Martinez Corp. purchased a delivery van with a $57000 list price. The company was given a $5400 cash discount by the dealer, and paid $2600 sales tax. Annual insurance on the van is $1200. As a result of the purchase, by how much will Martinez Corp. increase its van account?

Answer: Option D

Explanation: Short term investments can be defined as the liquid investments that are expected to be sold or be converted into cash within a particular time period, generally a year or operating cycle of the company. Primary examples are commercial paper and US treasury bills.

These are generally used to have cash availability at  short term notice in the entity or for some future project funding investment. For bad debt buffering specific provisions are made.

Businesses hold short-term securities as a substitute for cash and as a temporary repository for cash for specific purposes, but not typically as a buffer against bad debt losses.

Businesses hold short-term securities for a couple of key reasons. A. As a substitute for cash and B. As a temporary repository for cash being accumulated for a specific purpose are both correct answers. Holding short-term securities is a liquidity management strategy. These securities are easily convertible to cash, providing businesses with flexibility to cover short-term expenses or opportunities. It is not typically done as a buffer against bad debt losses, which is more associated with accounting practices and credit risk management.

Answer:

Supply curve for loanable funds would shift, leading to a fall in the equilibrium interest rate.

Explanation:

If the people are convinced that saving is important and start saving more, the  supply of loanable funds will increase. As a result the supply curve will shift to the right. This shift in the supply curve will be accompanied with a decline in the equilibrium interest rate.

So, the correct answer is: supply; downwards.

Answer:

The correct option is C) place utility

Explanation:

Place utility is the utility which is created for a product by making that product available to near by locations of the customers so that they can easily get access to those products. Same strategy is being applied in the question by E-gadgets , who are making their stores available to such locations , where their customers ( upper middle class and wealthy neighborhoods) can get access to the products easily( less than 15 minutes in the given case).

Answer:

The cost of land is $408,500.

Explanation:

For calculating the amount of cost of land . Following things is need to be considered.

1. Cash Paid - $ 65,000

2. Notes Payable - $330,000

3. Property tax - $2,500

4. Title Insurance - $6,000

5. Land leveling cost   - $ 5,000

Other costs are irrelevant because it is not related to the land.

The cost of land includes those cost which is related to the land. It can be any transactions, any tax or anything. Whether the cost is additional also, but it should be associated to the land.

So,

Cost of land = Cash paid + notes payable + property tax + title insurance + land leveling cost  

= $ 65,000 + $330,000 + $2,500 + $6,000 + $ 5,000

= $408,500

Hence, the cost of land is $408,500.

Answer:  An unearned revenue

Explanation: When any individual or entity receives money from customers for such service which has not been performed yet, then such income is termed as unearned revenue.

Unearned revenue is considered to be the liability of the recipient and and asset for the payee.

So from the above explanation we can conclude that right option is unearned revenue.

Answer:

Ending Inventory under LIFO $3,270

Explanation:

[tex]\left[\begin{array}{cccc}Month&Purchase&Sales&Remaining\\January&10&-6&4\\February&20&-5&15\\May&15&-9&6\\September&12&-8&1\\November&10&-13&0\\Total&67&-41&26\\\end{array}\right][/tex]

First: in LIFO you always start from the bottom line

subtracting the sales figure for each period.

Notice in nomvember the sales are greater than the amount purchased, so we decrease the september units by the diference

[tex]\left[\begin{array}{cccc}Month&Units&Cost&Subtotal\\January&4&120&480\\February&15&125&1,875\\May&6&130&780\\September&1&135&135\\November&0&140&0\\Total&26&-&3,270\\\end{array}\right][/tex]

Final answer:

Using the Periodic LIFO inventory valuation method, the value of the Cost of Goods Sold (COGS) is $4995. This is calculated by taking the cost of the most recent inventory purchases and working backward until all units sold are accounted for.

Explanation:

To calculate the Cost of Goods Sold (COGS) using the Periodic LIFO method, we need to match the most recent unit costs with the units sold. Under LIFO, the last items purchased are the first ones sold. We know there were 26 units in ending inventory on December 31. We must assume the sales were made right before the year ended, leaving the most recently purchased inventory to be sold last.

