Answer: (B) demanders, wanting to ensure they acquire the good, will bid the price lower.
Explanation:
In the free market, if the product price are above the equilibrium price then, the demand of the product rise and the demanders ensure that they acquire good quality products in the low price. Then, the quality and quantity both demand increases until the equilibrium are reached.
On the other hand, if the quantity of the product demand is less as compared to the quantity supply then it create shortage of the product.
Therefore, Option (B) is correct.
In a free market, if a good's price is above the equilibrium, suppliers will lower the price due to dissatisfaction with increasing inventories. This occurs because there's a surplus in the market, and the decline in price aims to clear that surplus.
Explanation:In a free market, if the price of a good is above the equilibrium price, then suppliers, dissatisfied with growing inventories, will lower the price. This is because suppliers recognize there's a surplus of goods, with more supply available than demand from consumers. Consequently, they will reduce the price with the aim of selling the surplus and clearing the inventories. It's also important to understand that in a free market, consumers aren't willing to pay more than the equilibrium price, and the market forces tend to restore the balance, hence the decrease in the price to meet the equilibrium stage again.
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Which of the following correctly describes a repurchase agreement? The sale of a security with a commitment to repurchase the same security at a specified future date and a designated price The sale of a security with a commitment to repurchase the same security at a future date left unspecified, at a designated price The purchase of a security with a commitment to purchase more of the same security at a specified future date
Answer:
The correct answer is A: The sale of a security with a commitment to repurchase the same security at a specified future date and a designated price
Explanation:
A repurchase agreement (Repo) is a short term agreement between two parties in which one party sells the other party security (usually government securities) at a price with an agreement to repurchase the exact same security at a fixed time and price. The maturity for a repurchase agreement can be from overnight to a year. The
Repurchase agreements are generally considered safe investments because the security in question functions as collateral, which is why most agreements involve U.S. Treasury bonds. The transaction allows the dealer to raise short term capital. It is a short term money market instrument in which two parties agree to buy or sell a security at a future date.
A repurchase agreement, also known as a repo, is a short-term borrowing agreement where one party sells a security to another party with an agreement to buy it back at a later date.
Explanation:A repurchase agreement, also known as a repo, is the sale of a security with a commitment to repurchase the same security at a specified future date and a designated price. Essentially, it is a short-term borrowing agreement where one party sells a security to another party with an agreement to buy it back at a later date. Repurchase agreements are commonly used by financial institutions to raise short-term funds.
Carbondale Casting produces cast bronze valves on a 10-person assembly line. On a recent day, 160 valves were produced during an 8-hour shift. a) Calculate the labor productivity of the line. b ) John Goodale, the manager at Carbondale, changed the layout and was able to increase production to 180 units per 8-hour shift. What is the new labor productivity per labor-hour? c) What is the percentage of productivity increase?
Answer:
(a) 2
(b) 2.25
(c) 12.5%
Explanation:
To solve this question we need to remember that
[tex]Total \, Productivity = \frac{Total\,Ouput}{Total \, Man \, Hours}[/tex]
(a) 10 persons produce 160 valves in 8 hours, this implies a productivity of 2=160/(8x10)
(b) 2.25= 180/(8x10)
(c) Percentage change is given by (2.25-2)/2=.125
Canyon Trails is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $390,000 would be terminated; in contrast, administrative assistants who earn $120,000 would be transferred elsewhere in the organization. Miscellaneous departmental overhead (e.g., supplies, copy charges, overnight delivery) is expected to decrease by $30,000, and $25,000 of corporate overhead, previously allocated to Human Resources, would be picked up by other departments. If Canyon Trails can secure needed H/R services locally for $410,000, how much would the company benefit by outsourcing?
Answer:
Benefit: 10,000
Explanation:
Salaries terminated: 390,000
decrease in misc overhead 30,000
outsourcing tariff: (410,000)
Benefit: 10,000
The most questions most important issue is how to account the 120,000 assistant and the fixed cost that will be allocate to other department.
The truth is, this are not relevant cost.
As the company would hire this assistant in the near future if the H/R is not outsource as the company won't keep them if they aren't useful.
Also the allocate cost are cost from other operations not related to human resources. So ust be disregard from the calcualtion.
We should consider only the explicit decrease, which are the salaries and fewer tracable overhead.
