Answer:
10%
Explanation:
IRR is the rate at which the net present value of a project is equal to zero. Using a financial calculator, use the following inputs and the CF function to find IRR;
The cost of the machine is the initial investment ; CF0 = -$24,388
Net cashflow year 1; C01 = 5,600
Net cashflow year 2; C02 = 5,600
Net cashflow year 3; C03 = 5,600
Net cashflow year 4; C04 = 5,600
Net cashflow year 5; C05 = 5,600
Net cashflow year 6; C06 = 5,600
then key in CPT IRR = 10.00%
Therefore, the internal rate of return is closest to 10%
In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for the month of April 2017 were as follows. Budget ActualIndirect materials $14,200 $13,700Indirect labor 19,100 19,900Utilities 11,400 12,100Supervision 4,600 4,600
All costs are controllable by the department manager.
Prepare a responsibility report for April for the cost center
Final answer:
A responsibility report compares budgeted costs to actual costs, highlighting variances and assisting a manager in decision-making. For the Assembly Department of Hannon Company, the report shows favorable and unfavorable variances in indirect materials, labor, and utilities, with no variance in supervision.
Explanation:
To draft this report, one must compare the budgeted costs against the actual costs incurred. A simple table can be created that lists each cost category, the budgeted amount, the actual amount, and the variance between the two.
Responsibility Report for April 2017
Cost Category Budgeted Actual Variance
Indirect Materials $14,200 $13,700 $500 Favorable
Indirect Labor $19,100 $19,900 $800 Unfavorable
Utilities $11,400 $12,100 $700 Unfavorable
Supervision $4,600 $4,600 $0
The manager of the department can then use this responsibility report to understand where costs were higher or lower than expected and make decisions accordingly.
A7X Corp. just paid a dividend of $2.30 per share. The dividends are expected to grow at 15 percent for the next eight years and then level off to a growth rate of 6 percent indefinitely. If the required return is 14 percent, what is the price of the stock today?
The price of a stock is calculated by discounting the value of all future dividends to the present using the required rate of return. In this case, the dividends for the next eight years grow at a rate of 15 percent and then level off at a 6 percent growth rate indefinitely. The discounted dividends are then summed to get the present value of the stock.
Explanation:To calculate the price of a stock today, you can use the Dividend Discount Model (DDM). The DDM is based on the expectation that the price of a stock is equivalent to the present value of all its future dividends. Dividends for the next eight years can be calculated individually considering the 15 percent dividend growth. This should be followed by calculating dividend value from year 9 onward, considering the indefinite 6 percent growth from then on. The cost of each future dividend should then be discounted to the present by the required 14 percent rate of return, and all these discounted dividends should be summed up to get the present stock value.
Here is a short example of how you can find the first two future dividends. The dividend in the next year (D1) would be the current dividend multiplied by 1.15 (15 percent growth), i.e., $2.30 * 1.15 = $2.645. The dividend in the second year (D2) would be the first year's dividend multiplied by 1.15 i.e., $2.645 * 1.15 = $3.04175. Then you would discount these by the required return and calculate the present value of each dividends.
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Exercise 9-5 Sandhill Co. purchased a new machine on October 1, 2017, at a cost of $80,010. The company estimated that the machine has a salvage value of $7,280. The machine is expected to be used for 72,400 working hours during its 7-year life. Compute the depreciation expense under the straight-line method for 2017 and 2018, assuming a December 31 year-end. (
Answer:
2017 = $2,598 and 2018 = $10,390
Explanation:
The computation of the depreciation expense for the second year is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($80,010 - $7,280) ÷ (7 years)
= ($72,730) ÷ (7 years)
= $10,390
In this method, the depreciation is same for all the remaining useful life
For 2017, the depreciation expense would be
= $10,390 × 3 months ÷ 12 months
= $2,598
The three months is calculated from the October 1, 2017, to December 31, 2017
And, in 2018 it would be $10,390
Joe was trying to sell his home. He went out drinking with some buddies on Friday night and got really drunk. Saturday morning his realtor came by with a contract for the sale of his home. Joe looked over the contract, asked the realtor some questions about the date of the closing, asked the realtor what he thought about the contract, then signed the contract and went back to bed. When he woke up on Saturday afternoon he saw a copy of the contract and had a change of heart. The contract was for $10,000 less then what he originally wanted for the house.
1. Joe wants to disaffirm, claiming he was drunk when he signed. Can he?
Answer:
Yes. Joe can disaffirm the contract as he was drunk when he signed it.