Let's calculate COGS step-by-step:

Begin with the most recent purchases and work backward until we account for the total number of units sold.

November: 10 units at $140 each

September: 8 units at $135 each

May: 9 units at $130 each

February: 5 units at $125 each

January: 6 units at $120 each

Now, calculate the value of the COGS:

November (10 units x $140) + September (8 units x $135) + May (9 units x $130) + February (5 units x $125) + January (6 units x $120)

COGS = ($1400) + ($1080) + ($1170) + ($625) + ($720)

COGS = $4995

In this case, the value of cost of goods sold is $4995 using the Periodic LIFO method.

Answer:

70,400 accounted for Cost of Goods Sold

Explanation:

1 - 25% sales - 20% admin = 1 - 45% = 55% factory

160,000 x 55% = 88,000 accounted for Goods Produced

88,000 x 80% sold = 70,400 accounted for Cost of Goods Sold

88,000 x 20% inventory = 18,600 account through Finished Goods Inventory

Answer:

52.12

Explanation:

The present value of an annuity of $9.05 for 9 years at a 10% will be $52.12

So the current share price of Burnett Corp must be $52.12 to fullfil the requirement of a 10% return

Answer:

The answer is $52.12.

Explanation:

We apply the dividend discount model to come up with the price for share.

The price for share under the dividend discount model is the present value of all its future dividend discounted at the required rate of return.

As the share has 9 annual equal dividend payments of $9.05 each year and the required rate is 10%, we have the price of the share is calculated by applying the annuity formula as:

(9.05/0.1) * [1 - 1.1^(-9) ] = $52.12.

So, the current share price is $52.12.

Answer:

The given statement is True. Online Aggregators are more comprehensive than the home listing service that real estate agents use.

Explanation:

Online aggregators are the programs or sites in the digital space which collects related items of content and link them and show them through their sites or programs.

Online aggregators puts the most relevant information that people are looking for. They link different aspects with each other to help people take decisions, like in this question, regarding the real estate.

Real Estate agents don't tell certain information to the client due to some laws or some insecurities of loosing the clients, but online aggregators make each and everything clear and even finds links between the choices of homes and display them on their sites. For example, an online aggregator may list the houses that are near to schools, hospitals, community service centers and also put the ranking of those schools and other services in that area, they tell the crime rate in that area, security, etc. But all such things are usually kept hidden by the real estate agents due to some overly restricted codes in their agreement of the licence from the government.

It is true!

Further Explanation:

Online aggregators:

A substance aggregator is an individual or association that assembles web content (or potentially at times applications) from various online hotspots for reuse or resale.  

online aggregators more extensive than the home posting administration:

Online Aggregators are more exhaustive than the home posting administration that realtors use. Clarification: Online aggregators are the projects or locales in the computerized space which gathers related things of substance and connection them and show them through their destinations or projects.  

Aggregators:

In the computerized fund environment, aggregators work as the paste that enables substances to like organizations, governments and benefactors effectively associate with an assortment of installment stages like portable cash administrations or banks and the clients who pay by means of those administrations.  

The reason for an aggregator:

A substance aggregator is an individual or association that assembles Web content (as well as at times applications) from various online hotspots for reuse or resale.  

Aggregator model:  

An aggregator model is a type of E-Commerce in which a site does not store or distribution center its own merchandise, yet rather gathers, or totals, data on a few products and ventures and combinations them into a solitary stage.

Subject: business

Level: college

Keywords: online aggregators, online aggregators more extensive than the home posting administration, Aggregators, The reason for an aggregator, Aggregator model.

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The second-year cash flow from financing activities for Globo-Che Co. was -$377 million. This was calculated using the cash flow formula and the provided cash flows from operations, investing, and the change in cash.

To find the cash flow from financing activities for Globo-Chem Co., we need to use the formula for cash flow, which is: Cash Flow from Operations + Cash Flow from Investing + Cash Flow from Financing = Change in Cash. We know the cash flow from operations ($1,053 million), the cash flow from investing (-$576 million), and the change in cash ($280 million - $180 million = $100 million).

