Answer:
Project X:
NPV= $3108,55
Project Y
NPV= $3267,75
Explanation:
Giving the following information, we need to find the net present values of both projects:
Project X:
i=0,10
Cash flow=
0= -$10,000
1= 4,500
2= 3,000
3= 3,000
4= 3000
5= 3600
Project Y:
i= 0,10
Cash flow=
0 = -$10,000
1=3,500
2=3,500
3=3500
4=3500
5=3500
The NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
The formula is:
n
NPV= ∑ [Rt/(1+i)^t]t-1
where:
R t =Net cash inflow-outflows during a single period t
i=Discount rate of return that could be earned in alternative investments
t=Number of timer periods
In this exercise:
Project X:
NPV= -10000 + (4500/1,10^1) + (3000/1,10^2) + (3000/1,10^3) + (3000/1,10^4) + (3600/1,10^5)= $3108,55
Project Y
NPV= $3267,75
Jane's, Peter's, Joshua's, and Austin's monthly incomes are $600, $550, $650, and $700, respectively. Since they live together, each of them is obliged to pay $100 for household expenses every month. In this scenario, who among the following is likely to be the most price sensitive among the four?
a. Jane
b. Austin
c. Joshua
d. Peter
Answer:
d. Peter
Explanation:
Price sensitivity: is the change in demand based on a price change. Because, after paying the rent Peter has the lowest income their price sensitivity will be higher.
His demand will change when the cost of a product or service change as the price occupies an important role in his purchasing criteria.
It will be willing to sacrifice quality in order to save price.
Which of the following requires marketing managers to decide which markets to target and determine how to position the product in the market? A. Performing a situational analysis B. Controlling the marketing functions C. Implementing a marketing plan D. Setting marketing objectives E. Developing marketing strategies
Answer: Developing marketing strategies
Explanation: In simple words, the strategy used by organisations to attract potential customers and persuading them to purchase the product is called the marketing strategy.
This strategy consists of a number of tools like advertising, discounts offering, availability in market etc.
Thus determining the target market and the position of the product comes under the purview of marketing strategy.
Fred who is a Colts Fan paid $75 for a ticket to go to a Football game. He also spent an additional $30 for parking and bought dinner for $10. Fred took four hours off from a part time job that pays him $10 an hour to go to the game. Fred’s opportunity cost of going to the game is
(A) $155
(B) $145
(C) $105
(D) $75
(E) $135
Answer:
The correcto answer is A: $155
Explanation:
Giving the following information we need to calculate the net profit or loss:
$75 for a ticket
$30 for parking
$10 dinner
Fred took four hours off from a part-time job that pays him $10 an hour to go to the game.
Total cost of the game= $115
Total loss from nos going to work= $40
Total loss= $155
If he wouldn't have gone to the game, he would have saved $115 and gain $40
The Jasmine Tea Company purchased merchandise from a supplier for $46,700. Payment was a noninterest-bearing note requiring Jasmine to make five annual payments of $12,000 beginning one year from the date of purchase. What is the interest rate implicit in this agreement?
Answer:
Implicit interest= 28.48%
Explanation:
Giving the following information:
The Jasmine Tea Company purchase merchandise from a supplier for $46,700.
Payment is five annual payments of $12,000 beginning one year from the date of purchase.
The total payment is= 12000*5= $60000
Implicit interest= (60000/46700)-1= 28.48%
You are buying an investment product that costs $50,000 today. The annual interest rate is 5% and the investment period is 3 years. The investment will repay you $10,000 at the end of year 1 and $15,000 at the end of year 2. Based on economic equivalent value of the investment, how much should you receive at the end of year 3? Round the answer to the nearest integer. (e.g. round 10.25 to 10, round 10.78 to 11)
Answer:
cash flow third year: 23,212
Explanation:
the economic equivalent value means the third payment will make the project equal to 50,000 today at 5% discount rate.
It mill make both option equivalent.
So the present value of the three payment will be 50,000.
