Answer: The description are as follows:
Explanation:
Monetary aggregates are as follows:
M1 = Currency with public + Check-able deposits + other deposits with RBI
M2 = M1 + Post office Savings A\c
(a) Selling shares of stocks doesn't affect any of the monetary aggregates, M1 or M2. But depositing the selling amount into savings account have an impact on M2. As savings account is a constituent of M2, which lead to increase in M2 and doesn't have any impact on M1.
(b) Selling shares of stocks doesn't affect any of the monetary aggregates, M1 or M2. But depositing the selling amount into checking account have an impact on both M1 and M2. As checking account is a constituent of M1 and M1 is a constituent of M2, so, this will increase both M1 and M2.
(c) If the amount is transferred from savings account to checking then this will increase the M1 and doesn't change M2. As checking account is a component of M1, so this will increase M1. M2 consists of both checking & savings account, so there is no impact on M2.
(d) Depositing cash into a checking account doesn't impact M1 or M2. Because there is just a transfer of funds from one component of M1 (that is currency with public) to another component of M1 (that is checking account).
(e) Depositing cash into a savings account doesn't have any impact on M2 but it decreases M1. Because there is a fall in the component of M1 (that is currency with public) which will decreases M1. There is no change in M2, as M2 consists of both M1 and Savings account.
Commodity Money is used in a situation where bottles of rum were used to pay for goods in colonial Australia. Commodity money is a money that is used for buying goods. Ideally, there is a trade of a commodity for a commodity.
Alpha Company was preparing its month-end bank reconciliation. The cash balance per the general ledger was $1,645. Alpha's accountant discovered that the bank had charged $15 in service charges for the month, that outstanding checks were $60, and that there were no deposits in transit. What is the correct adjusted ending cash balance?
Answer:
bank service expense 15 debit
cash 15 credit
Adjusted cash = 1,630
Explanation:
1,645
-15 bank services
1,630 adjusted cash balance
The accountant realize of the service fee at the momentof receive the bank statement, so it wasn't recorded. It must be adjusted
The outstanding checks are an adjustment made on the bank statement
The adjusted ending cash balance for Alpha Company after preparing its month-end bank reconciliation is $1,570.
Explanation:To find the adjusted ending cash balance for Alpha Company after preparing its month-end bank reconciliation, we need to make the necessary adjustments to the cash balance per the general ledger. The cash balance per Alpha's general ledger is $1,645. We then subtract the $15 bank service charges and the outstanding checks amount of $60 from the general ledger balance. Therefore, the adjusted ending cash balance is $1,645 - $15 - $60 = $1,570.
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Assuming that Intel needs to borrow money in the bond market to build a new chip-making factory, an increase in interest rates affects Intel's decision about whether to build the factory, because now the cost of borrowing money becomes ________.
Answer:
The cost of borrowing money becomes greater.
Explanation:
To borrow money from the bond the firm Intel needs to issue bonds. Then, it needs to pay interest on these bonds. This interest is the cost of borrowing.
When there is an increase in the interest rate in the market, the firm will be required to more interest. This increases the cost of borrowing from the bond market.
The returns from the new factory may not be able to cover this increased cost of borrowing. As a result the firm will be discouraged from borrowing.
Observation is an appropriate method for data collection in all of the following conditions except _____. A. purpose must be disguisedB. natural setting is necessaryC. anonymity is desiredD. memory decay is a factorE. behavioral data is needed
Answer: OPTION C
Explanation: Observation is a data collection method under which the analyst tries to gather the knowledge about the subject data by observing the different phenomena related to the data .
A. Purpose must be disguised as the observations are done for the collection of data and can affect the judgement of observer.
B. A natural setting is necessary or there might be some unfair results in observation.
C. Anonymity is not desired as it could hide some important perspectives of the subject leading to false observations.
D. Memory decay is a factor in considering observation as it can result in improper results.
E. Observation can not be done on quantitative data.
Answer: Option (c) anonymity is desired is correct.
Explanation:
Observation is an information gathering strategy. Where the observers looks at the general population in the normally occurring circumstances or in the natural settings.
He needs to hint the reason for the perception and furthermore need to share the adequate data about their exploration.
Memory decay plays a very important role under this kind of data collection method.
Which of the following is a condition in which observation is an appropriate method for data collection? A. Anonymity is desiredB. Respondents are widely dispersedC. Attitudinal information is neededD. Natural setting is imperativeE. Extensive amount of information is needed
The correct option here is D) natural settings are imperative.
Observation method of collecting data(primary) is one of the most popular method used , where data is collected by an observer, who personally observes the person from whom data is being collected or collecting knowledge through observation of the phenomena. This method comes to be very handy when the natural settings are very crucial or plays an important role, as an observer might have to use different observation practices for different research approaches.
What is the difference between revocable and irrevocable trust?
Answer:
Explanation:
A revocable trust is an agreement made by a person during his or her lifetime, naming a trustee and beneficiary. Trust resources must be moved to the trust with an adjustment in title of proprietorship. In this trust, trustor can terminate an aggrement at any point of time. Trust's assets are not protected from the trustor's creditors.