Wildhorse Co. uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows:
Units Per unit price Total
Balance, 1/1/2017 320 $5.00 $1600
Purchase, 1/15/2017 160 ..5.70 912
Purchase, 1/28/2017 160 ..5.90 944
An end of the month (1/31/2017) inventory showed that 260 units were on hand. If the company uses FIFO, what is the value of the ending inventory?
Answer:
Ending inventory= $1514
Explanation:
Giving the following information:
Beginning inventory: 320u*$5.00= $1600
Purchase, (1/15/2017)= 160u*5.70= $912
Purchase, (1/28/2017)= 160u*5.90= $944
Ending inventory= 260u
The company uses FIFO (first in, first out).
What is the value of ending inventory?
Ending inventory= 160u*5.90 + 100u*5.70= $1514
Final answer:
To calculate the ending inventory value using the FIFO method for Wildhorse Co., all available 260 units are considered from the initial stock at $5 each, totaling $1300.
Explanation:
The question involves calculating the value of the ending inventory for Wildhorse Co. using the FIFO (First-In, First-Out) method under a periodic inventory system. With FIFO, we allocate the oldest costs to cost of goods sold (COGS) and the most recent costs to ending inventory.
Here's how to calculate it:
Starting balance on 1/1/2017: 320 units at $5.00 eachPurchase on 1/15/2017: 160 units at $5.70 eachPurchase on 1/28/2017: 160 units at $5.90 eachAt the end of the month, 260 units were on hand. Using FIFO, we'll use up the oldest inventory first. Thus,
The first 320 units of ending inventory would come from the starting balance, but since we only have 260 units on hand, we use all 260 units at the starting balance price of $5.00, totaling $1300.Therefore, under FIFO, the value of the ending inventory is $1300.
Barkley’s Resort had 2,000 shares of $20 par value common stock outstanding. On June 1, Barkley’s purchased 200 shares of treasury stock at $21 per share and later reissued them for $22 per share. Which amount of profit from the reissuance will be reported?
Answer:
NONE
Explanation:
The treasury stock sales increase additional paid-in capital treasury stock. It do not generate net income the stokc are part of equity transactions. They cannot generate a gain, the differnece in value betwene cost and reissuance of the shares will be adjusted against additional paid-in capital Treasu Stock as state before.
You are the manager of Local Electronics Shop (LES), a small brick-and-mortar retail camera and electronics store. One of your employees proposed a new online strategy whereby LES lists its products at Pricesearch – a price comparison Web site that allows consumers to view the prices of dozens of retailers selling the same items. Would you expect his strategy to enable LES to achieve sustainable economic profits?
Answer:
The correct answer is No, because due to intense producer-producer rivalry.
Explanation:
In economics, competition means rivalry of competition between companies that participate in a market that apply better strategies so that they can minimize their costs, maximize their profits and thus remain active and innovative vis-à-vis other companies.
With this, it seeks that the economic agents strive to improve the use of resources to produce goods and services, and to improve and innovate in the quality and variety of these, with the purpose that results in improvements in competitiveness and more benefit for the consumer , all this to achieve greater economic growth and social welfare.
Listing LES's products on a price comparison website can increase visibility and potential sales, but it also introduces more competition. Over time, this might negatively impact sales if competitors offer better or cheaper products, as customers often value price over store loyalty on such platforms.
Explanation:Providing product listings and prices on a comparison website like Pricesearch can indeed boost business visibility and possibly sales. However, sustainable economic profits may not be guaranteed. This is due to the increased competition that such a platform invites. Listing the Local Electronics Shop (LES)'s products along with those of numerous other stores could expose LES to the risk of losing customers who may find better or cheaper products from competitors.
It is also important to remember that customers who shop on such platforms typically value price over loyalty to a particular store. If LES is unable to offer the most competitive prices, it could potentially lose sales. So while there may be a short-term boost in profits due to increased visibility and traffic, in the long term, the risk of increased competition could mitigate these benefits.
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equirement 1. Post the journal entries to the T-accounts. Use the dates as posting references in the T-accounts. We will post to the accounts one transaction at a time. Begin by posting the event from the 2nd. Received $ 14 comma 000 contribution from Brett Lawrence, owner, in exchange for capital. (We will post to the accounts one transaction at a time. Post only the transaction from July 2 in this step.)
Final answer:
To post the journal entry for the transaction on July 2, where the owner contributed $14,000, debit the cash account and credit the owner's equity account in the T-accounts.
