Answer: (A) Small-batch
Explanation:
Small batch production is one of the type batch production that is used for describing the small production and the low manufacturing in an organization.
The small batch production basically allow all the kinds of products in the market and the products are basically distribute in the small scale. This process is known as small batch production.
According to the question, Hermes international mainly produces the handbag as it is one of an example of small batch production.
How does a bond issuer decide on the appropriate coupon rate to set on its bonds?
Explain the difference between the coupon rate and the required return on a bond.
Answer
The answer and procedures of the exercise are attached in the following image.
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.
Makai Metals Corporation has 9.4 million shares of common stock outstandin par value $1,000 each. The common stock currently sells for $42 per share a maturity and sell for 113 percent of par. The market risk premium is 8.2 perce rate is 35 percent. a. What is the firm's market value capital structure?
Answer:
Please see attachment
Explanation:
Please see attachment
Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,900,000 Net operating income $ 4,900,000 Average operating assets $ 36,200,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
1. The margin for Alyeska Services Company: 27.37%
2. The turnover for Alyeska Services Company= 49.45%
3. The return on investment (ROI) for Alyeska Services Company = 13.54%
Explanation:
Please find the below for detailed explanations and calculations:
1. The margin for Alyeska Services Company = Net operating income / Sales = 4,900,000/17,900,000 = 27,37%;
2. The turnover for Alyeska Services Company= Sales / Average operating income = 17,900,000/36,200,000 = 49.45%;
3. The return on investment (ROI) for Alyeska Services Company = Net operating income/Average operating income= 4,900,000/36,200,000= 13.54%
Brutus Inc is considering the purchase of a new machine for $500,000. It is expected that the equipment will generate annual cash inflows of $100,000 and annual cash outflows of $37,500 over its 10 year life. Annual depreciation is $50,000. Compute the cash payback period.
Answer:
8 years
Explanation:
Given: Cost of new machine= $500000.
Annual cash inflow= $100000.
Annual cash outflow= $37500.
First, we will calculate annual payback or cash inflow.
Annual payback= [tex](cash\ inflow - cash\ outflow)[/tex]
∴Annual payback= [tex](\$ 100000 - \$ 37500)= \$ 62500[/tex]
Now computing cash payback period.
Cash payback period= [tex]\frac{initial\ investment}{annual\ payback}[/tex]
Cash payback period= [tex]\frac{500000}{62500} = 8\ yrs[/tex]
∴ Cash payback period is 8 years.
When payback period is short then investment is more attractive.
Robert Lewis Stevenson’s story, Imp in the Bottle, features a fabulous bottle whose owner will be granted any wish by the imp who lives within the bottle. The problem is that anyone who buys the bottle must sell it at a lower price or else suffer eternity in hell. [If you do not believe in hell, assume that you do for the purposes of this question.] Assuming the smallest possible unit of currency is one cent, would you buy the bottle if it were offered to you for $1,000? Explain your reasoning.
Answer:
Yes.
Explanation:
I would buy the bottle as anything can be asked for from the bottle and it will come true. Hence once the bottle is bought anything can be wished for and then the bottle can be sold off at a lower price than $1000.
Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts. The credit card company receives 3.5% of card sales as its fee. If Acme has $2,000 in credit card sales, which of the following statements is true?a. Acme debits Cash $2,000b. Acme debits Cash $1,930c. Acme debits Accounts Receivable - Credit Card Co $2,000d. Acme debits Accounts Receivable - Credit Card Co $1,930e. Acme credits Sales $1,930
Answer:
b. Acme debits Cash $1,930
Explanation:
Before passing the journal entry, first we have to do the calculations which his shown below
= Credit card sales - Credit card sales × fee percentage
= $2,000 - $2,000 × 3.5%
= $2,000 - $70
= $1,930
The journal entries are shown below:
Cash A/c Dr $1,930
To Sales A/c $1,930
(Being cash is received after applying the fee percentage)
A company works 320 days per year and has an annual demand of 2080 units of product desires to set an reorder point that will cover demand during lead time. If the lead time is 4 working days, what should the reorder point be? Group of answer choices
6.5 units
14 units
20 units
26 units
160 units
Answer:
D. Re-order point = 26 days
Explanation:
Given,
Annual Demand, D = 2,080 units
Number of working days = 320 days
Lead time = 4 days
We know,
Re-order point = (Annual demand/Number of working days)*Lead Time
Re-order point = (Annual demand/Number of working days)*Lead Time
Re-order point = (2,080/320)*4
Re-order point = (6.5*4)
Re-order point = 26 days
Therefore, the answer choice is D.