Applying these values to the formula: $1,053 million - $576 million + Cash Flow from Financing = $100 million. Solving for Cash Flow from Financing, we get: Cash Flow from Financing = $100 million - $1,053 million + $576 million = -$377 million. Thus, the cash flow due to financing activities in the second year of Globo-Chem Co.'s operation was -$377 million.

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Answer: 12.6 %

Explanation: The rate of growth that a company expects to maintain for a long term is called sustainable growth rate. It is denoted by G. Sustainable

growth rate helps the analysts to determine at what stage the company is in its life cycle.

.

FORMULA :-

GROWTH = Retention ratio *  return on equity

                 = ( 1 - Dividend payout ratio) * return on equity

                 [tex]= (1-\frac{5}{50} \%) * 14 \%[/tex]

                 = 0.9 * 0.14

                = 12.6 %

The expected growth rate of Arts and Crafts Inc.'s dividends is calculated using the Gordon Growth Model. Taking into account the current price of stock, the expected dividend, and the required rate of return, the growth rate comes out to be 4%.

To find the expected growth rate of the company’s dividends, the formula to use is the Gordon Growth Model. This model is as follows:

P = D / (r - g)

Where:
P represents the price of the stock today ($50 in this case),
D represents the expected dividend ($5 in this case),
r represents the required rate of return (14% in this case), and
g represents the rate of growth.

First, rearrange the formula to solve for g:

g = r - (D / P)

Then you substitute the given numbers:

g = 0.14 - (5 / 50)
g = 0.14 - 0.10
g = 0.04, or 4%

So, the expected growth rate of Arts and Crafts Inc.'s dividends is 4%.

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Answer:

Support - Staff

Explanation:

In the past, Human Resources (HR) was treated as a support - staff function with only an indirect link to corporate strategy. Today, HR is being embedded in organizational strategy.

Answer: Option B

Explanation: Studying the external factors that influence the operations of the organization is called external environment analysis.

A. Scanning in external activity refers to identifying the threats and opportunities in the environment.

C. Monitoring refers to keeping track of external factors that can affect operations.

D. Assessing involves analyzing the current trends in  various kinds of relevant factors such as political, economical etc.

.

Decrypting in simple words means decoding a data that has been saved in a code language. This is not a part of external environment analysis.  

Decrypting is not an activity used in the external environmental analysis process; instead, scanning, monitoring, and assessing are the typical activities involved.

The external environmental analysis typically involves scanning the environment to identify early signals of potential changes in the environment, monitoring those changes over time to assess their impact, and assessing to determine the timing and importance of the changes for the organization's strategies and their management.

Answer:

"While budgeted costs refer to the cost, at standard, for the total number of budgeted units. "

Explanation:

The first sentence would be the correct one

The budget consist of get the revenues and costs for the business using the standard measurement for one unit.

Please be more clear in future questions, thank you =)

Answer:

The correct answer would be option A, $96600.

Explanation:

Gross profit is the amount of profit which a company earns after deducting all the costs which incurred in the making and sale of the products of the company.  

Gross profit can be found out by the following formula:

Gross Profit = Total Sales - Cost of Goods Sold

Total Sales will be Sales Revenue - Sales Return - Sales Discounts

So here total sales revenue will be = 293000 - 26600 - 11200

= 255200

Total sales Revenue: 255200

Cost of goods Sold = 158600

Gross Profit = 255200 - 158600

Gross Profit = $96600

Answer:

Explanation:

Journal Entry : The journal entry is a recording of transactions which have two sides i.e. debit side and credit side. Debit side records all expenditures and losses, whereas credit side records income and gains.

(a) The entry which Bridgeport should make is shown below:

Cash A/c  Dr                                          $294                

Bank charge expense Dr ($300 × 2%) = 6

To Sales Revenue                                                 $300

(b) The entry which Sarasota should make, given a service charge of 2% on the amount of receivables sold is shown below:

Cash A/c  Dr                                                   $74,480                  

Bank charge expense Dr ($76,000 × 2%) = $1,520

To Accounts Receivable                                          $76,000

Bridgeport Restaurant will record a debit to Cash for the amount received after the bank fee ($294) and a debit to Bank Service Charge Expense ($6) with a credit to Sales Revenue ($300). Sarasota Company will record a debit to Cash for the amount received after the service charge ($74,480), a credit to Accounts Receivable ($76,000), and a debit to Loss on Sale of Receivables ($1,520).