Explanation:
The student is asking how to post a journal entry to a T-account for a business transaction that occurred on July 2, wherein Brett Lawrence contributed $14,000 to the business in exchange for capital. This transaction will impact the balance sheet by increasing both the business's assets and owner's equity. To post the transaction on the T-account, you would debit the Cash account (asset) and credit the Brett Lawrence, Capital account (owner's equity) to record the owner’s contribution.
Journal Entry:
Debit: Cash $14,000 (to record the increase in assets due to the owner's contribution)
Credit: Brett Lawrence, Capital $14,000 (to record the increase in owner's equity)
After this transaction, the business’s T-account would show a balance of $14,000 in the Cash account on the assets side and $14,000 in the Brett Lawrence, Capital account on the liabilities and equity side, reflecting the owner’s equity.
Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ____ in Alpha compared to Beta, holding other factors constant.
A. more
B. less
C. not at all
D. by the same amount
Which of the following are NOT included in the formal financial analysis of a capital budgeting program?
a. quality of the output
b. safety of employees
c. cash flow
d. Neither a nor b are included.
Answer: Option B
Explanation: Capital budgeting refers to the process in which an analyst tries to evaluate whether a long term investment will be profitable for the organisation or not.
In the capital budgeting process, only the quantitative aspects of a project will be taken into consideration and qualitative aspects such as quality and work space safety are not considered.
Hence from the above we can conclude that the right option is B.
In formal financial analysis of a capital budgeting program, factors like quality of the output and safety of employees are typically not included. The focus is primarily on the monetary aspects of a project.
Explanation:The formal financial analysis of a capital budgeting program typically includes the evaluation of all types of cash flows, such as initial investment, operating cash flows, and terminal cash flows. However, it does not take into account factors like the quality of the output or the safety of employees. These are important considerations, but they lie outside the realm of formal financial analysis.
Therefore, amongst the choices given, the correct answer is option (d) Neither a nor b is included. Quality of output (a) and safety of employees (b) don't typically fall within the material scope of a formal financial analysis in a capital budgeting program. The focus is more on the monetary aspects of a project like cash inflow, cash outflow, return on investment, and so on.
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On January 1, 2017, Alison, Inc., paid $60,000 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $200,000 and liabilities of $75,000. A patent held by Holister having a $5,000 book value was actually worth $20,000. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $30,000 and declared and paid dividends of $10,000. In 2018, it had income of $50,000 and dividends of $15,000. During 2018, the fair value of Allison’s investment in Holister had risen from $68,000 to $75,000.
Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2018?
Answer:
It will be valued at:
investment 70,000
goodwilll 1,000
patent 4,000
total 75,000
Explanation:
first we calcualte the equity of the company:
200,000 - 75,000 = 125,000 equity
then we calcualtethe investment proportion:
125,000 x 0.4 = 50,000 investment
15,000 x 0.4 = 6,000 patent
goodwill: 4,000 (60,000 - 56,000)
2017
income: 30,000 x 0.4 = 12,000
dividneds: 10,000 x 0.4 = (4,000)
amortization on patent
6,000 / 6 = 1,000 per year
2018
income: 50,000 x 0.4 = 20,000
dividneds: 15,000 x 0.4 = ( 6,000 )
amortization on patent: ( 1,000 )
50,000 + 12,000 - 4,000 - 1,000 + 20,000 - 6,000 - 1,000 = 70,000
then we add the patent and the goodwill
70,000 + 4,000 + 4,000 = 78,000
and wecheck for impairment:
as the fair value is 75,000 we decrease goodwill
The balance in the Investment in Holister account as of December 31, 2018, should be $77,000.
Explanation:To determine the balance in the Investment in Holister account as of December 31, 2018, we need to take into account the initial investment, share of earnings, dividends, and changes in the fair value of the investment. Additionally, we need to consider any adjustments for the excess cost and the fair value of the patent.