Explanation:
According to law, a person who enters into a contract while intoxicated (either by alcohol or drugs) can make void, the terms of that contract if the person can prove he/she was sufficiently intoxicated and was therefore impaired, at the time the contract was signed.
Therefore Joe can disaffirm the contract by arguing that he got really drunk on Friday night and as such, his decision making was affected when he signed the contract on Saturday morning.
Answer:
Yes. Joe can disaffirm the contract as he was drunk when he signed it.
Explanation:
An economist discussing trade policy in the New Republic wrote: "One of the benefits of the United States removing its trade restrictions [is] the gain to U.S. industries that produce goods for export. Export industries would find it easier to sell their goods abroad—even if other countries didn’t follow our example and reduce their trade barriers."Which of the following statements is true about the effect of a reduction in restrictions of imports? Check all that apply.A. Exports will increase.B. The real exchange rate will remain unchanged.C. Imports will increase.D. Net exports at any given real exchange rate will increase.E. The demand curve for dollars will shift to the left.F. The equilibrium level of net exports will remain unchanged
Answer: The correct answers are "A. Exports will increase." , "C. Imports will increase.", "E. The demand curve for dollars will shift to the left." and "F. The equilibrium level of net exports will remain unchanged".
Explanation:
"A. Exports will increase." , "C. Imports will increase.", "E. The demand curve for dollars will shift to the left." and "F. The equilibrium level of net exports will remain unchanged". are TRUE.
B. The real exchange rate will remain unchanged. Is FALSE because the change in the demand curve for dollars leads to a decrease in the real exchange rate.
D. Net exports at any given real exchange rate will increase. is FALSE because net exports at any given real exchange rate will decrease.
Answer: the demand curve for dollars will shift to the left added to the above.
Explanation:
The Bridal Gift Shop, Inc. has 14 units in ending merchandise inventory on December 31. The units were purchased in November for $165 each. The price lists from suppliers indicate the current replacement cost of the item to be $171 each. What would be the amount reported as Merchandise Inventory on the balance sheet?
A. $2,394
B. $336
C. $4,704
D. $2,310
Answer:
D. $2,310
Explanation:
Ending inventory or Merchandise Inventory is the value of goods available for sale at the end of the accounting period valued at the lowest of total purchase cost or total replacement cost.
In this problem, total purchase cost (P) is:
[tex]P= \$165*14 = \$2,310[/tex]
Total replacement cost (R) is:
[tex]R= \$171*14 = \$2,394[/tex]
Since purchase cost is lower than replacement cost, the amount reported as Merchandise Inventory on the balance sheet should be $2,310
Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows:
May 8 Spot rate: $ 1.25
May 31 Spot rate: $ 1.26
Jun. 7 Spot rate: $ 1.20
For what amount should Brisco's Accounts Payable be credited on May 8?
Answer:
$2,500,000
Explanation:
The computation of the amount which would be credited is shown below:
= Payment of foreign currency units (FC) is due in 30 days × exchange rate i.e spot rate on May 31
= 2,000,000 × $1.25
= $2,500,000
We simply multiply the payment with the spot rate so that the accurate value can come.
All other information which is given is not relevant. Hence, ignored it
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $105 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $105 to $110.00, and the stock has paid a dividend of $17.00 per share.
a. What is the remaining margin in the account?
Remaining margin $
b-1. What is the margin on the short position? (Round your answer to 2 decimal places.)
Short margin %
b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
Yes
No
c.
What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
Answer:
a. $30,500
b1. 27.73%
b2. Yes because the 30% margin requirement is higher than 27.73% actual
c. -41.90%
Explanation:
a. Margin requirement at the beginning = 1,000 x 105 x 50% = $52,500
Payoff gained/(lose) from the short-sell position = ( Delivery price in the position - Market price - Dividend per stock ) x 1,000 = ( 105 - 110 - 17) x 1,000 = (22,000)
=> Remaining margin = Initial margin + Payoff from the short-sell position = 52,500 - 22,000 = $30,500
b1. Margin on the short position = Remaining margin / Values of underlying stocks in the position = 30,500 / 110,000 = 27.73%
b2. As the traders is in short position and the actual price is higher than the exercised price in the option, the margin on the short position lower than requirement ( 27.73% < 30%) will trigger a margin call.
c. Return on the investment equals to Pay-off from the position / initial margin requirement = -22,000 / 52,500 = 41.90%
On January 1, 2015, Stronger Industries issued $480,000 of 9%, five-year bonds that pay interest semiannually on June 30 and December 31. They are issued at $499,483 and their market rate is 8% at the issue date. After recording the entry for the issuance of the bonds, Bonds Payable had a balance of $480,000 and Premium on Bonds Payable had a balance of $19,483. Stroger uses the effective interest bond amortization method. The first semiannual interest payment was made on June 30, 2015. Complete the necessary journal entry for the interest payment date of June 30, 2015 by selecting the account names an dollar amounts from the drop-down menus.