In the case of Bridgeport Restaurant, the entry in their books will reflect a debit (increase) to Cash for the amount received after deduction of the 2% bank fee. This would be $294 [(100% - 2%) x $300]. The restaurant will also make a credit (increase) to Sales Revenue for $300. Lastly, they'll record a debit (increase) to Bank Service Charge Expense for the $6 fee [$300 x 2%].

As for the Sarasota Company, when they sell their accounts receivable of $76,000, they'll record a debit (increase) to Cash for the amount they receive after the service charge has been subtracted. This would be $74,480 [(100% - 2%) x $76,000]. They'll also have to record a credit (decrease) to Accounts Receivable for $76,000 to clear that balance. Lastly, a debit (increase) to Loss on Sale of Receivables will be recorded for the amount of the service charge, which is $1,520 [$76,000 x 2%].

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Answer: HRM's responsibility to serve as a strategic partner

Explanation: an strategic partner is the person with whom a long-term agreement is reached for sharing of physical and/or intellectual resources in achievement of defined common objective.

Answer:

The market price of the security will be $42.86 when the Beta doubles and all other variables remains constant.

Explanation:

Given information -       Current market price    = $60

                                      Risk free rate                 = 6%

                                      Expected rate of return = 10%

                                      Market risk premium      = 8%

In this question we have to find the market price of the security when beta doubles it self, the formula which we can use to take out the market price is,

 \frac{DIVIDEND}{NEW\:EXPECTED\:RATE\: OF\: RETURN}

But here we have to first find out both the dividend and new expected rate of return and it is also told here that beta doubles itself but we don't know what the initial beta is, so lets take out what beta is , using formula for expected rate of return

Expected rate of return = Risk free rate + Beta x Market risk premium

                 10%               = 6% + Beta x 8%

                 4%                 = Beta x 8%

           Beta                  = 4% / 8%

           Beta                  = 1% / 2%    = .01 / .02 = .5

Now doubling the beta = .5 x 2 = 1

Putting this value of beta in the expected rate of return formula to calculate the new expected rate of return,

New expected rate of return = 6% + 1 x 8%

                                                = 14%

Now we just have to find the dividend , which we can by using formula of

Market price =  \frac{DIVIDEND}{\:EXPECTED\:RATE\: OF\: RETURN}

$60               = Dividend / 10%              (10% = .1)

$60 x .1          = Dividend

$6                  = Dividend

Now we have both dividend and new market rate of return and we just have to put these values in the formula

 \frac{DIVIDEND}{NEW\:EXPECTED\:RATE\: OF\: RETURN}

New market price = $6 / 14%            (14% = .14)

                              = $6 / .14

                              = $42.86

Answer: $42.85 per share

Explanation:

Given that,

The market price of a security(P) = $60 per share

expected rate of return(ERR) = 10%

the market risk premium(MRP) = 8%

risk-free rate(RFR) = 6%

ERR = RFR + Beta × (MRP)

10 = 6 + Beta(8)

Beta = [tex]\frac{4}{8}[/tex]

= 0.5

In this question, it is given that constant dividend paid in perpetuity

current market price per share, P = [tex]\frac{DPS}{ERR}[/tex]

Where, DPS - dividend per share

60 × 0.1 = DPS

$6 per share = DPS

If beta doubles then,

Beta = 0.5 × 2

= 1

∴ Required rate of return = 6 + 1 × 8

= 14%

So, market price of security = [tex]\frac{DPS}{Required rate of return}[/tex]

= [tex]\frac{6}{0.14}[/tex]

= $42.85 per share

Answer:

Given:

Firm with an average Price/Earning-Growth(PEG) ratio of 1.6, the stock price is Overpriced, because it has Price/Earning-Growth(PEG) ratio of 1.

where;

PEG = [tex]\frac{Price/Earning}{Earning\:Grtowth\:Rate}[/tex]

Price/Earning ration = [tex]\frac{Share Price}{Earning per share}[/tex]

Reason: It can be stated that a PEG ratio of less than 1 denotes that the stock is a good investment since it is below its “fair value.”