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What effect will each of the following have on the supply of auto tires? (Keeping all else constant)
a. A technological advance in the methods of producing tires:
b. A decline in the number of firms in the tire industry:
c. An increase in the prices of rubber used in the production of tires:
d. The expectation that the equilibrium price of auto tires will be lower in the future than currently:
e. A decline in the price of large tires used for semi trucks and earth-hauling rigs, a substitute in production. (with no change in the price of auto tires):
f. The levying of a per-unit tax on each auto tire sold:
g. The granting of a 50-cent-per-unit subsidy for each auto tire produced:
Answer:
Explanation:
a. Total supply of auto tires will increase because firms will produce more. In the Demand and Supply graph the supply curve will shift to the right.
b. Total supply will decrease because there are less tires offered on the market. In the Demand and Supply graph the supply curve will shift to the left.
c. Total supply will decrease because cost of production will increase, then firms will offer less quantity of tires. In the Demand and Supply graph the supply curve will shift to the left.
d. Total supply will decrease because firms will perceive less benefits of selling auto tires in the future. In the Demand and Supply graph the supply curve will shift to the left.
e. The total supply could increase if large tires producers decide to produce auto tires because it is more attractive. In the Demand and Supply graph the supply curve will shift to the right.
f. Total supply will decrease because the tax creates incentives to produce less. In the Demand and Supply graph the supply curve will shift to the left.
g. Total supply will increase because the subsidy creates incentives to produce more. In the Demand and Supply graph the supply curve will shift to the right.
Depending on the factor, the supply of auto tires may increase or decrease. Technological advances and subsidies can increase supply by reducing costs, while decreasing number of firms, increasing raw material costs, expectation of lower future prices and new taxes can decrease supply by increasing costs or reducing profitability.
Explanation:The factors listed in your question will differently affect the supply of auto tires, based on the principles of Economics and our understanding of supply and demand.
Technological advance in the methods of producing tires: this would increase supply, because more efficient production methods reduce the cost of manufacturing, allowing companies to produce more tires. A decline in the number of firms in the tire industry: this would likely decrease supply, as fewer firms in the industry means fewer sources of tires. An increase in the prices of rubber used in the production of tires: this would likely decrease supply because higher raw material costs reduce profit margins, discouraging production. The expectation of a lower equilibrium price for auto tires in the future: this would also decrease supply as companies may hold off on producing tires, anticipating lower returns in the future. A decline in the price of large tires used for semi trucks and earth-hauling rigs: this would likely have no effect on the supply of auto tires as they are different products with different markets. The levying of a per-unit tax on each auto tire sold: this would decrease supply as the added cost would limit the profitability of each unit sold, potentially discouraging production. The granting of a subsidy for each auto tire produced: this would likely increase supply as the subsidy effectively reduces the cost of production, encouraging companies to produce more. Learn more about Supply and Demand here:
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Cheyenne Corp. had the following records:
2017 2016
Ending inventory $34150
$30390
Cost of goods sold 211600 222040
What is Cheyenne inventory turnover ratio for 2017? (rounded)
Answer:
Ans. Inventory turnover ratio (2017) = 7
Explanation:
Hi, the formula to find the inventory turnover ratio is as follows.
[tex]Inventory TurnoverRatio=\frac{COGS}{Average Invetory}[/tex]
Where:
COGS= Cost of Goods Sold
If we need to find the inventory turnover ratio, first we need to find the average inventory, that is:
[tex]AverageInventory=\frac{(34150+30390)}{2} =32270[/tex]
Since we already know the COGS for 2017, the answer is as follows.
[tex]InventoryTurnoverRatio(2017)=\frac{211600}{32270} =7[/tex]
That is 7 times a year (rounded).
Best of luck.
Winston Watches stock price is $80 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 400 million shares of common stock outstanding. What is Winston's market/book ratio?
Answer:
market to Book ratio 5.33
Explanation:
Market Capitalization
market price x shares outstanding
80 x 400,000,000 = 32,000,000,000 = 32 billions (short scale)
Balance sheet:
Assets - Liab
10 - (1 + 3) = 10 - 4 = 6B
Market to Book Ratio
32 / 6 = 5.33
Winston Watches has a market/book ratio of 5.33, calculated by dividing its market value of equity ($32 billion) by its book value of equity ($6 billion).
To calculate Winston's market/book ratio, we first need to determine the book value and the market value of equity. The book value is the common equity which is given as $6 billion. The market value of equity is the current stock price multiplied by the number of shares outstanding, which is $80 per share × 400 million shares = $32 billion. The market/book ratio is then calculated by dividing the market value by the book value.
Market/Book Ratio = Market Value of Equity / Book Value of Equity
= $32 Billion / $6 Billion
= 5.33
Therefore, Winston Watches has a market/book ratio of 5.33.
