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
For policymakers the problem with a recessionary gap is _____ and the problem with an expansionary gap is _____.
A. a tendency for inflation to develop; wasted resources B. wasted resources; a tendency for inflation to develop
C. an increase in cyclical unemployment; an increase in structural unemployment
D. an increase in structural unemployment; an increase in cyclical unemployment
Answer:
The correct answer is option B.
Explanation:
A recessionary gap implies that the resources are not being fully utilized. This means resources are being wasted.
An expansionary gap, on the other hand, means that the economy is producing at more than potential level. The price level at this point is high. There is a tendency for inflation to develop in this situation.
To curb the recessionary gap the economy can adopt the expansionary fiscal and monetary policy. While to curb expansionary gap, contractionary monetary and fiscal policy can be adopted.
Which of the following is not correct?
a. With a growth rate of about 2 percent per year, average income per person doubles about every 60 years.
b. In some countries real income per person has changed very little over many years.
c. Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life.
d. The ranking of countries by average income changes substantially over time.
In economics, what is meant by "optimal decisions are made at the margin?" The concept of the margin was initially developed in 2012 by Professor Marginus; research is still being done on how it can be used for decision-making. The idea of the margin does not help compare trade-offs and is not relevant to decision-making. The idea of the margin is related to making decisions while thinking about the benefits and costs of small changes in behavior. The idea of the margin is that all economic decisions are made at the very fringes of society.
Answer:
The idea of the margin is related to making decisions while thinking about the benefits and costs of small changes in behavior.
Explanation:
Economic theory suggests that economic agents (firms, consumers and government) think on the sidelines. This means that decisions are made taking into consideration the benefits and costs of each choice. For example, for a firm to increase a unit of production (marginal unit) it will calculate the cost of production of that unit (marginal cost) and the profit that additional unit will generate (marginal benefit).
Optimal decisions are made at the margin by considering the benefits and costs of small changes in behavior or production.
Explanation:Optimal decisions are made at the margin means that decisions are made by considering the benefits and costs of small changes in behavior or production. It involves analyzing the additional benefits and costs of taking one more or one less unit of a resource or activity. For example, when deciding how long to sleep or how much time to allocate to exercise, thinking at the margin involves weighing the marginal benefit against the marginal cost to make the most productive or beneficial decision possible.
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Classifying Cash Flows Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: a. Retirement of bonds payable Investing b. Purchase of inventory for cash Financing c. Cash sales Investing d. Repurchase of common stock Investing e. Payment of accounts payable Operating f. Disposal of equipment
Answer:
a. Financing activity
b. Operating activity
c. Operating activity
d. Financing activity
e. Operating activity
f. Investing activity
Explanation:
Basically there are three types of activities:
1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.
2. Investing activities: It records those activities which include purchase and sale of the fixed assets
3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance. Example: equity, bonds payable, etc
Based on the above information about each activity, the reporting of each transaction is shown below:
a. Financing activity: As the transaction is related to the bond payable
b. Operating activity: As the transaction is related to the inventory
c. Operating activity: As the transaction is related to the sales
d. Financing activity: As the transaction is related to the common stock
e. Operating activity: As the transaction is related to the account payable
f. Investing activity: As the transaction is related to the equipment
You are considering implementing a lockbox system for your firm. The system is expected to reduce the average collection time by 1.2 days. On an average day, your firm receives 320 checks with an average value of $99 each. The daily interest rate on Treasury bills is 0.014 percent. What is the anticipated amount of the daily savings if this system is implemented?
Answer:
$532.224
Explanation:
A lockbox system is a working capital management technique that accelerates cash collection. By using a lockbox system, daily collections of $31,680 ($320 x 99) will contribute to accelerated collection/savings of $38,016 ($31,680 x 1.2). This can be used to invest in Treasury bills that will provide daily savings/return on investment of $532.224 ($38,016 x 0.014%).
Fred purchases a bond, newly issued by the Big Time Corporation, for $10,000. The bond pays $400 to its holder at the end of the first, second, and third years and pays $10,400 upon its maturity at the end of four years. The principal amount of this bond is ___, the coupon rate is ____, and the term of this bond is _____.
A. $400 ; 40%; four years
B. $10,000; 4%; four years
C. $10,000; $400; 4% D. $10,400; 4%; four years
Answer: The correct answer is "B. $10,000; 4%; four years".