If a PEG ratio is greater than 1 this will further means that stock is relatively expensive,and overpriced.

Therefore, the correct option is (b) Overpriced, because it has Price/Earning-Growth(PEG) ratio of 1.

1. Cash received from the sale of equipment is $39,400. 2. Depreciation expense recorded on equipment in 2017 is $110,000. 3. Cost of new equipment purchased in 2017 is $185,000.

1. The cash received from the sale of equipment can be determined by calculating the difference between the book value of the equipment and the loss on the sale. In this case, the book value of the equipment is $43,000 and the loss on the sale is $3,600. Therefore, the cash received would be $43,000 - $3,600 = $39,400.

2. The depreciation expense recorded on equipment during 2017 can be calculated by taking the difference in the accumulated depreciation of equipment between 2017 and 2016. In this case, the accumulated depreciation in 2017 is $106,000 and in 2016 it is $216,000. Therefore, the depreciation expense for 2017 would be $216,000 - $106,000 = $110,000.

3. The cost of new equipment purchased by Anders during 2017 can be determined by taking the difference in the net plant assets (equipment and buildings) between 2017 and 2016. In this case, the net plant assets in 2017 is $89,000 (equipment) + $286,000 (buildings) = $375,000, and in 2016 it is $69,000 (equipment) + $121,000 (buildings) = $190,000. Therefore, the cost of new equipment purchased during 2017 would be $375,000 - $190,000 = $185,000.

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Anders Company received $39,400 from the sale of equipment. A total depreciation expense of $72,000 was recorded on equipment during 2017. The cost of new equipment purchased in 2017 was $135,000.

Given the information in the comparative balance sheets and additional details of the equipment sale, we can answer the following questions:

How much cash did Anders receive from the sale of equipment?

The book value of the equipment sold was $43,000, and it was sold at a loss of $3,600. The cash received is the book value minus the loss, which can be calculated by:

43,000 - 3,600 = $39,400

How much depreciation expense was recorded on equipment during 2017?

The accumulated depreciation on equipment decreased from 2016 to 2017, suggesting that some assets were removed (in this case, sold). To find out how much was for depreciation apart from the disposition of equipment, we add the accumulated depreciation related to the sold equipment (original cost $225,000 minus book value $43,000) to the ending accumulated depreciation:

225,000 - 43,000 = 182,000

Then, the increase in depreciation is the beginning accumulated depreciation minus the ending accumulated depreciation, including the adjustment for sold equipment:

216,000 - (106,000 + 182,000) = $72,000.

What was the cost of new equipment purchased by Anders during 2017?

To find the cost of new equipment purchased, we start with the beginning equipment cost, subtract the cost of equipment sold, add the ending equipment total, and then subtract the original equipment cost total:

285,000 - 225,000 + 195,000 - 285,000 = $135,000.

Answer:

$22,300

Explanation:

Assuming that the net income that is stated here was after the payment of all debt obligations (e interest payment and preference share dividends) then this is all income that belongs to shareholders. This income can either be distributed as dividends or retained in the business  for future projects and would increase the value of equity in the balance sheet.

Out of the $30,300 net income, if only $8,000 was retained this year then the implication is that the difference between $30,300 and $8,000 was payed out as dividends.

[tex]Dividends paid =$30,300-$8,000 = $22,800[/tex]

Final answer:

The dividends distributed were calculated to be $22,300, which is the difference between the net income of $30,300 and the ending retained earnings of $8,000.

Explanation:

If there was no beginning retained earnings and the net income is $30,300, with ending retained earnings being $8,000, the dividends paid can be calculated as follows:

Dividends = Beginning Retained Earnings + Net Income - Ending Retained Earnings

Since the beginning retained earnings are $0, we can simplify the equation to:

Dividends = $0 + $30,300 - $8,000

Dividends = $30,300 - $8,000

Dividends = $22,300

Therefore, the amount of dividends that were distributed is $22,300.

Answer:

The old machine should be retained.

Explanation:

[tex]\left[\begin{array}{cccc}&continue&replace&Differential\\Proceeds \: from \: sale&0&27,200&27,200&Cost:&&&&purchase&0&-407,400&-407,400&manufacturing\:cost&-4,480,700&-4,422,600&58,100&Total \:cost&-4,480,700&-4,830,000&-349,300&Net&-4,480,700&-4,802,800&-322,100&\end{array}\right][/tex]

The old machine should be retained.