As there is no maximum and average lead time and no replenishment stock, I exclude the safety stock from the re-order point calculation.
The payroll register of Charbroil Company indicates $1,200 of social security tax withheld and $300 of Medicare tax withheld on total salaries of $20,000 for the period. Assume earnings subject to state and federal unemployment compensation taxes are $7,000, at the federal rate of 0.8% and the state rate of 5.4%. What is the total amount of payroll tax expense?a. $1,878b. $1,500c. $1,556d. $1,934
Answer:
d. $1,934
Explanation:
Total amount of payroll tax expense=Social security tax withheld+Medicare tax withheld +State and federal unemployment compensation taxes on earnings=1200+300+.062*7000=$1934 (d. $1,934)
There are three methods for estimating the cost of common stock from reinvested earnings (not newly issued stock): the CAPM method, the DCF method, and the bond-yield-plus-risk-premium method. However, only the CAPM method always provides an accurate and reliable estimate. True or false?
Answer:
False
Explanation:
Capital Asset Pricing Model(CAPM) of calculating cost of equity is not the accurate and reliable method making this statement false.
CAPM formula ; r = risk free rate + beta (Market return - risk free rate)
Its assumptions are have limitations as the beta is difficult to estimate since it is unstable and changes from time to time. Additionally, it is difficult to determine the correct risk free rate to use in the calculation.
In vendor-managed inventory systems,A. corporations send information to retail customers, bypassing wholesalers and retailers.B. companies send information to cooperatives.C. customers send information to retailers.D. manufacturers send sales information to the retailer.E. retailers send sales information to the manufacturer.
Answer: Option (E)
Explanation:
Vendor-Managed Inventory is referred to as the theory which is based and inspired by the assimilation in the supply chain management in association with the system ambulation. Vendor managed inventory is being utilized under the inventory management in order to equip oneself with the effect of bullwhip effect .
They really don’t purchase much, but they like the recreation the outing provides. Which type of shopping activity is this? Group of answer choices acquisitional shopping epistemic shopping experiential shopping impulsive shopping habitual shopping
Answer:
experiential shopping
Explanation:
Experiential Shopping is done in order to avoid the boredom and get engaged in an activity, basically for moving out of the room and finally having a view and enjoying it. The goods are purchased without any planning, and only because you saw them and you like them.
This is done in order to recreate peace.
This is done by people to create happiness and internal satisfaction. Shopping do not provide happiness to them unlike impulsive shopping, but the mere thought to go out and enjoy do provides them the happiness they intend to have.
Answer:
Andrea Amati invent?
A. The viol
B. The violin
C. The flute sanfijasionasi
D. The lute
Explanation:s dkgsjlg
Andrea Amati invent?
A. The viol
B. The violin
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C. The flute
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D. The lute
The rise of Walmart as one of the world's largest corporations has brought the concept of:
A) reverse auctions
B) target return on investment pricing
C) price points
D) high/low pricing
E) everyday low pricing
Answer:
correct option is E) everyday low pricing
Explanation:
solution
Rise of Walmart brought the concept of Everyday low pricing as we all aware everyone need good quality product in low price and Walmart is one the world largest corporation that give almost everyday attractive offer to their customers Incredible Prices on many different quality brands
they giver offer according to trends for autumn winter to attract all customers
so we can that here correct option is E) everyday low pricing
Webster Corporation's budgeted sales for February are $334,000. Webster pays sales representatives a commission of 6% of sales dollars. The company pays a sales manager a monthly salary of $5,300 and expects advertising expense of $2,900 per month. Compute the total budgeted selling expenses for February.
O $28,240.
O $20,040.
O $8,200.
O $25,340.
O $22,940.
Answer:
Compute the total budgeted selling expenses for February.
O $28,240.