Fred purchases a bond, newly issued by the Big Time Corporation, for $10,000. The bond pays $400 to its holder at the end of the first, second, and third years and pays $10,400 upon its maturity at the end of four years. The principal amount of this bond is $10000, the coupon rate is 4%, and the term of this bond is four years.
Explanation: The maturity of the bond is at 4 years.
Its future value or face value is 10000.
The coupon rate is equal to [tex]\frac{Cupon}{Face value}[/tex] x 100
So Coupon rate = [tex]\frac{400}{10000}[/tex] x 100 = 4%
The principal amount of the bond is $10,000, the coupon rate is 4%, and the term of the bond is four years.
Explanation:The principal amount of the bond is $10,000 because that is the initial purchase price of the bond. The coupon rate is 4% because the bond pays $400 each year, which is 4% of the principal amount. The term of the bond is four years because it pays $400 per year for three years and then $10,400 at the end of the fourth year, which is the maturity date.
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The Righter Shoe Store Company prepares monthly financial statements for its bank. The November 30 and December 31, 2016, trial balances contained the following account information:
Nov. 30 Dec. 31
Dr. Cr. Dr. Cr.
Supplies 3,100 4,600
Prepaid insurance 7,600 5,300
Salaries and wages payable 18,000 16,600
Deferred rent revenue 5,200 2,600
The following information also is known:
(a) The December income statement reported $3,600 in supplies expense.
(b) No insurance payments were recorded in December.
(c) $18,000 was paid to employees during December for salaries and wages.
(d) On November 1, 2016, a tenant paid Righter $7,800 in advance rent for the period November through January. Deferred rent revenue was credited.
Required:
(1) What was the cost of supplies purchased during December?
(2) What was the adjusting entry recorded at the end of December for prepaid insurance?
Answer:
purchase of supplies 5,600
insurance expense 2,300 debit
prepaid insurance 2,300 credit
Explanation:
(1) What was the cost of supplies purchased during December?
invneotry identity:
beginning supplies + purchase = ending supplies + expense
the left side are the input. The supplies could come from previous prior or be pruchase.
The right side the outputit could be consumer or kept at stock
3,100 + p = 4,600 + 3,600
purchase = 4,600 + 3,600 - 3,100 = 5,100
(2) What was the adjusting entry recorded at the end of December for prepaid insurance?
beginning insurance 7,600
ending insurance (5,300)
adjustment: 2,300
there was insurance expired for the value of 2,300
Which of the following accurately describes the difference between a change in supply and a change in quantity supplied? a. A change in quantity supplied is a movement along the supply curve, but a change in supply is a shift of the entire supply curve. b. A change in supply is a movement along the supply curve, but a change in quantity supplied is a shift of the entire supply curve. c. There is no difference; they mean the same thing. d. A decrease in supply causes an increase in demand, but a decrease in quantity supplied causes a decrease in demand.
Answer:
Option A
Explanation:
First let's make see the what is the difference (they are not the same thing.) And then lets analize which statement is the most accurate.
A change in supply and a change in quantity supplied are different things. The change in supply is caused by changes in costs and incentives that change how much a producer can and will produce at a given price.
The change in quantiy supplied is caused simply by a change in the retail price of the product.
The change in quantity supplied is shown as a movement along the curve. While the change in supply is shown graphically as a movement of the supply curve.
As we can see, that means that A is the correct answer.
Financial markets and intermediaries:
A. channel savings to real investment.
B. increase risks for businesses.
C. generally reduce the liquidity of securities.
D. prevent the transportation of cash across time.
Answer: A. channel savings to real investment.
Explanation: Financial intermediaries are institutions that serve as intermediaries to make financial processes easier and more efficient.
The most common are banks and brokerage firms, so they help channel investment channels and improve the inherent risk through established regulations.
Nick's Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $3 at the end of each year. The preferred sells for $35 a share. What is the stock's required rate of return? (Assume the market is in equilibrium with the required return equal to the expected return.) Round the answer to two decimal places.
Answer:
The stock's required rate of return is 8.57%
Explanation:
For computing the required rate of return for the stock, we need to apply the formula which is shown below:
The Required rate of return = (Dividend ÷ price) × 100
= ($3 ÷ $35 per share) × 100
= 8.57%
The find out the required rate of return, the dividend should be proportional to the price.