[tex]50,000 = PV_{year1}+PV_{year2}+PV_{year3}[/tex]
We will calculate each PV:
First year:
[tex]\frac{Nominal}{(1 + rate)^{time} } = PV[/tex]
Nominal: 10,000.00
time 1 year
rate 5% = 0.05
[tex]\frac{10000}{(1 + 0.05)^{1} } = PV[/tex]
PV 9,523.81
Second Year:
Nominal: 15,000.00
time 2 years
rate 0.05
[tex]\frac{15000}{(1 + 0.05)^{2} } = PV[/tex]
PV 13,605.44
Now, we go back to our previous formula:
[tex]50,000 = PV_{year1}+PV_{year2}+PV_{year3}[/tex]
50,000 = 9,523.81 + 13,605.44 + PV3
And solve for PV of third year:
PV3 = 26,870.75
Now we go into the formula for PV and solve for the nominal
Third Year:
Nominal: N
time 3 years
rate 0.05
PV 26,870.75
[tex]\frac{N}{(1 + 0.05)^{3} } = 26,870.75[/tex]
N = 23211.96415
The third year cash inflow should be for this amount to made the project economic equivalent
Fran buys 1,000 shares of stock issued by Miller Brewing. In turn, Miller uses the funds to buy new machinery for one of its breweries. In the terminology of macroeconomics....
a. Fran is investing; Miller is saving.
b. Fran is saving; Miller is investing.
c. Fran and Miller are both saving.
d. Fran and Miller are both investing.
Answer: d. Fran and Miller are both investing.
Explanation: An investment is the action of using a quantity of resources in a project or business to make a profit.
Both Fran and Miller are investing, because Fran wants to take advantage of his savings by buying the shares to make them grow and Miller wants to invest in his business, to be able to increase production or get a better result than he currently maintains.
Answer:
The correct answer is letter "B": Fran is saving; Miller is investing.
Explanation:
In Macroeconomics many points differentiate a saving from an investment. Savings are usually destined for short-term goals, allowing individuals to dispose of that money at any time. Investments are destined to be part of a long-term goal. Money cannot be cashed immediately out of investments since in most cases they are part of a production process, such as machinery in mines, for instance.
In that case, Fran is saving by buying 1000 shares of stock while Miller is investing by purchasing new machinery for one of its breweries.
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $ 110 million of 10% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 12%. The price paid for the bonds was $94 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $100 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? 4-b. Prepare the entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?
Answer:
investment in bonds 110 millions
discount on bonds 16 millions
cash 94 millions
to record purchase of bonds
cash 5.5 million
discount 0.14 millions
interest revenue 5.64 millions
to record cash proceeds on June 30th
cash 5.5 million
discount 0.1484 millions
interest revenue 5.6484 millions
to record cash proceeds on December 31th
Investment on Bonds
bonds 110,000,000
discount (15, 711, 600)
net 94,288,400
Cash flow:
Investing activities
purchase of bonds (94 millions)
proceeds from investmetn on bonds 11 millions
Explanation:
June 30th
110 x 10% / 2 = 110 x 5% = 5.5 millions cash proceed
94 x 12%/2 = 5.64 interest revenue
0.14 amortization
December 31th
110 x 10% / 2 = 110 x 5% = 5.5 millions cash proceed
94.14 x 0.06 = 5,6484
0.1484 amortization
Balance sheet:
will post the carring value of the bonds
Cash flow:
Will report the cash used in the purchase
and then, the cash proceed from the interest payment of June 30th December 31th
Norton Manufacturing expects to produce 2,800 units in January and 3,900 units in February. Norton budgets $45 per unit for direct materials. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is $37,950. Norton desires the ending balance in Raw Materials Inventory to be 60% of the next month's direct materials needed for production. Desired ending balance for February is $51,000. What is the cost of budgeted purchases of direct materials needed for January?
Answer:
Budgeted purchase= $193350
Explanation:
We need to calculate the cost of direct material during January. We need to know what are the purchase of direct material needed to produce the current month goods and for next month.
The unitary cost of material is $45, January's production 2800 units, February production 3900 units.
