Answer:
c. 7 percent
Explanation:
The real interest rate will be net of the effect of inflation.
In this case we are givne with the principal and the amount.
We will solve for nominal rate first:
amount/ principal - 1 = rate
1,120/1,000 - 1 = 0.12
Now, we calculate the real rate of return. we subtract the inflation from the nominal to achieve the real rate.
nominal - inflation = real rate
0.12 - 0.5 = 0.07
The real interest rate will be of 0.07 = 7%
Kanban is a term used to indicate some type of Visual Signal in the replenishment process. Which statement best describes the use of Kanban in reducing inventories in a Just-in-Time type of Operation? A. An operator asks the next station's operator to help him fix his machine. B. A supervisor signals to several work centers that the production rate should be changed. C. A "supplier" work center signals the downstream workstation that a batch has been completed. D. A "customer" work center signals to the "supplier" workstation that more parts are needed. E. A supervisor tells the operators to stay busy and start producing parts for next month.
Answer:
D. A "customer" work center signals to the "supplier" workstation that more parts are needed.
Explanation:
The Kanban system or procedure is based in signals that travel with the product all over its production process from the start up to the final client.
When a "customer work center" takes away some material from the warehouse, the "kanban" or signal travels with the material. So this is a "pull" system guided by the demand.
The signal (kanban) is how the client let the supply work center know that a new material is needed in the warehouse.
For all of this, de correct answer is D.A "customer" work center signals to the "supplier" workstation that more parts are needed.
Final answer:
Kanban is used as a visual signal to manage the replenishment process and reduce inventories in a Just-in-Time type of operation which is Option D. The customer work center signals the supplier workstation when more parts are needed.
Explanation:
In a Just-in-Time type of operation, Kanban is used as a visual signal to manage the replenishment process and reduce inventories. The best description of the use of Kanban in this context is option D: A 'customer' work center signals to the 'supplier' workstation that more parts are needed.
Kanban operates on the principle of pull-based production, where each workstation only produces parts when there is a demand for them. The 'customer' work center initiates a Kanban signal to the 'supplier' workstation when it requires more parts. This ensures that inventory levels are kept low and production is aligned with demand.
For example, in a car manufacturing plant, if the assembly line requires more tires, the 'customer' work center would send a Kanban signal to the 'supplier' workstation responsible for producing tires.
My existing business generate $135000 in EBIT. The corporate tax rate applicable to my business is 35%. Deprecaition reported in the financial statement is $25714. I don't need to spend any more for new equipment; however, I need $20250 additiona cash. I need to purchase $10800 in additional supplies such tableclothes and napkins on credit. It is also estimated that my accrual including taxes and wage payable will increase by $6750. Based on the information provided what will be my Free Cash Flow (FCF)?
Answer: $99,964
Explanation:
Given that,
EBIT = $135,000
Corporate tax rate = 35% of $135,000 = $47,250
Depreciation = $25,714
Need additional cash = $20,250
Additional supplies = $10,800
Accrual including taxes and wage payable will increase by $6,750
Operating cash flow = EBIT - Taxes + Depreciation
= $135,000 - $47,250 + $25,714
= $113,464
Investment in operating capital = Additional capital expenditure + Increase in NWC( net working capital)
= $0 + [($20,250 + $10,800) - ($10,800 + $6750)
= $13,500
Free Cash Flow (FCF) = Operating cash flow - Investment in operating capital
= $113,464 - $13,500
= $99,964
Four analysts cover the stock of Fluorine Chemical. One forecasts a 6% return for the coming year. The second expects the return to be negative 6%. The third predicts a return of 8%. The fourth expects a 2% return in the coming year. You are relatively confident that the return will be positive but not large, so you arbitrarily assign probabilities of being correct of 35 % comma 8 %, 17 %, and 40%, respectively, to the analysts' forecasts. Given these probabilities, what is Fluorine Chemicals expected return for the coming year