6. Determine the unit cost of each of these products using the method discussed in class. Then compare the resulting costs when all the overhead is allocated to the labor. (0.2 points) Indirect overhead = $150,000,000 Material Overhead = $9,100,000 Labor efficiency 87% Total labor hours 1,900,000 Direct labor rate $17.50 Total material purchased $510,000,000 Number of different products manufactured – approximately 300
Last year Stealth Bank received $100 million in interest payments from borrowers. $25 million in loans were written off as uncollectible. It paid out $30 million in interest to its depositors and collected $25 million for various fees it charged. Administration costs were $22 million and taxes were $3 million. What was the value of Stealth Bank's accounting profits?
Answer:
Accounting profit: 45,000,000
Explanation:
The accounting profit will bethe result of subtacting the expenses of the period from the revenues ofhte period.
interest revenues 100 millions
service charges 25 millions
write off (25) millions
interest paid (30) millions
admin cost (22) millions
taxes ( 3) millions
accounting profit: 45 millions
Garrett Corporation provided the following information for the year: Beginning Balancelong dashWork-in-Process Inventory $ 25 comma 000 Ending Balancelong dashWork-in-Process Inventory 57 comma 000 Beginning Balancelong dashDirect Materials 80 comma 000 Ending Balancelong dashDirect Materials 59 comma 000 Purchaseslong dashDirect Materials 362 comma 000 Direct Labor 472 comma 000 Indirect Labor 18 comma 000 Depreciation on Factory Plant and Equipment 23 comma 000 Plant Utilities and Insurance 268 comma 000 What was the amount of direct materials used in production during the year?
Answer:
Direct material used= $383000
Explanation:
Giving the following information, we need to calculate the amount of direct material used in production:
Beginning Work-in-Process Inventory $ 25000
Ending Work-in-Process Inventory 57000
Beginning Direct Materials 80000
Ending Direct Materials 59000
Purchases Materials 362000
Direct Labor 472000
Indirect Labor 18000
Depreciation on Factory Plant and Equipment 23000
Plant Utilities and Insurance 268000
Direct material used= beginning inventory direct material + purchase direct material - ending inventory direct material
Direct material used= 80000 + 362000 - 59000= $383000
The following data pertains to activity and costs for two months: June July Activity level in units........... 10,000 12,000 Direct materials .................. $16,000 $ ? Fixed factory rent ............... 12,000 ? Manufacturing overhead .... 10,000 ? Total cost ........................... $38,000 $42,900 Assuming that these activity levels are within the relevant range, the manufacturing overhead for July was: A) $10,000 B) $11,700 C) $19,000 D) $9,300
Answer:
B) $11,700
Explanation:
The computation of the manufacturing overhead is shown below:
Total cost = Direct material + Fixed factory rent + Manufacturing overhead
where,
Direct material = July units × (direct material cost ÷ June units)
= 12,000 units × ($16,000 ÷ 10,000 units)
= $19,200
The other items values would remain the same.
Now put these values to the above formula
So, the value would equal to
$42,900 = $19,200 + $12,000 + Manufacturing overhead
$42,900 = $31,200 + Manufacturing overhead
So, manufacturing overhead = $11,700
You run a hotel with 200 rooms. Fixed daily cost is $1500 which includes staff salary and property charges, maintenance cost is additional $300 daily. Variable cost per room is $15 which includes cleaning, utility cost etc. You charge $100 per room per day. You sold 50 rooms today, how much revenue did you earn.
Answer:
The revenue is $2,450
Explanation:
The computation of the revenue is shown below:
= Sales - variable cost - additional costs - fixed cost
where,
Sales = Selling units × price per unit
= 50 rooms × $100
= $5,000
Variable cost = variable cost × price per unit
= 50 rooms × $15
= $750
The other cost value would remain the same
Now put these values to the above formula
So, the value would equal to
= $5,000 - $750 - $300 - $1,500
= $2,450
Answer:
The revenue we earned for 1 day by renting the rooms equals $2450.
Explanation:
Since we rent 50 rooms at the rate of $100 per room thus the overall revenue that we earn equals
[tex]R=50\times 100=$5000[/tex]
Now the expenditures include:
1) Fixed daily cost = $1500
2) Maintenance cost = $300
3) Variable cost = $15 thus cost for 50 rooms equals = 15x50= $750
Thus the total expenditure on the hotel is the sum of all the above charges
thus [tex]E=1500+300+750=2250[/tex]
Thus the net revenue is the difference in total revenue and the total expenditure
Thus Net Revenue =$5000-$2550=$2450
You and your best friend have decided to start a small coffee shop together while in college. Though you have been friends since grade school, you and your best friend agreed that a partnership agreement is necessary to maximize the potential success of the partnership. Draft a memo to your best friend outlining the issues that need to be addressed in the agreement.
Answer: It is important to establish limits through the partnership agreement, because by trust there could be disagreements in the future, some ideas for this agreement are the following:
I. The dividends resulting from the coffee shop profits must be distributed equally and will correspond to the amount resulting from discounting sales less costs and expenses.
II. Personal loans will not be allowed to the owners with the money taken from the coffee shop box.
III. It will not be allowed to consume the products of the coffee shop without paying what corresponds.
IV. Both owners will have the same rights to perform the duties of a manager.
To draft a partnership agreement for a coffee shop venture, it is important to address key issues such as roles and responsibilities, capital contributions, decision-making, expenses and liabilities, dispute resolution, exit strategy, and intellectual property.
Explanation:Memorandum
To: [Best friend's name]
From: [Your name]
Date: [Date]
Subject: Partnership Agreement
Dear [Best friend's name],
I hope this message finds you well. As we embark on our coffee shop venture, I believe it is crucial for us to have a well-defined partnership agreement to optimize our chances of success. Here are some key issues that need to be addressed:
Roles and Responsibilities: Clearly outline each of our roles and responsibilities in the operation of the coffee shop. Specify areas of expertise, decision-making authority, and tasks assigned to each partner.Capital Contributions: Determine the initial capital investment required from each partner. Discuss the distribution of profits and losses based on our respective contributions.Decision-Making: Establish a decision-making process to avoid conflicts and ensure smooth operations. This may include consultation, voting, or assigning decision-making authority based on expertise and responsibilities.Expenses and Liabilities: Discuss how expenses will be managed and shared, including ongoing operational costs, rent, utilities, and legal or regulatory compliance. Determine how any potential liabilities will be addressed and shared.Dispute Resolution: Establish a mechanism for resolving disputes between partners, such as mediation or arbitration, to ensure the partnership continues in case conflicts arise.Exit Strategy: Plan for the possibility of one or both partners wanting to exit the partnership. Outline procedures for selling shares, transferring ownership, or dissolving the partnership if necessary.Intellectual Property: Address ownership and rights related to any intellectual property created or used by the partnership, including branding, logos, and recipes.I believe that addressing these issues in our partnership agreement will help us navigate the challenges of running a coffee shop while maintaining our strong friendship. Let's work together to draft the agreement and consult legal professionals if needed.
Best regards,
[Your name]
Suppose Natasha currently makes $50,000 per year working as a manager at a cable TV company. She then develops two possible entrepreneurial business opportunities. In one, she will quit her job to start an organic soap company. In the other, she will try to develop an Internet-based competitor to the local cable company. For the soap-making opportunity, she anticipates annual revenue of $465,000 and costs for the necessary land, labor, and capital of $395,000 per year. For the Internet opportunity, she anticipates costs for land, labor, and capital of $3,250,000 per year as compared to revenues of $3,275,000 per year. What opportunity should she pursue?
Answer:
It will be better to pursue the soap business as it provide a 20,000 economic gain.
Explanation:
currently Natasha wages: $50,000
soap business:
sales revenue 465,000 - cost = 395,000 = 70,000 accounting profit
less 50,000 opportunity cost: 20,000 economic gain
Internet opportunity as it will compete with the local TV company shw currently works, most probably will be fired or quit the job.
3,275,000 revenues - 3,250,000 cost = 25,000 accounting profit
less 50,000 opportunity cost: (25,000) economic loss
It will be better to pursue the soap business as it provide a 20,000 economic gain.
Final answer:
Considering both accounting and implicit costs, the organic soap business offers Natasha an economic profit of $20,000, while the Internet business would result in a loss of $25,000. Hence, Natasha should pursue the organic soap business opportunity.
Explanation:
When evaluating which entrepreneurial opportunity to pursue, Natasha must consider not only the accounting profit but also the economic profit, which factors in both explicit and implicit costs. The organic soap business anticipates an annual revenue of $465,000 with expenses of $395,000, resulting in an accounting profit of $70,000. Meanwhile, the Internet-based business expects revenues of $3,275,000 against costs of $3,250,000, leaving an accounting profit of $25,000.
However, Natasha must also consider the loss of her current $50,000 salary as an implicit cost. The economic profit calculation would be the accounting profit minus the implicit cost. For the soap business, the economic profit would be $20,000 ($70,000 - $50,000), and for the Internet business, it would result in a loss of -$25,000 ($25,000 - $50,000). Thus, based on economic profit, Natasha should pursue the organic soap business opportunity.
The Hopkins Company has estimated that a proposed project’s 10-year annual net cash benefit, received each year end, will be $2,500 with an additional terminal benefit of $5,000 at the end of the 10th year. Information on present value factors is as follows: Present value of $1 at 8% at the end of 10 periods .463 Present value of an ordinary annuity of $1 at 8% for 10 periods 6.710 Assuming that these cash inflows satisfy exactly Hopkins’ required rate of return of 8%, what is the initial cash outlay?
Answer:
the present value of the project at 8% discount rate is 19,090
this will be the cost ofthe investment.
Explanation:
we will calcualtethe present value of a 10 years annuity at 8% return
and the present value of a lump sum in 10 years
2,500 x 6.710 annuity factor = 16,775
5,000 x 0.463 lump sum factor = 2,315
TOTAL 19,090
Advertising 2,800 Beginning of year inventory 37,800 Depreciation 1,300 End of year inventory 38,200 General and administrative expenses 5,100 Gross sales 145,600 Interest expense 5,000 Lease payments 2,600 Management salaries 39,500 Purchases 41,600 Research and development 7,800 Returns and allowances 8,100 Taxes 16,200. What was gross profit from income statement for the year ending December 31, 2017? 2. What was operating profit (i.e., EBIT) from Delicious Dishes income statement for the year ending December 31, 2017?
Answer:
Gross Profit: $136.200
Operating Profit: $ 78.400
Explanation:
Gross Margin income statement
Sales $ 145.600 Return & Allowance -$ 8.100 Depreciation -$ 1.300Gross Profit $ 136.200
GAV Expenses -$ 5.100 Lease Expenses -$ 2.600 Management Expenses -$ 39.500 R&D Expenses -$ 7.800 Advertising Expenses -$ 2.800EBIT $ 78.400
Interest Expenses -$ 5.000EBT $ 73.400
Taxes Expenses -$ 16.200Net Income $ 57.200
Does GAAP routinely require companies to disclosure forecasts of financial variables to external users? Indicate yes or no and explain how your answer relates to the qualitative characteristics of accounting information.
Answer:
No, they don´t.
Explanation:
Forecast is not required by GAAP, as the Relevance and the Faithful Representation are concepts that are not compatible with data projection. Forecast implies estimates, and subjective interpretations that do not fulfill financial statements aim and are difficult to verify.
GAAP does not require companies to disclose financial forecasts as they could compromise the reliability and verifiability of financial information, which are key qualitative characteristics of accounting information.
Explanation:No, GAAP (Generally Accepted Accounting Principles) does not routinely require companies to disclose forecasts of financial variables to external users. Disclosing such forecasts is not typically mandated because they deal with future events that are uncertain and thus, could potentially mislead users of financial statements. The qualitative characteristics of accounting information, as per GAAP, include relevance and faithful representation. Forecasts could be relevant, but due to their inherent uncertainty, may lack the reliability needed for faithful representation. Moreover, GAAP focuses on providing information that helps users make decisions based on historical financial data that are verifiable and objective.
On May 1, Cullumber Company, a company that provides flying lessons, was started by issuing common stock in exchange for cash of $45,100. Following are the assets and liabilities of the company on May 31, 2019, and the revenues and expenses for the month of May. Cash $ 4,800 Notes Payable $28,000 Accounts Receivable 7,550 Rent Expense 1,150 Equipment 64,150 Maintenance and Repairs Expense 600 Service Revenue 6,950 Gasoline Expense 2,250 Advertising Expense 650 Utilities Expense 150 Accounts Payable 1,550 No additional investments were made in May, but the company paid dividends of $350 during the month. Prepare an income statement for the month of May.
Answer:
Explanation:
Before preparing the income statement, first, we have to compute the net income or net loss. So, the calculation is shown below:
In the simplest form, the net income = Total revenue - total expenses
= Service Revenue - Rent Expense - Maintenance and Repairs Expense - Gasoline Expense - Advertising Expense - Utility Expense
= $6,950 - $1,150 - $600 - $2,250 - $650 - $150
= $2,150
The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:
During the year, the Senbet Discount Tire Company had gross sales of $1.21 million. The company’s cost of goods sold and selling expenses were $590,000 and $243,000, respectively. The company also had notes payable of $820,000. These notes carried an interest rate of 6 percent. Depreciation was $120,000. The tax rate was 25 percent. a. What was the company’s net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.) b. What was the company’s operating cash flow? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.)
Answer:
Ans. Net Income= $148,350 ; Operating Cash Flow= $268,350
Explanation:
Hi, first we need to find the interest expense that would come from the amount of notes payable times its interest rate, that is:
[tex]Interest Expense=NotesPayable*InterestRate=820,000*0.06=49,200[/tex]
Now we have all that we need.
In the image below, you can find the way the net income and the operating cash flow was calculate, please notice the signs aside of each item, that is the guide of how to calculate.
For example:
Gross Sales - Cost of Goods Sold =Gross Margin
1,200,000 - 590,000=610,000
Gross Margin - Selling Expenses-Depreciation= EBIT
610,000 - 243,000 - 120,000 = 247,000
EBIT - Interest Expenses = EBT
247,000 - 49,200 = 197,000
EBT - Taxes = Net Income
197,000 - (197,000*0.25) = 148,350
To find the operating cash flow we go like this.
Net Income + Depreciation = Operating Cash Flow
148,350 + 120,000 = 268,350
The only thing to add here is the net income and the depreciation. We add back the depreciation because this is an expense that is not monetary, therefore the funds are still in the company but the government allow us to discounted from taxes.
This is how this should look like
Notes Payable 820000
Interest 6% (49200 )
Income Statement
Gross Sales $1.200.000
(-)COGS -$590.000
(=)Gross Margin $610.000
(-)Selling Expenses -$243.000
(-)Depreciation -$120.000
(=)EBIT $247.000
(-)Interest Expense -$49.200
(=)EBT $197.800
(-)Taxes 25% -$49.450
(=)Net Income $148.350
Operating Cash Flow
Net Income $148.350
(+)Depreciation $120.000
(=)Operatign Cash Flo $268.350
Best of luck.
The company's net income is $115,750. The operating cash flow for the company is $320,250.
Explanation:To calculate the company's net income, we need to subtract the cost of goods sold, selling expenses, interest expenses, and depreciation from the gross sales. The net income is then subjected to the tax rate to calculate the after-tax net income. In this case, the company's net income is $115,750.
To calculate the company's operating cash flow, we start with the net income and then add back the depreciation expense. We also subtract the increase in notes payable. The operating cash flow for the company is $320,250.
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The terms of a partnership agreement provide that one of the partners is to receive a salary allowance of $30,000, plus a bonus of 20 percent of income after deduction of the bonus and the salary allowance. If income is $150,000, the bonus should be:
A. $18,000
B. $20,000
C. $24,000
D. $30,000
Answer:
The correct answer is C: Bonus= $24000
Explanation:
The terms of a partnership agreement provide that one of the partners is to receive a salary allowance of $30,000, plus a bonus of 20 percent of income after deduction of the salary allowance.
The formula to calculate the bonus is:
Bonus=0,20*(Income-salary)
If income is $150000
Bonus= 0,20*(150000-30000)=$24000
The bonus for the partner is calculated by first subtracting the salary allowance from the total income and then applying the 20% bonus rate to the remaining amount. In this case, the bonus amounts to $24,000 (20% of $120,000), making the correct answer C.
Explanation:The question asks to calculate the bonus for a partner based on a partnership agreement provision. This is a mathematical problem within the scope of business studies, specifically related to profit distribution in partnerships.
To find the bonus amount, we first deduct the salary allowance from the income, then calculate 20% of the remaining amount as the bonus:
Income = $150,000
Salary allowance = $30,000
Income after salary deduction = $150,000 - $30,000 = $120,000
Bonus = 20% of Income after salary deduction
Bonus calculation:
Bonus = 0.20 × Income after salary deduction
Bonus = 0.20 × $120,000
Bonus = $24,000
Therefore, the correct answer is C. $24,000.
What is the eventual effect on real GDP if the government increases its purchases of goods and services by $80,000? Assume the marginal propensity to consume (MPC) is 0.75. $ What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $80,000? Assume the MPC has not changed. $ An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in an identical eventual effect on real GDP. a smaller eventual effect on real GDP. a larger eventual effect on real GDP. no change to real GDP.
Answer:
Given that,
(a) Government purchases increases by $80,000
Marginal propensity to consume (MPC) = 0.75
[tex]Real GDP =\frac{1}{1-MPC}\times Government\ purchases[/tex]
[tex]Real GDP =\frac{1}{1-0.75}\times 80,000[/tex]
= 4 × 80,000
= $320,000
Therefore, Real GDP increases by $320,000.
(b) If transfers increases by $80,000
MPC = 0.75 (MPC doesn't change)
[tex]Real GDP =\frac{MPC}{1-MPC}\times Government\ transfers[/tex]
[tex]Real GDP =\frac{0.75}{1-0.75}\times 80,000[/tex]
= 3 × 80,000
= $240,000
Therefore, total change in real GDP is $240,000. So, real GDP increases by $240,000.
(c) It is totally clear from the above calculations that an increase in the government transfers or taxes, as opposed to an increase in government purchases will result in a smaller eventual effect on real GDP.
Change in real GDP occur due to increase in government transfers = $240,000
Change in real GDP occur due to increase in government purchases = $320,000
The eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $80,000 is c. a smaller eventual effect on real GDP
Explanation:What is the eventual effect on real GDP if the government increase its purchases of goods and services by $50,000? Assume the marginal propensity is to consume is 0.75
The change in real gross domestic product is
[tex]=\frac{1}{1-MPC} * change in the government purchase\\=\frac{1}{1-0.75} * $50,000\\=4*$50.000\\=$200.000[/tex]
Therefore the is increasing of the real gross domestic product by $200.000 with an increase of $50.000 in the purchase of the government.
What is the eventual effect on real GDP if the government instead of changing its spending, increases transfers by $50,000? Assume the MPC has not changed.
[tex]=\frac{1}{1-MPC} * change in transfers\\=\frac{0.75}{1-0.75} * $50,000\\=3*$50.000\\=$150.000[/tex]
Therefore the is increasing of the real gross domestic product by $150.000 with an increase of $50.000 in the purchase of the government.
Therefore an increase in government transfers or taxes as opposed to an increase in government purchases of goods and services will result in:
a. an identical eventual effect on real GDP b. a larger eventual effect on GDPc. a smaller eventual effect on real GDP d. no change to real GDPLearn more about real GDP https://brainly.com/question/2381522
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Suppose that every time a fund manager trades stock, transaction costs such as commissions and bid–ask spreads amount to 0.4% of the value of the trade. If the portfolio turnover rate is 50%, by how much is the total return of the portfolio reduced by trading costs? (Round your answer to 1 decimal place.)
Answer: 0.4%
Explanation:
Given that,
At every time a fund manager trades stock, then
Transaction costs = 0.4% of the value of the trade
Portfolio turnover rate = 50% ; On an average, 50% of the portfolio stock is sold and exchange with the other securities every year.
Trading costs on selling orders = 0.4%
Trading costs on buying orders = 0.4%
Therefore,
Total return of the portfolio reduced by trading costs:
[tex]= 2\times0.50\times0.004[/tex]
= 0.4%
1. Make the following statement True by filling in the blank from the choices below: Critical infrastructure owners and operators play an important partnership role in the critical infrastructure security and resilience community because they ____.
Answer:
The answer is "Develop and implement security and resilience programs for the critical infrastructure under their control, while taking into consideration the public good as well".
Explanation:
In the past, industrial control systems were generally not connected to IT networks and did not contain complex computing capabilities; therefore, they could be adequately protected using physical security measures like locks and fences. However, as OT has become more integrated with IT, such physical measures are becoming less adequate in securing the underlying critical assets.
Final answer:
To make the statement true, critical infrastructure owners and operators are important because they share responsibility and risk with partners, which includes leveraging complementary skills and making business decisions together.
