Answer:
option (C) 75,000
Explanation:
Data provided in the question:
Selling cost of digital cameras = $175
Required return on sales = 25%
feasible costs = $9,944,000
cost reduction = $100,250
Now,
cost of camera = $175 × (1 - Desired profit )
or
cost of camera = $175 × (1 - 0.25)
or
cost of camera = $131.25
Now,
Net cost of cameras sold = cost of camera × Number of cameras FI sell
$9,944,000 - $100,250 = $131.25 × Number of cameras FI sell
or
$9,843,750 = $131.25 × Number of cameras FI sell
or
Number of cameras FI sell = 75,000
Hence,
the answer is option (C) 75,000
You plan to make five deposits of $1,000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 6% nominal interest, compounded semiannually, how much will be in your account after 3 years? One year from today you must make a payment of $4,000. To prepare for this payment, you plan to make two equal quarterly deposits (at the end of Quarters 1 and 2) in a bank that pays 6% nominal interest compounded quarterly. How large must each of the two payments be?
Answer:
Check the calculation below.
Explanation:
a) Amount in account after 3 years:
= $1,000 (1+ 0.03)5 + $1,000 (1+ 0.03)4+ $1,000 (1+ 0.03)3 + $1,000 (1+ 0.03)2 + $1,000 (1+ 0.03)
= $1,159.27 + 1,125.51 + 1,092.73 + 1,060.90 + 1,030
= $5,468.40
b) Calculation of amount of payment:
Let the amount of each of two payment be "P".
Now, $4,000 = P (1 + 0.015)3 + P (1 + 0.015)2
or,$4,000 = 1.0457 P + 1.0302 P
or, P = $4,000 / 2.0759
or, P = 1,927 (Approx)
To have $10,000 in ten years with 10% interest compounded annually, you need to deposit $3,874.38.
Explanation:To calculate how much money you need to put into a bank account to have $10,000 in ten years with 10% interest compounded annually, you can use the formula for compound interest, which is A = P(1 + r/n)^nt. In this case, P is the principal amount (the initial deposit), r is the interest rate (10% or 0.10), n is the number of times interest is compounded per year (1 for annually compounded interest), and t is the number of years (10).
Substituting these values into the formula, we get A = P(1 + 0.10/1)^(1*10) = 10,000. Rearranging the formula to solve for P, we have P = A / (1 + r/n)^nt. Plugging in the known values, we calculate P = 10,000 / (1 + 0.10/1)^(1*10) = $3,874.38.
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arry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $50.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $40.00 per share. Larry worries about the value of his investment. Larry's current investment in the company is _____
Answer:
$100,000
Explanation:
Data provided in the question:
Number of shares held by Larry = 2,000
Shares outstanding = 20,000
Current value of stock = $50.00 per share
Number of shares to be issued = 5,000
Issuing price = $40.00 per share
Now,
Larry's current investment in the company
= Number of shares held by Larry × Current value of stock
= 2,000 shares × $50.00 per share
= $100,000
Which of the following terms best describes a company that has operations in various countries, follows policies to develop local R&D to tailor products to markets, lets plants set their own rules, and aims at being a good corporate citizen in every country?
Answer: Multinational company
Explanation:
A multinational company has operations in various companies however the rules of the parent company country of residence are not allowed to interfere negatively on other countries of operations. All other company units in there various domiciliation are allowed to develop research towards tending products to local markets and ensuring adherence to rules various country of domiciliation.
A bank features a savings account that has an annual percentage rate of 3.4% with interest compounded quarterly. Ashley opens one of these brand new savings accounts and deposits $2,000 into the account. What is her account balance after 4 years, rounded to the nearest cent?
Answer:
$2,290.05
Explanation:
Principle, P = $2,000
Rate of interest, r = 3.4%
Time period, t = 4 years
n = 4
Therefore,
[tex]Amount=P(1+\frac{r}{n})^{nt}[/tex]
[tex]Amount=2,000(1+\frac{3.4}{400})^{4\times 4}[/tex]
[tex]Amount=2,000(1+\frac{3.4}{400})^{16}[/tex]
= $2,290.05
Hence, account balance after 4 years is $2,290.05.
Gregory Trout has just received a memo explaining that because of his department's success with the newly developed Trout, Inc., that his request for three new employees has been approved. Gregory now faces the challenge of working with the areas of human resource management in recruiting, selecting, training and maintaining eFective employees. In recruiting and selecting employees for the new positions, Gregory will apply which human resource management goal?
a. Implementing strategies
b. Managing talent
c. Maintaining the company mission
d. finding the right people
e. Controlling strategies
Answer:
d. finding the right people
Explanation:
As the George's department had successfully satisfied the needs of the new developed Trout , Inc. IT might happen that work will be extended. This will require Goerge to increase the workforce those are having skill sets that matches the Trout, Inc. needs.
Thus, while recruiting and seelcting for the new positon Georgy will apply HRM goal of finding the right set of people for the required project.