Answer:
Expected return = 3.78%
Explanation:
Given:
Expected returns Probabilities of being correct
6% 35%
- 6% 8%
8% 17%
2% 40%
Now,
Expected return is calculated as:
= Summation of [ Return × Probability ]
therefore,
Expected return
= ( 0.06 × 0.35 ) + ( -0.06 × 0.08 ) + ( 0.08 × 0.17 ) + ( 0.02 × 0.40 )
= 0.021 - 0.0048 + 0.0136 + 0.008
= 0.0378
or
= 0.0378 × 100%
or
Expected return = 3.78%
The expected return of Fluorine Chemicals for the coming year, considering the given probabilities and forecasts, is 3.78%
Explanation:To calculate the expected return of Fluorine Chemicals, you would need to multiply each analyst's forecast by their respective probability of being correct, and then add these results together. The formula to achieve this is as follows: (Analyst 1's forecast * Analyst 1's probability) + (Analyst 2's forecast * Analyst 2's probability) + (Analyst 3's forecast * Analyst 3's probability) + (Analyst 4's forecast * Analyst 4's probability). Plugging in the given values gives: (6*0.35) + (-6*0.08) + (8*0.17) + (2*0.40) = 2.1 - 0.48 + 1.36 + 0.8 =
3.78%
Therefore, given these probabilities, the expected return for Fluorine Chemicals for the coming year is 3.78%
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For the fiscal year ended December 31, 2016, Alpha Company had credits sales that amounted to $300,000. Historically, 2.5% of credit sales are uncollectible. Alpha Company uses the percentage of sales method to determine its uncollectible accounts. The balance before any end of the year adjusting entry in the Allowance for Uncollectable Accounts is a credit value of $1,575. Use this information to prepare the adjusting General Journal entry (without explanation) for the fiscal year.
Answer:
uncollectible accounts expense 5925
Allowance uncollectible accounts 5925
Explanation:
credit sales 300000
Uncollectible 2,50%
Uncollectible account 7500
Uncollectible account credit 1575
Adjustment 5925
uncollectible accounts expense 5925
Allowance uncollectible accounts 5925
The following standards have been established for a raw material used to make product O84: Standard quantity of the material per unit of output 8.9 meters Standard price of the material $ 19.00 per meter The following data pertain to a recent month's operations: Actual material purchased 5,300 meters Actual cost of material purchased $ 104,520 Actual material used in production 5,100 meters Actual output 680 units of product O84 The direct materials purchases variance is computed when the materials are purchased. What is the materials price variance for the month
Answer:
Purchase price variance=(19,72-19)*596=$429,12
Explanation:
The direct material variance is the difference between the standard cost of materials resulting from production activities and the actual costs incurred. The direct material variance is comprised of two other variances, which are:
- Purchase price variance
- Material yield variance
Purchase price variance: This is the difference between the standard and actual cost per unit of the direct materials purchased, multiplied by the standard number of units expected to be used in the production process. This variance is the responsibility of the purchasing department.
Purchase price variance=(actual price - standard price)*standard units
In this exercise:
Standard price= $19 meter
Standard units=5300/8,9=596 units
Actual price=104520/5300= $19,72
Purchase price variance=(19,72-19)*596=$429,12
A corn futures contract closed yesterday at a price of $2.40 a bushel. The maximum daily price range is $0.40 and the daily price limit is $0.20. Therefore, the: Question 1 options: a) highest closing price for today is $2.80 a bushel. b) most the price can fluctuate today is $0.20 a bushel. c) minimum change in the price today is $0.20 a bushel. d) lowest closing price for today is $2.20 a bushel.
Answer:
D -lowest closing price for today is $2.20 a bushel.
Explanation:
Range refers to the difference between the highest and lowest value of any variable for a given time period. The daily price limit refers to the maximum increase in price or the price decline that is allowed for a futures contract in one given trading session relative to the previous day's settlement price.
With this in mind, the right option is
D -lowest closing price for today is $2.20 a bushel.