Direct material for Januarys production:
2800 units * $45= $126000
Direct material for February:
($45*3900)*0,60= $105300
Initial inventory= 37950
Budgeted purchase= 126000+105300-37950= $193350
Country A can produce, at most, 50 olives or 25 pickles, or some combination of olives and pickles such as the 30 olives and 10 pickles it is currently producing. Country B can produce, at most, 130 olives or 65 pickles, or some combination of olives and pickles such as the 90 olives and 20 pickles it is currently producing.
a. Is there a basis for trade? If so, offer the two countries a deal they can't refuse.
Answer:
There is no basis for trade, as both country has the same opportunity cost. It will not produce benefit from trade
Explanation:
We will check if there is a comparative advantage between country's to know if there is benefit from trade:
Country A
olives opportunity cost:
25/50 = 1/2 = 0.50
Do an olive means renounce to half-unit of pickles
pickes opportunity cost:
50/25 = 2
Do a pickle cost 2 olives for country A
Country B
olives opportunity cost:
65/130 = 1/2 = 0.5
Do an olive means renounce to half-unit of pickles
pickles:
130/65 = 2
each pickle is produce at the expense of 2 olives
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number
of Units Unit
Cost
Apr. 1 Beginning inventory 530 $2.37
Apr. 20 Purchase 310 2.50
Dunbar sold 640 units of inventory during the month. Cost of goods sold assuming LIFO would be
Answer:
Cost of goods sold assuming LIFO would be $474
Explanation:
Date Q U.cost Cost Sold Inventory Cost
april 1 530 2,37 1256,1 330 200 474
apri 20 310 2,5 775 310 0 0
640
A "Name That Tune" contest has a grand prize of $500,000. However, the contest stipulates that the winner will receive just $200,000 immediately, and $30,000 at the end of each of the next 10 years. Assuming that one can earn 8% on their money, how much has the contest winner actually won?
(A) 1,302
(B) $201,302
(C) $401,302
(D) $500,000
(E) None of the above
Answer:
The correct answer is (C) $401,302
Explanation:
To get how much the contest winner actually won, we have to calculate the amount receive at the end of each year discounted at this moment. Then, we added all the payments.
For example, the first payment in $200,000 at this moment, so we add $200,000.
At the end of the first year we receive $30,000, and the rate of discount is 8%
The formula of discount is P=A/ (1+r)ⁿ
A=Final amount
P= Principal
r= interest rate
n= time
Year 1 = A/ (1+r)ⁿ =$30,000/1,08¹= 27777,77
Year 2 =$30,000/1,08²= 25720,16
Year 3=23814,96
Year 4=22050,89
Year 5=20417,49
Year 6=18905,08
Year 7=17504,71
Year 8=16208,06
Year 9=15007,46
Year 10=13895,80
Total 401302,44
In general, individuals and nations should specialize in producing goods _________ other individuals or nations.
A. that they can produce more quickly than
B. that they can produce less quickly than
C. for which they have a lower opportunity cost compared to
D. for which they have a higher opportunity cost compared to
Answer: In general, individuals and nations should specialize in producing goods "C. for which they have a lower opportunity cost compared to" other individuals or nations.
Explanation: According to the theory of comparative advantages: Each country should specialize in what is most efficient. A comparative advantage is the ability of one country to produce using relatively less resources than another.
Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends. a. What effect will this growth have on funds? b. If the dividend payout is only 5 percent, what effect will this growth have on funds?
The growth in sales is expected to increase funds by approximately $986,425.
Step 1
To determine the effect of the sales growth on funds, we first calculate the net assets and then assess the change in funds.
Net Assets:
Net Assets = 55% of Sales
= 0.55 * $1,870,000
= $1,028,500
Step 2
Return on Sales (ROS):
ROS = 9% of Sales
= 0.09 * $1,870,000
= $168,300
Step 3
Dividends Paid:
Dividends = 25% of Profits
= 0.25 * ROS
= 0.25 * $168,300
= $42,075
Step 4
Change in Funds:
Change in Funds = Net Assets - Dividends Paid
= $1,028,500 - $42,075
= $986,425
Therefore, the growth in sales from $1,670,000 to $1,870,000 will result in an increase in funds by $986,425.
The increase in sales is expected to boost funds by $986,425, calculated by subtracting dividends paid from the net assets.