An irrevocable trust moves trust resources irreversibly into a trust, and the trustor can't alter or terminate the aggrement once made. Trust's assets are protected from the trustor's creditors under certain circumstances.
The key difference between a revocable trust and an irrevocable trust is that a revocable trust can be modified or terminated by the grantor during their lifetime, while an irrevocable trust cannot be easily changed once established.
Explanation:Difference Between Revocable and Irrevocable Trust
A trust is a crucial element in estate planning. Revocable and irrevocable trusts are two primary types of trusts that determine how assets are managed after one's death. With a revocable trust, the grantor (the person who creates the trust) maintains control over the trust assets during their lifetime. They may alter, amend, or completely revoke the trust as they see fit. Upon the grantor's death, a revocable trust usually becomes irrevocable, meaning that its terms can no longer be modified.
Conversely, an irrevocable trust, once created, typically cannot be changed or revoked by the grantor. This means that any assets placed within an irrevocable trust are no longer under the control of the grantor, and the trust's terms are set in stone, barring some exceptional circumstances. Additionally, because of this relinquishment of control, irrevocable trusts often provide certain tax advantages and asset protection benefits not available with revocable trusts.
Understanding the differences between these types of trusts is important for anyone engaged in estate planning, as they each carry implications for control over assets and potential financial benefits.
At the beginning of a recent year, JetBlue's assets were $6,549 million and its equity was $1,546 million. During the year, assets increased by $44 million and liabilities decreased by $64 million. What was JetBlue's equity at the end of the year
Answer:
Thus, the JetBlue's equity at the end of the year is $1,654 million
Explanation:
In this case, the accounting equation is used.
Accounting equation means the equation which shows double accounting entry system. Double accounting means debit side and credit side. In this accounting equation, the total assets is equal to total liabilities + total equity.
Total Assets = Total Liabilities + Total Equity
$6549 = Total Liabilities + $1,546
Total Liabilities = $5,003 million
In the question the assets is increased by $44 million whereas liabilities is decreased by $64 million.
So,
Updated asset value = $6,549+$44
= $6,593 million
Updated liabilities value = $5,003 - $64
= $4,939 million
So, the ending equity value will be
= Ending assets - Ending liabilities
= $6,593 million - $4,939 million
= $1,654 million
Thus, the JetBlue's equity at the end of the year is $1,654 million
Final answer:
JetBlue's equity at the end of the year can be calculated using the basic accounting equation. After accounting for the increase in assets and the decrease in liabilities, JetBlue's equity at the end of the year was found to be $1,654 million.
Explanation:
To calculate JetBlue's equity at the end of the year, we would use the accounting equation which is:
Assets = Liabilities + Equity
We are told that at the beginning of the year, JetBlue's assets were $6,549 million and its equity was $1,546 million. During the year, assets increased by $44 million and liabilities decreased by $64 million.
To find the new asset value at the end of the year, we add the increase to the initial asset value:
New Assets = Old Assets + Increase in Assets
New Assets = $6,549 million + $44 million = $6,593 million
Next, we need to adjust the liabilities. Since JetBlue's liabilities decreased, we subtract this decrease from the initial assets to find the initial liabilities using the rearranged accounting equation:
Initial Liabilities = Initial Assets - Initial Equity
Initial Liabilities = $6,549 million - $1,546 million = $5,003 million
Now, we find the new liabilities value:
New Liabilities = Initial Liabilities - Decrease in Liabilities
New Liabilities = $5,003 million - $64 million = $4,939 million
We use the accounting equation one last time to find the equity at the end of the year:
Equity at End of Year = Assets at End of Year - Liabilities at End of Year
Equity at End of Year = $6,593 million - $4,939 million = $1,654 million
Therefore, JetBlue's equity at the end of the year was $1,654 million.
Ramirez Company sells a product for $80 per unit. The variable cost is $60 per unit, and fixed costs are $4,850,000. Determine (A) the break-even point in sales units and (B) the sales units required for the company to achieve a target profit of $500,000.
Answer:
(A) Break even will be $19,400,000 or 242,500 units(B) Target profit in sales units will be 267,500 unitsExplanation:
Break Even Point (dollars) = Fixed Cost / contribution margin ratio
Break Even Point (units) = Fixed Cost / contribution margin per unit
Contribution Margin Unit = Sales Price - Variable Cost = 80 - 60 = 20
Contribution Margin Ratio = Contribution per unit / Sales Price = 20 / 80 = 0.25
Break even will be $19,400,000 or 242,500 units
Remember:
Contribution Margin will be sales minus variable cost
while the ratio is doing the contribution over the sales price
Trget profit (units) = target profit / contribution per unit +BEP =
500,000/20 + 242,500 = 267,500
or (target profit + fixed cost) / contribution margin per unit =
(4,850,000 + 500,000) / 20 = 267.500
Remember:
Target profit always must be higher than BEP (break-even point) If not, either or both are wrong, because in order to make gains, first you need to pay the fixed cost (BEP) so target profit number needs to be higher than that, always.
The break-even point for Ramirez Company is 242,500 units, and to achieve a target profit of $500,000, the company needs to sell 267,500 units.