This is worked out as $2.40 - $0.20 = $2.20
A manager checked production records and found that a worker produced 185 units while working 50 hours. In the previous week, the same worker produced 116 units while working 40 hours. Compute Current period productivity and Previous period productivity. (Round your answers to 2 decimal places.)
Answer:
Current Period Productivity= 3.7units/hour
Previous Period Productivity= 2.9units/hour
Explanation:
Giving the following information:
Worker produced 185 units while working 50 hours.
In the previous week, the same worker produced 116 units while working 40 hours.
We will compute productivity based on units per hour.
Worker productivity= Total units/total hours
Current Period Productivity= 185/50= 3.7units/hour
Previous Period Productivity= 116/40= 2.9units/hour
Wizard Co. purchased two machines for $250,000 each on January 2, 2005. The machines were put into use immediately. Machine A has a useful life of 5 years and can only be used in one research project. Machine B will be used for 2 years on a research and development project and then used by the production division for an additional 8 years. Wizard uses the straight-line method of depreciation. What amount should Wizard include in 2005 research and development expense?
Answer:
75,000
Explanation:
The straight-linedepreciation is calculate by dividing the acquisition value over the useful life
Machine A useful life is for 5 years
250,000 / 5 years = 50,000 per year
Machine B useful life is:
2 years in development project and then 8 years in a production division
total useful life for 10 years
250,000/ 10 years = 25,000
Total development expense:
machine A depreciation 50,000 + machine B depreciation 25,000 = 75,000
development expense 75,000
acc depreciation machine A 50,000
acc depreciation machine B 25,000
Which of the following is true of resources? A. Their availability is unlimited. B. They are inputs used to produce goods and services. C. When resource availability is increased, scarcity is eliminated. D. Both b and c.
Answer: D. Both b and c
Explanation: Resources are a set of elements available to solve a need, they are usually used as raw material to supply companies, however their availability may be limited, so there may be a shortage that is the lack of something in the market, given this situation should be increased the amount available for production to be continued.
Veronica had been getting red patches on her face after using a protein-based lotion manufactured by Nature Life Research Lab. On consulting a dermatologist, she learned that the lotion's steroid levels were beyond the standard levels permitted by the government and the damage caused by the lotion was irreversible. Which of the following will address Veronica's grievances? A. Laws related to property rights B . Product liability laws C. Intellectual property laws D. Foreign Corrupt Practices Act E. Sarbanes-Oxley Act
Answer: Product liability laws
Explanation: It is the branch of law that deals with the suppliers or distributors of products that causes injuries to the customers that consumed them. As per these laws the responsibility in case of defect lies with the sellers in the distribution channel.
In the given case, Veronica, has been getting red patches on her faces after using a defective product.
Hence, from the above we can conclude that the correct option is B.
In the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:
Albert 500000
Bert 300000
Connell 200000
Based on the preceding information, what amount of goodwill will be recorded if Daniel invests $450,000 for a one-third interest?
A. $0
B. $10,000
C. $50,000
D. $100,000
Answer: Option (c) is correct.
Explanation:
Given that,
Income sharing ratio = 5:3:2
Albert's capital = $500,000
Bert's capital = $300,000
Connell's capital = $200,000
If Daniel invests $450,000 for 1/3 rd interest then,
Total capital = $500,000 + $300,000 + $200,000
= $1,000,000
Therefore, total capital of the partnership will be;
= [tex]1,000,000\times\frac{3}{2}[/tex]
= $1,500,000
So,
Share of Daniel will be = $1,500,000 – $1,000,000
= $500,000
Hence,
Value of Goodwill = Share of Daniel - Amount invested by Daniel
= $500,000 - $450,000
= $50,000
Opportunity cost is best defined as: A. the monetary price of any productive resource. B. the amount of labor that must be used to produce one unit of any product. C. the ratio of the prices of imported goods to the prices of exported goods. D. the amount of one product that must be given up to produce one more unit of another product.