Explanation:
The statement, “Critical infrastructure owners and operators play an important partnership role in the critical infrastructure security and resilience community because they share responsibility and risk with one or more partners,” becomes true when filled in with the concept of shared responsibility and risk. Partnerships in critical infrastructure sectors are vital as they often involve complementary skills that can significantly bolster the security and resilience of the infrastructures. Additionally, partners in these arrangements also have the capacity to make all business decisions jointly, which is an important aspect of managing shared infrastructure.
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. David invests $50,000 for a one-fifth interest. What amount of goodwill will be recorded?
A. $20,000
B. $4,000
C. $40,000
D. $15,000
Answer:
A. $20,000
Explanation:
For computing the goodwill amount we have to apply the formula which is shown below:
= Required capital - actual capital
where,
We know that David invested $50,000 for one-fifth interest
So, Required capital = David investment amount × 5
= $50,000 × 5
= $250,000
And, the actual capital would be
= Allen capital + Daniel capital + David investment
= $140,000 + $40,000 + $ 50,000
= $230,000
So, the goodwill would be
= $250,000 - $230,000 = $20,000
This year, Clearwater Inc., will produce 55,600 hot water heaters at its plants in Harrisburg, PA in order to meet its expected demand. To accomplish this, each laborer at the Clearwater Plant will work 150 hours per month. If the labor productivity at the plant is 0.20 water heaters per labor-hour, How many heaters can one labor produce every month?
Answer:
Working 150 hours and producing 0.2 water heater per hour, each worker produce 30 heater per month.
Explanation:
the productivity is 0.20 water heater per labor-hour
during the month an employee works 150 hours
to know the amount of water heater per laborer, we will multiply the productivity rate by the amount of hours per month
150 hours x 0.2 = 30 water heater
Each employee produces 30 water heater.
A single laborer at the Clearwater Plant, with a productivity rate of 0.20 heaters per labor-hour and working 150 hours per month, is expected to produce 30 hot water heaters each month.
Explanation:Given that the labor productivity at the Clearwater Plant is 0.20 water heaters per labor-hour, we can calculate how many heaters one laborer can produce in a month by multiplying the productivity rate by the number of hours worked per month.
One laborer works 150 hours per month. Therefore, the number of heaters one laborer can produce every month is:
0.20 heaters/labor-hour × 150 hours/month = 30 heaters/month
Thus, a single laborer at Clearwater Inc. is expected to produce 30 hot water heaters each month.
In 2018, Rachel received a $1,900 refund of state income taxes that she paid in 2017. In 2017, Rachel claimed itemized deductions of $6,900 and this total included $2,800 of state income taxes. How much of the refund, if any, must Rachel include in her 2018 gross income if the standard deduction for 2017 was $5,800?
Answer:
$1,100
Explanation:
The amount which Rachel must include in her 2018 gross income would be computed by applying an equation which is shown below:
= Itemized deductions - standard deductions
= $6,900 - $5,800
= $1,100
The $1,100 would be included in the $1,900 refund which is presented in her 2018 gross income.
The excess amount between itemized deductions and standard deductions would indicate the extra refund amount which is already included in its $1,900 refund amount
A partial listing of costs incurred during March at Febbo Corporation appears below: Factory supplies $ 9,000 Administrative wages and salaries $ 85,000 Direct materials $ 126,000 Sales staff salaries $ 30,000 Factory depreciation $ 33,000 Corporate headquarters building rent $ 43,000 Indirect labor $ 26,000 Marketing $ 65,000 Direct labor $ 99,000 "The total of the product costs listed above for March is": Multiple Choice $516,000 $68,000 $293,000 $223,000
The total product costs for Febbo Corporation in March is calculated by adding up direct materials, direct labor, and factory overheads (includes factory supplies, factory depreciation, indirect labor), which equals $293,000.
Explanation:The total product costs would be the addition of direct materials, direct labor, and factory overheads. Here, 'Factory supplies', 'Factory depreciation', and 'Indirect labor' fall under factory overheads. So you simply need to add up those costs.
Adding these amounts together results in: Direct materials ($126,000) + Direct labor ($99,000) + Factory supplies ($9,000) + Factory depreciation ($33,000) + Indirect labor ($26,000) = $293,000.
So, the total of the product costs listed above for March is $293,000.
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