Economic questions always deal with:
A. financial matters.
B. political matters.
C. insufficient resources.
D. choice in the face of limited resources.
Answer:
D. choice in the face of limited resources.
Explanation:
Economic question always deal with the choice in the face of limited resources, since resources are limited and humans needs are unlimited. Resources are always limited, and economics deals with the choice to administrate the resources the best way possible.
When a person decides to assign a resource to a specific use, he is discarding its use for another purpose. This is known as the opportunity cost.
This year, Druehl, Inc., will produce 60 comma 000 hot water heaters at its plant in Delaware, in order to meet expected global demand. To accomplish this, each laborer at the plant will work 160 hours per month. If the labor productivity at the plant is 0.15 hot water heaters per labor hour, how many laborers are employed at the plant?
Answer:
The answer is: 2500 employees
Explanation:
Giving the following information we need to calculate the number of employees:
Total production= 60000
Hours per worker= 160 hours
labor productivity= 0,15
It takes to a single employee= 1/0,15= 6,67 hours to make a heater.
Each worker produces=160/6,67=24 heaters a year.
Now we can calculate the number of workers:
60000/24= 2500 employees
Anne Aurum, a jewelry maker, needs to purchase 125.00 grams 22 karat gold. She thinks she can get a better deal on 22 karat gold if she buys it from India. Anne can purchase 22 karat gold from the local gilding shop for $1,285.00 American dollars per ounce. She can purchase gold from India for the price of 999 Indian rupees per gram. Anne determines that 15.0 rupees is equal to 22.0 American cents and that 1.0 gram is 0.035274 oz. How much money (in American dollars) will it cost Anne to purchase 125.00 grams of 22 karat gold from her local gilding shop versus from purchasing the same amount from India? FYI-she gets free shipping from India. Gotta love free shipping
Answer:
Local shop= $5665,89
India=$1831,5
Explanation:
Hi, we have to calculate whether it is cheaper to buy 125 gr of 22 karat gold from the local shop or India.
We have the following information:
EEUU: $1285 an ounce of gold
India= 999 rupee/gr.
1gr=0,035274 ounce
15 rupees=$0,22
First, we calculate how much does it cost in EEUU:
125gr*0,35274=4,40925 ounces
$1285*4,40925 ounces= $5665,89
Now, we calculate how much does it cost in India:
999rupees*125gr=124875 rupees
124875 rupees=? = (124875*0,22)/15=$1831,5
Which of the following is true of discouraged workers, as defined by the Bureau of Labor Statistics?
a. They are counted as part of the labor force
b. They are dissatisfied with their current jobs and are considering quitting
c. They are working part-time but would like full-time work
d. They have not looked for work in the last 4 weeks, but would like a job and are available for work
Answer: d.They have not looked for work in the last 4 weeks, but would like a job and are available for work
Explanation: Hi, according to the Bureau of Labor Statistics, statement "d" is true .
Discouraged workers are people that aren´t in the labor force who want to be a part of it by wanting a job. They are also available for work and looked for a job sometime in the last 12 months, but not in the last four weeks.
Because of not looking for a job in the last 4 weeks they are not considered as unemployed.
Which of the following is NOT a characteristic of a market in equilibrium?
A. Excess supply is zero.
B. All consumers are able to purchase an amount equal to their quantity demanded.
C. Excess demand is zero.
D. The equilibrium price is stable, i.e., there is no pressure for it to change.
B. All consumers are able to purchase an amount equal to their quantity demanded.
The statement that is not a characteristic of a market in equilibrium is all consumers are able to purchase an amount equal to their quantity demanded.
A market is in equilibrium when the quantity demanded is equal to the quantity supplied. It is represented graphically by the intersection of the demand curve with the supply curve.
At equilibrium, excess demand and supply is zero. Below the equilibrium point, there is excess demand. Excess demand would lead to an upward pressure on price until quantity demanded equals quantity supplied. Also, when there is excess supply, there would be a downward pressure on price until price falls to equilibrium price.
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Atlantis Corporation has 12,000 shares of 14%, $78 par noncumulative preferred stock outstanding and 29,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $188,000. How is the dividend allocated between preferred and common stockholders?
Answer:
The preferred shareholders will be allocated a dividend of $131040 and the common shareholders will be allocated a dividend of $56960.
Explanation:
Total dividend declared =$188000
the allocation of dividends:
Preferred shareholders = (12000×14%)×$ 78
= $ 131040
Common shareholders = Total dividends - preferred shareholders dividend
= $ 188000 - $ 131040
= $ 56960
Therefore, the common shareholders will be allocated dividends of $ 56960 and the preferred shareholders will be allocated dividends of $ 131040.