The differential analisys shows cost will increase 322,100 if replaced.

The sale from the old machine is an income for the relacement alternative.

the cost of the new machine is an expense

the value of the 7 years of manufacturing cost show a cost saving for 58,100

this savings, along with the proceeds from the old machine, doesn't cover the acquisition of the new machine. It is a bad investment.

Based on the cost-benefit analysis, purchasing the new machine is more cost-efficient for the Bryant Company over a span of seven years. The total cost of keeping the old machine is higher than replacing it with a new one by $111,700.

The question is asking whether the Bryant Company should replace an existing factory machine or continue to use it based on its book value, potential sale value, and the cost and benefits of a new machine. To resolve this, we need to conduct a cost-benefit analysis.

First, let's calculate the total cost of keeping the old machine: over 7 years, the remaining depreciation is the book value which is $90,800, plus, the annual manufacturing cost which is $640,100 multiplied by 7 years, equals to about $4,570,500.

Second, let's calculate the cost of replacing it with a new one: the new machine will cost $407,400, plus $27,200 (the net loss from selling the old machine), plus the new manufacturing costs (annual $631,800 multiplied by 7 years) which is about $4,458,800.

The difference between the two options (keeping the old machine and buying a new machine) is $4,570,500 - $4,458,800 = $111,700. This shows that buying a new machine is more cost-efficient by $111,700 over 7 years.

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Answer:

The direct labor rate variance is negative 16,500

Explanation:

8,000 units at 2hours per unit = 16,000 hours x $12 per hour = $192,000 standart cost for the job

actual 15,000 hours and $196,200 total labor cost

labor cost per hour = 196,200/15,000 = 13.1 actual rate per hour

( standar rate - actual rate ) x actual hours = rate variance

(12 - 13.1) x 15,000 = -1.1 x 15,000 = -16,500

Answer:

Billy's mom increases his weekly allowance by $ 55 . As a result, Billy increases the number of apps he downloads on his smartphone.

If with increase in income demand increases, the good will be a normal good. Thus, apps that billy downloads are normal goods.

Susan gets a 15 percent performance bonus at work. She can finally stop eating so many frozen pizzas and eat something more tasty. Frozen pizzas are: Inferior goods

Here with increase in income, the demand for a commodity falls, the so called commodity is a inferior good. Thus, in this case frozen pizzas are inferior goods.

Mike is an appliance salesman. Refrigerator sales in his store have fallen and so has his commission. Mike decides to switch from name brand cereal to generic cereal. Generic cereal is: Inferior goods

If there is a fall in income and thus demand increases, the good is inferior. Thus, in this case generic cereal is an inferior good.

Hair stylist Molly loses a few of her clients. Molly cuts back on the number of smoothies she buys during the week. Smoothies are: Normal goods

If there is a decrease in income and thus demand falls, the good is normal. Thus, smoothies as commodity in this case will be refereed to as normal goods.

Final answer:

Smartphone apps are normal goods, frozen pizzas are inferior goods, generic cereal is a normal good, and smoothies are inferior goods.

Explanation:

According to the information provided, we can determine if a good is a normal good or an inferior good by analyzing the relationship between income and quantity consumed.

Answer:

Given:

Monopolist earns = $60 million

The opportunity cost of funds = 18 %

The monopolist will earn = $20 million after another firm enters the market

The present value of the monopolist’s current and future earnings if entry occurs can be computed using the following formula:

[tex]\Pi_{MD} = Earning Annualy + \frac{Earning After firm enters}{Opportunity cost}[/tex]

[tex]\Pi_{MD} = \Pi_{M} + \frac{\Pi_{D}}{i}[/tex]

[tex]\Pi_{MD} = 60 + \frac{20}{0.18}[/tex]

[tex]\Pi_{MD} = 171.1[/tex]

The present value of the monopolist’s is $171.1 million

If the monopolist can earn $35 million indefinitely by limit pricing,then the present value of the monopolist’s current earnings:

[tex]\Pi_{MD} = \Pi_{M} + \frac{\Pi_{D}}{i}[/tex]

[tex]\Pi_{MD} = 60 + \frac{35}{0.18}[/tex]

[tex]\Pi_{MD} = 254.4[/tex]

∴ If the monopolist can earn $35 million indefinitely by limit pricing, then they should do so.