Final answer:
The journal entry for the interest payment date of June 30, 2015, involves the accounts: Interest Expense, Premium on Bonds Payable, and Cash. A portion of the interest payment is allocated to the reduction of the premium on Bonds Payable.
Explanation:
The journal entry for the interest payment date of June 30, 2015, will involve the following accounts: Interest Expense, Premium on Bonds Payable, and Cash. Since the bonds were issued at a premium, a portion of the interest payment will be allocated to the reduction of the premium. The specific amounts for each account can be calculated as follows:
Interest Expense: $480,000 (Bonds Payable) * 9% (interest rate) * 6/12 (6 months) = $21,600
Premium on Bonds Payable: $19,483 (balance) - $21,600 (interest expense) = -$2,117
Cash: $21,600 (interest payment)
Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows: Standard tons of direct material (steel) per car 22 Standard cost per ton of steel $ 16.00$16.00 During the month of March, the company produced 1 comma 5001,500 cars. Related production data for the month follows: Actual materials purchased and used (tons) 7 comma 0007,000 Actual direct materials total cost $ 118 comma 000$118,000 What is the direct materials quantity variance for the month?
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The standards for the railroad cars are as follows: Standard tons of direct material (steel) per car 22 Standard cost per ton of steel $16.00 During March, the company produced 1,500 cars. Related production data for the month follows: Actual materials purchased and used (tons) 7,000 Actual direct materials total cost $118,000
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (33,000 - 7,000)*16= $416,000 unfavorable
California Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, OperationsVP, is considering a new Hi-Speed shredder to replace the oldmachine, referred to in the shop as "Clunker." Hi-Speed will have a fixed cost of $85,000 per month and a variable cost of$1.25 per bag. Clunker has a fixed cost of only $44,000 permonth, but a variable cost of $1.75. Selling price is $2.50 per bag.
a) What is the crossover point in units (point ofindifference) for the processes?
The crossover point is XX units. (Round your response to the nearest whole number.)
b) What is the monthly profit or loss if the company changes to the Hi-Speed shredder and sells 60,000 bags per month?
The monthly profit or loss if the company changes to theHi-Speed shredder and sells 60,000 bags per month is $ XX. (Round your response to the nearest dollar and include a minus sign if necessary.)
c) What is the monthly profit or loss if the company stays with Clunker and sells 60,000 bags per month?
The monthly profit or loss if the company stays with Clunker and sells 60,000 bags per month is $ XX. (Round your response to the nearest dollar and include a minus sign ifnecessary.)
Answer:
The answer is. Q is 82,000 units ,the company will make a loss of $ -10000 if the company changes to Hi speed, if the company stays with clunker it will make a profit of $1,000
Explanation:
a) Clunker. Hi speed
Fixed cost. $44,000. $85,000
Variable cost. 1.75. 1.25
Q (output in indifference point / cross over point) = FC of Hi speed - FC of Clunker/VC of Clunker - VC of Hi speed
FC of Clunker + VC of Clunker = FC of Hi speed + VC of Hi speed
44,000 + 1.75Q = 85,000 + 1.25Q
Collect like terms
1.75Q - 1.25Q = 85,000 - 44,000
0.5Q = 41,000
Q = 41,000/0.5
Q = 82,000 units
(b)
Since the sellingprice is $2.50 per bag, Revenue will be 2.50 × 60,000 = 150,000
Income Statement
Dr. Cr
$ $
Revenue. 150,000
Variable cost (1.25 × 60,000) 75,000
Add:Fixed cost 85,000
-------------
(160,000)
Profit/Loss. -10,000
---------------- --------------------
150,000. 150,000
-------------------- -----------------------
If the company changes to Hi speed, it will make a loss of $10,000
(c)
Dr. Cr
$ $
Revenue. 150,000
Variable cost (1.75 × 60,000) 105,000
Add: Fixed cost. 44,000
---------------
(149,000)
Profit /Loss. 1,000
------------------ ---------------------
150,000. 150,000
---------------------- -----------------------
If the company stays with clunker, it will make a profit of $1,000
Final answer:
The crossover point for the new Hi-Speed shredder and Clunker is at 82,000 units. Using the Hi-Speed shredder and selling 60,000 bags results in a loss of $10,000 per month, while continuing with Clunker results in a profit of $1,000 per month.