Complete question : Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends. What effect will this growth have on funds?
for planning control, and decision-making purpose:
(A) fixed costs should be converted to a per unit basis
(B) discretionary fixed costs should be eliminated
(C) variable costs should be ignored
(D) mixed costs should be separated into their variable and fixed components
Answer:
D) mixed costs should be separated into their variable and fixed components
Explanation:
A mixed cost is a cost that contains both a fixed cost component and a variable cost component. It is important to understand the mix of these elements of a cost, so that one can predict how costs will change with different levels of activity. Typically, a portion of a mixed cost may be present in the absence of all activity, in addition to which the cost may also increase as activity levels increase. As the level of usage of a mixed cost item increases, the fixed component of the cost will not change, while the variable cost component will increase. The formula for this relationship is
An airline manufacturer incurred the following costs last month (in thousands of dollars):
a. Airplane seats . . . . . . . . . . . . . . . . . . . . . . . . . $220
b. Production supervisors' salaries . . . . . . . . . . . . . . $170
c. Depreciation on forklifts . . . . . . . . . . . . . . . . . . . . $110
d. Machine lubricants . . . . . . . . . . . . . . . . . . . . . $35
e. Factory janitors' wages . . . . . . . . . . . . . . . . . . . . . $60
f. Assembly workers' wages . . . . . . . . . . . . . . . . . . . $600
g. Property tax on corporate marketing office . . . . . $25
h. Plant utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160
i. Cost of warranty repairs . . . . . . . . . . . . . . . . . . . . $230
j. Machine operators' health insurance . . . . . . . . . . $40
k. Depreciation on administrative offices . . . . . . . . . $60
l. Cost of designing new plant layout . . . . . . . . . . . . $165
m. Jet engines . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700
Requirement
1. Assuming the cost object is an airplane, classify each cost as one of the following: direct material (DM), direct labor (DL), indirect labor (IL), indirect materials (IM), other manufacturing overhead (other MOH), or period cost. What is the total for each type of cost? (Enter amounts in thousands instead of dollars by omitting the $000s. Leave cells blank that do not require numerical inputs.)
DM DL IM IL MOH Period
a. Airplane seats . . . . . . . . . . . . . . .
b. Production supervisors' salaries .
c. Depreciation on forklifts . . . . . . . .
d. Machine lubricants . . . . . . . . . . .
e. Factory janitors' wages . . . . . . . .
f. Assembly workers' wages . . . . . .
Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
In this exercise:
Direct Material:
Airplane seats . . . . . . . . . . . . . . . . . . . . . . . . . $220
Jet engines . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700
Total= $1920
Direct labor:
Assembly workers' wages . . . . . . . . . . . . . . . . . . . $600
Machine operators' health insurance . . . . . . . . . . $40
Total= $640
Indirect labor:
Production supervisors' salaries . . . . . . . . . . . . . . $170
Factory janitors' wages . . . . . . . . . . . . . . . . . . . . . $60
Total= $230
MOH:
Machine lubricants . . . . . . . . . . . . . . . . . . . . . $35
Plant utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160
Depreciation on forklifts . . . . . . . . . . . . . . . . . . . . $110
Total= $305
Period cost:
Property tax on corporate marketing office . . . . . $25
Cost of warranty repairs . . . . . . . . . . . . . . . . . . . . $230
Depreciation on administrative offices . . . . . . . . . $60
Cost of designing new plant layout . . . . . . . . . . . . $165
Total= $480
Normative and positive statements
The following table contains statements that provide some analysis of policies that address breast cancer.
Categorize each of them as positive or normative.
Statement
Positive
Normative
Breast cancer is the fifth most common cause of cancer death.
For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality.
Doctors should encourage women aged 60 to 69 to be screened for breast cancer.
The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer.
Answer:
1. Breast cancer is the fifth most common cause of cancer death - Positive statement
2. For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality - Positive statement
3. Doctors should encourage women aged 60 to 69 to be screened for breast cancer - Normative statement
4. The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer - Normative statement
Final answer:
Explanation of positive and normative statements about breast cancer policies.
Explanation:
Normative:
Doctors should encourage women aged 60 to 69 to be screened for breast cancer.The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer.Positive:
Breast cancer is the fifth most common cause of cancer death.For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality.Warner Company has the following data for the past year:
Actual overhead $470,000
Applied overhead:
Work-in-process inventory $100,000
Finished goods inventory 200,000
Cost of goods sold 200,000
Total $500,000
Warner uses the overhead control account to accumulate both actual and applied overhead.
Calculate the overhead variance for the year.
Final answer:
The overhead variance for Warner Company is a $30,000 unfavourable variance, which means the company applied $30,000 more in overhead than the actual overhead costs.
Explanation:
The overhead variance is calculated by subtracting the applied overhead from the actual overhead. In the case of Warner Company, the actual overhead for the past year was $470,000, and the total applied overhead was $500,000 (sum of applied overhead in work-in-process inventory, finished goods inventory, and cost of goods sold).
To find the overhead variance, we use the following formula:
Overhead Variance = Actual Overhead - Applied Overhead
Overhead Variance = $470,000 - $500,000
Overhead Variance = -$30,000
This result indicates that there is a $30,000 unfavourable variance, meaning that Warner Company has over-applied its overhead costs by $30,000.
Messana Corporation reported the following data for the month of August: Inventories: Beginning Ending Raw materials $36,000 $24,000 Work in process $23,000 $17,000 Finished goods $37,000 $55,000 Additional information: Raw materials purchases $69,000 Direct labor cost $94,000 Manufacturing overhead cost incurred $54,000 Indirect materials included in manufacturing overhead cost incurred $8,000 Manufacturing overhead cost applied to Work in Process $56,000 The cost of goods manufactured for August is: $227,000 $229,000 $219,000 $217,000
The cost of goods manufactured for August is $217,000.
The cost of goods manufactured for August is $217,000.
Calculate the total manufacturing costs: Direct materials used = Beginning raw materials + Raw materials purchases - Ending raw materials = $36,000 + $69,000 - $24,000 = $81,000.Calculate total manufacturing costs: Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead applied = $81,000 + $94,000 + $56,000 = $231,000.Cost of goods manufactured: Cost of goods manufactured = Total manufacturing costs + Beginning work in process - Ending work in process = $231,000 + $23,000 - $17,000 = $217,000.The correct cost of goods manufactured for August is $237,000, calculated by adding raw materials used, direct labor, manufacturing overhead applied, and adjusting for the change in work in process inventory.
To determine the cost of goods manufactured for Messana Corporation for the month of August, we need to calculate the total manufacturing costs:
Starting with Raw materials, we calculate the total used: Beginning inventory plus purchases minus ending inventory gives us $36,000 + $69,000 - $24,000 = $81,000.
To the raw materials used, we add the direct labor cost of $94,000 and manufacturing overhead cost applied to work in process of $56,000. The indirect materials have already been included within the manufacturing overhead cost incurred, so we don't add them again.
We add these together to get total manufacturing costs before adjusting for work in process inventory which gives us $81,000 (Raw materials used) + $94,000 (Direct labor) + $56,000 (Manufacturing overhead applied) = $231,000.
To find the Cost of Goods Manufactured, we then adjust for the change in Work in Process inventory: $231,000 + $23,000 (Beginning Work in Process inventory) - $17,000 (Ending Work in Process inventory) = $237,000.
Therefore, none of the provided options are correct. The correct Cost of Goods Manufactured for August would be $237,000.
Interest-only loan (regular interest payments each year and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $35 comma 000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $35 comma 000 with an annual interest rate of 12% over the next 15 years. Determine the cash flow to the woman under an interest-only loan, in which Ponzi will pay the annual interest expense each year and pay the principal back at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 14?
Answer:
Ans. From years 1 through 14 she will receive $4,200 and ending year 15 she will receive $39,200 (which is $35,000 of the loan plus $4,200 interest)
Explanation:
Hi, this works just like a bond with a coupon, so first we need to find the amount of interest that she is going to receive every year, at the end of the year, with an annual interest rate of 12%.
[tex]Interests=Loan*(interestRate)[/tex]
[tex]Interest=35,000*0.12=4,200[/tex]
So, that is what she will receive every year at the end of the year from yr1 through 14. in year 15 she will get $39,200, which is the interest + the principal, in our case, $35,000.