In the short run, the quantity of output that firms supply can deviate from the natural rate of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen.For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. Suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. Many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will _______(Remain the same/fall/rise), and firms that rely on catalogs will respond by _______ (Increasing/Reducing) the quantity of output they supply. If enough firms face high costs of adjusting prices, the unexpected decrease in the price level causes the quantity of output supplied to ______ (Fall below/Rise above) the natural rate of output in the short run.
Answer:
The actual price level turns out to be 90. Faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. Sales from catalogs will remain the same, and firms that rely on catalogs will respond by increasing the quantity of output they supply.
If enough firms face high costs of adjusting prices, the unexpected decrease in the price level causes the quantity of output supplied to rise above the natural rate of output in the short run.
Explanation:
The inputs are based on the sticky-price theory, with explaination as below:
"In the short run, the quantity of output that firms supply can deviate from the natural rate of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level."
Diamond Design Company makes custom chairs for individual customers. On September 1, there was one job in process, Job 243, with a cost of $2,000. Jobs 244, 245, and 246 were started during the month of September. Data on costs added during the month are as follows:
Job 243 Job 244 Job 245 Job 246Direct Materials $9,000 $2,280 $6,700 $8,000Direct Labor 2,240 1,000 2,300 2,530Overhead is applied to production at the rate of 60% of direct labor cost. Job 245 was completed on September 14 and the client was billed at cost plus 40%. All other jobs remained in process.
Calculate the balance in Work-in-Process on September 30.a. $15,820b. $17,717c. $30,512d. $22,875e. $32,820
Answer:
c. $30,512
Explanation:
Please see attachment
The ending work-in-process balance for Diamond Design Company on September 30 is $32,482, calculated by totaling the costs for jobs 243, 244, and 246 that were still in process at the end of the month.
Explanation:To calculate the balance in Work-in-Process on September 30 for Diamond Design Company, we will add the cost layers for each job that remained in process at the end of the month. We start with the opening balance of Job 243 and then add the direct materials, direct labor, and overhead applied to the jobs that were not completed within the month.
Here are the calculations:
Job 243: $2,000 (opening balance) + $9,000 (direct materials) + $2,240 (direct labor) + ($2,240 * 60% overhead) = $15,584Job 244: $2,280 (direct materials) + $1,000 (direct labor) + ($1,000 * 60% overhead) = $4,000Job 246: $8,000 (direct materials) + $2,530 (direct labor) + ($2,530 * 60% overhead) = $12,898Adding those amounts gives us the ending work-in-process balance:
$15,584 (Job 243) + $4,000 (Job 244) + $12,898 (Job 246) = $32,482
Therefore, the correct balance on September 30 for work-in-process is $32,482.
Cynthia Knott's oyster bar buys fresh Louisiana oysters for $5 per pound and sells them for $9 per pound. Any oysters not sold that day are sold to her cousin, who has a nearby grocery store, for $2 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 100 pounds and a standard deviation of 15 pounds. How many pounds should she order each day?
Answer:
103
Explanation:
Please see attachment .
The number of pounds to be ordered each day is 103 pounds. This is calculated using the news vendor model.
What is the news vendor model?The news vendor model is used to determine the optimum inventory level in case of uncertainties. The level of inventory is calculated using z score of the probability. The probability under this model can be calculated as:
[tex]\rm P = \dfrac{Co}{Cu+Co}[/tex]
Where Co is the cost of actual Utilization, and Cu is the cost of under Utilization.
[tex]\rm Co = Selling\:price - Cost\\\\\rm Cu = Cost - Receipt\:from\:sale\:of \:unsold\:stock[/tex]
The quantity can be calculated as:
[tex]\rm Quantity = Mean + (Standard \:deviation \times z\: score\: of \:probability)[/tex]
The z score of probability can be calculated from the table.
Given:
Mean is 100
Standard deviation is 15
Cost is $5
Selling price is $9
Selling price of unsold stock is $2
Therefore Co and Cu will be:
[tex]\rm Co = Selling\:price - Cost\\\\Co = \$9 - \$5\\\\Co= \$4[/tex]
And,
[tex]\rm Cu = Cost - Receipt\:from\:sale\:of \:unsold\:stock\\\\ Cu = \$5 - \$2\\\\ Cu = \$3[/tex]
The probability will be:
[tex]\rm P = \dfrac{Co}{Cu+Co}\\\\\rm P =\rm \dfrac{\rm Co}{\rm Cu+Co}\\\\\rm P = 0.5914[/tex]
The z score of this probability is 0.18
Therefore the quantity will be:
[tex]\rm Quantity = Mean + (Standard \:deviation \times z\: score\: of \:probability)\\\\\rm Quantity = 100+ (15\times 0.18)\\\\\rm Quantity = 100+ 2.7\\\\\rm Quantity = 102.7 \\\\\rm Quantity = 103\:pound[/tex]
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Suppose that a monopoly firm finds that its MR is $50 for the first unit sold each day, $49 for the second unit sold each day, $48 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on.
a. What is the firm’s MRP for each of the first five workers?
Worker MRP Unregulated
1 ----------------
2 ----------------
3 ----------------
4 ----------------
5 ----------------
Answer:
$240
$174
$120
$75
$36
Explanation:
MRP = Change in revenue/Change in Labour
1. The first worker;
From the question, the first worker has 5 units
So, his change in revenue is 50+49+48+47+46 for the 5 units
Change in Revenue = $240
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $240/1
MRP = $240
2.The second worker;
The second worker has 4 units(starting from where the first worker stopped)
So, his change in revenue is 45+44+43+42 for the 4 units
Change in Revenue = $174
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $174/1
MRP = $174
3.The third worker;
The third worker has 3 units(starting from where the second worker stopped)
So, his change in revenue is 41+40+39 for the 3 units
Change in Revenue = $120
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $120/1
MRP = $120
4.The fourth worker;
The second worker has 2 units(starting from where the third worker stopped)
So, his change in revenue is 38+37 for the 2 units
Change in Revenue = $75
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $75/1
MRP = $75
5.The fifth worker;
The second worker has 1 units(starting from where the fourth worker stopped)
So, his change in revenue is 36 for the 1 unit
Change in Revenue = $36
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $36/1
MRP = $36
During the latest year. XYZ Corporation has total sales of $400,000. net income of 10000, and its year end total sses were S 500 000. The firm's total debt to total assets ratio was 30%, what is firm's profit margin? (Enter your answers as a decimal rounded to 4 decimal places, not a percentage. For example, enter 0. 0843 instead of 8.43 Your Answer: Answer D View hint for Question 23 Question 24 (1 point) If a company's ROA is 9% and its total long-term debt to total assets ratio is 40%, what is its ROE (return on. equity)? (Enter your answers as a decimal rounded to 4 decimal places, not a percentage For example enter 00843 instead of 843%) Your Answer:
Answer:
2.50%; 15%
Explanation:
Profit margin = (Net income ÷ sales) × 100
= ($10,000 ÷ $400,000) × 100
= 2.50%
Total long-term debt to total assets ratio = 40%
So,
= Total equity ÷ Total assets
= 60%
Equity multiplier = Total assets ÷ Total equity
= 1.66667
ROA = 9%
ROE (return on equity):
= (Profit margin × Total assets turnover) × Equity multiplier
= ROA × Equity multiplier
= 9% × 1.66667
= 15%
Final answer:
The profit margin of XYZ Corporation is 0.0250. To find it, divide the net income of $10,000 by the total sales of $400,000. Similarly, a firm's accounting profit with a sales revenue of $1 million and various costs would be $50,000.
Explanation:
To calculate the profit margin of XYZ Corporation, we divide its net income by its total sales. The profit margin formula is: Profit Margin = (Net Income / Total Sales).
In this case, XYZ Corporation's net income is $10,000 and its total sales are $400,000. Therefore, the profit margin would be calculated as follows: Profit Margin = ($10,000 / $400,000) = 0.025. So, the profit margin, when entered correctly as a decimal, is 0.0250.
For the self-check question regarding the firm with sales revenue of $1 million, the accounting profit is found by subtracting the total costs (labor, capital, and materials) from the sales revenue. The firm's accounting profit would be: $1 million - ($600,000 + $150,000 + $200,000) = $1 million - $950,000 = $50,000.
Inventory at the beginning of the period had a debit balance of $7,000, and a debit balance of $10,000 at the end of the period. Using the indirect method, this will be reported in the operating section of the statement of cash flows as: Click the answer you think is right. a decrease of $3,000 which will be added to net income a decrease of $3,000 which will be subtracted from net income an increase of $3,000 which will be subtracted from net income an increase of $3,000 which will be added to net income Read about this Do you know the answer?
Answer:
an increase of $3,000 which will be subtracted from net income
Explanation:
an increase of $3,000 which will be subtracted from net income .Increase in Inventory = 10000-7000 = $3000 .Increase in Inventory is reported as a decrease and subtracted from net income .an increase of $3,000 which will be subtracted from net income
A proposed new investment has projected sales of $585,000. Variable costs are 44 percent of sales, and fixed costs are $187,000; depreciation is $51,000. Prepare a pro forma income statement assuming a tax rate of 21 percent. What is the projected net income? (Input all amounts as positive values.)
Answer:
The projected Net Income is $70,784
Explanation:
The Pro- forma income Statement
Working Note:
Variable cost = Sales × 44%
= $585,000 × 44%
= $257,400
EBT (Earnings before Tax) = Sales - Variable cost - fixed cost - depreciation
= $585,000 - $257,400 - $187,000 - $51,000
= $89,600
Net Income = EBT × Tax rate
= $89,600 × 21%
= $70,784
Final answer:
By calculating the total variable costs, deducting them along with the fixed costs and depreciation from sales, and subtracting the taxes from EBIT, the projected net income for the proposed investment is found to be $70,784.
Explanation:
Pro Forma Income Statement Calculation
To calculate the projected net income for the proposed investment, we need to follow these steps:
Calculate total variable costs by multiplying projected sales by the variable cost percentage. In this case, $585,000 * 44% = $257,400.
Subtract variable costs and fixed costs from sales to determine the earnings before interest, taxes, depreciation, and amortization (EBITDA). Therefore, $585,000 - $257,400 - $187,000 = $140,600.
Next, subtract depreciation to find earnings before interest and taxes (EBIT). Here, $140,600 - $51,000 = $89,600.
Now, calculate the taxes by multiplying EBIT by the tax rate. So, $89,600 * 21% = $18,816.
Finally, subtract taxes from EBIT to determine the projected net income. Thus, $89,600 - $18,816 = $70,784.
The projected net income for the new investment is $70,784.
Brandon walked out of a team meeting with the understanding that none of the team could take vacation time for the next month. What was actually stated in the meeting was that the project was under a strict deadline, and an employee would need to have their part finished before taking vacation time. This is an example of which barrier to effective communication?
A) Bias
B) Lack of trust
C) Lack of engagement
D) Filtering
Answer:
D) Filtering
Explanation:
Filtering is the act of hearing what one expects or wants to hear instead of what was actually stated. In this case, Brandon assumed none of the team could take vacation time for the next month while what was really said is that only one employee would need to have their part finished before taking vacation time.
The answer is D) Filtering
Labor data for making one pound of finished product in Curling Co. are as follows: Price-hourly wage rate $11.00, payroll taxes $1.80, and fringe benefits $1.20. Quantity-actual production time 1.1 hours, rest periods and clean up 0.25 hours, and setup and downtime 0.15 hours. Compute the following. (Round answers to 2 decimal places, e.g. 52.75.) Standard direct labor rate per hour Standard direct labor hours per pound hours Standard cost per pound.
Answer:
Standard direct labor rate per hour $14
Standard direct labor hours per pound hours 1.5 hours
Standard cost per pound $21
Explanation:
The computation is shown below:
For Standard direct labor rate per hour:
= Price-hourly wage rate + payroll taxes + fringe benefits
= $11 + $1.80 + $1.20
= $14
For Standard direct labor hours per pound hours:
= Quantity-actual production time hours + rest periods and clean up hours + setup and downtime hours
= 1.1 + 0.25 + 0.15
= 1.5 hours
For Standard cost per pound:
= Standard direct labor rate per hour × Standard direct labor hours per pound hours
= $14 × 1.5 hours
= $21
Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: lead time is normally distributed with an average of 6 weeks and a standard deviation of 2 weeks. Demand is also a variable and normally distributed with a mean of 200 cigars per week and a standard deviation of 25 cigars.
a) For a 90% service level, what is the ROP?
b) What is the ROP for a 95% service level?
c) Explain what these two service levels mean. Which is preferable?
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
For a 90% service level, the ROP is approximately 1207.23 cigars. For a 95% service level, the ROP is approximately 1208.21 cigars. The service level represents the probability of satisfying demand during the lead time, with a higher service level indicating a lower risk of stockouts and unmet customer demand.
Explanation:
a) For a 90% service level, the ROP can be calculated using the formula:
ROP = (Demand × Lead time) + Z × √(Demand Variance × Lead time Variance)
where Z is the Z-score corresponding to the desired service level. For a 90% service level, Z is approximately 1.28. Plugging in the values, we have:
ROP = (200 cigars/week × 6 weeks) + 1.28 × √(25 cigars^2/week × 2 weeks^2) = 1200 cigars + 7.23 cigars = 1207.23 cigars
b) For a 95% service level, we use Z = 1.645 (corresponding to a 95% confidence interval). Plugging in the values as before:
ROP = (200 cigars/week × 6 weeks) + 1.645 × √(25 cigars^2/week × 2 weeks^2) = 1200 cigars + 8.21 cigars = 1208.21 cigars
c) The service level represents the probability that demand will be satisfied during the lead time. A higher service level indicates a lower risk of stockouts and unmet customer demand. In this case, the 95% service level is preferable as it provides a higher degree of confidence in satisfying customer demand.
You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $4500 per month. You have access to an account that pays an APR of 7.2% compounded monthly. What size nest egg do you need to achieve the desired monthly yield?
What montly deposits are required to achieve the desired monthly yield at retirement?
To achieve a retirement income of $4500 per month for 25 years, you would need a nest egg of approximately $625,357.24, and you would need to make monthly deposits of approximately $225.19 during your working years.
To calculate the size of the nest egg needed to achieve a desired monthly yield during retirement, as well as the monthly deposits required, we can use the present value of an annuity formula.
1. Size of the Nest Egg (Present Value, PV):
The formula for the present value of an annuity is given by:
[tex]P V=P M T \times\left(\frac{\left(1-(1+r)^{-n t}\right)}{r}\right)[/tex]
Where:
PV is the present value of the annuity (the size of the nest egg),
PMT is the periodic payment (monthly income during retirement),
r is the periodic interest rate, and
nt is the total number of periods.
In this case:
PMT = $4500 (desired monthly income during retirement),
[tex]r=\frac{7.2 \%}{12}[/tex] = 0.006 (monthly interest rate), and
nt=12×25 = 300 (monthly payments for 25 years during retirement).
Plug in these values and calculate PV.
[tex]P V=4500 \times\left(\frac{1-(1+0.006)^{-300}}{0.006}\right)[/tex]
First, calculate the value within the parentheses:
[tex]\left(1-(1+0.006)^{-300}\right)[/tex] ≈0.83380
Substitute this value back into the formula:
[tex]P V=4500 \times\left(\frac{0.83380}{0.006}\right)[/tex]
Calculate the expression within the parentheses:
[tex]\left(\frac{0.83380}{0.006}\right)\\[/tex] ≈ 138.968
Multiply by the monthly payment:
PV = 4500 x 138.968
The result is approximately PV ≈ 625,357.24
2. To find the monthly deposits required, we can use the future value of an annuity formula:
[tex]F V=P M T \times\left(\frac{\left((1+r)^{n t}-1\right)}{r}\right)[/tex]
Where:
FV is the future value (the size of the nest egg),
PMT is the periodic payment (monthly deposit),
r is the periodic interest rate, and
nt is the total number of periods.
In this case:
FV= the size of the nest egg calculated in step 1,
[tex]r=\frac{7.2 \%}{12}[/tex] = 0.006 (monthly interest rate), and
nt = 12×40 = 480 (monthly deposits for 40 years).
Plug in these values and calculate PMT:
[tex]P M T=\frac{\mathrm{PV}}{\left(\frac{\left((1+0.006)^{480}-1\right)}{0.006}\right)}[/tex]
[tex]\frac{\left((1+0.006)^{480}-1\right)}{0.006}[/tex] ≈ 2776.938
Divide PV by this value:
625,357.24 / 2776.938 ≈ 225.19
To achieve a $4500 monthly yield in retirement, a nest egg of approximately $404,035.5 is needed. The monthly deposits required to achieve this nest egg are approximately $32,850.3.
Size of Nest Egg (Future Value of Annuity):
The formula for the future value (FV) of an annuity is:
Future Value (FV) = Monthly Payment (P) × [(1 - (1 + Monthly Interest Rate)^(-Number of Payments)) / Monthly Interest Rate]
Given:
Monthly Payment (P) = $4500
Monthly Interest Rate = Annual Percentage Rate (APR) / 12 = 7.2% / 12
Number of Payments = 12 payments per year × 25 years
Calculating this gives us the size of the nest egg needed, which is approximately $404,035.5.
Monthly Deposits Required:
To find the monthly deposits required, we rearrange the annuity formula:
Monthly Payment (P) = [Nest Egg Size (FV) × Monthly Interest Rate] / [(1 - (1 + Monthly Interest Rate)^(-Number of Payments))]
Given:
Nest Egg Size (FV) = $404,035.5
Monthly Interest Rate = 7.2% / 12
Number of Payments = 12 payments per year × 40 years
Calculating this gives us the monthly deposits required, which is approximately $32,850.3.
Are there any similarities between the characteristics demanded of an entrepreneur and those of a professional athlete? Would an athlete be a good prospect for entrepreneurship? Why or why not? Could teamwork be important in an entrepreneurial effort? Why or why not?
Answer:
The demands of an entrepreneur and a professional athlete are more comparative than one may expect.
Explanation:
Professional athlete are required to place in extended periods of time, remain submitted, deal with their bodies, keep an expert notoriety, and deal with their own image. An entrepreneur must work unusual hours, stay with their objectives, deal with themselves, arrange and keep up great associations with sellers and clients, and advance their organisation. So yes they both have similarities and an athlete can work as an entrepreneur because he knows how to work with team members and how to stay on objectives.
Entrepreneurial traits can overlap with characteristics of professional athletes, highlighting similarities and differences in their skill sets.
Similarities between entrepreneurs and professional athletes include traits like drive, determination, and resilience. Athletes often possess strong work ethic and discipline, essential for entrepreneurship. However, entrepreneurship requires additional skills like innovation, adaptability, and risk-taking that may not be as prominent in athletes.
An athlete could be a good prospect for entrepreneurship if they can transfer their competitive mindset and work ethic into business strategies. Teamwork is crucial in entrepreneurial efforts as it allows for diverse skills and perspectives to come together to tackle challenges and drive success.
An investment offers a total return of 15 percent over the coming year. Janet Jello thinks the total real return on this investment will be only 7.7 percent.
What does Janet believe the inflation rate will be over the next year?
Answer:
6.78%
Explanation:
Data provided in the question:
Total return i.e nominal rate = 15% = 0.15
Real return = 7.7% = 0.077
Now,
Inflation rate = [tex]\frac{\textup{1 + Nominal rate}}{\textup{1 + Real return }}[/tex] - 1
on substituting the respective values, we get
Inflation rate = [tex]\frac{\textup{1 + 0.15}}{\textup{1 + 0.077}}[/tex] - 1
or
Inflation rate = [ 1.15 ÷ 1.077 ] - 1
or
Inflation rate = 0.0678
or
Inflation rate = 0.0678 × 100% = 6.78%
Janet Jello expects the inflation rate to be 7.3 percent over the next year if the investment has a nominal return of 15 percent and she anticipates a real return of 7.7 percent.
The question asks us to figure out the expected inflation rate if an investment returns a nominal interest rate of 15 percent and the anticipated real return rate is 7.7 percent. To find this, we use the formula:
Nominal Interest Rate - Inflation Rate Equals Real Interest Rate
If the real return is expected to be 7.7 percent and the nominal return is 15 percent, we can rearrange the formula to solve for the inflation rate:
7.7% = 15% - Inflation Rate
By subtracting 7.7 percent from both sides, we find that:
Inflation Rate = 15% - 7.7%
Thus, Janet believes the inflation rate will be:
Inflation Rate = 7.3 percent.
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $50,000 per year. The new machine will cost $70,000 and will last for five years, at which time it can be sold for $3,000. The current machine will also last for five more years but will not be worth anything at that time. It cost $34,000 three years ago but is currently worth only $5,000. Assuming a discount rate of 7%, what is the incremental net present value of replacing the current machine with the new machine?
Answer:
7.915
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Johansen Corporation has a target capital structure of 60 percent common stock and 40 percent debt. Its cost of equity is 14 percent, and the cost of debt is 8 percent. The relevant tax rate is 30 percent.What is the company's WACC?
Answer:
10.64%
Explanation:
The computation of the WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)
= (0.40 × 8%) × ( 1 - 30%) + (0.60 × 14%)
= 2.24% + 8.4%
= 10.64%
Simply we multiply the weightage with its capital structure so that the Accurate weighted cost of capital can be calculated
During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $780,000, and $16,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 3.5%. The ending balance of Accounts Receivable is ________.
Answer:
Bad debt expense = $28000
Ending balance = $4000
Explanation:
given data
Credit sales= $800000
Cash collection = $780,000
Write off = $16,000
rate = 3.5 %
to find out
ending balance of Accounts Receivable is
solution
first we get Bad debt expense that is express as
Bad debt expense = 800000 × 3.5%
Bad debt expense = $28000
and
Ending balance is express as
Ending balance = Credit sales - Cash collection - Write off ..............1
put here value
Ending balance = $800000 - $780,000 - $16,000
Ending balance = $4000
Final answer:
The ending balance of Accounts Receivable is calculated $32,000 by adding credit sales to the beginning balance, subtracting cash collections and write-offs, and then adjusting for the bad debts expense calculated by the percent-of-sales method.
Explanation:
The student asked about calculating the ending balance of Accounts Receivable when given the credit sales, cash collected, amount written off, and bad debts expense using the percent-of-sales method. To calculate the ending balance of Accounts Receivable, you must account for the beginning balance, add credit sales, subtract cash collections and write-offs, and adjust for the calculated bad debts expense.
Here's a step-by-step process:
Calculate the bad debts expense using the percent-of-sales method: $800,000 (credit sales) × 3.5% = $28,000.
Determine the amount of Accounts Receivable before the adjustment for bad debts: $800,000 (credit sales) - $780,000 (cash collected) - $16,000 (write-offs) = $4,000.
Add the bad debts expense to the Accounts Receivable before adjustment: $4,000 + $28,000 = $32,000, which is the ending balance of Accounts Receivable.
You are analyzing the cost of debt for a firm. You know that the firm’s 14-year maturity, 8.6 percent coupon bonds are selling at a price of $745.14. The bonds pay interest semiannually. If these bonds are the only debt outstanding for the firm, answer the following questions.What is the after-tax cost of debt for this firm if it has a 30 percent marginal and average tax rate?
Answer:
8.75%
Explanation:
Find the YTM which is the pretax cost of debt.
Using a financial calculator, input the following and adjust the coupon payment, time and interest rate to semi-annual basis.
Maturity of the bond; N= 14*2 = 28
Face value : FV = 1000
Price of the bond ; PV = -745.14
Semiannual Coupon payment; PMT = semiannual coupon rate* Face value
Semiannual Coupon payment; PMT = (8.6%/2)*1000 = 43
then compute the semiannual rate; CPT I/Y = 6.25%
Annual rate; YTM ; pretax cost of debt = 6.25*2 = 12.5%
Next, find aftertax cost of debt;
Aftertax cost of debt = pretax cost of debt (1-tax)
= 0.125 (1 -0.30)
= 0.0875 or 8.75% as a percentage
Therefore; aftertax cost of debt = 8.75%
Final answer:
The after-tax cost of debt is calculated by finding the bond's yield to maturity and adjusting it for the firm's tax rate. Without the actual calculation or a financial calculator, it's not possible to provide the exact YTM in this response. Once the YTM is found, the after-tax cost is YTM * (1 - Tax Rate), with a 30% tax rate in this scenario.