Answer:
D. The amount of one product that must be given up to produce one more unit of another product.
Explanation:
Opportunity cost is defined as the potential benefits that you would recieve if you choose one option over another. This is an economic term that can easily be applied in our day to day lives: Ex. When you choose to study over work, the opportunity cost is represented by the money you could earn as payment for your work.
In business, companies must decide whether they produce a wide range of products or services or if they focus their resources in producing those products in which they are more efficient and would represent higher earnings.
The opportunity cost is defined as the amount of one product that must be given up to produce one more unit of another product.
What does the opportunity cost?The opportunity cost is defined as the cost of the next best alternatives, which means the amount of one product must be given up to produce one more unit of another product,
Giving up one opportunity and taking another is done to get more benefits among the other alternative.
Example:
Roman is a manufacturer of garments, here he has two choices, either to manufacture jeans with a cost of 150 per jeans or to manufacture trousers with the cost of 140 per trousers.
Here, the difference between the cost of jeans and trousers is the opportunity cost for him.
Therefore, Option D is correct.
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ndicate in which part of the statement of cash flows each item would appear: operating activities, investing activities, or financing activities. (a) select a part of the statement of cash flows Cash received from customers. (b) select a part of the statement of cash flows Cash paid to stockholders (dividends). (c) select a part of the statement of cash flows Cash received from issuing new common stock. (d) select a part of the statement of cash flows Cash paid to suppliers. (e) select a part of the statement of cash flows Cash paid to purchase a new office building.
Answer:
(a) Cash received from customers = Cash flow from operating activities as this is the regular transaction of every business.
(b) Cash paid to stockholders = Cash flow from financing activities as this is the payment for any investment made by shareholders, in return when the shares are matured or treasury stock is purchased then, this is financing activity.
(c) Cash received from issuing new common stock = Cash flow from financing activity, as this will generate funds for the company, therefore it is a financing activity.
(d) Cash paid to suppliers = Cash flow from operating activities, this a regular payment in exchange of goods purchased, cash outflow.
(e) Cash paid to purchase a new office building = Cash outflow from investing activity, as this is an investment capital in nature, and will provide in return capital base or other income in form of rent.
Answer the following questions using the information below: Berman's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Flexible Variances Budget Price Efficiency Material A $40,000 $1,000F $3,000U Material B 60,000 500U 1,500F Direct labor 80,000 500U 2,500F The most likely explanation of the above variances for Material A is that:
Answer:
The variances for Materials A can indicate that the business purchases a lower quality materials, therefore cheaper.
Explanation:
The variances for Materials A can indicate that the business purchases a lower quality materials, therefore cheaper.
Which produce a favorable price variance because, this lower quality had a lower price per unit of material.
This lower quality makes the manufacturing process use more materials, generating an unfavorable quantity variance as, the the standard materials would use less quantity.
Final answer:
The favorable price variance indicates a lower purchasing cost for Material A, while the unfavorable efficiency variance suggests inefficient use of the material in production.
Explanation:
The most likely explanation for the variances for Material A at Berman's Camera Shop, where there is a $1,000 favorable price variance but a $3,000 unfavorable efficiency variance, is that the purchasing department secured a lower price than expected for Material A, which resulted in a favorable price variance. However, more of Material A was used than planned in the production process, leading to an unfavorable efficiency variance. This suggests that the materials may have been used inefficiently or that there was waste during the production process.
Frightproof Commuter Airlines is considering adding a new flight to its current schedule from Metro to Hicksville. This route has the following prices and costs. Selling price per passenger per flight $ 70 Variable cost per passenger per flight $ 20 Fixed cost per flight $ 4,400 Income tax rate 30 % Required: a. Compute Frightproof's break-even point in number of passengers per flight. b. How many passengers per flight must Frightproof have to earn $1,750 per flight after taxes?