Best of luck.
Suppose GDP in this country is $1,680 million. Enter the amount for government purchases.
National Income Account Value (Millions of dollars)
Government Purchases ( G )
Taxes minus Transfer Payments ( T ) 360
Consumption ( C ) 1,000
Investment ( I ) 280
Complete the following table by using nationa income accounting identtes to nationa saving, in you calculacons use aita mom the preceding table. cakulate National saving (S) million
Answer:
G= 400
S= 280
Explanation:
Giving the following information:
GDP in this country is $1,680 million.
National Income Account Value (Millions of dollars)
Government Purchases ( G ) =?
Taxes minus Transfer Payments ( T )= 360
Consumption ( C )= 1,000
Investment ( I )= 280
The formula to calculate GDP is:
GDP=C+I+G+/-NX
GDP= C+I+G
1680= 1000 + 280 + G
G= 1680 - 1000 - 280= 400
Savings= (Y-T-C) + (T-G)
S= (1680 - 360 - 1000) + (360 - 400)
S= 280
The Government Purchases (G) can be calculated as $400 million, subtracting Consumption (C) and Investment (I) from GDP. Also, National Saving (S) is calculated as $280 million, using the formula S = GDP - C - G.
Explanation:The subject of this question is national income accounts, specifically about government purchases (G). According to the national income accounting identities, GDP (Gross Domestic Product) is the sum of Consumption (C), Investment (I), Government Purchases (G), and Net Exports (which are not mentioned in this question). In this case, the GDP is $1,680 million, Consumption is $1,000 million and Investment is $280 million. To calculate Government Purchases (G), we subtract Consumption (C) and Investment (I) from the total GDP.
So, G = GDP - C - I
Plug in the given amounts
G = $1,680 million - $1,000 million - $280 million
Hence, Government Purchases (G) = $400 million.
We also calculate National Saving (S) using the following identity: S = GDP - C - G. From our previous calculation, we know that G = $400 million, so:
S = $1,680 million - $1,000 million - $400 million
Therefore, National Saving (S) = $280 million.
Learn more about National Income Accounting here:https://brainly.com/question/33716698
Preston Company manufactures a product with a unit variable cost of $140 and a unit sales price of $264. Fixed manufacturing costs were $720,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 3,000 units at $210 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows: Select one: a. Income would increase by $156,000. b. Income would decrease by $162,000. c. Income would increase by $210,000. d. Income would increase by $6,000.
Answer:
c. Income would increase by $210,000.
Explanation:
For computing the effect of net income, first we have to compute the net income which is shown below:
Net income = Sales - variable cost - fixed cost
where,
Sales = Number of units × selling price per unit
= 10,000 units × $264
= $2,640,000
Variable cost = Number of units × variable cost per unit
= 10,000 units × $140
= $1,400,000
And, the fixed cost is $720,000
Now put these values to the above formula
So, the value would equal to
= $2,640,000 - $1,400,000 - $720,000
= $520,000
If 3,000 additional units are sell
Then, increased in the net income would be
= Additional units × (New Selling price - variable cost)
= 3,000 units × ($210 - $140)
= 3,000 units × $70
= $210,000
Carlin Company, which uses net present value to analyze investments, requires a 10% minimum rate of return. A staff assistant recently calculated a $500,000 machine's net present value to be $86,400, excluding the impact of straight-line depreciation. FV of 1 (i=10%, n=5): 1.611 FV of a series of $1 cash flows (i=10%, n=5): 6.105 PV of $1 (i=10%; n = 5): 0.621 PV of a series of $1 cash flows (i=10%, n=5): 3.791 If Carlin ignores income taxes and the machine is expected to have a five-year service life, the correct net present value of the machine would be:
Answer:
The correct net present value of the machine would be $86,400
Explanation:
For computing the net present value, the discount factor, yearly cash inflows are required.
In the question, it is already mentioned that Carlin ignores income taxes, and for depreciation, income tax is to be considered. So, automatically the depreciation is also not be considered in calculating part which means that the net present value would remain the same.