Final answer:

The present value of the monopolist’s earnings when entry occurs is the $60 million for the first year plus the discounted value of the $20 million annual profit thereafter. When compared to the present value of $35 million annual profits indefinitely achieved through limit pricing, the monopolist can make a strategic decision by comparing the present values of both scenarios.

Explanation:

To solve for the present value of the monopolist's current and future earnings with another firm entering the market, we must discount the future profits to the present value using the opportunity cost of funds, in this case, 18%. The monopolist earns $60 million initially and $20 million annually thereafter. The present value of earning $60 million indefinitely is calculated by dividing $60 million by the opportunity cost rate, which is $60 million / 0.18. However, since entry occurs, we calculate the present value of the first year's profit of $60 million plus the perpetuity starting from the second year at $20 million annually, discounted by the 18% rate.

The first year's profit is:

PVfirst year = $60 million

The perpetuity starting from the second year is:

PVsecond year onwards = $20 million / 0.18

The total present value when another firm enters the market is:

PVtotal = PVfirst year + PVsecond year onwards / (1 + 0.18)

In the case of limit pricing, the monopolist would earn $35 million indefinitely. To calculate the present value of these earnings:

PVlimit pricing = $35 million / 0.18

To decide if the monopolist should pursue limit pricing, we compare the present value of earnings with limit pricing to that of earning $60 million initially and $20 million thereafter when there is entry.

Answer:

The option B is a correct answer which is useful in assessing the liquidity position of a company.

Explanation:

Defensive Interval Ratio :

The defensive interval ratio (DIR) is that ratio which measures that by how many days can company operate without fixed assets or non current assets.

It is a type of liquidity ratio which shows that company can pay its current obligations without impacting long term obligations. It is always display in days.

Return on Stockholders' equity :

The return on stockholder equity is a profitability ratio which represents how much the company is earning profit during a particular period.

Liquidity ratio:

The liquidity ratio is that ratio which shows the relationship between current assets and current liabilities. It describes that how the company can meet its short term obligations with its available current assets.

Thus, by above explanation it is clear that the option B is a correct answer which is useful in assessing the liquidity position of a company.

The defensive-interval ratio is the only ratio among the options provided that is useful in assessing the liquidity position of a company. It measures the company's ability to cover daily operational expenses with its liquid assets. Return on stockholders' equity is related to profitability rather than liquidity.

To assess the liquidity position of a company, certain financial ratios are used. The correct answer to which ratio is useful in assessing this is B. Defensive-interval ratio only. The defensive-interval ratio (also known as the defensive interval period) measures a company's ability to operate without access to additional external financial resources. It calculates how many days a company can cover its cash expenses without the need for additional cash inflows. This ratio is computed by dividing liquid assets by daily operational expenses.

On the other hand, the return on stockholders' equity (ROE) measures a company's profitability and how efficiently it uses its equity capital. It is not a measure of liquidity but of profitability and return on investment. To calculate ROE, you divide net income by average shareholders' equity.

Therefore, for assessing liquidity, we focus on ratios that evaluate how well a company can meet its short-term obligations, like the defensive-interval ratio. Ratios dealing with profitability or return on investment, such as ROE, are not relevant to liquidity assessments.

To calculate the net cash provided by operating activities, both the net income and adjustments for non-cash transactions and changes in working capital are considered. The companies net cash provided by operating activities is $133,400.

To calculate the net cash provided or used by operating activities in a company, we need to consider both net income and adjustments for non-cash transactions and changes in working capital.

In this company’s case, the net income is $122,000.

The adjustments for non-cash transactions include a depreciation expense of $34,000 (which increases net cash flow because it is a non-cash expense) and a gain on the sale of plant assets of $8,000 (which reduces net cash flow because it is a non-cash gain).