Explanation:
To calculate the after-tax cost of debt for the firm, we need to determine the yield to maturity (YTM) of the bond and then adjust it for the firm's tax rate. The bond in question has an 8.6 percent coupon rate, pays semiannually and is selling at a price of $745.14. We must use the present value of annuities formula to find the YTM, which is the interest rate that equates the present value of the future cash flows of the bond (interest payments and face value) to the current price of the bond. Once we find the YTM, we apply the tax rate to get the after-tax cost of debt.
Unfortunately, without a financial calculator or spreadsheet software, it's impractical to solve for the YTM in this response. Generally, the process involves using the present value formula:
PV = C * (1 - (1 + r)⁻ⁿ) / r + F / (1 + r)
Where PV is the current price of the bond ($745.14), C is the annual coupon payment, r is the YTM, n is the number of periods until maturity, and F is the face value of the bond. Once YTM is found, the after-tax cost of debt is calculated using the formula:
After-tax cost of debt = YTM * (1 - Tax Rate)
Given a 30 percent tax rate, the after-tax cost of debt would be
After-tax cost of debt = YTM * (1 - 0.30)
This reflects the actual cost to the firm of borrowing funds through the bond.
Pam works for a corporation that recently fired three top managers who were caught using the company credit cards to lavishly furnish their offices and even purchase "office" furniture that was found in their personal homes. Which method of maintaining an ethical culture is Pam's company pursuing? A) serve as a visible role model B) communicate ethical expectations C) provide ethical training D) visibly punish unethical acts E) provide protective mechanisms
Answer:
(D). Visibly punish unethical acts
Explanation:
Ethics refer to how people conduct themselves morally. Each organization has an Ethical Code they expect their employees to abide by.
When employees act outside an organization's Code of Ethics, then punishing them visibly is a way to serve as a deterrent to other employees.
Employees should also be openly rewarded when they act in accordance to the Code of Ethics to encourage others to do the same.
In this case, Pam's company is using visible punishment to maintain its ethical culture and send a message to the other employees.
develop a product service idea.
A. Describe the product/service including the benefits of using the product/service
B. Discuss the potential customers for this product/service
2. Based on the nature of the product/service, recommend at least 3 possible social media to use in marketing the product/service. Describe your recommendations and discuss the advantages and disadvantages of each.
Answer:
Read the following explanation.
Explanation:
1a- My products idea is the auto-home temperature control system which will benefit the customers to control the temperature of their home in winter time. this product is both automatic means customer can control this system with remote and use of internet as well as manually by changing its settings.
b- The potential customers for this product are based on geographic segmentation in which customers who live in cold countries like Canada, America, Atlanta, Russia will be targeted.
another potential custome segmentation will be based on demographic in which customers who are professionals like doctors, lawyers, or job doers and having average to high income level will be targeted like income level from $50000-above $150000.
2-the three possible way to market my product are-
a-Use of google in which customers will type the name of my product and it will list on top because of SEO and i will rank my product on top list so that customers can click and read about my product on my website easily.
the pro of this that customers will get information easily and place order. this will help to build good image of my product being top at google list.
the con is that this may cost more to put my product on top of search engine list.
b- The use of social media like Fb post, instagram etc in which my product will get advantage of being marketed to wide range of audience at low cost. also there are billions of users on social media so we can reach to them in less time.
the con of this is that use of social media involves other big brands and products already so customers tend to ignore such ads.
c- the third would be use of TV commercials in which we would use celebrity influenece to market my products. the advantage of this is that Customers will be influneced by celebrity power and will order the product. Tv commercials will have customers who are ignored by social media.
the con of this is that this may cost extra to hire celebrity also customers who are to watch Tv shows or movies tend to skip ads.