The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 $250,000 $37,500 $480,000 $450,000 $550,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 9%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? $1,307,822 $767,500 $1,625,000 $2,142,500
Answer:
PV of the cash flow: $1,307,822
Explanation:
We will calculate the present value of a lump sum for each cash flow:
[tex]\frac{cashflow}{(1 + rate)^{time} } = PV[/tex]
cashflow 250,000.00
time 1.00
rate 0.09
[tex]\frac{250000}{(1 + 0.09)^{1} } = PV[/tex]
PV 229,357.80
cashflow 37,500.00
time 2.00
[tex]\frac{37500}{(1 + 0.09)^{2} } = PV[/tex]
PV 31,563.00
cashflow 480,000.00
time 3.00
rate 0.09
[tex]\frac{480000}{(1 + 0.09)^{3} } = PV[/tex]
PV 370,648.07
cashflow 450,000.00
time 4.00
rate 0.09
[tex]\frac{450000}{(1 + 0.09)^{4} } = PV[/tex]
PV 318,791.34
cashflow 550,000.00
time 5.00
rate 0.09
[tex]\frac{550000}{(1 + 0.09)^{5} } = PV[/tex]
PV 357,462.26
Then, we will add each present value:
year 1: 229,357.7982
year 2: 31,562.99975
year 3: 370,648.0704
year 4: 318,791.345
year 5: 357,462.2625
total PV 1,307,822.476
Answer:
Present value of cash flows should be $1,307,822
Explanation:
We cannot use annuity formula for this problem because the amount of cash flows occurring in each year is different and we would need to find the present value of each cash flow separately
The present value of the cash flow can be computed using the following formula
PV = FV/(1+i)^n
The rate at which the cash flows are to be discounted is 9 percent
For the first year the cash flow is $250,000 and we can compute the pressent value of the cash flow as under
250,000/(1+0.09) = 250,000/1.09 = $229,357.80
Foe the second year the cash flow is $37,500
37,500/(1+0.09)^2= 37,500/1.1881 = $31,563
The present value of the cash flows for the subsequent years are provided as under
480,000/(1+0.09)^3 = 480,000/1.295 = $370,648.07
450,000/(1+0.09)^4 = 450,000/1.4116 = $318,791.34
550,000/(1+0.09)^5 = 550,000/1.5386 = $357,462.26
Adding up all the present values computed above, gives us the present value of cash flows
229,357.8 + 31,563 + 370,648.07 + 318,791.34 + 357,462.26 = $1,307,822 approx
Ms. BK is a self-employed architect who earns $205,000 annual taxable income. For the past several years, her tax rate on this income has been 35 percent. Because of recent tax law changes, Ms. BK’s tax rate for next year will decrease to 25 percent. Based on a static forecast, how much less revenue will the government collect from Ms. BK next year? How much less revenue will the government collect from Ms. BK next year if she responds to the rate decrease by working more hours and earning $280,000 taxable income? How much less revenue will the government collect from Ms. BK next year if she responds to the rate decrease by working fewer hours and earning only $180,000 taxable income?
Answer:
a.- 20,500 less tax collected
b.- 1,750 less tax collected
c.- 26,750 less tax collected
Explanation:
under a static forecast:
205,000 x (0.35-0.25) = 205,000 x 0.1 = 20,500
The government will collect 20,500 less dollars from Ms BK's
under a flexible forecast:
205,000 x 35% - 280,000 x 25% = 71,750 - 70,000 = 1,750
It will loss tax revenue for $1,750
205,000 x 35% - 180,000 x 25% = 71,750 - 45,000 = 26,750
Jacques has plans to go to a play and already has a $50 nonrefundable, nonexchangeable, and nontransferable ticket. Now Kyoko, whom Jacques has wanted to date for a long time, asks him to a party. Jacques would prefer to go to the party with Kyoko and forgo the play, but he doesn't want to waste the $$50 he spent on the play ticket.
From the perspective of an economist, if Jacques decides to go to the party with Kyoko, what has he just done?