Explanation:
To calculate the crossover point where the total costs of both the new Hi-Speed shredder and the old machine Clunker are the same, we set up the following equation:
Total cost of Hi-Speed = Total cost of Clunker
Fixed cost of Hi-Speed + (Variable cost of Hi-Speed * Number of units) = Fixed cost of Clunker + (Variable cost of Clunker * Number of units)
85000 + 1.25x = 44000 + 1.75x
Solving for x gives us the crossover point:
85000 - 44000 = 1.75x - 1.25x
41000 = 0.5x
x = 82000 bags
To calculate the monthly profit or loss for selling 60,000 bags per month with the Hi-Speed shredder, we use the formula:
Profit = (Selling price per bag * Number of bags sold) - (Fixed cost + Variable cost per bag * Number of bags sold)
Profit = (2.50 * 60000) - (85000 + 1.25 * 60000)
Profit = $150000 - $160000 = -$10000
For the Clunker:
Profit = (2.50 * 60000) - (44000 + 1.75 * 60000)
Profit = $150000 - $149000 = $1000
The monthly profit or loss with the Hi-Speed shredder for selling 60,000 bags per month is -$10,000, and staying with Clunker would result in a $1000 profit.
A company has a beginning inventory of $ 20 comma 000 and purchases during the year of $ 130 comma 000. The beginning inventory consisted of 3 comma 000 units and 6 comma 000 units were purchased during the year. The company has 5000 units left at yearminusend. Under averageminuscost, what is Cost of Goods Sold? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)
Answer:
$66,680
Explanation:
The computation of the cost pf goods sold is shown below:
= Number of units sold × average cost per unit
where,
Number of units sold equals to
= Beginning inventory units + purchased units - ending inventory units units
= 3,000 units + 6,000 units - 5,000 units
= 4,000 units
Now the average cost per unit would be
= (Beginning inventory + purchases) ÷ (Beginning inventory units + purchased units)
= ($20,000 + $130,000) ÷ (3,000 units + 6,000 units)
= $16.67
Now put these values to the above formula
So, the value would equal to
= $4,000 units × $16.67
= $66,680
Most markets are not monopolies in the real world because
A. supply curves slope upward.
B. firms usually face downward-sloping demand curves.
C. firms usually equate price with marginal cost.
D. there are reasonable substitutes for most goods.
Answer:
D. there are reasonable substitutes for most goods.
Explanation:
A monopoly is when there is only one firm operating in the industry. There are also no subsituites for goods and services produced by the monopoly. The monopoly sets the price for his product and earns economic profit in the long and short run.
There aren't a lot of monopolies in the real world because most goods have substitutes. Therefore, consumers can substitute the monopoly product for another product and there isn't just one firm operating in the industry.
Most markets are not monopolies in the real world because there are reasonable substitutes for most goods, which allows consumers to choose similar products from different firms. The demand for a monopolist's product constrains its price, and a monopolist cannot require consumers to purchase its product.
Explanation:In the real world, most markets are not monopolies because there are reasonable substitutes for most goods. This means that consumers have options and can choose to purchase similar products from different firms if one firm raises its prices. While a monopolist can charge any price for its product, the demand for the firm's product constrains the price. No monopolist, even one that is thoroughly protected by high barriers to entry, can require consumers to purchase its product. Because the monopolist is the only firm in the market, its demand curve is the same as the market demand curve, which is downward-sloping.
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Sunny Day Manufacturing Company has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 8.70% into the foreseeable future. If Sunny Day expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be Alpha Moose Transporters Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure consists of 50% debt, 5% preferred, and 45% equity. Determine Alpha Moose Transporters's retained earnings breakpoint
A. $1,903,889
B. $1,655,556
C. $1,738,334
D. $1,986,667
Answer:
Alpha Moose Transporters's retained earnings breakpoint is B. $1,655,556
Explanation:
Addition to retained earnings = $745,000
Weight of equity = 45%
Retained earnings breakeven = $745,000 / 45%
= $1,655,556.
Retained earnings breakeven is $1,655,556.
Answer:
Based on the data provided as 50% is the debt,but 5% is preferred and 45% is the equity,and the foreseeable future rate is 8.7% so the retained earnings will be $1,738,334,option C is correct.