Answer:
Instructions are listed below
Explanation:
Giving the following information:
Selling price per passenger per flight $ 70
Variable cost per passenger per flight $ 20
Fixed cost per flight $ 4,400
Income tax rate of 30 %
1) Break-even point= fixed costs/ controbution margin
Break-even point= 4400/(70-20)= 88 passengers
2) Break-even points= {[Fixed costs + [net profit/(1-t)]}/contribution margin
Break-even points= [4400 + (1750/0.70)]/50= 138 passengers
Which of the following statements is true of standardized promotions?
a. They convey messages according to the country-of-origin effect.
b. They reduce the costs incurred by companies for promotional efforts.
c. They are proven to be more effective than localized promotions in all countries.
d. They display different content through similar modes of promotion.
Answer:
The correct answer is B: They reduce the costs incurred by companies for promotional efforts.
Explanation:
Global standardization in marketing is a standardized marketing strategy that can be used globally. This type of marketing strategy conforms to work across different cultures and countries to sell a product. The company uses standard brands, formulations, packaging, positioning and distribution in its global markets. Products that have virtually universal demand in all countries and cultures make standardized marketing effective.
Standardized marketing for global companies typically offers significant cost benefits. If the same message works universally, you don't have to spend money to develop customized marketing messages. A strong brand can have the same effect in different areas around the world. What makes a strong presence in one country, can have the same effect in other countries.
The true statement about standardized promotions is that they reduce the costs incurred by companies for promotional efforts. They achieve economies of scale but may not be effective in all markets due to cultural differences and are not tailored to the country of origin.
Standardized promotions involve using the same promotional strategy and materials across different countries and cultures. This approach aims to achieve cost efficiency by exploiting economies of scale in production and distribution of promotional materials. However, they are not necessarily effective in all countries due to cultural differences, and in some cases, the content may be misunderstood or less appealing to the local audience.
Furthermore, such promotions do not convey messages according to the country-of-origin effect, as they do not typically tailor the message to the local culture or market specifics. Standardized promotions are not proven to be more effective than localized promotions in all countries; effectiveness can vary greatly depending on a range of factors, including cultural nuances and consumer behavior. Lastly, standardized promotions do not inherently display different content through similar modes of promotion; instead, they usually offer the same content across different markets.
Taser Industries must decide whether to make or buy some of its components. The costs of producing 175,000 battery packs for its product are as follows: Direct Materials $15,000 Direct Labor $5,000 Variable overhead $6,000 Fixed overhead $9,000 The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $2,000 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs
Answer:
It is cheaper to produce in-house. Cost savings= $3500
Explanation:
We need to find whether it is better to produce in-house or to purchase to a supplier.
Q= 175000
Produce in house:
Direct Materials $15,000
Direct Labor $5,000
Variable overhead $6,000
Fixed overhead $9,000
Total cost= $35000
Outsource:
Purchase Cost= 175000q*$0.18= $31500
Fixed Cost= (9000-2000)= $7000
Total cost=$38500
It is cheaper to produce in-house. Cost savings= $3500
Serena Corporation uses estimated manufacturing overhead costs of $880,600 and estimated direct labor hours of 200,000 in establishing manufacturing overhead rates. Allocated manufacturing overhead was $1,012,100 and actual manufacturing overhead was $970,500. What were the number of actual direct hours worked? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)
Answer:
the actual hours were 229,866
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
the predetermined overhead rate will be the quotient between the expected overhead and the expected value of the cost driver.
880,600 / 200,000 = 4.403
If we allocated 1,012,100
then actual hours x 4.403 = 1,012,100
actual hours = 1,012,100 / 4.403 = 229.866,000
the actual hours were 229,866
Answer:
The number of actual direct hours worked is $229,866 hours
Explanation:
In this question, first, we have to compute the predetermined overhead rate which is shown below:
Predetermined overhead rate = (Estimated manufacturing overhead costs) ÷ (Estimated direct labor hours)
= $880,600 ÷ $200,000
= $4.403
Now the number of actual direct hours worked equals to
= (Allocated manufacturing overhead) ÷ (Predetermined overhead rate)
= ($1,012,100) ÷ ($4.403)
= $229,866 hours
he Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: Amount Sales $ 1,107,000 Selling price per pair of skis $ 410 Variable selling expense per pair of skis $ 45 Variable administrative expense per pair of skis $ 17 Total fixed selling expense $ 155,000 Total fixed administrative expense $ 110,000 Beginning merchandise inventory $ 70,000 Ending merchandise inventory $ 100,000 Merchandise purchases $ 280,000 Required: 1. Prepare a traditional income statement for the quarter ended March 31. 2. Prepare a contribution format income statement for the quarter ended March 31. 3. What was the contribution margin per unit?
Answer:
Instructions are listed below
Explanation:
1) The general structure of an income statement proceeds as follow:
Revenue/Sales (+)
Cost of Goods Sold (COGS) (-)
=Gross Profit
Marketing, Advertising, and Promotion Expenses (-)
General and Administrative (G&A) Expenses (-)
=EBITDA
Depreciation & Amortization Expense (-)
=Operating Income or EBIT
Interest (-)
Other Expenses (-)
=EBT (Pre-Tax Income)
Income Taxes (-)
=Net Income
In this exercise:
Revenues= 1107000
COGS= Beginnig inventory + purchase - ending inventory= 250000
Gross profit= $857000
Administrative expense= $17 *2700q+110000= 155900
Selling expense= $155,000 + 45*2700q= 276500
EBITDA= 424600
2)A Contribution Margin Income Statement is a special format of the income statement that segregates the variable and fixed expenses involved in running a business. It shows the revenue generated after deducting all variable and fixed expenses separately.
Sales= 1107000
Variable costs:
Cost of goods sold= 250000
Variable Selling expense= $45*2700= 121500
Variable administration expense= 17*2700= 45900
Total variable costs= 417400
Contribution Margin= 689600
Fixed costs:
Selling expense= 155000
administration expense= 110000
Total fixed cost= 265000
Net profit= 424600
3) Unitary contribution margin= contribution margin/Q= 689600/2700= $255.41
Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,000 off the list price. a. If the rate of interest is 0.83% a month, calculate the present value of the payments to Kangaroo Autos.
Answer:
8,938.0168
Explanation:
Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,000 off the list price. If the rate of interest is 0.83% a month, the present value of the payments to Kangaroo Autos is 8,938.0168.
The present value of the payments to Kangaroo Autos is approximately $8,333.63.
To calculate the present value of the payments to Kangaroo Autos, we can use the formula for the present value of an annuity:
[tex]PV=\frac{PMT×(1−(1+r) −n )}{r}[/tex]
Where:
PMT = Payment per period ($300)
r = Interest rate per period (0.83% or 0.0083)
n = Number of periods (30 months)
Plugging in these values:
[tex]PV= \frac{300×(1−(1+0.0083) −30 ) }{0.0083} ≈$8,333.63[/tex]
The present value of the payments to Kangaroo Autos is approximately $8,333.63. This is the equivalent lump sum that would need to be invested now to cover the series of future payments at an interest rate of 0.83% per month.
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Kilt Company had the following information for the year:
Direct materials used $ 110,000
Direct labor incurred (5,000 hours) $ 150,000
Actual manufacturing overhead incurred $ 166,000
Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours. Assume the only inventory balance is an ending Work in Process balance of $17,000. How much overhead was applied during the year?
Answer:
The applied overhead is $231,000
Explanation:
The computation of the applied overhead is shown below:
= Predetermined overhead rate × direct labor hour
= $42 × 5,500 hours
= $231,000
Since the predetermined overhead rate is given in the question, so there is no need to re calculate it.