Explanation:
$ 334,000 Sales
$ 20,040 Sales representatives a commission
$ 5,300 Sales manager salary
$ 2,900 Advertising expense
Total Budgeted Selling Expenses : $20,040 + $5,300 + $2,900 = $28,240
Given here is the December 31, 2013, preclosing trial balance for the City of Hudson Golf Course Enterprise Fund.Compute as of December 31, 2013, (a) total net position; (b) net investment in capital assets, net of related debt; (c)restricted net position: and (d) unrestricted net position.Oty of HudsonGolf Course Enterprise FundPredoslng Trial BalanceDecember", 208Debits (teatsCash 5 15,045Accounts receivable 37,000Estimated uncolectble accounts S 5,000Cash—restricted for debt service 150,000Cash—restricted for customer deposits 23,000Land 900,000Equipment 325,000Accumdated depreciation—eminent 105,000Buildngs 1,500,000Accumdated depreciation—builtings 650,000Accounts payable 20,000Customers’ deposits payable 23,000Interest payable on customer deposits 835Revenue bonds payable 1,000,000Accmed interest payabFrevenue bonds 6,500Net position, January 1, 2013 940,740
Answer:
Explanation:
a) For total net position :
Particulars Amount
total net assets
revenue from rentals $ 800,000.00
personal service expense $ 380,000.00
Utilities expense $ 63,000.00
repairs and maintenace respense $ 47,000.00
depreciation expense-equipment $ 15,000.00
depreciation expense-building $ 50,000.00
interest expense $ 40,030.00
uncollectible accounts expense $ 5,000.00
supplies expense $ 1,000.00 $ 601,030.00
increase in net assets $ 198,970.00
add net assets in beginning of the yr $ 940,740.00
Total ending net assets $ 1,139,710.00
b) net investment in capital assets, net of related debt:
Particulars Amount
Net capital assests $ 900,000.00
land $ 325,000.00
equipment $ 1,500,000.00
accumulated depreciation-equipment $ 105,000.00
accumulated depreciation-buildings $ 650,000.00 $ 1,970,000.00
less revenues bonds payable $ 1,000,000.00
net assets invested in capital assets, net of related debt $ 970,000.00
c) For restricted net position
Particulars Amount
Restricted assets
cash restricted fordebt service $ 150,000.00
cash restricted for customer deposit $ 23,000.00 $ 173,000.00
liabilities payable from restricted assets
customers deposits payable $ 23,000.00
restricted net assets $ 150,000.00
d) For unrestricted net position
Particulars Amount
net assets, unrestricted
total nets assets, end of year $ 1, 139,710.00
less net assets invested in capital assets, net of related $ 970,000.00
less net assets, restricted $ 150,000.00
Net assets, unrestricted $ 19,710.00
Under Armour, Inc. is an American supplier of sportswear and casual apparel. Following are selected financial data for the company for the period 2009â2013.2009 2010 2011 2012 2013Profit margin (%) 5.6 6.5 6.7 7.1 7.1 Retention ratio (%) 100.0 100.0 100.0 100.0 100.0 Asset turnover (X) 1.6 1.6 1.6 1.6 1.5 Financial leverage (X) 1.7 1.7 1.9 1.8 1.9 Growth rate in sales (%) 18.7 24.8 39.0 25.2 27.7 Calculate Under Armourâs annual sustainable growth rate for the years 2009 through 2013. (Round your answers to 1 decimal place.)
The sustainable growth rate (SGR) can be calculated using the formula SGR=(Retention ratio*Return on Equity). ROE is derived from the combination of profit margin, asset turnover, and financial leverage. By applying the provided data for Under Armour, Inc. ranging from 2009 to 2013, calculated values range from 15.1% to 20.3%
Explanation:The sustainable growth rate (SGR) for a company is the rate at which the company can grow its sales, earnings, and dividends while maintaining its current financial structure. It's typically calculated using the formula: SGR=(Retention ratio*Return on Equity), given as a percentage. The return on equity (ROE) can be derived from the combination of profit margin, asset turnover, and financial leverage (the formula for which is ROE=Profit margin*Asset turnover*Financial leverage).
Now, applying the given data:
2009: SGR = 100.0% * (5.6% * 1.6 * 1.7) = 15.2%2010: SGR = 100.0% * (6.5% * 1.6 * 1.7) = 17.7%2011: SGR = 100.0% * (6.7% * 1.6 * 1.9) = 20.3%2012: SGR = 100.0% * (7.1% * 1.6 * 1.8) = 20.4%2013: SGR = 100.0% * (7.1% * 1.5 * 1.9) = 20.2%These values are approximate and should be rounded to the nearest decimal point in any professional financial report.