The total dividend owed to the preferred shareholders is $130,800. The remaining $57,200 is distributed to holders of the common stock.
Explanation:To find out how dividends are allocated, we first need to calculate the dividend due to preferred stockholders. Given that the noncumulative preferred stock pays out 14% at a par value of $78, each preferred share receives 0.14 * $78 = $10.92 per share. Multiplying this ratio by the 12,000 preferred shares gives us a total dividend for the preferred stockholders - $130,800.
Now, if the total dividends declared are $188,000, we then subtract the amount allocated to the preferred shareholders from this total. $188,000 - $130,800 = $57,200. So, the remainder of the dividends, $57,200, is distributed amongst the holders of the 29,000 shares of common stock.
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Your credit card company charges a monthly compound interest rate of 2.5%. If you have an outstanding balance (money that you owe) of $2500, how much would it cost you to pay off this debt 2 years later? (Assuming no additional charges on the credit card.) You can round the answer to the nearest integer.
Answer:
FV= $4521.81
Explanation:
Giving the following information:
Your credit card company charges a monthly compound interest rate of 2.5%.
Debt= $2500
n= 24 (monthly)
We need to use the following formula to calculate the final value of this debt.
FV= PV*(1+i)^n
PV= present value
FV= 2500*(1+0.025)^24
FV= $4521.81
Ana’s team was reorganized to be cross-functional, and each member is now expected to collaborate on every step of the process for updating her company’s website, including generating content, encouraging traffic through SEO optimization, and tracking the website’s hits.
(A) Increasingly diverse workforce
(B) Self-directed work groups and virtual teams
(C) New work environments
Answer:
Self-directed work groups and virtual teams
Explanation:
The groups are usually people with diverse skills that work together into a project without the classic managerial structure since the team is capable enough to understand when and how to generate value.
Final answer:
Ana's team transition to a cross-functional, team-based approach is a reflection of modern organizational trends where diverse skills and collaboration are emphasized to adapt to rapid changes in technology and work dynamics.
Explanation:
Team-Based Approach in Modern Work Environments
The question describes a scenario where Ana's team has been reorganized into a cross-functional team. It outlines a shift in the company's organizational structure that now requires the team members to collaborate on all processes related to updating the company's website, indicating a move towards a more integrated and team-based approach. This modern work environment demands diversified skills and collective efforts in tasks such as content generation, SEO optimization, and tracking website performance.
The shift towards a team-based organization is a response to the changing dynamics of the workplace influenced by rapid advancements in technology, the need for a diverse skill set due to complex systems, and the drive for higher productivity. This business strategy has led organizations to abandon the traditional vertical hierarchy in favor of creating teams capable of synergistic collaboration. However, such team structures also present new challenges in management, particularly in terms of member engagement and the evaluation of virtual team performance.
Moreover, cross-functional teams like Ana's are empowered to manage various aspects of a project, reflecting a shift from individual to collective accountability. Effective communication, especially in virtual settings, and the empowerment of teams have been identified as critical factors for the success of this new paradigm.
The Morris Corporation has $300,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris's annual sales are $1.5 million, its average tax rate is 40%, and its net profit margin on sales is 4%. If the company does not maintain a TIE ratio of at least 4 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morris's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.
Answer: 1.41
Explanation:
Given that,
Debt outstanding = $300,000
interest rate = 8% annually
annual sales = $1.5 million
average tax rate = 40%
net profit margin on sales = 4%
interest amount = 300,000 × 0.08
= $24,000
net profit = 4% of 1.5 million
= $6,000
Profit before tax = [tex]\frac{6,000}{0.60}[/tex]
= $10,000
earning before interest and tax = profit before tax + interest
= $10,000 + $24,000
= $34,000
TIE ratio = [tex]\frac{EBIT}{Interest}[/tex]
= [tex]\frac{34,000}{24,000}[/tex]
= 1.41
At the beginning of 2018, Calston Incorporated reports inventory of $10,000. During 2018, the company purchases additional inventory for $27,000. At the end of 2018, the cost of inventory remaining is $7,700.
Calculate cost of goods sold for 2018.