And, the other items which are mentioned in the question are not considered in the computation part. Hence, these items would be ignored
Bill, a local inventor, developed a diet pill that he believes will solve the obesity problem in the United States. Bill wants to create a new company, 50% owned by Bill and 50% owned by a major drug company. Although he believes the pills are safe, Bill is concerned about liability if someone becomes sick or dies. The best form of business organization for the new company is
Answer:
Corporation
Explanation:
The corporations have a limited liability. They answer until they investmnet amount. While a partnership will have unlimited liability. A corporation on which Bill has 50% of the shares and 50% are own by the major drug company will provide the desired capital structure and limited liability
Donna Bader spent her final year at college studying the effect of various economic factors on the economy of developing nations. Based on the results of her study, she concluded that globalization does these countries more harm than good. Which of the following statements, if true, strengthens Donna's argument? People in low-wage nations have a high mortality rate and no access to healthcare facilities. Because of the increase in employment opportunities, workers from developing countries flock to developed countries. Low-wage nations tend to have poorly developed transport and communication systems. Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Answer:
Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Explanation:
Globalization is an economic and political phenomenon that has transformed the relations of production and labor. The companies started to produce in countries where the labor is cheaper, becoming consequently more competitive.For the development of firms and the evolution of capitalism globalization is a very positive phenomenon. However, globalization has some deleterious effects. Some multinational companies take advantage of flaws in the labor laws of underdeveloped countries to exploit the labor of the people of those countries. With low wages and poor social security, people in these countries consume less, get sicker and have less access to goods and services. This hinders human development and hence the productivity and economy of these countries.
S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $715,000 and sold the bonds on January 3, 2019, for $717,500. At December 31, the bonds had a fair value of $713,500. When it purchased the Coca-Cola bonds, S&L Financial decided to elect the fair value option for this investment. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment (ignoring interest)?
Answer:
2018 loss for 1,500
2019 gain for 4,000
Explanation:
purchase at 715,000
December 31th 713,500
adjusting entry december 31th
loss on investment 1,500 debit
marketable securities 1,500 credit
january 3rd, 2019
cash 717,500 debit
gain on investemnt 4,000 credit
martetable securities 713,500 credit
to record gain on investment
Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 10% per year. If D0 = $2 and rs = 13%, what is the estimated value of Brushy Mountain's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
The estimated value of Brushy Mountain's stock is $41.40
Explanation:
For computing the estimated value of stock, we need to apply the formula which is shown below:
= (D0 × (1 +g) ) ÷ (rs - g)
where,
The D0 would be a 0 year dividend
g = earning and dividend rate
rs = required rate of return
Now put these values to the above formula
So, the answer would be equal to
= $2 × (1 - 0.10) ÷ {13% - (- 10%)}
= $2 × 0.90 ÷ 23%
= $2 × 20.7
= $41.40
Since in the question, the growth rate is declining so we add the minus sign before writing the earning and the dividend rate.
The Allowance for Bad Debts account has a debit balance of $ 9 comma 000$9,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $ 12 comma 000$12,000. What will be the amount of the adjustment in the Allowance for Bad Debts account?
Answer:
the amount of the adjustment in the Allowance for
Bad Debts account $3.000
Explanation:
Initial Balance
Allowance for Uncollectible Accounts $ 9.000
END Balance
Allowance for Uncollectible Accounts $ 12.000
The adjustment entry in the accountig will be
Bad debt expense $ 3.000
Allowance for Uncollectible Accounts $ 3.000
Beginning three months from now, you want to be able to withdraw $3,400 each quarter from your bank account to cover college expenses over the next four years. If the account pays .56 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years? (
To meet college expenses over the next four years with quarterly withdrawals of $3,400 and a 0.56% interest rate, you would need approximately $302,670.60 in your bank account today.
Explanation:Retirement Account CalculationTo solve for the amount needed today to meet the college expense needs over the next four years, we will use the formula for the present value of an annuity due to the quarterly withdrawals. The formula is PV = PMT × ((1 - (1 + r)^{-n}) / r)× (1+r), where PV is the present value (initial amount needed), PMT is the quarterly withdrawal amount, r is the quarterly interest rate, and n is the total number of withdrawals.
In this scenario, PMT is $3,400, r is 0.56% or 0.0056 in decimal form, and n is 4 years times 4 quarters/year, which equals 16 quarters. Using the formula, we calculate:
Therefore, you would need approximately $302,670.60 in your bank account today to meet your expense needs over the next four years with a quarterly interest rate of 0.56 percent.