Sales $1,406,537 Operating Income $102,299 Total Assets (investment) $541,233 Target Rate of Return (Cost of Capital) 10% What is return on investment? Input your answer to 1 decimal place. For example if you calculate .1892 enter 18.9.
Answer:
18.90%
Explanation:
The formula to compute the return on investment is shown below:
= Operating income ÷ Total Assets (investment)
= $102,299 ÷ $541,233
= 18.90%
It shows a relationship between the operating income and the total assets i.e investment so that the accurate return on investment can be computed
All other information which is given is not relevant. Hence, ignored it
Answer:
18.9
Explanation:
ROI = Net Profit / Total Investment *100
ROI = ($102,299/$541,233)*100
ROI = 18.9
York’s outstanding stock consists of 80,000 shares of cumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
2015 $ 20,000
2016 28,000
2017 200,000
2018 350,000
Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)
Dividends paid to each class of stockholders can be calculated by multiplying the dividend rate and number of shares. Preferred stockholders receive a fixed dividend rate, while common stockholders receive the remaining dividends. The total dividends paid to the preferred stockholders over four years is $897,000, and the total dividends paid to the common stockholders is $309,000.
Explanation:The amount of dividends paid each year to each class of stockholders can be calculated by multiplying the dividend rate by the number of shares. For the preferred stock, the dividend rate is 7.5% of the par value of $5, yielding $0.375 per share. The total dividends paid to the preferred stockholders for each year are as follows: 2015 - $30,000, 2016 - $42,000, 2017 - $300,000, and 2018 - $525,000. The total dividends paid to the preferred stockholders for the four years combined is $897,000.
The common stockholders do not receive a fixed dividend rate like the preferred stockholders. Instead, they receive the remaining amount of dividends after the preferred stockholders are paid. To determine the dividends paid to the common stockholders, subtract the amount paid to the preferred stockholders from the total dividends declared each year. The total dividends paid to the common stockholders for each year are as follows: 2015 - $20,000, 2016 - $14,000, 2017 - $100,000, and 2018 - $175,000. The total dividends paid to the common stockholders for the four years combined is $309,000.
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Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during 2017: direct materials costs, $710,000; direct labor costs, $3,600,000; and factory overhead costs applied, $2,520,000.
1. Determine the company’s predetermined overhead rate for 2017.
2. Assuming that the company’s $77,000 ending Work in Process Inventory account for 2017 had $26,000 of direct labor costs, determine the inventory’s direct materials costs.
3. Assuming that the company’s $550,000 ending Finished Goods Inventory account for 2017 had $329,000 of direct materials costs, determine the inventory’s direct labor costs and its overhead costs.
Answer:
Please see attachment
Explanation:
Please see attachment
Dream, Inc., has debt outstanding with a face value of $6 million. The value of the firm if it were entirely financed by equity would be $17.85 million. The company also has 350,000 shares of stock outstanding that sell at a price of $38 per share. The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs? (Assume that the market value of the debt is the same as the face value of the debt, because the debt has just been issued at today’s market interest rate, that the debt is perpetual, and that in this economy corporate taxes as well as financial distress costs exist.)
Answer:
$650,000
Explanation:
For computing the decrease in the expected bankruptcy costs, first we have to determine the total firm value in each case which is shown below:
Total firm value = Equity + Debt × corporate tax rate
= $17,850,000 + $6,000,000 × 0.35
= $17,850,000 + $2,100,000
= $19,950,000
Now the total firm value based on market share
= Equity + Debt
= 350,000 shares × $38 + $6,000,000
= $13,300,000 + $6,000,000
= $19,300,000
The difference would be
= $19,950,000 million - $19,300,000
= $650,000
An airline has the following data about an airplane:
Annual lease cost $8,000,000
Lease term: 8 years
Useful life of airplane: 35 years
Fair market value of leased asset: $83 million
Present value of lease payments: $78 million
Bargain purchase option: None
Transfer to lessor at end of lease? Yes
Is this a capital or operating lease? Why?
A.
This is a capital lease because the leased asset cost exceeds $5 million.
B.
This is a capital lease because the substance of the transaction is a capital lease.
C.
This is a capital lease because it meets at least one of the four capital lease criteria.
D.
This is an operating lease. It fails all of the capital lease criteria.
Answer:
Option C). This is a capital lease because it meets at least one of the four capital lease criteria.
Explanation:
In the following situations, the lease transactions are called Finance Lease.
i) The lessee will get the ownership of leased asset at the end of the lease term.
ii) The lessee has an option to buy the leased asset at the end of lease term at price, which is lower than its expected fair value at the date on which option will be excercised.
iii) The lease term covers the major part of the life of asset.
iv) At the beginning of lease term, Present value of minimum lease rental covers substantially the initial fair value of the leased asset.
In the given question, Present value of minimum lease rental amounting to $ 78 million covers substantially 94 % portion of the initial fair value of leased asset. Accordingly, last condition / last situation mentioned above to treat lease as finance lease is satisfied in the given question. In other words, out of four capital lease criteria mentioned above, fourth criteria / fourth condition (At the beginning of lease term, Present value of minimum lease rental covers substantially the initial fair value of the leased asset) is satisfied in this given question.
Present value of minimum lease rental as a percentage of initial fair value of leased asset :-
= (78 Million / 83 Million ) * 100
= 0.94 * 100
= 94 % (approx).
Lease in given question is capital lease because it meets at least one of the four capital lease criteria.
The correct answer is D. This is an operating lease. It fails all of the capital lease criteria.
To determine whether the lease is a capital lease or an operating lease, we can use the criteria outlined by accounting standards. A capital lease is a lease that meets any one of the following four criteria:
The lease transfers ownership of the asset to the lessee at the end of the lease term.The lease contains a bargain purchase option.The lease term is equal to or greater than 75% of the estimated economic life of the leased property.The present value of the lease payments equals or exceeds 90% of the fair value of the leased property.In this case:
There is no bargain purchase option.The lease transfers the asset back to the lessor at the end of the term.The lease term (8 years) is less than 75% of the useful life of the airplane (35 years).The present value of the lease payments ($78 million) is less than 90% of the fair market value of the asset ($83 million).Apple hosts a large number of forums, which become customers' primary source of product information after warranties expire and are organized by product lines and type of user (consumer or professional). These forums are an example of ________.
Answer:
The answer is online communities.
Explanation:
Apple hosts a large number of forums, which become customers' primary source of product information after warranties expire and are organized by product lines and type of user (consumer or professional). These forums are an example of _online communities._______.
GEICO, the number-two auto insurer with $15 billion in revenue last year, spent $0.9 billion on advertising that year and plans to continue spending the same percentage of sales on advertising next year. The average advertising-to-sales ratio for the insurance industry is 0.1 percent of sales. If GEICO projects $20 billion in sales next year, using the percentage-of-sales method of advertising budgeting, how much will the company budget for advertising of basing it on projected sales?
Based on the given percentage-of-sales method, if GEICO continues to allocate 0.1% of its sales to advertising, it should budget $20 million for advertising next year.
Explanation:The question is asking for the projected advertising budget for GEICO if it continues to Base its advertising expenses on its sales, a method known as the percentage-of-sales method. Given that the insurance industry's average advertising-to-sales ratio is 0.1 percent of sales, this is the percentage we'll apply to GEICO's projected sales to estimate its advertising budget.
To find out how much GEICO will spend on advertising next year based on the given percentage, we need to multiply the projected sales by the average advertising-to-sales ratio. So, GEICO's advertising budget will be: $20,000,000,000 × 0.001 = $20,000,000. This means that if GEICO continues to allocate 0.1% of its sales to advertising, it should budget $20 million for advertising next year.
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__________ is a feature of job control unionism that threatens ___________________.A. Standardized wages tied to jobs; functional flexibilityB. Detailed systems of narrow job classifications; employment flexibilityC. Detailed, lengthy, legalistic union contracts; procedural flexibilityD. Restrictive work rules; wage flexibility
Answer:
The answer is letter C
Explanation:
Detailed, lengthy, legalistic union contracts; procedural flexibility.
Job control unionism is a form of labor unionism that uses detailed, lengthy, legalistic union contracts. These contracts provide procedural flexibility for union members but can be seen as a threat to employers who value flexibility in managing their workforce.
Explanation:C. Detailed, lengthy, legalistic union contracts; procedural flexibility
Job control unionism is a form of labor unionism that focuses on maintaining control over job assignments and work rules. One of its features is the use of detailed, lengthy, legalistic union contracts. These contracts outline specific job classifications, work processes, and procedures. While these contracts provide procedural flexibility for union members, they can be seen as a threat to employers who value flexibility in managing their workforce.
Benchmarking involves:
1. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.
2. checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with.
3. studying whether a company's resource strengths are more or less powerful than the resource strengths of rival companies.
4. studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities.
5. comparing the best practices in one industry against the best practices in another industry.
Answer:
1. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.
Explanation:
Benchmarking -
It is the method of comparing the business performance and the process like the cost , time and quality .
Benchmarking is also known as process benchmarking , or , best practice benchmarking .
It is the comparison among various companies , that how the company performs various value chain activities .
Hence , from the question , the correct statement for the given term is ( 1. ) .
Benchmarking involves comparing companies' performance, costs, and effectiveness of value chain activities, as well as comparing competitive capabilities and best practices across industries.
Explanation:Benchmarking involves comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities. It also includes studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities. Additionally, benchmarking involves comparing the best practices in one industry against the best practices in another industry.
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Your Way, Inc. Eric buys companies that are small or companies in financial trouble. He helps these companies turn around and develop a competitive advantage. The company that he recently purchased is called Your Way, Inc. The company sells men's clothing and accessories. Your Way keeps the sewing machines for clothes manufacturing at a separate production facility so that the store location space can be reserved for display and selling. After looking over the different products available, Eric realized that the company's previous owner was not aware of the product life cycle because the company kept items that were obviously too old and out of date. Also, because of the high turnover, employees did not have good knowledge of the different product lines and did not know the difference between a product line and a product mix. To move the company forward, Eric thought of the following two measures: first, developing a new product to incorporate into the product mix; and second, eliminating the out-of-date products. Refer to Your Way, Inc. If Eric wanted to develop a new product, he would begin with(A) concept testing.(B) screening.(C) product analysis.(D) idea generation.(E) marketing analysis.
Answer: Marketing analysis
Explanation:
Marketing analysis which is detemining market needs or demand is the first step in be able to get a good demand for a product. After the analysis a product can then be designed to meet the Market needs through idea generation, product analysis and testing the concept.
Which of the following statements is CORRECT?
a. If an asset is sold for less than its book value at the end of a project's life, it will generate a loss for the firm, hence its terminal cash flow will be negative.
b. Only incremental cash flows are relevant in project analysis, the proper incremental cash flows are the reported accounting profits, and thus reported accounting income should be used as the basis for investor and managerial decisions.
c. Changes in net operating working capital refer to changes in current assets and current liabilities, not to changes in long-term assets and liabilities, hence they should not be considered in a capital budgeting analysis.
d. It is unrealistic to believe that any increases in net operating working capital required at the start of an expansion project can be recovered at the project's completion. Operating working capital like inventory is almost always used up in operations. Thus, cash flows associated with operating working capital should be included only at the start of a project's life.
e. If equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. In this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.
Answer:
e. If equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. In this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.
Explanation:
Answer to Question is Point E i.e. If equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. In this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.
Because Book value is the Vaue of an assets recorded in the Balance sheet at the end of the Financial year. Book value is calculated by adjusting Original Cost for depreciation, amortization made for the asset. If the equipment is sold for a value more than its book value , it will result in profit. Despite the taxes on profit, the end of the cash flow will be greater.
As the Book value at the time of sale is calculated after giving effect of depreciation, amortisation.
Westville, a small developed country, is experiencing a very high rate of inflation. Roma Anderson, a market research analyst, thinks that the high level of inflation is due to an acute shortage of goods available in the economy. According to her, the government should use expansionary fiscal policies to boost the economy. Meanwhile, Robert Simpson, a member of the finance ministry, is of the opinion that the high level of inflation is the result of excessive household spending. He suggests that the government should increase personal income tax rates to curb consumption demand. Which of the following, if true, will strengthen Robert's claim that high consumer spending is the cause of high inflation? OA· The number of discouraged workers in Westville has increased this year. OB. One of Westville's leading trading partners was recently hit by a severe recession. Oc、 The gender wage gap in westville has increased substantially in the last few years. OD. Leading firms producing consumer durables have reported a decline in profits in recent times. OE. There is consensus among leading economists and industry experts that the output gap in Westville is currently negatuve
Answer:
There is consensus among leading economists and industry experts that the output gap in Westville is currently negative.
Explanation:
There are two different people who have two different views for the increasing inflation. Robert's claim that the reason behind high inflation is the high consumer spending will be strengthened if there is a consensus among leading economists and the industry experts that the output gap in Westville is negative. This means that the actual output is less than the potential output and so, the consumer spending will increase, leading to the inflation.