Answer:
COGS for 2018 : 119,300
Explanation:
We use the inventory identity to solve for Cost of Goods Sold:
[tex]$$Beginning Inventory + Purchase = Ending Inventory + COGS[/tex]
The right side are the input of inventory: it can be from previous prior and purchase from the period. And the left side are the destination, it can be on stock or sold.
We plug our values into the formula and solve for COGS
100,000 + 27,000 = 7,700 + COGS
COGS = 100,000 + 27,000 - 7,700 = 119,300
Answer: COGS for 2018 : 119,300
Explanation:
1) Decide whether you would expect relationship between the following pairs of dependent and independent variables (respectively) to be positive, negative, or ambiguous. Explain your reasoning. a. Aggregate net investment in the United States in a given year and GDP in that year. b. The number of acres of wheat planted in a season and the price of wheat at the beginning of that season. c. Aggregate net investment and the real rate of interest in the same year and country. d. The quantity of canned tuna demanded and the real price of a can of tuna. e. The growth rate of GDP in a year and the average hair length in that year.
Answer:
(a) GDP is a dependent variable and aggregate net investment is a independent variable. There is a positive relationship between the variables which means that an increase in the net investment will lead to increase GDP.
(b) There is a negative relationship between the variables which means that as the supply of wheat increases, as a result price of wheat falls. So, as the number of acres of wheat planted in a season increases as a result price of wheat decline.
(c) There is a negative relationship between the variables which means that an increase in the interest rate in an economy will lead to increase the cost of borrowings and hence, net investment falls.
(d) There is a negative relationship between the variables because of the law of demand. It states that an increase in the price of a commodity will lead to reduce the quantity demanded for that commodity.
(e) There is no relationship between these variables. Both the variables are totally uncorrelated.
Ed runs an auto repair business out of the garage attached to his personal residence. How should he account for each of the following items?a. Cash received from repair services, $28,000.b. Interest paid on his home mortgage, $7,300.c. Power jack hoist purchased at a cost of $12,000.d. Electricity bills, $3,600. (Ed does not have separate electricity service to the garage.)e. Checks received from customers that were returned by his bank, $1,600. The bank charged Ed’s account $35 for processing the bad checks.f. Telephone bill for phone in the garage, $420. (Ed has a separately listed phone in his house.)g. Advertising in the local newspaper, $800.h. Interest paid on home furniture loan, $600.
Answer:
a. Cash received from repair services, $28,000. Repair business
b. Interest paid on his home mortgage, $7,300.Personal expenses
c. Power jack hoist purchased at a cost of $12,000. Repair business
d. Electricity bills, $3,600. (Ed does not have separate electricity service to the garage.)Personal expenses
e. Checks received from customers that were returned by his bank, $1,600. Repair business
The bank charged Ed’s account $35 for processing the bad checks.Repair business
f. Telephone bill for phone in the garage, $420. (Ed has a separately listed phone in his house.)Repair business
g. Advertising in the local newspaper, $800.Repair business
h.Interest paid on home furniture loan, $600.Personal expenses
Explanation:
Under the entity concept, Ed must segregate the income and expenses associated with his auto repair business from those that are personal. The importance of this segregation is that all trade or business expenses are deductible for adjusted gross income, while most personal expenditures are not deductible.
c
Ed's accounting of business transactions involves recording cash received from services as revenue, capitalizing equipment purchase, deducting direct business expenses such as advertising and a separate telephone line, and apportioning shared expenses like electricity. Personal expenses such as the home mortgage interest and home furniture loan interest are typically not deductible for business.
When Ed runs his auto repair business out of the garage attached to his personal residence, he needs to account for various business transactions differently. Here's how Ed should account for each of the items provided:
We have a separate country known as Lezette-ville. The GDP per capita in 2010 was $18,000 in 2010 dollars. While in 2018, the GDP per capita was $20,725 in 2018 dollars. The CPI in 2010 is 218 while the CPI in 2018 is 251. How would you characterize the growth in GDP per capita from 2010 to 2018?
Answer:
It will be a nominal increase. Not a real increase in the purchase power of the persons
Explanation:
We will check for the effect of inflation:
18,000 x 251/218 = 20.724,77
18,000 dollars in 2010 have aprroximate the same purchase power of 20,725 dollars in 2018
Therefore, there was no real wroth in the GDP per capita from this time period.
It was all nominal increase, there was no improve in the purchase power of the consumer.
A share of stock with a beta of 0.76 now sells for $51. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 3%, and the market risk premium is 6%. If the stock is perceived to be fairly priced today, what must be investors’ expectation of the price of the stock at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
This question is about calculating expected year-end stock price based on certain financial indicators. The Capital Asset Pricing Model (CAPM) formula is used to derive the expected return of the stock. Once this is calculated, it is used to solve for the expected stock price at the end of the year.
Explanation:The subject of this question relates to stock pricing and the expected returns by investors based on certain known financial indicators such as the beta of a stock, the current or purchase price, the expected year-end dividend, the risk-free rate (T-bill rate), and the market risk premium.
To calculate investor's expectation of the stock price at the end of the year, we need to use the Capital Asset Pricing Model (CAPM). Here is the formula: Expected Return = Risk-free rate + Beta*(Market Return - Risk-free rate). First, calculate the expected return: Expected Return = 3% + 0.76*(6% - 3%) = 5.28%. Then, find out the total expected return including dividends: Total Expected Return = (Expected price end of year - Current price + expected annual Dividend) / Current price. Given that the Total Expected Return is equal to the expected return calculated using CAPM, you can solve for the Expected price at end of year.
Learn more about Stock Pricing here:https://brainly.com/question/34139852
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Which of the following statements is true of service facilities? Select one: a. They store their services as physical inventory. b. They need to be in close proximity to customers. c. They rely more on hard technology than soft technology to perform work. d. They require employees with stronger technical skills than behavioral skills.
Answer: Option B
Explanation: Service facilities refers to those companies that have business of providing services such as emergency medical care, automobile repair etc.
These firms belongs to service industry in which every customer might need a little bit different work from the others. Thus, in order to know their customers specific wants and preference they must have a close relationship with them.
Hence from the above we can conclude that the right option is B.
Gibbs Corporation owned 20,000 shares of Oliver Corporation's $5 par value common stock. These shares were purchased in 2009 for $240,000. On September 15, 2013, Gibbs declared a property dividend of one share of Oliver for every ten shares of Gibbs held by a stockholder. On that date, when the market price of Oliver was $21 per share, there were 180,000 shares of Gibbs outstanding. What NET reduction in retained earnings would result from this property dividend?
a. $162,000 b. $378,000 c. $108,000 d. $216,000
Answer:
. $378,000
Explanation:
For every 10 shares of Gibbs, the stockholres receive 1 share of Oliver
There are 180,000 shares of Gibbs outstanding, so it will give as property dividends:
180,000 / 10 = 18,000 Oliver Shares
Each share has a market cost for 21 so, the dividends declared have a value of:
18,000 x 21 = 378,000
This will be recorded as follow:
when the dividends are declared:
Retained Earnings 378,000 debit
Property Dividends Payable 378,000 debit
And when the stock delivered:
Property Dividends Payable 378,000 debit
Oliver Investment 378,000 credit
Kristoff Walker operates his own catering service. Summary financial data for February are presented in equation form as follows. Each line designated by a number indicates the effect of a transaction on the equation. Each increase and decrease in owner's equity, except transaction (5), affects net income..
Assets = Liabilities + Owner's Equity
Cash + Supplies + Land = Accounts Payable + Kristoff Walker, Capital - Kristoff Walker, Drawing + Fees Earned - Expenses
Bal. 34,700 4,500 86,800 9,400 116,600
1. +40,600 +40,600
2. -17,400 +17,400
3. -30,200 -30,200
4. +1,700 +1,700
5. -2,300 -2,300
6. -8,300 -8,300
7. -3,500 -3,500
Bal. 17,100 2,700 104,200 2,800 116,600 -2,300 40,600 -33,700.
What is the amount of the net decrease in cash during the month?
Answer:
- $17,600
Explanation:
The computation of the net decrease in cash during the month is shown below:
= $40,600 - $17,400 - $30,200 - $2,300 - $8,300
= - $17,600
After calculating the items which are presented in the column 1 represent the net decrease in cash for $17,600 amount.
The net decrease in cash represents an outflow of cash. In this, the chances of loss may be higher than the loss.
Answer:
$4,000
Explanation:
Net gross increase = $(40,600 + 40,600 + 1,700 + 1,700) = $84,600
Net gross decrease = - $( 30,200 + 30,200 + 2,300 + 2,300 + 8,300 + 8,300 + 3,500 + 3,500) = -$88,600
∴ Net decrease = -$88,600 + $84,600 = $4,000