In using the net present value method, only projects with a zero or positive net present value are acceptable because:
a. the return from these projects equals or exceeds the cost of capital
b. a positive net present value on a particular project guarantees company profitability
c. the company will be able to pay the necessary payments on any loans secured to finance the project
d. Both a and b are correc
Answer:
Option A
Explanation:
When you use a net present value method you are discounting the estimated cash flows of your project applying an interest rate that is related to your cost of capital. So, if your projects discounted cash flows are greater than zero it means that your project profitability is greater than your alterative project.
Projects with a zero or positive net present value are acceptable because the return from these projects equals or exceeds the cost of capital
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Net present value is a capital budgeting method.
Capital budgeting methods are used to determine the profitability of a project that is about to be undertaken
Only projects with a positive Net Present Value should be accepted. A project with a negative Net Present Value should not be chosen because it isn't profitable. When choosing between positive Net Present Value projects, choose the project with the highest Net Present Value first because it is the most profitable.
Projects with zero Net Present Value, earn just what it costs to undertake the project
To learn more about Net Present Value, check here: https://brainly.com/question/16528949?referrer=searchResults
If the CPI was 95 in 1955 and is 475 today, then $100 today purchases the same amount of goods and services as...
a. $20.00 purchased in 1955.
b. $4.75 purchased in 1955.
c. $500 purchased in 1955.
d. $95.00 purchased in 1955.
Answer:
The correct answer is option a.
Explanation:
The CPI or consumer price index is a tool to measure inflation in the economy. It includes a basket of goods and services generally consumed by households. Changes in the price of these goods and services are calculated to measure the inflation rate.
In the year 1955, the CPI was 95.
In the current year, the CPI is 475.
This means that today $100 will be able to purchase
= [tex]\$ 100 \ \times\ \frac{95}{475}[/tex]
= $20
$100 in current year will be able to purchase the same amount of goods and services that $20 purchased in the year 1995.
The CPI is a measure of the average change over time in prices. $100 today would purchase the same amount as $4.21 in 1955.
Explanation:The CPI (Consumer Price Index) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Given that the CPI was 95 in 1955 and is 475 today, we can calculate the percentage increase in the CPI over this time period: (475 - 95) / 95 = 400 / 95 = 4.21.
This means that prices have increased by 4.21 times since 1955. So, $100 today would purchase the same amount of goods and services as $4.21 purchased in 1955.
At the beginning of Year 1, a company reported a balance in common stock of $154,000 and a balance in retained earnings of $54,000. During the year, the company issued additional shares of stock for $44,000, earned net income of $34,000, and paid dividends of $10,400. In addition, the company reported balances for the following assets and liabilities on December 31. Assets Liabilities Cash $ 53,000 Accounts payable $ 8,600 Supplies 11,300 Utilities payable 3,200 Prepaid rent 26,000 Salaries payable 3,900 Land 220,000 Notes payable 19,000 Required: Prepare a statement of stockholders’ equity. Prepare a balance sheet.
Answer:
statement of stockholders' equity
for the year 1
Common Stock Retained Earings Total
Balance Jan 1 154,000 54,000 208,000
Net Earnings 34,000 34,000
Dividends -10,400 -10,400
Stock issued 44,000 44,000
Balance, Dec 31 198,000 77,600 275,600
Assets Liability
Cash 53,000 Account Payable 8,600
Supplies 11,300 Utilities Payable 3,200
Prepaid Rent 26,000 Salaries Payable 3,900
Land 220,000 Note payable 19,000
Common Stock 198,000
Retained Earnings 77,600
Total Assets 310,300 Total Liab + SE 310,300
Explanation:
For the stockholder statment, we simply post the values of the first part.
Then for the balance sheet: We will work with the numbers given in the the second part.
The payable are the liabilities, the rest are assets.
Finally, we transfer the stock value from the Stockholders statemnet
and check the total for each column