Risk premium for portfolio 2 )
Risk premium for portfolio 2 = (21.30%) / 2.2
Risk premium for portfolio 2 = 9.68%
Expected return–beta relationship E(rp) = 5% + 5.12% * (Beta of Portfolio 1) + 9.68% * (Beta of Portfolio 2)
[tex]E_{rp} = 5\% + 5.12\% \beta_{p1} + 9.68\% \beta_{p2}[/tex]
A stabilized budget is:
A. budget that forecasts income/expense and can br projected over a short period of time (usually 5 years).
B. budget for annual depreciation and non-cash items
C. budget to plan for financing long-term outlays, such as fixed assets (i.e. facilities and equipment)
D. annual budget which includes income/expense for ongoing operations
Answer:
A. budget that forecasts income/expense and can br projected over a short period of time (usually 5 years).
Explanation:
A stabilized budget is a projection of income and expenses that is made for a period of five years and the expenses are constant during this time. According to this, the answer is that a stabilized budget is a budget that forecasts income/expense and can br projected over a short period of time (usually 5 years).
Hamilton justified establishing a national bank because he intended:
A. To serve as a means for foreign investors to stabilize the new government.
B. To encourage the wealthy to invest in the bank and become attached to the national government.
C. To provide loans that would strengthen the agrarian nature of the United States.
D. To gain support from southern cities such as Charleston, Savannah and Baltimore.
Answer:
B. To encourage the wealthy to invest in the bank and become attached to the national government.
Explanation:
Alexander Hamilton proposed the idea of having a national bank and it was approved by the congress in 1791.
Hamilton justified establishing a national bank because he intended to encourage the wealthy to invest in the bank and become attached to the national government.
The national bank had $10,000000 (Ten million dollars) in capital.
Hamilton justified establishing a national bank to encourage the wealthy to invest in the bank and become attached to the national government.
Explanation:Hamilton justified establishing a national bank because he intended to encourage the wealthy to invest in the bank and become attached to the national government. By establishing a national bank, Hamilton believed that the wealthy would have a stake in the success of the government and be more likely to support it. This would help stabilize the government and foster economic growth.
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The main goal of auditing internal control is Group of answer choices To allow the auditor to fix any internal control deficiencies. To form an opinion on the ability of internal controls to prevent fraud. To assure management that internal control is preventing all material misstatements on the financial statements. To evaluate the effectiveness of controls over all relevant financial statement disclosures in the financial statements.
Answer:
To evaluate the effectiveness of controls over all relevant financial statement disclosures in the financial statements.
Explanation:
In Accounting, an internal control is a mechanism, procedure, rule or policy designed by management to secure assets, promote efficiency, ensure accountability and prevent fraudulent behavior in an organization.
The main goal of auditing internal control is to evaluate the effectiveness of controls over all relevant financial statement disclosures in the financial statements.
Suppose that a Swiss watchmaker imports watch components from Sweden and exports watches to the United States. Also suppose the dollar depreciates, and the Swedish Krona appreciates, relative to the Swiss Franc. In this case, the Swiss watchmaker would be:
Answer:
In this case, the depreciation of the US dollar will make the Swiss watches more expensive for American customers, which will probably lower their demand.
The Swedish krona appreciation will increase the production costs of the watches, so the company will suffer twice, its sales will lower and its costs will increase.
A depreciating dollar and an appreciating Swedish Krona relative to the Swiss Franc will lead to increased costs for imported components from Sweden for the Swiss watchmaker, but at the same time, make their exports to the United States more competitive.
If the dollar depreciates and the Swedish Krona appreciates relative to the Swiss Franc, the Swiss watchmaker will likely find that the cost of importing components from Sweden becomes more expensive while the watches exported to the United States become cheaper for American buyers. This situation affects the watchmaker's profits in different ways:
Importing costs rise: Since the Swedish Krona is stronger relative to the Swiss Franc, the watchmaker will need to spend more Francs to purchase the same amount of components from Sweden.
Export revenue increases: A depreciating dollar means American consumers will find Swiss watches relatively cheaper. As a result, demand for Swiss watches may increase in the U.S. market, potentially leading to higher sales volumes.
Therefore, the real exchange rate change has a dual impact on the Swiss watchmaker's business. On one hand, it benefits from increased competitiveness in the United States market. On the other hand, it faces higher costs for its supplies from Sweden.
Louis, an employee at Yoko Inc., had been notified of his termination from the company without sufficient justification. During the termination process, Louis’s manager took into consideration his dignity, concerns, and feelings. Which of the following determinants of interactional justice did Louis not receive from his manager? Social sensitivity Consideration Ethicality Explanation Empathy
Answer: Explanation
Explanation:
According to the given question, the explanation is one of the type of determinant of the interactional justice that the Louis not received from his manager as Louis is one of an employee at the Yoko Inc., and without any sufficient explanation he receive a notification for termination.
The explanation is one of the type of interactional justice determinant that emphasizing the main aspects of the given decision and justify the reasons for their specific decisions.
The interactional justice is one of the type of concept that helps in explain the positive workplace or environment and it is the main responsibility of the manager to make the effective decisions with justified explanation.
Therefore, Explanation is the correct answer.
During autumn months, passenger railroads across the globe deal with a condition called slippery rail. It results from a combination of water, leaf oil, and pressure from the train's weight, which creates a slippery black ooze that prevents trains from gaining traction. One solution for slippery rail is to cut back trees from all of a rail firm's rail network on a regular basis, thereby helping prevent the problem from developing. If incurred, would this railroad expense be a better example of a fixed cost or a variable cost? Why? A. This is an example of a fixed cost because the cost doesn't vary with the number of trains. B. This is an example of a variable cost because it is a long-run cost. C. The cost can be either fixed or variable depending on whether we are talking about the short run or long run.
Answer:
A) This is an example of a fixed cost because the cost doesn't vary with the number of trains.
Explanation:
A fixed cost is a cost that does not vary as the total output varies. In this case, the number of trains using the tracks would be the total output, and the tracks need to bee cleaned regardless of how many trains will use them. Since the costs do not vary depending on the number of trains that will use the tracks, it is considered a fixed cost.
An investor knows the total assets and total liabilities of a company, but they are not sure how much of the assets and liabilities are current versus long-term. Based on this, the investor could calculate
Answer:
The investor must find Current Ration and Quick Ratio.
Explanation:
The reason is that the current ratio tells that how much of the current assets are financed from the current liabilities. This gives a better understanding of the financing of the working capital through current liabilities. The quick ratio does the same but the effect of the inventory is eliminated.
Suppose that a firm has purchased some land for $1,250,000 a year ago to develop a new outlet, and the land now would sell $2,000,000. They are now evaluating the outlet and that it would cost them $12,000,000 to build the outlet, $150,000 to purchase needed equipment, $15,000 to transport and install the equipment, and $500,000 in inventory ($250,000 coming from one of their warehouses). What would you estimate its initial investment outlay to be?
Answer:
$13,915,000
Explanation:
Land-cost $1,250,000
Construction cost $12,000,000
Equipment cost(150,000+15,000) $165,000
Inventory $500,000
Total initial investment outlay $13,915,000
Please note that fair value of land is irrelevant as the land was purchased for the outlet being set up and not for any other project.
Lewis, a salesperson at an automobile showroom, convinced one of his sales leads to buy the latest car in the showroom. Two weeks after the car was delivered to the buyer, Lewis calls the customer to check if he is satisfied with the car and his service. Upon hearing the satisfied reply, Lewis adds that he can be reached in case of any complaints in the future. In this case, Lewis is _________.
a. following-up with his customer.b. handling objections from his customer.c. resolving his customer's complaint.d. closing the sale.
Answer:
a. following-up with his customer.
Explanation:
Based on the scenario being described within the question it can be said that Lewis is following-up with his customer. This is when a salesperson contacts a customer some time after their purchase in order to make sure that they are happy with their purchase. This allows the salesperson to address any problems or concerns that the customer may have with their product. All with the goal of trying to capture the loyalty of the customer, since a customer that is happy with an initial purchase is more likely to return.
A production line is to be designed to make 500 El-More dolls per day. Each doll requires 11 activities totaling 16 minutes of work. The factory operates 1000 minutes per day. What is the required cycle time for this assembly line?
a. one-half minute.
b. one and one-half minutes.
c. two minutes.
d. 5,500 minutes.
Answer:
The required cycle time for this assembly line is 2 minutes.
Explanation: Given that
The factory operates for 1000 minutes/day
Daily operating time= factory operates 1000 minutes per day
Schedule output = 500 El
Hence, to calculate the required cycle time for the assembly line
Cycle time = daily operating time ÷ the output schedule.
1000 / 500 = 2 minutes
To determine the required cycle time, divide the total work time by the number of units. The correct option is C.
Explanation:To determine the required cycle time for an assembly line, we need to divide the total work time by the number of units to be produced. In this case, we have 500 dolls to be made in 1000 minutes.
So, the required cycle time is:
Cycle Time = Total Work Time / Number of Units
= 1000 minutes / 500 dolls
= 2 minutes per doll
Therefore, the required cycle time for this assembly line is (C) two minutes.
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For the purpose of calculating GDP, investment is spending on
a. stocks, bonds, and other financial assets.
b. real estate and financial assets such as stocks and bonds.
c. capital equipment, inventories, and structures, including household purchases of new housing.
d. capital equipment, inventories, and structures, excluding household purchases of new housing.
Answer:
c. capital equipment, inventories, and structures, including household purchases of new housing.
Explanation:
Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.
GDP calculated using the expenditure approach:
Consumption spending + Investment spending by businesses + Government Spending + Net Export
Consumption spending is the amount spent by households on durable and non durable goods.
Investment spending is spending on capital equipment, inventories, and structures, including household purchases of new housing.
Government spending includes spending by government or an agency of the government.
Net Export is export less import.
I hope my answer helps you
GDP investment is the expenditure on capital equipment, inventories, and structures, including household purchases of new housing. It emphasizes tangible assets that contribute to productivity, not just the transfer of ownership of financial assets.
Explanation:For the purpose of calculating GDP, investment is best defined as spending on capital equipment, inventories, and structures, including household purchases of new housing. This definition (option c) emphasizes the tangible assets that contribute to productivity, as opposed to financial transactions such as the purchase of stocks and bonds, which do not directly influence productive output. For example, when a company purchases new machinery or a family buys a newly built home, these are counted as investments because they represent new additions to the country's productive capacity.
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Kelly inc. sold $930,000 worth of goods during the year, out of which $820,000 was on credit. accounts receivable at the beginning of the year amounted to $95,000 and $115,000 at the end of the year. compute kelly's accounts receivable turnover for the year.
Answer:
The accounts receivable turnover of Kelly for the year is 7.8
Explanation:
The formula for computing the accounts receivable turnover of Kelly for the year is as:
Accounts receivable turnover = Net Credit Sales / Average Accounts receivable
where
Net credit sales amounts to $820,000
Average accounts receivable formula is as:
Average accounts receivable = Beginning Accounts receivable + Ending Accounts receivable / 2
= $95,000 + $115,000 / 2
= $210,000 / 2
= $105,000
So, putting the values above as:
Accounts receivable turnover = $820,000 / $105,000
Accounts receivable turnover = 7.80
Doris recently started her position at Monro Company. The company uses the dollar-value LIFO inventory method. On her first day at work, Doris was asked to calculate the cost index for a new inventory layer. The company's records reveal that the cost in terms of the base year was $50,000 and the cost in terms of the layer year was $100,000. What is the cost index for the new layer
Answer
2
Explanation:
Cost index in dollar - value LIFO method is used to determine the change in prices since the beginning of he base year by comparing the year end inventory to the base layer cost.
The extended cost of the ending inventory at the most recent price is divided by the cost of the ending inventory at the base year price.
Workings
Cost in term of base layer = $50,000
Cost in term of the layer layer $100,000
Cost index = 100000/50000 = 2
To calculate the cost index for a new inventory layer in the dollar-value LIFO method, divide the layer year cost by the base year cost and multiply by 100. Here, the cost index is found to be 200.
The question asks about calculating the cost index for a new inventory layer using the dollar-value LIFO inventory method. To find the cost index for the new layer, we divide the cost in terms of the layer year by the cost in terms of the base year and then multiply by 100. Given the cost in the base year is $50,000 and the cost in the layer year is $100,000, the calculation would be ($100,000 / $50,000) × 100 = 200. Therefore, the cost index for the new layer is 200.
By examining relationships between items in the statement of cash flows, investors and creditors can do all of the following except make predictions of the amounts, timing, and uncertainty of future cash flows. determine reasons for the difference between net income and net cash provided by operating activities. determine the entity’s ability to earn future income. determine cash investing and financing transactions made during the period.
Answer:
determine cash investing and financing transactions made during the period.
Explanation:
When you analyze the statement of cash flows, you can determine and predict how will operating cash flows be in the future. E.g. a project is generating high amounts of cash, so you can predict that it will continue to do so for some time. But what you cannot predict or even compare is related to the financial and investing transactions that the company will make in the future. E.g. by analyzing a cash flow you cannot know if the company will decide to invest in other projects or will it decide to issue more stocks.
Presented below are transactions related to Tom Brokaw, Inc.May 10 Purchased goods billed at $16,200 subject to cash discount terms of 2/10, n/60.11 Purchased goods billed at $12,400 subject to terms of 1/15, n/30.19 Paid invoice of May 10.24 Purchased goods billed at $10,500 subject to cash discount terms of 2/10, n/30.A) Prepare general journal entries for the transactions above under the assumption that purchases are to be recorded at net amounts after cash discounts and that discounts lost are to be treated as financial expense. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.)May 10May 11May 19May 24B) Assuming no purchase or payment transactions other than those given above, prepare the adjusting entry required on May 31 if financial statements are to be prepared as of that date. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
May 10, purchased goods on account, terms 2/10, n/60
Dr Merchandise inventory 15,876
Cr Accounts payable 15,876
May 11, purchased goods on account, terms 1/15, n/30
Dr Merchandise inventory 12,276
Cr Accounts payable 12,276
May 19, paid May 10th invoice
Dr Accounts payable 15,876
Cr Cash 15,876
May 24, purchased goods on account, terms 2/10, n/30
Dr Merchandise inventory 10,290
Cr Accounts payable 10,290
Adjusting entry May 31 (purchase discounts lost on May 11th purchase)
Dr Purchase discounts lost 124
Cr Accounts payable 124
Since the company didn't pay the invoice in time, accounts receivable increases by $124 to $12,400 total. The lost discount is considered an expense.
T/F a house with a replacement value of $110,000 is currently insured for $90,000. The house has suffered a $15,000 loss from windstorm damage. The insurance company will pay the full $15,000 less the deductible.
Answer:
TRUE
Explanation:
Replacement value or costs describes the amount an insurance company will pay if the property is insured, in the event that the insured property is stolen or destroyed. It is the amount of money it will cost to replace a property or asset. In this scenario, since the cost of damage is at an amount ($15000) lower than the amount ($90,000) that the property was insured for, the insurance company will pay the full amount for the damage less the deductibles.
The Wei Corporation expects next year’s net income to be $15 million. The firm is currently financed with 40% debt. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei’s dividend payout ratio be next year?
Answer:
52%
Explanation:
Before diving into the use of residual distribution model, first, let us specify what our Total Investment required, Equity, Next year net income is:
Total Investment Required = 12,000,000
Equity = 12,000,000 × (1 - 40%) = 7,200,000
Next Year Net income = 15,000,000
Using the residual distribution model , we can specify that,
Retention Amount of Net income = Equity required = 7,200,000
and,
Dividend Distribution = Net income - Retention Amount of Net income
==> Dividend Distribution = 15,000,000 - 7,200,000
==> Dividend Distribution = 7,800,000
Therefore,
Payout ratio = Dividend Distribution ÷ Net income
==> Payout ratio = 7800000 ÷ 15000000 = 0.52
Therefore, the Payout ratio for next year will be 52%
To maintain the existing debt ratio while investing in profitable opportunities, Wei Corporation should retain $7.2 million of its net income. The remaining $7.8 million can be distributed as dividends, giving a dividend payout ratio of 52%.
Explanation:To calculate the dividend payout ratio for the Wei Corporation, we must first determine how much of the net income will be used for profitable investments while maintaining the current debt ratio.
The Wei Corporation has $12 million worth of investment opportunities and wants to maintain its structure which is 40% debt financed. This means, of the $12 million investment, 60% ($7.2 million) would come from Wei's equity. This is the portion of net income that Wei must retain.
Wei Corporation's net income for the next year is projected to be $15 million. After investing $7.2 million in profitable investments, it has $7.8 million ($15 million - $7.2 million) left. This is the amount that can be paid out as dividends to the shareholders.
So, to calculate the dividend payout ratio we divide the dividends by the net income. That gives us a dividend payout ratio of 52% ($7.8 million / $15 million).
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In addition to providing home mortgages, large commercial banks have specialized in providing short-term funds to mortgage banking companies in order to enable them to originate mortgage loans and hold the loans until the mortgage banking company can sell them in the secondary market. This type of financing is commonly referred to as___
Answer:
warehousing
Explanation:Warehouse financing as a type of financing is the process whereby manufacturers or producers take loan and the collateral for the loan taken are their goods/ items. The collateral which is the goods or commodities are held in high regards or trust by a third party who serves as a trustee holds the goods on the lender's behalf. s. an approved agent can also be used.
Warehouse financing is importantly necessary as it provides manufacturers with better and favorable loan terms , cost effective and an adequate repayment plan also as a merit to its use.
The type of financing large commercial banks provide to mortgage companies to allow them to originate and hold the loans until they can be sold off in the secondary market is called warehouse lending. This practice of securitizing loans and selling them in the secondary market brought both opportunities and challenges to financial markets.
Explanation:In addition to providing home mortgages, large commercial banks also specialize in providing financing known as warehouse lending to mortgage banking companies. These short-term funds enable mortgage companies to originate loans and hold them until they can be sold off in the secondary market.
The secondary market is a market where banks and other financial institutions sell their loans. This system came into prominence during the 1990s and early 2000s when changes in finance and banking laws allowed institutions to securitize their mortgage loans, or turn them into bonds, and sell them off. This meant that banks could separate their financial interests from the ability of the borrower to repay, thus increasing the attractiveness of higher-risk loans.
This process of securitization let the lenders off-load the mortgage risk to investors. Yet, it also fostered the creation of subprime loans, as banks found they could afford to make risky loans, sell them, and avoid the financial consequences when borrowers failed to repay.
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Jose has been offered a new job. The new job will pay more than his current job. Jose is hesitant to take the new job because it will cause his income to exceed the maximum amount in his current tax bracket. He is concerned that the increase in taxes will exceed his increased income from the new job.
a. This is not possible. Only the portion of income that exceeds Jose's current bracket will be taxed at the higher rate, not his total taxable income.
b. This is possible. Jose's entire taxable income will be taxed at the higher rate which could cause his increased taxes to exceed his increased salary.
Final answer:
Jose's concern that an increase in taxes will exceed his increased income due to moving into a higher tax bracket is unfounded, as only the income exceeding his current bracket's maximum is taxed at the higher rate, not his entire income.
Explanation:
The concern that Jose has about the increase in taxes exceeding his increased income from the new job due to moving into a higher tax bracket is based on a misunderstanding of how tax brackets work. Only the portion of income that exceeds the maximum amount of his current bracket will be taxed at the higher rate; the rest of his income will continue to be taxed at the lower rates applicable to those amounts. This design prevents situations where a raise or higher income results in a lower after-tax income, meaning it is not possible for Jose's increase in taxes to exceed his increase in income purely due to changing tax brackets.
For example, if Jose moves from a job paying just under the limit of one bracket into a job paying above that limit, only the income above the previous bracket's limit is taxed at the higher rate. The rest of his income up to that point is taxed at the same rate as before. The tax system is progressive, meaning that higher income levels are taxed at higher rates, but this applies only to the income within those higher brackets. Hence, the correct statement regarding Jose's situation is: 'This is not feasible. Only the portion of income that exceeds Jose's current bracket will be taxed at the higher rate, not his total taxable income.'
What are the disadvantages of a contract for deed? Write at least 2
Answer:
Explanation:
A Contract for Deed refers to the tool which allows buyers who do not qualify for conventional lending, or buyers who are in need of a faster financing option to purchase a property.
The seller will still retain the legal rights to the property until the balance of the payment is made. The legal rights are only transferred after the buyer has made the final payment.
Disadvantages Include:
To the seller, clearing the title may take time and money if the buyer defaults on the contract.The seller can decide to foreclose on the property if the buyer defaults, and the buyer has no recourse against the seller.