Robert's claim that high consumer spending is causing inflation in Westville could be strengthened by the evidence that leading consumer product firms are seeing declining profits, suggesting that demand is outstripping supply and hence driving up prices. However, a holistic approach is required to fully understand complex economic issues such as inflation.
Explanation:The debate revolving around the cause of high inflation in Westville can be strengthened by examining which claim aligns more closely with the symptoms observed in the economy. Inflation can be succinctly summarized as 'too many dollars chasing too few goods'. Bearing this definition in mind, Robert's argument that excessive household spending is at the root of the inflation problem would be reinforced if there is evident high demand meeting a lack of supply.
Going through the options provided, the one that would most strongly support Robert's claim would be if leading firms notably producing consumer durables have reported a decline in profits. A decline in corporate profits in consumer industries may indicate excessive spending. If people are buying more than these companies can produce, it would artificially inflate prices, contributing to a high inflation rate.
However, it's essential to note that economic indicators should not be evaluated in isolation and understanding economic trends generally requires a comprehensive view of various interrelated factors.
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A new storm drainage system must be constructed right away to reduce periodic flooding that occurs in a city that is in a valley. Five mutually exclusive designs have been proposed, and their present worth (in thousands of dollars) of costs and benefits are the following.System 1 2 3 4 5PW of cost $1000 $4000 $4000 $10,000 $14,000PW of benefits $8000 $8000 $14,000 $16,000 $24,000Which sytem has the greatest B-C ratio?
Answer:
Design 1
Explanation:
Benefit-Cost ratio is used to determine the net benefit pre dollar invested in a project.
Benefit-Cost ratio formula = PW of benefits / PW of cost
Design 1; 8000/1000 = 8
Design 2; 8000/4000 = 2
Design 3; 14000/4000 = 3.5
Design 4; 16000/10000= 1.6
Design 5; 24000/14000= 1.7
Therefore, from the above calculations, design 1 has the greatest Benefit-Cost ratio.
You made an investment of $12,000 into an account that paid you an annual interest rate of 3.5 percent for the first 5 years and 7.9 percent for the next 15 years. What was your annual rate of return over the entire 20 years
Answer:
interest rate r = 6.78 %
Explanation:
given data
investment = $12,000
interest rate = 3.5 percent = 0.035
time = 5 year
interest rate = 7.9 percent = 0.079
time = next 15 year
to find out
What was your annual rate of return over the entire 20 years
solution
we get here interest rate as
interest rate r = [tex][(1+r)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1[/tex] ...................1
here t1 is time period for first 5 year and t2 is time i.e next 15 year and r1 and r2 is rate
now put here value we get
interest rate r = [tex][(1+)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1[/tex]
interest rate r = [tex][(1+0.035)^{5} * (1+0.079)^{15}]^{\frac{1}{5+15}} - 1[/tex]
interest rate r = 1.0678 - 1
interest rate r = 0.0678
interest rate r = 6.78 %
Tara and Robert formed the TR Partnership four years ago. Because they decided the company needed some expertise in multimedia presentations, they offered Katie a 1/3 interest in partnership capital if she would come to work for the partnership. On July 1 of the current year, the unrestricted partnership interest (fair market value of $25,000) was transferred to Katie. How should Katie treat the receipt of the partnership interest in the current year?
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
The standard cost of product 5252 includes 1.90 hours of direct labor at $14.30 per hour. The predetermined overhead rate is $22.00 per direct labor hour. During July, the company incurred 4,000 hours of direct labor at an average rate of $14.60 per hour and $80,100 of manufacturing overhead costs. It produced 2,000 units.
(a) Compute the total, price, and quantity variances for labor.
(b) Compute the total overhead variance.
Answer:
a) The total, price, and quantity variances for labor is $4,060 totally, $0.3 per direct labour, and 200 hours respectively
b) The total overhead variance is $36,100
Explanation:
The variance is the difference between actual figures and standard figures.
The actual hour taken for 1 unit in July is 2.0 hour, so the quantity variance for labor in per unit is 0.1 hour = 2.0 – 1.9; then the total quantity variance for 2,000 units produced in July is 200 hours = 0.1 x 2,000
The price variance for labor is $0.3 = $14.60 - $14.30
The total standard cost for labor in July is $54,340 = $14.3 x 1.9 hours x 2,000 units
The total actual cost for labor in July is $58,400 = $14.6 x 2.0 hours x 2,000 units
So the variance in total labor cost of July is $4,060 = $58,400 - $54,340
The standard overhead cost for 2,000 units is $44,000, while the actual overhead cost in July is $80,100. So the total overhead variance is $36,100