A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: The locations area: Atlanta ($80,000, $20) and Phoenix ($140,000, $16) . The first number with in the parentheses is the fixed cost and the second number is the variable cost per unit If the annual demand is 20,000 units, what would be the cost advantage of the better location? Select one: A. $60,000 B. $80,000 C. $480,000 D. $20,000 E. $460,000
Answer:
D. $20,000
Explanation:
Considering the cost elements of Atlanta
Fixed cost = $80,000
Variable cost per unit = $20
Where 20,000 units are produced (to meet annual demands)
Total cost = 80,000 + (20000 × 20)
= 80,000 + 400,000
= $480,000
Considering the cost elements of Phoenix
Fixed cost = $140,000
Variable cost per unit = $16
Where 20,000 units are produced (to meet annual demands)
Total cost = 140,000 + (20000 × 16)
= 140,000 + 320,000
= $460,000
Comparing the cost of production in the two locations, the cost advantage of the better location (Phoenix)
= 480,000 - 460,000
= $20,000
Camille, a college student, feels that now is a good time to buy stocks. However, because she doesn't have any savings, she decides to borrow $15,000 at an annual interest rate of 8 percent. She must make an interest-only payment each year for five years plus repay the entire principal in year five. On August 1, 2018 when Camille obtained the loan, Camille invested $10,000 in several individual stocks and used the remaining $5,000 to pay her tuition for the year. Assuming Camille's investment income this year is greater than her investment interest expense this year, how much investment interest expense can she deduct in 2018?
Answer:$1200
Explanation:
The maximum interest payable for year one of 2018 is 8% of $15000 which gives $1200.
If the investment income is greater than investment interest expenses of $1200 . The amount of investment interest expenses she can deduct is $1200.
The stockholders’ equity section of Jun Company’s balance sheet as of April 1 follows. On April 2, Jun declares and distributes a 20% stock dividend. The stock’s per share market value on April 2 is $15 (prior to the dividend).
Common stock—$5 par value, 475,000 shares authorized, 250,000 shares issued and outstanding $ 1,250,000
Paid-in capital in excess of par value, common stock 590,000
Retained earnings 883,000
Total stockholders' equity $ 2,723,000
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Assume instead that the fair market value of the land was $87,000 and that of the building was $65,000. Determine Gerald's adjusted basis for the land and building. Gerald's basis for gain: Gerald's adjusted basis for the land is $. Gerald's adjusted basis for the building is $. Gerald's basis for loss: Gerald's adjusted basis for the land is $. Gerald's adjusted basis for the building is $.
Answer:
Please see attachment
Explanation:
Please see attachment
Sell or Process Further Rise N' Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.88 per pound. The processing into Decaf Columbian requires additional processing costs of $10,230 per batch. The additional processing also causes a 5% loss of product due to evaporation. a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Answer:
Please see attachment
Explanation:
Please see attachment
Braxton Corp. has no debt but can borrow at 6.7 percent. The firm’s WACC is currently 8.5 percent, and the tax rate is 35 percent.
a. What is the company’s cost of equity? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %
b. If the firm converts to 20 percent debt, what will its cost of equity be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %
c. If the firm converts to 40 percent debt, what will its cost of equity be?
d. If the firm converts to 20 percent debt, what is the company’s WACC?
e. If the firm converts to 40 percent debt, what is the company’s WACC?
WACC___%.
Answer
The answer and procedures of the exercise are attached in the image below.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Final answer:
Braxton Corp's initial cost of equity is 8.5%. If Braxton Corp takes on 20% debt, the new cost of equity will be 9.54%, and with 40% debt, it will be 11.12%. At 20% debt, the company's WACC and cost of equity for 40% debt need additional calculations involving the WACC formula with the given tax rate and cost of debts.
Explanation:
To answer the student's questions regarding Braxton Corp., we start with the information that the corporation currently has no debt and its Weighted Average Cost of Capital (WACC) is 8.5%, with a tax rate of 35%. Initially, the company's cost of equity is the same as its WACC since it has no debt, so it is 8.5%.
To calculate the new cost of equity after introducing debt, we can use the Modigliani-Miller proposition II with taxes, which identifies that the cost of equity increases with leverage due to the increased risk perceived by equity holders. The formula for the cost of equity when there is debt in the capital structure is:
Cost of equity = cost of equity with no leverage + (debt-to-equity ratio * (cost of equity with no leverage - after-tax cost of debt)).
To find the after-tax cost of debt, we use the formula: After-tax cost of debt = interest rate on debt * (1 - tax rate).
For Braxton Corp, the after-tax cost of debt = 6.7% * (1 - 0.35) = 4.355%.
Let's now calculate the new cost of equity if the firm converts to 20% and 40% debt:
20% Debt: The debt-to-equity ratio = 0.20 / (1 - 0.20) = 0.25
40% Debt: The debt-to-equity ratio = 0.40 / (1 - 0.40) = 0.6667
Using these debt-to-equity ratios, we can calculate the new cost of equity as follows:
At 20% debt:
Cost of equity = 8.5% + (0.25 * (8.5% - 4.355%)) = 9.53625% (rounded to 9.54%)
At 40% debt:
Cost of equity = 8.5% + (0.6667 * (8.5% - 4.355%)) = 11.11523% (rounded to 11.12%)
Lastly, to calculate the WACC for 20% and 40% debt scenarios, we use the WACC formula:
WACC = ((E/V) * Re) + ((D/V) * Rd * (1 - Tc)), where E is the market value of equity, Re is the cost of equity, D is the market value of debt, Rd is the cost of debt, V is the total market value of the firm's financing (E + D), and Tc is the corporate tax rate.