The question you've asked involves concepts from managerial accounting, specifically relating to break-even analysis and profit planning. Let's calculate both the break-even point and the quantity needed to achieve a target profit for Ramirez Company.
A. Break-even point in sales units: This is calculated by dividing the total fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price per unit minus the variable cost per unit. So, for Ramirez Company, that would be:
Break-even point = Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
Break-even point = $4,850,000 / ($80 - $60)
Break-even point = $4,850,000 / $20 = 242,500 units
B. Sales units required for a target profit: To determine this, you will add the target profit to the total fixed costs and then divide by the contribution margin per unit. The formula is:
Required Sales Units for Target Profit = (Total Fixed Costs + Target Profit) / (Selling Price per Unit - Variable Cost per Unit)
Required Sales Units for Target Profit = ($4,850,000 + $500,000) / $20
Required Sales Units for Target Profit = $5,350,000 / $20 = 267,500 units
Gerda, a real estate agent, is selling a moderately priced house in a subdivision. She knows from her uncle that the factory being built half a mile from the subdivision will be manufacturing dog food, using a process that creates a very strong odor that permeates the surrounding neighborhood. A buyer, who is unaware of the type of factory under construction, makes an offer on one of the houses Gerda is selling, and within a short time, the deal goes through. What does this scenario best illustrate?
Answer:
The correct answer is, Information Asymmetries.
Explanation:
Information Asymmetry is a concept in contract theory and economics, in which there are two parties involved, and out of which one party has better or more information than the other party.
So in this example, Gerda is a real state agent and she is selling a house to a party and she knows by her resources that a factory is soon opening in the area where she is going to finalize a purchase deal with the other party. But the buyer is unaware of the fact that a factory is going to open near the house which he is going to purchase. So this who scenario best illustrates the concept of Information Asymmetries.
A firm is trying to decide which of two machines to install to reduce excessive costs of repairs due less reliable old machines. The new machines cost $1000 and have useful lives of five years, and no salvage value. Machine A can be expected to result in $300 savings annually. Machine B will provide cost savings of $400 the first year, but will decline $50 annually, making the second-year savings $350, the third year savings $300, and so forth. With interest at 7%, which machine should be purchased based on benefit-cost ratio?
Answer:
TMachine B will be the most benefical.
Explanation:
1,000 5 year savings for $300
1,000 5 year saving of 400 and decreasing 50 per year
interest rate 7%
TIR first machine: 15,2382%
TIR second machine: 17,4663%
The better option would be the second machine, because it produce a better yield and therefore it will have a better NPV when calculate a 7% rate
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,066,500, divided into four activities: fabrication, $522,000; assembly, $182,000; setup, $195,750; and inspection, $166,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 7,250 dlh 19,500 dlh 52 setups 91 inspections Bass boat 21,750 6,500 383 634 29,000 dlh 26,000 dlh 435 setups 725 inspections Each product is budgeted for 2,500 units of production for the year. a. Determine the activity rates for each activity. Fabrication $ per direct labor hour Assembly $ per direct labor hour Setup $ per setup Inspection $ per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat $ per unit Bass boat $ per unit
Answer:
a. Activity rates for each activity
Fabrications = $18/dlh
Assembly = $7/dlh
Setup = $450/setup
Inspection = $230/inspection
b. Activity-based factory overhead per unit for each product
Speed Boats = $124.532
Bass boats = $302.068
Explanation:
Provided there are various activities as follows
Activity Cost Speed Boats Bass boats Total activity
Fabrications $522,000 7,250 dlh 21,750 dlh 29,000 dlh
Assembly $182,000 19,500 dlh 6,500 dlh 26,000 dlh
Setup $195,750 52 setups 383 setups 435 setups
Inspection $166,750 91 inspections 634 inspections 725 inspt.
a. Activity rates for each activity
Fabrications = $522,000/29,000 dlh = $18/dlh
Assembly = $182,000/26,000 dlh = $7/dlh
Setup = $195,750/435 setups = $450/setup
Inspection = $166,750/725 inspections = $230/inspection
b. Activity-based factory overhead per unit for each product
Activity Speed Boats Bass boats
Fabrications 7,250 x $18 = $130,500 21,750 X $ 18 = $391,500
Assembly 19,500 X $7 = $136,500 6,500 X $7 = $45,500
Setup 52 X $450 = $23,400 383 X $450 = $172,350
Inspection 91 X $230 = $20,930 634 X $230 = $145,820
Total of both = $311,330 = $755,170
Total units are 2,500 of each product
Cost p.u. = $311,330/2,500 =$124.532 = $755,170/2,500 =$302.068
a. Activity rates for each activity
Fabrications = $18/dlh
Assembly = $7/dlh
Setup = $450/setup
Inspection = $230/inspection
b. Activity-based factory overhead per unit for each product
Speed Boats = $124.532
Bass boats = $302.068
Which of the following statements is CORRECT? Question 8 options: An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks. The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio. It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock. Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount. An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Answer:
Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
Explanation:
a) are e) are the same just the working is diferent but are true:
A stock’s stand-alone will be higher than a portfolio of more stocks.
A rational investor can eliminate the diversifiable risk by holding the stock in a well-diversified portfolio, and the risk that remains is called market risk So are FALSE
b) higher correlation means the stocks behave in the same direction, so the risk is not eliminate. To decrease the risk it should be a portfolio of lower correlation
FALSE
c) two stock one with risk of 10% and one with risk of 2%
the portfolio of this two shares, assuming same quantity, would be less than 10% making the statment false.
FALSE
d) Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
That is correct, because the market risk is there even if the portfolio is compose of all the of the market.
Because It cannot be eliminated through diversification
TRUE
An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Explanation:The correct statement among the options is: An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Diversification is an important concept in investing. It involves spreading investments across different assets, such as stocks, bonds, and mutual funds, to reduce the risk associated with investing in a single asset or company.
By holding a well-diversified portfolio that includes a large number of different stocks and assets, an investor can reduce the impact of any individual stock's performance on their overall portfolio and eliminate most of the risk that is specific to individual stocks.
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The Finishing Department had 11,000 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs. 33,000 units were received from the previous department. The ending Work-in-Process Inventory consisted of 4,300 units which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses first-in, first-out (FIFO) process costing. How many units were transferred-out during the period? 44,000 units. 28,700 units. 26,300 units. 39,700 units.
Answer:
39,700 units.
Explanation:
The transferred units are calculated using physical units.
So the complete % are irrelevant.
11,000 beginning
33,000 started
4,300 ending inventory
11000+33000 = 44000 units worked during the period
ending inventory (4300)
transferred out 39700
An activity-based costing system is developed in four steps: a. Compute the predetermined overhead allocation rate for each activity. b. Identify activities and estimate their total indirect costs. c. Identify the allocation base for each activity and estimate the total quantity of each allocation base. d. Allocate indirect costs to the cost object. Which of the following is the correct order for performing these steps? b, a, c, d a, b, c, d c, a, b, d b, c, a, d
Your question asks what order does a activity-based costing system work by.
Answer: b, c, a, dThe order:
1. b). Identify activities and estimate their total indirect costs.
2. c). Identify the allocation base for each activity and estimate the total quantity of each allocation base.
3. a). Compute the predetermined overhead allocation rate for each activity.
4. d). Allocate indirect costs to the cost object.
The reason why the answer choice "b, c, a, d" is the correct answer because that's the correct order for the activity-based costing system.
The activity-based costing system first identifies the activities that are going on and find the indirect cost, then identifies the allocation base for the activities that are occurring to find the quantity of the allocation base, then solve the pre-determined rate of allocation for each activity, and finally get the indirect cost for the object.
I hope this helps!Best regards,MasterInvestorPoskey Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Wages and salaries $ 349,000 Depreciation 290,000 Utilities 199,000 Total $ 838,000 Distribution of resource consumption: Activity Cost Pools Assembly Setting Up Other Total Wages and salaries 65% 20% 15% 100% Depreciation 35% 20% 45% 100% Utilities 15% 75% 10% 100% How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?
Answer:
[tex]\left[\begin{array}{cccccc}&Cost&Assembly&Setting Up&Other&Total\\wages&349,000&226,850&69,800&52,350&349,000\\Depreciation&290,000&101,500&58,000&130,500&290,000&Utilities&199,000&29,850&149,250&19,900&199,000&Total&838,000&358,200&277,050&202,750&838,000&\end{array}\right][/tex]
Explanation:
We mulitply each line by the stated percent of each activity
for example
Setting Up % x Utilities= Utilities cost assigned to setting up
199,000x 75% = 149,250
Assembly % Depreciation= Depreciation cost assigned to assembly
35% x 290,000 = 101,500
This process must be done to assign each portion of cost.
A blue-ocean strategy: A). is an offensive strike employed by a market leader that is directed at pilfering customers away from unsuspecting rivals to boost profitability.B). involves an unexpected (out-of- the-blue) preemptive strike to secure an advantageous position in a fast-growing market segment.C). works best when a company is the industry's low-cost leader.D). involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.E). involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.
Answer: The correct answer is D).
Explanation: A blue ocean strategy is used to gain a broad and durable competitive advantage by abandoning existing markets and inventing a new market segment in which competitors are minimal and allow the company to meet a new demand.
A blue-ocean strategy, correctly identified as choice D, focuses on creating a new market space that makes existing competition irrelevant, diverging from traditional competitive methods of cost leadership or product differentiation.
Explanation:The question asks to identify which statement correctly defines a blue-ocean strategy. Among the provided options, choice D is accurate. A blue-ocean strategy involves creating a new industry or market segment that makes the competition irrelevant by inventing and capturing entirely new demand. This strategy is distinct from conventional competitive strategies that aim to outperform rivals within existing markets. By developing uncharted market spaces (blue oceans), companies avoid the fierce competition in overcrowded industries (red oceans) and open up avenues for growth and profitability that are not based on competing within the confines of existing industry boundaries.
Michael Porter's framework advises firms to either pursue cost leadership or product differentiation but cautions against trying to achieve both, as it may lead to being 'stuck in the middle'. This contrasts with a blue-ocean strategy, which essentially bypasses the need to compete directly with others by creating a new market space.
Nancy Henderson is a saleswoman for a manufacturer of small kitchen appliances. She does not directly solicit orders. Her primary duties involve promotional activities and introducing new products to her employer's indirect customers. She spends much of her time demonstrating appliances at various retail stores. Nancy would be classified as a(n):
Answer: sales and marketing person
Explanation: Nancy Henderson would be considered as a sales and marketing employee with detailed knowledge. She will be considered as a hardworking employee as she spends much of her time in demonstration of new products to prospective customers. She is focused on her job as she carefully follow orders which are not even direct from her manager. Her primary duties regarding promotion and introduction clarifies she is involved in sales and marketing activities.
Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 8 percent and its return on assets (investment) is 17.75 percent. What is its assets turnover? (Round your answer to 2 decimal places.) b. If the Butters Corporation has a debt-to-total-assets ratio of 30.00 percent, what would the firm’s return on equity be? (Input your answer as a percent rounded to 2 decimal places.) c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 25.00 percent? (Input your answer as a percent rounded to 2 decimal places.)
Answer:
Part a = 2.22 %
Part b = 25.36%
Part c = 23.67%
Explanation:
The Du Pont method is that method which defines the return on equity into three parts that includes gross profit margin, asset turnover, and financial leverage.
The profit margin and asset turnover show the relation with sales revenue whereas the financial leverage show a ratio of debt and shareholder equity.
a. Asset turnover : In duo Pont method,the asset turnover formula :
= Return on Assets ÷ Profit margin
= 17.75% ÷ 8%
= 2.22 %
b. The Return on equity is equal to
= Return on assets ÷ (1 - debt to total assets ratio)
= 17.75% ÷ (1-0.30)
= 25.36%
c. Applying same formula which is used in part b
Return on equity = Return on assets ÷ (1 - debt to total assets ratio)
= 17.75% ÷ (1 - 0.25)
= 17.75% ÷ 0.75
= 23.67%
Hence, Part a = 2.22 %
Part b = 25.36%
Part c = 23.67%
Final answer:
The asset turnover for Butters Corporation is 2.22, the return on equity (ROE) with a debt-to-total-assets ratio of 30.00 percent is 25.36%, and if the ratio decreases to 25.00 percent, the ROE would be 23.67%.
Explanation:
We are asked to examine the relationship between profitability ratios using the Du Pont method for the Butters Corporation. The Du Pont formula is a strategic way to look at two major determinants of return on equity (ROE): operational efficiency as measured by profit margin and asset use efficiency as indicated by asset turnover.
a. Calculating Asset Turnover:
The asset turnover can be calculated using the return on assets (ROA) formula, which is ROA = Profit Margin × Asset Turnover. Given that Butters Corporation has a profit margin of 8 percent and a ROA of 17.75 percent, we can derive the asset turnover by rearranging the formula: Asset Turnover = ROA / Profit Margin = 17.75% / 8% = 2.21875, which rounded to two decimal places is 2.22.
b. Calculating Return on Equity (ROE):
The return on equity can be calculated with the formula ROE = ROA / (1 - Debt-to-Total-Assets Ratio). Substituting the given values, ROE = 17.75% / (1 - 30.00%) = 17.75% / 0.70 = 25.36%, rounded to two decimal places is 25.36%.
c. Effect of a Decreased Debt-to-Total-Assets Ratio on ROE:
If the debt-to-total-assets ratio decreases to 25.00 percent, the ROE would then be recalculated as ROE = 17.75% / (1 - 25.00%) = 17.75% / 0.75 = 23.67%, so the new ROE would be 23.67% rounded to two decimal places.
Which of the following describes the function of geodemographic segmentation? It determines the type of lifestyles that consumers have by asking them about their activities, interests, and opinions and groups them based on the similarity of their responses. It stresses the belief that the benefits people are seeking in consuming a given product are the basic reasons for the existence of true market segments. It identifies consumers' primary motivations and whether they are driven by ideals, achievement, and/or self-expression. It identifies the specific households in a market by focusing on local neighborhood areas and creates classifications of neighborhoods where people live and shop.
Answer: It identifies the specific households in a market by focusing on local neighborhood areas and creates classifications of neighborhoods where people live and shop.
Explanation:
Geo-demographic segmentation is a classification technique used in marketing to discover whether the entity of a population fall into different groups by making comparing various characteristics with certain assumption.
Geo-demographic segmentation is based on principles such as:
People who live in the same neighborhood have similar characteristics.
Neighborhoods can be classified in terms of the characteristics of the population.
Geodemographic segmentation involves identifying households in specific neighborhoods and grouping them into classification based on where they live and shop, utilizing GIS to analyze geographical and socioeconomic data for targeted marketing and strategic planning.
Explanation:The function of geodemographic segmentation best matches the description of identifying specific households in a market by focusing on local neighborhood areas and creating classifications of neighborhoods where people live and shop. This technique leverages the power of Geographic Information Systems (GIS) to analyze and visualize geographical data, alongside the socioeconomic characteristics collected from various sources like census data, financial institutions, and consumer behavior patterns. For instance, factors such as household incomes, personal tastes, and environmental concerns are gathered and transformed into "lifestyle segments," offering businesses critical insights into the lifestyle preferences of different consumer groups. This allows for targeted marketing strategies and location-based decision-making, such as finetuning mailing lists for a solar company or determining the optimal site for a new supermarket using GIS suitability analysis.
Farley Frozen Yogurt is a perfectly competitive firm. The market price of a frozen yogurt cake is $6. Farley sells 200 frozen yogurt cakes. Its AVC is $9 and its AFC is $2. Farley should:a. Continue to produceeven though it is losing money.b. Decrease productionto increase profits.c. Increase productionto increase profits.d. Shut downimmediately, it is losing money
Answer:
hmm...
Explanation:
i thinks it's gonna be choice B
The law of supply declares which of the following?a. supply falls as price fallsb. supply increases as price fallsc. supply stays the same no matter how prices changed. supply falls as prices increase
The law of supply states that supply increases as the price falls.
Explanation:A market equilibrium occurs when the total quantity of goods and services demanded in an economy equals the total quantity supplied, resulting in stable economic conditions without inflation or recession. Thus, it is directly influenced. by both the forces of demand and supply.
The law of supply declares that supply increases as the price falls. This means that when the price of a good or service goes down, suppliers are willing to produce and sell more of it. Conversely, when the price goes up, suppliers are willing to produce and sell less of it. This relationship remains true as long as all other factors influencing supply, such as production costs and technology, remain constant.
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The correct answer to the student's question is 'a. supply falls as price falls,' as the law of supply states there is a direct relationship between price and quantity supplied.
The law of supply is a fundamental concept in economics that describes how producers respond to changes in price. According to the law of supply, if all other factors are held constant (ceteris paribus), an increase in the price of a good or service will lead to an increase in the quantity supplied of that good or service. Conversely, if the price of a good or service falls, the quantity supplied will also decrease. Therefore, the correct answer to the student's question is 'a. supply falls as price falls.'
Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500. A. Upland has higher productivity and higher real GDP per person than Lowland. B. Upland has higher productivity but lower real GDP per person than Lowland. C. Upland has lower productivity but higher real GDP per person than Lowland. D. Upland has lower productivity and lower real GDP per person than Lowland.
Answer:
A.- Upland has higher productivity and higher real GDP per person than LowlandExplanation:
GDP per person: GDP / population
Productivity: GDP / hours worked
GDP per person Upland 342,000 / 15,000 = 22,8
Hours worked Upland = 9,000* 8 = 72,000
Productivity Upland = 342,000 / 72,000 = 4.75
GDP per person Lowland 171,500 / 8,000 = 21.4375
Hours worked Lowland 7,000* 7 = 49,000
Productivity Lowland = 171,500 / 49,000 = 3.5
Comparison
22.8 > 21.4375 & 4.75 > 3.5
This problem involves calculating productivity (output per hour) and real GDP per person (total output per person). It is found that Upland has higher productivity and higher real GDP per person than Lowland.
Explanation:In order to answer this question, we need to understand two economic concepts: productivity and real GDP per person. Productivity is the output produced per hour of work. In Upland, workers produce $342,000 in 8*9000 hours, which gives a productivity of about $4.75/hour. In Lowland, workers produce $171,500 in 7*7000 hours, leading to a productivity of about $3.50/hour. Hence, Upland has higher productivity.
Real GDP per person is the total output divided by the population. Upland has a real GDP per person of $342,000/15,000 which is approximately $22.8/person, whereas Lowland has a real GDP of $171,500/8,000 amounting to about $21.44/person. Therefore, Upland has a higher real GDP per person. This means the correct answer would be Upland has higher productivity and higher real GDP per person than Lowland.
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Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate, liquidating distribution of $16,000 cash, inventory with a $16,000 fair value (inside basis $8,000), and accounts receivable with a fair value of $8,000 (inside basis of $12,000) to Daniela. JRD has no liabilities at the date of the distribution. Daniela's basis in her JRD partnership interest is $20,000. What is the amount and character of Daniela's gain or loss from the distribution?
Answer: The amount and character of Daniela's gain or loss from the distribution will be $0.
Explanation:
Given : Daniela is a 25% partner in the JRD Partnership, liquidating distribution of $16,000 cash, inventory with a $16,000 fair value (inside basis $8,000), and accounts receivable with a fair value of $8,000.
Here, Daniela will not recognize any gain or loss on the distribution. She will instead reduce the basis of the inventory she receives in complete liquidation of her interest.
At the beginning of the year, Uptown Athletic had an inventory of $640000. During the year, the company purchased goods costing $2020000. If Uptown Athletic reported ending inventory of $960000 and sales of $3440000, their cost of goods sold and gross profit rate would be:
Answer:
Cost of Goods Sold = $1,700,000
Gross Proft = $1,740,000
Explanation:
We solve this assingemtn using the inventory identity:
[tex]$$Beginning Inventory + Purchase = Ending Inventory + COGS[/tex]
We post the given and solve for the missing part:
640,000 + 2,020,000 = 960,000 + COGS
COGS = 640,000 + 2,020,000 - 960,000 = 1,700,000
Next we use the COGS value to calculate the gross profit.
[tex]Sales \: Revenues- \: COGS = \: Gross \: Profit[/tex]
3,440,000 - 1,700,000 = 1,740,000
An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS recovery period and is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e., revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000. An effective income tax rate of 40% is used by the company and the after-tax MARR equals 15% per year.
What is the approximate value of the company's before-tax MARR?
Answer:
Before tax minimun accepted rate of return = 25%
Explanation:
tax rate 40%
after.tax MARR 15%
We need to covnert the after tax rate into before tax.
Everything else is irrelevant for the calculation.
[tex]after-tax = before-tax \: (1-tax\:rate)[/tex]
0.15 = before-tax X (1 - 0.40)
0.15/0.60 = .25
Jill’s business has current assets of $50,000 and current liabilities of $25,000. Which statement is true about the company’s current ratio? The ratio is $25,000 and is not acceptable for most industries. The ratio is 50% and is acceptable for most industries. The ratio is 2 and is acceptable for most industries. Current ratio can not be determined from the information given.
Answer:
The ratio is 2 and is acceptable for most industries is true about the company’s current ratio.
Explanation:
Current Ratio shows the relationship between currents assets and current liabilities. It is a type of liquidity ratio which is required to meet short term liabilities. The current assets includes stock, debtors, cash whereas current liabilities include bills payable, creditors, etc. Both current assets and current liabilities have a life of less than one year. The formula to compute current ratio is given below:
Current Ratio = Current Assets ÷ Current Liabilities
The Current Assets is $50,000 whereas current liabilities of $25,000
So,
The current ratio = $50,000 ÷ $25,000 = 2 times
The current ratio is always shown in times only.
Thus, The ratio is 2 and is acceptable for most industries is true about the company’s current ratio and other statements are false.
Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.50%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
The total amount of all common equity investors' investments in a firm, along with the total value of all common shares, plus retained earnings (RE) and additional paid-in capital (APIC), is known as common equity.
Explanation:
The stock of a company is neither an asset nor a liability. A common stock is a type of investment.
The cost of common equity at Pearson is 14%.Given:WACC =12.50%Tax rate = 25%Outstanding bibds = 12%Capital structure = 30:70[tex]\text{After-tax cost of debt}[/tex] [tex]= \text{yield to maturity}[/tex] × [tex](1-\text{tax rate})[/tex]
[tex]= 12(1-0.25)[/tex]
[tex]=9[/tex]%
[tex]\text{WACC} =[/tex] [tex]\text{Respective costs}[/tex] × [tex]\text{Respective weight}[/tex]
[tex]12.5 = (9) (0.3) + (0.7)[/tex] × [tex]\text{Cost of common equity}[/tex]
[tex]\text{Cost of common equity}[/tex] = [tex]\frac{(12.5-2.7)}{0.7}[/tex]
[tex]=14.00[/tex]%
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The cost of common equity for Pearson Motors is 14.67%.
To find the cost of common equity (rs), we can use the Weighted Average Cost of Capital (WACC) formula:
[tex]\[ WACC = \frac{D}{V} \times rd \times (1 - t) + \frac{E}{V} \times rs \][/tex]
We can plug these values into the WACC formula:
[tex]\[ 0.1250 = 0.30 \times 0.12 \times (1 - 0.25) + 0.70 \times rs \][/tex]
Solving for [tex]\( rs \):[/tex]
[tex]\[ 0.1250 = 0.30 \times 0.12 \times 0.75 + 0.70 \times rs \][/tex]
[tex]\[ rs = \frac{0.0980}{0.70} \][/tex]
[tex]\[ rs = 0.1400 \][/tex]
Converting to percentage form and rounding to two decimal places:
[tex]\[ rs = 14.00\% \][/tex]
However, since we are not rounding intermediate calculations, the precise value before rounding to two decimal places is:
[tex]\[ rs = 14.666666666667\% \][/tex]
Rounded to two decimal places, the cost of common equity is 14.67%.
n Crawford Company, the predetermined overhead rate is 80% of direct labor cost. During the month, $210,000 of factory labor costs are incurred, of which $180,000 is direct labor and $30,000 is indirect labor. Actual overhead incurred was $200,000. The amount of overhead debited to Work in Process Inventory should be:
Answer:
WIP 144,000 debit
Factory Overhead 144,000 credit
Explanation:
210,000 labor cost
30,000 indirect labor
180,000 direct labor
The rate is based on direct labor cost, so we use this figure.
180,000 x 80% = 144,000
Remember, the rate is calculate using a given cost driver. So it only this cost driver matters.
Final answer:
The amount of overhead debited to Work in Process Inventory for Crawford Company would be $144,000, based on the predetermined overhead rate of 80% of the $180,000 direct labor cost.
Explanation:
In the Crawford Company scenario, the predetermined overhead rate is calculated as 80% of the direct labor cost. Given that the direct labor cost for the month is $180,000, we would apply the overhead rate to this figure to determine how much overhead should be debited to Work in Process Inventory.
Calculating the overhead debited, we take 80% of $180,000, which is:
0.80 × $180,000 = $144,000Therefore, the amount of overhead debited to Work in Process Inventory would be $144,000.
It is important to note that this figure is based on the predetermined overhead rate and not on the actual overhead costs incurred by the company during the month.
Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, and that the price of each candy cane is $0.10. Now suppose that the price of sugar rises, increasing the marginal and average total cost of producing candy canes by $0.05; there are no other changes in production costs. Based on the information given, we can conclude that once all the adjustments to long-run equilibrium are achieved, the price of candy canes will equal: five cents. ten cents. fifteen cents
Answer:
The price will increase to $0.15 or 15 cents.
Explanation:
In a perfect competition the firm operates at the level where it's price is equal to the marginal cost of production.
So, initially the firm will be operating at price level $0.10 but when there is an increase in the marginal cost of production by $0.05 due to increase in sugar prices, the candy cane producing firms will adjust their price accordingly.
So, the price will also increase by the same amount and thus the new price level will be $0.15.
Fields Cutlery, a manufacturer of gourmet knife sets, produced 20,000 sets and sold 23,000 units during the current year. Beginning inventory under absorption costing consisted of 3,000 units valued at $66,000 (Direct materials $12 per unit; Direct labor, $3 per unit; Variable Overhead, $2 per unit, and Fixed overhead, $5 per unit.) All manufacturing costs have remained constant over the 2-year period. At year-end, the company reported the following income statement using absorption costing: Sales (23,000 × $45) $ 1,035,000 Cost of goods sold (23,000 × $22) 506,000 Gross margin $ 529,000 Selling and administrative expenses 115,000 Net income $ 414,000 60% of total selling and administrative expenses are variable. Compute net income under variable costing.
Answer:
Net income under variable costing would be $429,000.
Explanation:
Under the variable costing method the most important point to understand here is that fixed cost of the previous period ( 3000 units in this case ) would not be carried over to current period. Which means that the fixed cost and cost of goods sold be less now and the profit will increase.
NET INCOME =
SALES = $ 1035,000 ( 23,000 X 45 )
(-) COST OF GOODS SOLD = ($ 391,000) ( 23000 X 17 )
( We have multiplied 23,000 units by 17 because now those fixed cost of $5 are not carried forward to this period)
GROSS CONTRIBUTION MARGIN = $1035,000 - $391,000
= $644,000
(-)VARIABLE SELLING AND ADMINISTRATION EXPENSES = ($69,000)
( $115,000 X 60% )
CONTRIBUTION MARGIN = $644,000 - $69,000
= $575,000
(LESS) FIXED COSTS = ($146,000) [ $100,000 + $46,000 ]
1) MANUFACTURING COST = 20,000 X $5
= $100,000
2) SELLING AND ADMINISTRATION EXPENSES = $115,000 X 40%
= $46,000
INCOME = $575,000 - $146,000
= $429,000
Under variable costing, only variable manufacturing costs are included in the product cost. The cost per unit is $17. After calculating the total variable cost, cost of ending inventory, cost of goods sold (COGS) under variable costing, and total variable selling and administrative costs, the net income under variable costing is calculated to be $414,000.
Explanation:Under variable costing, only variable manufacturing costs are included in the product cost. Thus, the cost per unit would be the sum of direct materials, direct labor, and variable overhead, which equals $12 + $3 + $2 = $17.
With the production of 20,000 sets, total variable cost would be 20,000 * $17 = $340,000.
End inventory consists of unsold units (i.e., produced units minus sold units), which in this case is 2000 sets (20,000 units - 18,000 units). So, the variable cost of ending inventory would be 2000 * $17 = $34,000. Now subtract the cost of ending inventory from the total variable cost to get the Cost of Goods Sold (COGS) under variable costing; $340,000 - $34,000 = $306,000.
Next, compute the Total Variable Selling and Administrative Costs like this: 60% * $115,000 = $69,000.
Now you can calculate Net Income under variable costing using the formula: Sales - (COGS under variable costing + Total Variable Selling & Administrative Expenses + Fixed costs). Which is: $1,035,000 - ($306,000 + $69,000 + $5*20,000) = $414,000.
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Omega Instruments has budgeted $300,000 per year to pay for certain ceramic parts over the next 5 years. If the company expects the cost of the parts to increase uniformly according to an arithmetic gradient of $10,000 per year, what is it expecting the cost to be in year 1, if the interest rate is 10% per year?
Answer:
281,281.28
Explanation:
expected cost 300,000 + 10,000 = 310,000
with an inerest rate of 10%
discount value equals to 281,281.28
Omega Instruments is expecting the cost of the parts to be $341,000 in Year 1.
Data and Calculations:
Annual budgeted payment for ceramic parts =$300,000
Period of budget = 5 years
Expected increase in the cost of the parts = $10,000 per year
Price of the parts in Year 1 = $310,000 ($300,000 + $10,000)
Interest rate per year = 10%
Expected cost of the ceramic parts in Year 1 based on 10% interest rate = $341,000 ($310,000 x 1.1)
Thus, Omega Instruments expects the cost of the parts to rise to $341,000 in Year 1.
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