Answer:
evaluate under opportunity cost
Explanation:
This is an exmaple of opportunity cost:
The opportunity cost is the cost of the best alternative rejected:
Jacques opportunity cost of the date is lossing the play and the $50 dollars of the ticket
as the date and party opportunity cost is not datingthe girl
As Jacques picks the date , it will be evaluating dating as more rewarding than the play as it prefer to renounce to the play rather than the date
Compute the total manufacturing cost for a manufacturer with the following information for the month. Raw materials purchased $ 43,200 Direct materials used 58,250 Direct labor used 14,000 Factory supervisor salary 8,800 Salesperson commissions 6,000 Depreciation expense—Factory building 3,700 Depreciation expense—Delivery equipment 3,400 Indirect materials 1,800
Answer:
Cost of good manufactured= $86550
Explanation:
To calculate the cost of manufactured goods we need to use the following formula:
Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress
Beginning work in progress= 0
Direct materials = beginning inventory + purchase - ending inventory= 58250
Direct labor= 14000
Manufactured overhead=Factory supervisor salary + Depreciation expense Factory building + Indirect materials= 8800 + 3700 + 1800= 14300
Ending work in progress= 0
Cost of good manufactured= 58250 + 14000 + 14300= $86550
You have been offered an investment that will pay you $10,000 in 10 years. You think a 7% annual rate compounded annually is an appropriate rate of return or interest rate for this investment. What is the most you would be willing to pay for this investment today based on this information? Round your answer to the nearest dollar.
Answer:
Explanation:
the minimun value is expressed by the present value of the investment using a 7% rate, lets recall the formula for finding present values:
[tex]PV=FV*(1+i)^{-n}[/tex]
where, PV is present value, FV is the future value, and n is time elapsed. So applying to this problem we have:
[tex]PV=10,000*(1+0.07)^{-10}[/tex]
[tex]PV=5,083.49[/tex]
So the minimun value which is profitable to pay is 5,083.49 today, in that sense you will get a return on 7% compounded after 10 years
The treasurer of Riley Coal Co. is asked to compute the cost of fixed income securities for her corporation. Even before making the calculations, she assumes the aftertax cost of debt is at least 5 percent less than that for preferred stock. Debt can be issued at a yield of 8.0 percent, and the corporate tax rate is 25 percent. Preferred stock will be priced at $52 and pay a dividend of $5.20. The flotation cost on the preferred stock is $3. a. Compute the aftertax cost of debt. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
b. Compute the aftertax cost of preferred stock. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
c. Based on the facts given above, is the treasurer correct?
Answer: (a) 6%
(b) 10.61%
(c) Yes
Explanation:
a) After tax cost of debt = Yield (1- tax)
= 8 ( 1 - 0.25)
= 8 × 0.75
= 6%
b) [tex]cost\ of\ preferred\ stock =\frac{dividend}{price-flotation\ cost}[/tex]
[tex]cost\ of\ preferred\ stock =\frac{5.20}{52-3}[/tex]
[tex]cost\ of\ preferred\ stock =\frac{5.20}{49}[/tex]
= 0.1061 or 10.61%
Note: Cost of preferred stock is not tax deductible
c),Yes the treasurer is correct ,The cost of debt is 5% less than cost of preferred stock [10.61 - 6 = 4.61%]
There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period of time, given the other quantity, and it is given as ni=72.If $1 is invested for 10 years, what compound rate is necessary for the money to double?
Answer:
i=7.2%
Explanation:
Giving the following information:
There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period, given the other quantity, and it is given as ni=72
We have $1 for 10 years. We will assume that it needs to duplicate in 10 years.
Years to double= 72/interest rate
10=72/i
i=72/10= 7.2
Control:
FV= 1*(1.072^10)= 2
Denson, Inc. has 10,000 shares of 7%, $100 par value, non-cumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2014. There were no dividends declared in 2013. The board of directors declares and pays a $120,000 dividend in 2014. What is the amount of dividends received by the common stockholders in 2014?a. $0.b. $70,000.c. $120,000.d. $50,000.
Answer:
d. $50,000.
Explanation:
the preferred stock are non-cumulative so their unpaid dividends of previous year are not accumulated and carry over the following years.
10,000 shares x $100 x 7% = $70,000 dividends to preferred shares
120,000declared dividends
- 70,000 preferred dividends
50,000 available for common stock