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JacksonJackson Bank lends JabbourJabbour Clothing Company $125 comma 000125,000 on September 1. JabbourJabbour signs a $125 comma 000125,000, 6%, six-month note. The journal entry made by JabbourJabbour on December 31, its fiscal year-end, is
Answer:
Explanation:
The journal entry is shown below:
Interest expense A/c Dr $3,000
To Interest payable A/c $3,000
(Being interest is recorded)
The computation of the interest expense is shown below:
= Principal × rate of interest × number of months ÷ total number of months in a year
= $125,000 × 6% × (4 months ÷ 12 months)
= $2,500
The four-month is calculated from the September 1 to December 31
Van Den Borsh Corp. has annual sales of $68,735,000, an average inventory level of $15,012,000, and average accounts receivable of $10,008,000. The firm's cost of goods sold is 85% of sales.
The company makes all purchases on credit and has always paid on the 30th day.
However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,946,000 and accounts receivable by $1,946,000.
What will be the net change in the cash conversion cycle, assuming a 365-day year?
Round to the nearest whole day.
a. –25 days
b. –31 days
c. –27 days
d. –32 days
Answer:
The answer is d. -32 days.
Explanation:
*The before change cash conversion cycle = Days of inventory outstanding + Days of receivables outstanding - Days of payable outstanding.
in which:
Days of inventory outstanding = Average inventory / Cost of good sold x 365 = ( 15,012,000 / ( 68,735,000 x 0.85) ) x 365 = 94 days
Days of receivables outstanding = Average Receivables / Revenue x 365 = ( 10,008,000 / 68,735,000 x 365 = 53 days
Days of payable = 30 days
=> Before change cash conversion cycle = 117 days.
* The after-change cash conversion cycle is calculated with the same formula, however with estimated changes be applied in the formula as followed:
Days of inventory outstanding = Average inventory / Cost of good sold x 365 = ( (15,012,000 - 1,946,000) / ( 68,735,000 x 0.85) ) x 365 = 82 days
Days of receivables outstanding = Average Receivables / Revenue x 365 = ( (10,008,000 - 1,946,000) / 68,735,000 x 365 = 43 days
Days of payable = 40 days
=> After-change cash conversion cycle = 82 + 43 - 40 = 85 days
=> Net change is 85 - 117 = -32 days
Final answer:
The net change in the Cash Conversion Cycle for Van Den Borsh Corp., after adjusting for inventory and accounts receivable reductions and the extended payment period to suppliers, is a decrease of 31 days which directly influences cash flows. This is computed by calculating the initial and new Days Inventory Outstanding and Days Sales Outstanding, along with the change in Days Payable Outstanding, and comparing the initial and new CCC values. The correct answer is option (B).
Explanation:
The Cash Conversion Cycle (CCC) measures the time taken between the outlay of capital and the collection of revenue from the sales of goods. It is calculated by adding the Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and subtracting the Days Payable Outstanding (DPO). In this case, we need to first calculate these components using the provided information:
Days Inventory Outstanding (DIO) is calculated as (Average Inventory / Cost of Goods Sold) * 365. Days Sales Outstanding (DSO) is calculated as (Average Accounts Receivable / Total Sales) * 365. Days Payable Outstanding (DPO) is currently 30 days, since the company pays on the 30th day, and will become 40 days after they decide to pay on the 40th day.
Once we have the initial CCC value using the original inventory and receivables levels, we compute a new CCC value using the reduced levels. The net change in the CCC will inform us about the impact on the cash flows. Let's calculate each component:
Cost of goods sold (COGS) = $68,735,000 * 85% = $58,424,750
Original DIO = ($15,012,000 / $58,424,750) * 365 = 93.8 days (rounded to nearest whole day)
New DIO with reduced inventory ($15,012,000 - $1,946,000):
New Inventory = $15,012,000 - $1,946,000 = $13,066,000
New DIO = ($13,066,000 / $58,424,750) * 365 = 81.6 days (rounded to nearest whole day)
Original and new DSO are calculated using total sales and average accounts receivable:
Original DSO = ($10,008,000 / $68,735,000) * 365 = 53.2 days (rounded to nearest whole day)
New DSO with reduced receivables ($10,008,000 - $1,946,000):
New Receivables = $10,008,000 - $1,946,000 = $8,062,000
New DSO = ($8,062,000 / $68,735,000) * 365 = 42.8 days (rounded to nearest whole day)
Change in DPO = 40 days - 30 days = +10 days
Initial CCC = DIO + DSO - DPO = 93 days + 53 days - 30 days = 116 days
New CCC = New DIO + New DSO - New DPO = 82 days + 43 days - 40 days = 85 days
Net change in the CCC = New CCC - Initial CCC = 85 days - 116 days = -31 days. Therefore, the correct answer is b. – 31 days.
Raytheon's State College location had a gross income of $20,000,000 in 2018. In 2018 they also paid $3,000,000 in employee salaries, $4,000,000 in operating and maintenance costs, $800,000 in depreciation expense, and $210,000 in insurance for manufacturing facilities. Calculate the net income of Raytheon State College for 2018.
Answer:
$11,990,000
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
The computation of the net income is shown below:
= Gross income - employee salaries - operating and maintenance costs - depreciation expense - insurance for manufacturing facilities
= $20,000,000 - $3,000,000 - $4,000,000 - $800,000 - $210,000
= $11,990,000
On January 1, 2021, Lyle's Limeade issues 3%, 20-year bonds with a face amount of $80,000 for $69,058, priced to yield 4%. Interest is paid semiannually.What amount of interest expense will be recorded in the December 31, 2021, annual income statement?
Answer:
The interest expense of $2,765.94 is recorded in the annual income statement.
Explanation:
As the interest is paid semiannually, so the first interest will be in June, it is computed by using the method of effective interest rate :
Interest expense = Amount × Rate / 2
=$69,058 × 0.04 / 2
= $1,381.16
Now, Computing the amount of the above interest expense that amortizes the bond discount as:
= Face value × issued at 3% / 2
= 80,000× 0.03 / 2
= $1,200
= $1,381.16 - $1,200
= $181.16
The difference is added to the carrying value of the bond which is:
= Difference amount + Carrying amount
= $181.16+ $69,058
= $69,239.16
The interest for 6 months ending on December 31 is computed as:
= $69,239.16 ×0.04 / 2
= $1,384.78
Total interest expense at 12/31/12 would be:
= June 30 expense + December 31 expense
= $1,381.16 + $1,384.78
= $2,765.94
The interest expense Lyle's Limeade would record in the December 31, 2021, annual income statement, based on its bond issued at discount, would be $2,789.94.
Explanation:Lle's Limeyade issued a 3% bond whose face value is $80,000. However, this bond was sold for less than its face value at $69,058, meaning that the bond was issued at a discount. This happens when the market interest rate (4% in this case) is higher than the bond's coupon interest rate (3%). Interest expense for a bond issued at a discount is calculated using the market interest rate at the time the bond was issued multiplied by the bond's book value at the beginning of the year.
Since the interest is paid semiannually, you would use 2% (4%/2) as the rate for each 6-month period. Therefore, if this bond was issued on January 1, 2021, the interest expense recorded in the December 31, 2021, annual income statement would be the sum of the interest expenses of the two 6-month periods in 2021.
The interest for the first six months would be $69,058 (book value at beginning of 2021) * 2% = $1,381.16. Then, the book value at the beginning of the second period would be $69,058 (initial book value) + $1,381.16 (first period interest) = $70,439.16. So, the interest expense for the second six months is $70,439.16 * 2% = $1,408.78.
So, the total interest expense that would be recorded in the December 31, 2021, annual income statement would be $1,381.16 (first six months interest) + $1,408.78 (second six months interest) = $2,789.94.
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Which of the following best describes the concept of laissez-faire?
a.
Government should not intervene in the economy.
b.
Government should actively intervene in the economy whenever it judges the action to be beneficial.
c.
Government should intervene in the economy only to promote short-term economic stability.
d.
Government should intervene in the economy only to maximize long-term growth rates.
e.
Government should intervene in the economy only when the economy is not at full employment or there is substantial inflation.
Answer:
a. Government should not intervene in the economy.
Explanation:
The concept of laissez-faire arose during the economic liberalism movement and promotes that the government should not intervene in the economy. According to laissez-faire, the main economic role of the government was to regulate and protect rights to private property.
Therefore, the answer is a. Government should not intervene in the economy.
Laissez-faire is a principle of economic liberalism where government intervention in the economy is minimized, allowing individual economic interests to guide the market. It's best described by the statement: Government should not intervene in the economy.
Explanation:The concept of laissez-faire is best described by option a: Government should not intervene in the economy. Originating from the French phrase that literally means 'let do', laissez-faire is a fundamental principle associated with economic liberalism, where the role of the government in the economy is minimized.
This economic ideology assumes that when individuals are free to pursue their own economic interests, the result is beneficial for society as a whole. In a laissez-faire system, the market is guided by the invisible hand of supply and demand, not by government intervention.
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Using the information below for Singing Dolls, Inc., determine cost of goods manufactured for the year:
Work in Process, January 1 $ 53,800
Work in Process, December 31 38,900
Total Factory overhead 7,400
Direct materials used 14,400
Direct labor used 28,400"
Answer:
COGS= $65,100
Explanation:
Giving the following information:
Using the information below for Singing Dolls, Inc., determine cost of goods manufactured for the year:
Work in Process, January 1 $ 53,800
Work in Process, December 31 38,900
Total Factory overhead 7,400
Direct materials used 14,400
Direct labor used 28,400
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 53,800 + 14,400 + 28,400 + 7,400 - 38,900= 65,100
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= $65,100
Grouper Corporation had 141,600 shares of stock outstanding on January 1, 2017. On May 1, 2017, Grouper issued 68,400 shares. On July 1, Grouper purchased 10,320 treasury shares, which were reissued on October 1. Compute Grouper’s weighted-average number of shares outstanding for 2017. Weighted-average number of shares outstanding
Answer:
184,620 shares
Explanation:
The computation of the weighted-average number of shares outstanding is shown below:
On January 1, 2017 to May 1, 2017
= 141,600 shares × 4 months ÷ 12 months
= 47,200 shares
On May 1, 2017 to July 1, 2017
= 141,600 shares + 68,400 shares × 2 months ÷ 12 months
= 35,000 shares
On July 1, 2017 to October 1, 2017
= 141,600 shares + 68,400 shares - 10,320 shares × 3 months ÷ 12 months
= 49,920 shares
On October 1, 2017 to December 31, 2017
= 141,600 shares + 68,400 shares - 10,320 shares + 10,320 shares × 3 months ÷ 12 months
= 52,500 shares
So, the Weighted-average number of shares outstanding would be
= 47,200 shares + 35,000 shares + 49,920 shares + 52,500 shares
= 184,620 shares
What is the payback period for an investment project with an upfront cost of $1,000,000, but benefits of $400,000 per year forever? (Note: Enter the number of years as your answer, but do not enter "years", just the number.)
Answer:
2.5
Explanation:
Upfront cost = $1,000,000
Yearly benefits = $400,000
The payback period is the time that a business takes to repay the amount investment. That is, the time it takes to break even.
In this case, since benefits are steady and no further incurred costs are mentioned. The payback period (t) is given by:
[tex]t=\frac{\$1,000,000}{\$400,000} \\t=2.5\ years[/tex]
On October 1, 2018, Parker Company made a loan to one of its customers. The customer signed a 9-month note for $150,000 at 13%. Calculate the maturity value of the note. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
Maturity value = $164,625
Explanation:
given data
time = 9 month
principal = $150,000
rate = 13%
to find out
maturity value
solution
we get here Maturity value that is express as
Maturity value = Principle + interest ........................1
put here value we get Maturity value
Maturity value = $150,000 + ( $150,000 × 13% × [tex]\frac{9}{12}[/tex] )
Maturity value = $150,000 + $14,625
Maturity value = $164,625
Final answer:
The maturity value of the 9-month note for $150,000 at a 13% annual interest rate is $164,625 when rounded to the nearest dollar.
Explanation:
To calculate the maturity value of the note for Parker Company's customer, we must compute both the principal and the interest accrued over the 9-month period. The interest can be determined using the formula:
Interest = Principal imes rate imes time
In this case:
Principal = $150,000
Annual Interest Rate = 13%
Time = 9 months (9/12 of a year)
Firstly, we transfrom the annual interest rate into a monthly interest rate and then apply it to the 9 months:
Interest = $150,000 imes 0.13 imes (9/12)
Following the calculations to two decimal places:
Interest = $150,000 imes 0.13 imes 0.75 = $14,625
The total maturity value is found by adding the principal to the interest:
Maturity Value = Principal + Interest
Maturity Value = $150,000 + $14,625
Maturity Value = $164,625
Round to the nearest dollar:
Maturity Value = $164,625
________ management is a systematic, structured approach to improvement, in which people critically examine, rethink, and redesign business processes in order to achieve dramatic improvements in one or more performance measures, such as quality, cycle time, or cost.
A. Business process
B. Business activity
C. Application service
D. Business service
E. Application performance\
Answer: (A) Business process management
Explanation:
The business process management is one of the systematic and structure approach for monitoring, executing, designing and also control the process in the business management.
The main aim of the business process management is that it helps in improve the overall operation of the business management. It also control the workflow and also reduce the expenditure of the business.
It also achieve the various dramatic improvement by measuring the performance, quality and the cost. Therefore, Option (A) is correct.
The component of a firm's service quality information system that is used specifically to assess employee performance is:
a. employee surveys.
b. customer focus group interviews.
c. solicitation of customer complaints.
d. total market service quality survey.
e. mystery shopping.
Answer:d. total market service quality survey.
Explanation:
The analysis of the total market service quality survey helps to provide details information on the product performance, personal contributions to success, company competitor performance, and other market related results.
Employee survey will not give information on the product nor customers evaluation, customer focused interview will miss out other vital information like competitors market performance, solicitation of customers complain may be bias and mystery shopping may not be adequate to be used for evaluation.
Suppose that the position of a nation's long-run aggregate supply (LRAS) curve has not changed, but its long-run equilibrium price level has increasedincreased. FACTOR
(a) A rise in the value of the domestic currency relative to other world currencies
(b) An increase in the quantity of money in circulation
(c) An increase in the labor force participation rate
(d) A decrease in taxes
(e) A rise in real incomes of countries that are key trading partners of this nation
(f) Increased long-run economic growth
Of the factors given above, which could account for the price level increaseincrease with constant LRAS?
(A) Factors a, c, and f.
(B) Factors c and f.
(C) Factors b, d, and e.
(D) Factors b, c, d, and f.
Answer: (D) Factors B, C, D & F
Explanation:
Factor B: An increase in the quantity of money in circulation implies inflation. This will definitely cause a rise in the price level of goods and services in the nation.
Factor C: An increase in the labour force participation rate implies an increase in the quantity supply of labour. This implies an increase (general increase, not per labourer) in the price paid for labour (wages and salaries) in the nation.
Factor D: A decrease in production taxes paid by firms will encourage more production. This increase in supply of goods and services produced will result in an increased price level. The LRAS curve still won't shift. It will remain constant but along the curve, price level and quantity level will have increased.
On the other hand - for individuals - a decrease in income tax implies higher purchasing power (higher income-after-tax). This will in turn raise the prices of the goods and services purchased by individuals.
Factor F: Increased long run economic growth means increased productivity (or Gross Domestic Product) in the economy. This usually has the effect of raising inflation rate which directly impacts price level in the economy/nation.
For the wrong answers, here is the reason why they are wrong:
Factor (A)
A rise in the value of domestic currency, relative to other world currencies, does the damage of (or has the effect of) reducing the quantity of goods imported from this country by other countries. This will in turn reduce the quantity of goods exported by this country and hence, quantity produced will reduce in this country. This, instead of increasing price level, will reduce it.
Factor (E)
A rise in real incomes in trade partner countries does not mean that the extra real incomes will be used to purchase products from this country or to engage on foreign trade with this country.
You are welcome.
Hampton Corporation's common stock dividends are expected to grow by 8% per year. Recently, the firm paid a $3.00 common stock dividend. Hampton has a beta of 1.40. The expected return on the S&P 500 index is 12.5% and the rate of return on U.S. Treasury securities is 7%. Using this information and the CAPM, what is the stock's intrinsic value?
a) $72
b) $66.67
c) $24
d) $48.36
e) $25.92
Answer:
d) $48.36
Explanation:
For computing the intrinsic value, first we have to compute the cost of equity by using CAPM Model which is shown below:
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 7% + 1.4 × (12.5% - 7%)
= 7% + 1.4 × 5.5%
= 7% + 7.7%
= 14.70%
Now the intrinsic value would be
In this question, we apply the Gordon model which is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Current year dividend
= $3 + $3 × 8%
= $3 + 0.24
= $3.24
The other items rate would remain the same
Now put these values to the above formula
So, the value would equal to
= 3.24 ÷ (14.70% - 8%)
= $48.36
The intrinsic value of Hampton Corporation's common stock as per the Capital Asset Pricing Model (CAPM) is calculated to be $48.36.
Explanation:To calculate the intrinsic value of Hampton Corporation's common stock using the Capital Asset Pricing Model (CAPM), we first need to determine the required rate of return. We use the formula: Risk-free rate + Beta*(Market rate of return - Risk-free rate), in this case is 7% + 1.4*(12.5% - 7%) = 14.3%.
Next, we calculate the expected dividend in the next year, which would be the recent dividend paid grown by the growth rate. That gives us $3.00 * 1.08 = $3.24.
The intrinsic value is calculated using the Gordon Growth Model which is the expected dividends divided by required rate of return minus the growth rate. Hence, the intrinsic value will be $3.24 / (14.3% - 8%) = $48.36.
Therefore, the option d) $48.36 is the correct answer.
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The softbank telecommunications and internet corporation prides itself on being a forward-thinking, innovative company.To market its various products, Softbank coordinates many marketing tools such as sales promotions, digital marketing, advertising, public relations campaigns, and even some guerrilla marketing with its corporate and marketing strategic message. What impact does a coordinated message have on Softbank's target markets?
a. it reinforces the company's culture and marketing message across a variety of platforms and creates a more efficient and effective means to impact customers' perceptions and behavior.
b. it communicates messages across a variety of platforms and creates fractured marketing communication that impacts customers' perceptions and behavior.
c. it delivers a variety of messages across various platforms and creates confusion among its target market customers' perceptions and behavior.
Answer:
(A). It reinforces the company's culture and marketing message across a variety of platforms and creates a more efficient and effective means to impact customers' perceptions and behavior.
Explanation:
Coordination ensures resources are fully utilized and wastages are reduced. As such, it leads to efficiency and effectiveness in an organization.
Coordination in marketing ensures a consistent message across all the organization's marketing platforms.
By coordinating its corporate and strategic message with its marketing tools, Softbank Telecommunications and Internet Corporation, focuses on achieving its goals and objectives, while also communicating its values and culture to its customers in various target markets.
A coordinated message reinforces Softbank's culture and marketing message across platforms, creating an efficient and effective means to impact customers' perceptions and behavior.
Explanation:A coordinated message has a positive impact on Softbank's target markets because it reinforces the company's culture and marketing message across a variety of platforms. This creates a more efficient and effective means to impact customers' perceptions and behavior. By using various marketing tools such as sales promotions, digital marketing, advertising, public relations campaigns, and guerrilla marketing, Softbank ensures a consistent and cohesive message that resonates with its target market.
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Given a relevant range, which ONE of the following statements is TRUE? Group of answer choices
a. A fixed cost is fixed in total and decreases per unit as the number of units increases.
b. A variable cost is fixed in total and decreases per unit as the number of units increases.
c. A variable cost is variable in total and decreases per unit as the number of units increases.
d. A variable cost is variable in total and increases per unit as the number of units increases.
Final answer:
The correct statement regarding costs within a relevant range is that a variable cost is variable in total and decreases per unit as the number of units increases. Fixed costs remain constant in total, while variable costs such as labor and raw materials vary directly with the level of output.
Explanation:
When discussing costs within a relevant range, it is important to understand how different types of costs behave in relation to production levels. Answer choice (a) states that a fixed cost is fixed in total and decreases per unit as the number of units increases. This is correct, as fixed costs, such as rent or salaries, do not change with the level of output; therefore, when more units are produced, the cost allocated to each unit of product becomes less.
Answer choices (b) and (d) incorrectly describe variable costs. Variable costs change in total depending on the level of production, but they do not decrease per unit as the number of units increases, nor do they increase per unit as the output increases. Instead, as indicated in choice (c), a variable cost is variable in total and decreases per unit as the volume of production increases, due to economies of scale and the spreading of fixed costs over more units. Therefore, option (c) is the correct answer.
Labor and raw materials are examples of variable costs because they vary directly with the level of output. The more goods or services produced, the more labor and raw materials are generally required, thus increasing the variable costs.