The changes in working capital are calculated by subtracting the increase in current assets and the decrease in current liabilities. Here, accounts receivable decreased by $10,200 (which increases cash flow), merchandise inventory increased by $22,000 (which decreases cash flow), prepaid expenses increased by $7,000 (which decreases cash flow), and accounts payable increased by $4,200 (which increases cash flow).

Combining all these factors, the calculation becomes:  

Net income + Depreciation - Gain on Sale + Decrease in Accounts Receivable - Increase in Inventory - Increase in Prepaid Expenses + Increase in Accounts Payable

 = $122,000 + $34,000 - $8,000 + $10,200 - $22,000 - $7,000 + $4,200 = $133,400

Therefore, the company’s net cash provided by operating activities amounts to $133,400.

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Final answer:

Using a normal costing system, Financial Planning Partners Inc. will show that the year-end accounting records have applied $336,000 in indirect costs for the year after calculating the predetermined overhead rate and applying it to the actual direct labor hours worked.

Explanation:

To calculate the year-end accounting records for indirect costs using a normal costing system, we need to calculate the predetermined overhead rate (POR) and then apply it to the actual direct labor hours (dlh) worked during the year.

Step 1. Calculate the predetermined overhead rate:

Budgeted indirect costs: $300,000

Budgeted direct labor-hours: 50,000 dlh

Predetermined overhead rate (POR) = Budgeted indirect costs ÷ Budgeted direct labor-hours

POR = $300,000 ÷ 50,000 dlh

POR = $6 per dlh

Step 2. Apply the POR to the actual direct labor hours:

Actual direct labor-hours: 56,000 dlh

Applied indirect costs = POR × Actual dlh

Applied indirect costs = $6 per dlh × 56,000 dlh

Applied indirect costs = $336,000

Therefore, the year-end accounting records will show that the company applied $336,000 in indirect costs for the year.

Answer:

the general welfare will be the sum of consumer surplus and producer surplus.

Explanation:

The consumer and producer surplus assessment serves to measure the overall efficiency of the market, which in turn is associated with overall well-being. An efficient market is one in which both consumers and producers have the incentive to negotiate and effect trade.

Consumer surplus is the difference between the amount he or she is willing to pay and how much he or she actually pays for the product. This surplus is positive when the amount paid is less than the amount for which the consumer would be willing to pay.

Similarly, the producer's surplus is the difference between the market price and the price at which the seller is willing to produce and sell. When the producer's surplus is positive, it means that he sells the product for a price higher than the minimum value that would stimulate him to produce.

Thus, the general welfare will be the sum of consumer surplus and producer surplus.

Answer: Low, high, opportunity, reservation.

Explanation: When the price of a good or service is low enough, it will encourage consumers to buy. However, the price also has to be high enough to encourage producers to sell. In this way, both parties benefit from the sale. In order to calculate producer surplus, sellers must understand their direct costs and their opportunity costs, whereas consumers must consider their reservation price based on the value they place on a particular good or service.

Answer:

a. Investment decision b. financial asset c. Public corporation d. Corporation e. Treasurer f. the cost incurred from conflicts of interest between managers and shareholders

Explanation:

a. Expenditure on research and development will be categorized as an investment decision, as the return on this is not certain. Such investment may or may not increase productivity or find a new product line.

b. A bank loan is classified as a financial asset because it is a non physical, liquid asset. A real asset is a physical asset which has some intrinsic value, for instance, land, equipment etc.

c. A public corporation is a company owned by government whose shares are publicly traded, so if it's listed on stock exchange the company will be a public corporation.

d. In partnerships, the partners share profits and liability equally. While in the corporations there is limited liability.

e. The controller supervises over accountants and oversees the preparation of reports, auditing and accounting functions of a company. While the treasurer manages the external interactions, such as interactions with bankers, investors and share holders.

f. Agency cost is an internal expense. It arises when an agent acts on behalf of principal. It arises from core inefficiencies, for instance,it arises when interest of managers of the company and the shareholders is in conflict.

The terms 'investment decision,' 'financial asset,' 'public corporation,' 'corporation,' 'the treasurer,' and 'agency cost' are correct answers in the context of finance and business vocabulary related to decisions, assets, corporations, roles, and costs.

The vocabulary check for a student studying basic concepts in finance and business might look like this: