Answer:
Goodwill 1,040,000
2.- It will need to be amortized at year-end
3.- Goodwill can only be created through third parties operations, Robinson cannot increase his own goodwill. A third party must be willing to pay that amount
Explanation:
3,830,000 - 2,790,000 = difference 1,040,000
An entity with a large volume of customer remittances by mail could most likely reduce the risk of employee misappropriation of cash by usingA . a bank lockbox system. B . independently prepared mailroom prelists. C daily check summaries. D . employee fidelity bonds.
Answer: Option (a) is correct.
Explanation:
A bank lockbox system is a type of service that is provided by the banks to the companies for receiving the payments from customers.
Under this system, all the payments that is made by the customers are going towards the special post office box.
Then bank goes to the post box, recovering the payments that is made by the customers and process them, after that banks deposited those payments into the companies bank account.
A bank communicate to its processing center. And all the documents of remittance are properly scanned, incorporates all the payment information and all the clearing updates are communicated to accounts receivable. The companies lockbox data is restored every night for the secure data storage and easily access-able.
Stan's Market recorded the following events involving a recent purchase of merchandise: Received goods for $20,000, terms 2/10, n/30. Returned $400 of the shipment for credit. Paid $100 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's merchandise inventory Question 33 options: 1) increased by $19,306. 2) increased by $19,700. 3) increased by $19,308. 4) increased by $19,208.
Answer:
4) increased by $19,208
Explanation:
Net inventory purchased = Purchase - Purchase return = $20,000 - $400 = $19,600
Payment of freight made outward for purchase return is not part of inventory thus $100 freight ignored.
Now terms of purchase provide 2% discount if payment made within 10 days, and total credit period = 30 days.
Given payment made within discount period thus discount availed =
$19,600 X 2% = $392
Net value of inventory = $19,600 - $392 (Discount Availed) = $19,208
On the whole inventory will increase with this value.
Correct option is 4) increased by $19,208
Jon P. Farmer is the founder of Kolopua Hawaii LLC, a company that markets Pure Hawaiian Air. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. Retailing for about $5 apiece, the bottles are sold at gift shops in Hawaii, as well as to travel agents nationwide who give them to clients. As a(n) _____, Farmer's annual income exceeds $100,000 annually.
Answer:
Jon P . Farmer here is an entrepreneur , whose annual income exceeds $100,000 annually.
Explanation:
According to the given question Jon P. Farmer here is an entrepreneur who earns more than $100,000 annually. We can say that Jon P.Farmer is an entrepreneur because here Jon has created his own business ( marketing pure Hawaiian air ), by founding the Kolopua Hawaii LLC, he is taking most of the risk here and he is also getting most of the rewards from the sale of floral bouquet .
Jon P. Farmer is the founder of Kolopua Hawaii LLC, which markets and sells 'Pure Hawaiian Air.' This unique business idea of bottling and selling the distinctive Hawaiian flower-scented air has earned him an annual income exceeding $100,000.
Explanation:Jon P. Farmer is the founder of Kolopua Hawaii LLC, a company that sells a unique product: Pure Hawaiian Air. This business concept involves capturing the aromatic air of Hawaii and bottling it for sale. A creative marketing strategy is utilized, focusing on the distinctive Hawaiian floral bouquet often experienced by tourists. Retailing at approximately $5 per bottle, these bottles are sold at gift shops in Hawaii and to travel agents nationwide who, in turn, distribute them to their clients. As the proprietor of such a novel business, Farmer's annual income exceeds $100,000 annually.
Despite the provided information about another individual named Paul Farmer, who is a remarkable medical anthropologist, his history seems to be irrelevant to the question concerning Jon P. Farmer. Therefore, the referenced information does not provide further insights into Jon P. Farmer's entrepreneurial endeavors with Kolopua Hawaii LLC.
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The total factory overhead for Magnum Corporation is budgeted for the year at $500,000. This is divided into three activity pools: fabrication, $246,000; assembly, $144,000, and setup, $110,000. Magnum manufactures two types of kayaks: Basic and Deluxe. The activity-based usage quantities for each project by activity is as follows: Fabrication Assembly Setup Basic 2,000 dlh 8,000 dlh 5 setups Deluxe 10,000 dlh 24,000 dlh 15 setups Total activity-base usage 12,000 dlh 32,000 dlh 20 setups Each product is budgeted for 2,500 units of production for the year. What is the activity-based factory overhead per unit for the Deluxe kayak?
Answer:
The ABC overhead for a Deluxe kayak will be $170.93
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
We are going to divide the overhead cost over the cost driver of each activity.
[tex]\left[\begin{array}{cccc}-&Overhead&Total&Rate\\fabric&246,000&10,000&24.6\\assembly&144,000&32,000&4.5\\setup&110,000&15&7,333.33\\\end{array}\right][/tex]
Now we apply the rate to Deluxe Kayak:
[tex]\left[\begin{array}{cccc}-&Rate&Deluxe&Overhead\\fabric&24.6&10,000&246,000\\assembly&4.5&24,000&108,000\\setup&7,333.33&10&73,333.33\\Total&-&-&427,333.33\\\end{array}\right][/tex]
Finally we divide the overhead for Deluxe between the units produced
427,333.33/ 2,500 = 170.933 = 170.93
Answer the given two questions relating to demand and the law of demand.
A shift in the demand curve can be caused by: (a) a change in the price of a good. (b) a change in the technology used by firms. (c) a change in one of the determinants of demand. (d) a change in the cost of production.
Which of the choices illustrates the law of demand? (a) Kathy offers for sale more candy bars at $2 than at $1. (b) Joe wants to buy more candy bars at $2 than at $1. (c) None of the choices. (d) Sue wants to buy more candy bars at $1 than at $2.
Answer: First question: The correct answer is (c) a change in one of the determinants of demand.
Second question: The correct answer is (d) Sue wants to buy more candy bars at $1 than at $2.
Explanation:
1) Some of the determining factors of the demand are the price of the product, the income of the consumer, the price of complementary goods or services, the price of substitute products or the taste of the consumer, among others . A change in these determinants produces a shift in the demand curve.
2) The law of demand reflects the relationship between the demand that exists of a good in the market and the quantity of the same that is offered based on the price that is established. At a lower price the demand increases and at a higher price the demand decreases.
A shift in the demand curve is caused by a change in one of the demand determinants, not by a change in the price of the good itself. The law of demand is shown when consumers want to buy more of a good at a lower price than at a higher price, as with Sue wanting more candy bars at $1 than at $2.
Explanation:To answer the questions relating to demand and the law of demand, it's important to understand the concepts involved clearly. First, a shift in the demand curve is caused by: (c) a change in one of the determinants of demand. This includes factors such as changes in consumer tastes, income, price of related goods (complements or substitutes), and expectations about future prices. It does not occur because of a change in the price of the good itself, which instead causes a movement along the demand curve.
The choice that illustrates the law of demand is (d) Sue wants to buy more candy bars at $1 than at $2. This is because the law of demand states that, ceteris paribus, when the price of a good falls, the quantity demanded will increase, and vice versa. Therefore, Sue wanting to buy more at a lower price and less at a higher price exemplifies this economic principle.
On January 1, Five Star Services has the following balances: Accounts Receivable $ 28 comma 000 (debit) Bad Debts Expense $ 0 Five Star Services has the following transactions during January: Credit sales of $ 140 comma 000, collections of credit sales of $ 90 comma 000, and writeminusoffs of $ 19 comma 000. Five Star Services uses the direct writeminusoff method. At the end of January, the balance of Accounts Receivable is ________.
Answer:
At the end of January, the balance of Accounts Receivable is $ 59,000.
Explanation:
Given that,
Accounts Receivable - $ 28,000 (debit)
Bad Debts Expense - $ 0
Credit sales - $ 140,000
collections of credit sales - $ 90,000
Write minus offs - $ 19,000
Under write minus off method, the chances of bad debts is high which is important to recognized while doing the calculation of accounts receivable.
The balance of accounts receivable is computed below:
= Beginning balance of accounts receivable + credit sales - collection of credit sales - write minus off
= $ 28, 000 + $ 140,000 - $ 90,000 - $ 19,000
= $ 59,000
Thus, at the end of January, the balance of Accounts Receivable is $ 59,000
The balance of Accounts Receivable at the end of January for Five Star Services, based on the given transactions and balances, is $59,000.
Explanation:To find the ending balance of accounts receivable for Five Star Services, we first need to understand the transactions that have occurred during the month of January. The initial balance of accounts receivable is $28,000. The company has credit sales of $140,000, which would increase the accounts receivable balance as these are sales made on credit not yet received. Collections of credit sales are $90,000. These collections reduce the accounts receivable balance as the money is now collected and no longer owed. Lastly, write-offs of $19,000 reduce the accounts receivable balance as these are amounts that will not be collected, hence removed from accounts receivable. So, the calculation is as follows:
Beginning Accounts Receivable ($28,000) + Credit Sales ($140,000) - Collections ($90,000) - Write-offs ($19,000) = Ending Accounts Receivable Balance. Plugging in these values, we find the balance at the end of January is $59,000.
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Net interest margin—often referred to as spread—is the difference between the rate banks pay on deposits and the rate they charge for loans. Suppose that the net interest margins for all U.S. banks are normally distributed with a mean of 4.15 percent and a standard deviation of .5 percent. (a) Find the probability that a randomly selected U.S. bank will have a net interest margin that exceeds 5.40 percent. (Round answer to 4 decimal places.) P (b) Find the probability that a randomly selected U.S. bank will have a net interest margin less than 4.40 percent. (Round answer to 4 decimal places.) P (c) A bank wants its net interest margin to be less than the net interest margins of 95 percent of all U.S. banks. Where should the bank’s net interest margin be set? (Round the z value to 3 decimal places. Round answer to 4 decimal places.)
The probability of a bank's net interest margin exceeding 5.40 percent or being less than 4.40 percent can be calculated using the normal distribution and z-scores. To be less than 95 percent of all banks, one must find the 95th percentile and corresponding net interest margin value.
Explanation:To find the probabilities regarding the net interest margins for U.S. banks, we will use the properties of the normal distribution. The mean of this distribution is 4.15 percent, and the standard deviation is 0.5 percent.
Part a: Probability of a Margin Exceeding 5.40%
To find the probability that a bank has a net interest margin greater than 5.40 percent, we calculate the z-score using the formula z = (X - μ) / σ, where X is 5.40, μ (mu) is 4.15, and σ (sigma) is 0.5. The z-score represents how many standard deviations the value X is from the mean. After finding the z-score, we can use the standard normal distribution table or a calculator to find the probability.
Part b: Probability of a Margin Less than 4.40%
Similarly, to find the probability of a net interest margin less than 4.40 percent, we calculate the z-score for 4.40 percent. Again, we look up this z-score in the standard normal distribution table or use a calculator to get the probability.
Part c: Setting a Margin to be Less Than 95% of all Banks
To find the net interest margin that is less than 95 percent of all U.S. banks, we need to find the 95th percentile of the normal distribution. This involves looking for the z-score that corresponds to the cumulative probability of 0.95 and then using the z-score formula in reverse to find the net interest margin X. We use the formula X = μ + z *σ.
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Final answer:
The probability that a randomly selected U.S. bank will have a net interest margin exceeding 5.40 percent is 0.0062, and the probability that it will be less than 4.40 percent is 0.6915. A bank looking to have a net interest margin lower than 95% of all U.S. banks should set its margin to be lower than approximately 4.9725 percent.
Explanation:
To solve these problems involving the net interest margin for U.S. banks, we will use the properties of the normal distribution, since the problem states that the net interest margins are normally distributed with a mean of 4.15 percent and a standard deviation of 0.5 percent.
(a) Probability a bank has a net interest margin exceeding 5.40 percent
To find this probability, we calculate the z-score using the formula:
Z = (X - μ) / σ
Where:
X is the value of interest, 5.40%
μ is the mean, 4.15%
σ is the standard deviation, 0.5%
Z = (5.40 - 4.15) / 0.5 = 2.5
Using standard normal distribution tables or a calculator, we find the probability for Z > 2.5, which is approximately 0.0062. Thus, the probability that a randomly selected U.S. bank will have a net interest margin that exceeds 5.40 percent is 0.0062 or 0.62%.
(b) Probability a bank has a net interest margin less than 4.40 percent
We calculate the z-score for 4.40 percent:
Z = (4.40 - 4.15) / 0.5 = 0.5
Using standard normal distribution tables or a calculator, we find the probability for Z < 0.5, which is approximately 0.6915. Therefore, the probability that a randomly selected U.S. bank will have a net interest margin less than 4.40 percent is 0.6915 or 69.15%.
(c) Net interest margin position for a bank to be less than 95% of banks
To be less than the net interest margins of 95% of banks, we need to find the 95th percentile in the standard normal distribution. The z-score associated with this is approximately 1.645. We convert this z-score back to an X value using the formula:
X = Zσ + μ = 1.645(0.5) + 4.15
X = 0.8225 + 4.15 = 4.9725%
Therefore, the bank should set its net interest margin to be lower than approximately 4.9725 percent.
When Shawn started at the new company, almost everyone within the organization was quick to offer suggestions at meetings and get involved in the decision making process. Although Shawn was normally not a very talkative person, the constant involvement of everyone else eventually had Shawn offering ideas as well. This is an example of _____________. a. Emotional intelligence theory b. Situation strength theory c. Personality conflict theory d. Transformational leadership theory e. Affective disorder theory.
Your question asks what Shawn is experience during his organization's meetings.
Answer: B). Situation strength theoryThe reason why answer choice "B). Situation strength theory" is the correct answer because the situation that Shawn is experiencing best fits the description of the Situation strength theory.
In the situation strength theory, it says that behaviors can occur because of a specific environment, and that is what is happening in this question.
The environment that Shawn is in shows a strength in sharing ideas and is highly involved in the decision processes of the organization. Because of this environment, Shawn's behavior has transitioned in order to meet the level of behavior that he is experiencing in the environment.
This is the reason why Shawn's behavior changed from being a not-so talkative person to sharing the ideas for the organization
I hope this helps!Best regards, MasterInvestorShawn's situation is an example of the Situation Strength Theory, which asserts that an individual's personality expression can be influenced by the cues and expectations of their current environment.
Explanation:This scenario is an example of
Situation Strength Theory
. This theory postulates that the way we manifest our personality (in this case, Shawn's typical reserve) can be influenced by the circumstances we find ourselves in. The strength of a situation can be determined by how clear the cues are regarding the expected behaviour (in Shawn's case, his colleagues actively participating in meetings), the consequence of the behavior, and the consistency of the expected behavior. In this company culture, where active participation is the norm, it led Shawn to also participate more than he usually does.
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Consider the following production and cost data for two products, X and Y:Product X ProductYContribution margin per unit............................. $24 $18Machine-hours needed per unit........................ 3 hours 2 hoursThe company has 15,000 machine hours available each period, and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period?a. $120,000b. $125,000c. $135,000d. $150,000
Answer:
c. $135,000
Explanation:
We will compare the contribution per machine hour as machine hours are limited.
Computing contribution per machine hour
Product X Y
Contribution per unit $24 $18
Machine hours per unit 3 2
Contribution per machine
hour [tex]\frac{24}{3}[/tex] [tex]\frac{18}{2}[/tex]
= $8 = $9
Since contribution per machine hour is higher of product Y, thus maximum production of Product Y will be done, in that case total units that can be produced of Y = 15,000 hours/ 2 hours per unit = 7,500 units
Total contribution = 7,500 X $18 per unit = $135,000
Thus correct option is c. $135,000
Keaubie Company has the following: Total Sales: $500,000; Contribution Margin Ratio: 20%; Fixed Costs: $80,000; What is the amount of Keaubie Company's net income or net loss for the period? $20,000 net income $100,000 net income $20,000 net loss $100,000 net loss
Answer:
(A) $20,000 net income
Explanation:
[tex]Sales \times $Contribution Margin Ratio = Total Contribution[/tex]
500,000 * 20% = 100,000
[tex]Contribution - Fixed \: Cost = Result \: for \: the \: period[/tex]
100,000 - 80,000 = 20,000 net income
Remember: The contribution margin represent how much contribution bring to the table $1 of sales.
So if CMR equals to 20% each dollar generates $0.20 of contribution
Final answer:
To calculate Keaubie Company's net income, multiply the total sales by the contribution margin ratio to get the contribution margin, and then subtract fixed costs. The calculation shows a $20,000 net income for the period.
Explanation:
Net Income Calculation for Keaubie Company
To determine the net income or net loss for the Keaubie Company, we can use the following financial information:
Total Sales: $500,000Contribution Margin Ratio: 20%Fixed Costs: $80,000The first step is to calculate the contribution margin which is obtained by multiplying the total sales by the contribution margin ratio. The contribution margin amounts to:
Total Sales × Contribution Margin Ratio = $500,000 × 20% = $100,000
Next, we will subtract the fixed costs from the contribution margin to get the net income:
Contribution Margin - Fixed Costs = Net Income
$100,000 - $80,000 = $20,000 net income.
Therefore, Keaubie Company has a net income of $20,000 for the period.
You want to borrow $97,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $2,050, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60-month APR loan?
Answer:
9,7699353%
Explanation:
We need to calculate the Rate of return for the loan with 60 payment of 2050 every month of a loan for 97,000
[tex]2050* \frac{1-(1+rate)^{60} }{rate} = 97,000[/tex]
This is formula is completed using lineal interpolation, or a financial calculator, or a computer software like Excel among others.
This will give us a monthly rate of 0,81416%
Now to convert to Annual Percentage rate we multply by 12
and get 9,7699353%
The next dividend payment by Savitz, Inc., will be $1.84 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. The stock currently sells for $36 per share. a. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the expected capital gains yield? (Enter your answer as a percent.)
Answer:
Dividend Yield 5.11%
Cost of Capital or expected return 10.11%
Explanation:
1.84/36 = 0.0511111 = 5.11%
we use the gordon model to calculate the return.
[tex]\frac{divends}{return-growth} = Intrinsic \: Value[/tex]
[tex]\frac{1.84}{return-0.05} = 36[/tex]
1.84/36 + 0.05 = 0.1011111 = 10.1111%
The dividend yield is 5.11% and the capital gains yield can be calculated using the total return.
Explanation:To calculate the dividend yield, we divide the annual dividend payment by the current stock price. In this case, the dividend is $1.84 per share and the stock price is $36. Dividing $1.84 by $36 gives us 0.0511. Multiply this by 100 to get the dividend yield as a percentage: 5.11%.
The expected capital gains yield can be calculated by subtracting the dividend yield from the total return. Since the question does not provide the total return, we cannot calculate the exact capital gains yield. However, we know that the total return includes both dividends and capital gains, so the capital gains yield would be the remaining percentage after subtracting the dividend yield from the total return.
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Hugh has the choice between investing in a City of Heflin bond at 6 percent or investing in a Surething bond at 9 percent. Assuming that both bonds have the same nontax characteristics and that Hugh has a 40 percent marginal tax rate, what interest rate does Surething Inc., need to offer to make Hugh indifferent between investing in the two bonds?
Hugh would be indifferent in investing in the City of Heflin bond or Surething bond if Surething offers an interest rate of 10%. This is because the after-tax return for Surething at 10% would be equal to the return from the tax-exempt City of Heflin bond at 6%.
Explanation:The key to solving this problem is understanding the concept of after-tax returns. Hugh, being in the 40% tax bracket, must consider how much he will actually keep after tax. For the City of Heflin bond at 6%, if this is a tax-free bond, the after-tax yield is 6%. If Hugh were considering a taxable bond like the Surething bond, the yield would be reduced by his tax rate. This can be calculated using the formula: Before-tax Yield * (1 - Tax Rate).
Using this formula, the equivalent interest rate Surething Inc. needs to offer is: 0.06 / (1 - 0.4) = 0.1 or 10%. Hugh would be indifferent to investing in the two bonds if Surething offers a 10% rate as this would give him the same after-tax return as the 6% tax-free bond.
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Firms in a monopolistically competitive industry produce: a) homogeneous goods and services. b) differentiated products. c) monopolistic goods only. d) only industrial products—and no consumer products. e) only consumer products—and no industrial products.
Firms in a monopolistically competitive industry produce differentiated products.
Firms in a monopolistically competitive industry produce differentiated products—products that differ slightly but serve similar purposes—to establish themselves in the market. They have some market power to set prices.
Explanation:Firms in a monopolistically competitive industry produce differentiated products. Monopolistic competition is a type of imperfect competition in which there are many producers and consumers in the marketplace, but each firm has a minuscule percentage of the market share. Each firm differentiates its products in some way from its competitors' products. Some examples are branding, quality, location, service, etc., instead of competing on price alone. Firms in these types of industries have some degree of market power, allowing them to charge different prices for their products.
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If imports are $100 million less than exports, government expenditures are $500 million, consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP is
Answer:
$1900 million
Explanation:
The formula for GDP :
Y(GDP)= Investment spending + Consumer expenditure + Government expenditure + Imports - Exports
if we input the numbers from our example we can find out the calculation of GDP as so:
GDP = $500 million + $1000 million + $500 million - $100 million
∴ GDP = $1900 million
Consider the special case of a monopoly in which MC = 0. Let's find the firm's best choice when more goods can be produced at no extra cost. A great deal of e-commerce is close to this model, where the fixed cost of inventing the product and satisfying government regulators is the only cost that matters. Consider a monopoly facing the following demand curve and fixed costs: P = 120 – 12Q; Fixed costs = 1,000 Should the firm go into business? If so, how much should the firm produce?
Answer: No, because of loss.
Explanation:
Given that it is a case of monopoly where, MC = 0
Demand curve: P = 120 - 12Q
Fixed Cost (FC) = 1,000
profit maximizing condition for a monopolist, MR = MC
Total Revenue(TR) = PQ = 120Q - 12Q²
Marginal Revenue(MR) = [tex]\frac{dTR}{dQ}[/tex]
= 120 - 24Q
Now, MR = MC
120 - 24Q = 0
Q = 5 units
P = 120 - 12 × 5 = $60
Profit/ Loss = TR - FC [ ∴ TR = 300]
= 300 - 1000
= -700
So, there is loss incurred if the firm go into the business.
Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year 1, $12,500; year 2, $10,000; year 3, $7,500; year 4, $5,000; year 5, $2,500; year 6, $0; and year 7, $12,500. Walt believes that he should earn an annual rate of 8 percent on this investment. How much should he pay for this investment?
Considering an 8% annual rate of return, Walt should not pay more than $39,315 for this investment, which is the sum of the present values of the investment returns over the seven-year period.
Explanation:In order to ascertain how much Walt should pay for an investment that provides varying returns for seven years with an intended annual rate of 8%, we need to calculate the present value of all the future investments. This cash flow is discounted to the present value using the formula: PV = FV / (1 + r)^n where FV is future value, r is the interest rate and n is the number of periods.
Year 1: $12,500 / (1 + 0.08)^1 = $11,574Year 2: $10,000 / (1 + 0.08)^2 = $8,610Year 3: $7,500 / (1 + 0.08)^3 = $5,887Year 4: $5,000 / (1 + 0.08)^4 = $3,675Year 5: $2,500 / (1 + 0.08)^5 = $1,735Year 6: $0Year 7: $12,500 / (1 + 0.08)^7 = $7,834By summing up these calculated values, Walt should not pay more than $39,315 for this investment given his expectation of an 8% return.
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he University Health Center receives 500 flu vaccinations at the beginning of each flu season. Suppose they offer these vaccines for $20.00 each. Assume that college students have varying budgets, some have some money to spare, some are on a very tight budget. Some students have pre‑existing conditions, such as asthma and diabetes, that place them at high risk for the flu. Who will receive the vaccines if the University Health Center sells them for this price? the students who will pay for them at that price the students who most need them the students with asthma and diabetes the students who most want them Suppose the school sells all of the vaccines at this price. What has it managed to achieve? Choose the best answer.
Answer: 1. STATEMENT 1
2. It has achieved efficiency.
Explanation:
1. The students who will pay for them at that price will receive the vaccines if the university health center sell them for this price. In this case the theory of free market comes into play, those who have the money will get the resources.
2. The free market theory helps to establish efficiency. If the resources were to be distributed for free the demand will exceed supply resulting in inefficient use of resources.
The flu vaccines offered at $20 each will be bought by those willing to pay that price, which may not align with those who most need them. The school has allocated the vaccines by market demand but hasn't necessarily achieved an efficient distribution for maximizing social value.
Explanation:When the University Health Center offers flu vaccinations at $20.00 each, it will likely result in the vaccines being sold to the students who are willing to pay for them at that price. This may not necessarily be the students who most need them, such as those with asthma and diabetes or those who are on a very tight budget. In selling all of the vaccines at this price, the school has managed to allocate the vaccines to those who value them enough to pay the set price, but this does not guarantee vaccination of those who could potentially benefit the most or contribute most to the greater social value of flu shots.
Flu vaccinations carry a higher social value than the sum of their individual valuations because they not only protect the vaccinated individual but also help in reducing the spread of the flu to others. This creates external benefits and contributes to a healthier community. In offering the vaccines at a fixed price, the school has managed an allocation based on market demand but may not have reached an efficient distribution based on social need and benefit.
Consider the following information: Portfolio Expected Return Beta Risk-free 6 % 0 Market 10.2 1.0 A 8.2 1.4 a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.4. (Round your answer to 2 decimal places.) b. What is the alpha of portfolio A.
Answer:
a. The return predicted by CAPM for a portfolio with a beta of 1.4 is 11.88%
b. The alpha of portfolio A is -3.68%
Explanation:
The formula for computing the return by Capital Assets Pricing Method (CAPM) model.
Expected return = Risk Free rate + (Beta × Market Risk Premium)
where,
Market risk premium = market return - risk free rate
Now, putting the values in the above equation
a. Expected return = 0.06 + 1.4 × (0.102 - 0.06)
= 0.06 + 1.4 × 0.042
= 0.06 + 0.0588
= 0.1188
= 11.88 %
Thus, the return predicted by CAPM for a portfolio with a beta of 1.4 is 11.88%.
b. The alpha should be = Portfolio expected return - expected return
= 8.20 - 11.88 %
= -3.68%
Thus, the alpha of portfolio A is -3.68%
Using the Capital Asset Pricing Model (CAPM), the expected return on portfolio A, which has a beta of 1.4, is 10.08%. The alpha of portfolio A is -1.88, indicating that it has underperformed the market given its level of risk.
Explanation:The Capital Asset Pricing Model (CAPM) is a formula used in the finance industry to calculate the expected return on an investment given its risk-free rate, beta and the expected market return.
a. The expected return on portfolio A, which has a beta of 1.4, can be calculated as follows:
Return = Risk-free rate + Beta * (Market Return - Risk-free rate)
Applying the given values,
Return = 6 + 1.4 * (10.2 - 6) = 10.08%.
b. The alpha of portfolio A is the difference between the actual return and the expected return calculated through CAPM. In this case, the actual return is 8.2%. Therefore, Alpha = Actual return - CAPM return = 8.2 - 10.08 = -1.88. A negative alpha means the investment has underperformed the market given its level of risk.
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If a store sells a good at the market price, even though the government authorities have set the minimum price that can be charged, the store is selling the good in a(n): black market for a market price that is higher. black market for a market price that is lower. effort to eliminate a surplus of the good. legal market for a market price that is higher. legal market for a market price that is lower.
When a store sells goods at a market price that is lower than the government set minimum price, it is operating in a legal market where market forces like demand and supply are driving down the price. This doesn't indicate a black market operation. The market price can be below the minimum price in situations of surplus or increased competition.
Explanation:If a store sells a good at the market price, even though the government authorities have set the minimum price that can be charged, the store is conducting a legal market for a market price that is lower. A minimum price, also known as a price floor, is a legal minimum price set by the government. However, the market price can be lower if demand and supply factors drive it down. The market price is determined by the interaction of quantity demanded and quantity supplied. In a situation where supply exceeds demand, the market price can fall below the minimum price.
Consider an example where international companies find there is an excess supply of a product, which drives the market price down below their cost of production. A local store, in order to compete and sell their goods, might also lower their prices, even below the set minimum price. This becomes a function of the shift in demand or supply factors rather than a violation of the minimum price rule.
Moreover, if the market price is lower than the minimum price, it does not signify a black market operation. A black market situation would usually arise when goods are sold illegally, above or below the government set price, usually during times of shortage or rationing.
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The store is selling goods at a market price lower than the set minimum price within an illegal black market. Black markets exist often as a result of pricing controls by the government.
Explanation:If a store is selling a good at market price, despite a set minimum price by the government, it is functioning within a black market for a market price that is lower. A black market refers to an illegal market in which goods or currencies are bought and sold in violation of rationing or government control. Here, the goods are sold below the price mandated by the government. A primary reason for the existence of such markets is the set price controls by the government, which make goods available at official prices lower than their market equilibrium levels, leading to shortages and the emergence of black markets.
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According to the research literature on strategy and structure, the relationship between strategy and structure most strongly imply that _____________.
strategy can effectively be formulated without considering structural elements
structure follows strategy strategy follows structure
structure typically has a very small influence on the strategy of a firm
Answer: Option B
Explanation: An organization and arrangement of interrelated elements can be defined as the structure of the primary subject. In simple words it can be described as many party of an element put together.
Strategy can be defined as the method or plan made to achieve future goals or objectives.
a. Strategy formulation cannot be done with out taking into consideration the structure. for example- a company with debt in its financial structure cannot take same risks as company with equity in its financial structure.
b. wrong strategy formulation can effect structure severely similarly structure of the organisation must be taken into consideration before
making strategy.
c. Structure of organisation is the primary consideration in making strategy thus its influence will be high.
Therefore right answer is statement B .
_____ track progress in meeting an organization’s objectives and help managers determine if a specific objective is being achieved. Select one: a. Goals b. Taglines c. Headlines d. Results
Answer:
The answer is
A.. Goals
Explanation:
Not sure how to explain this one
Hope it helps
In early July, Damon Rutton purchased a $70 ticket to the December 15 game of the Sarasota Shippers. Parking for the game was expected to cost approximately $22, and Rutton would probably spend another $15 for a souvenir program and food. It is now December 14. The Shippers were having a miserable season and the temperature was expected to peak at 5 ˚ on game day. Damon is thinking about skipping the game and taking his wife to the movies and dinner, at a cost of $50. The amount of sunk cost that should influence Damon’s decision to spend some time with his wife is
Answer:
Sunk cost will be = $70
Explanation:
Sunk Cost refers to the cost for which the amount has been already spent, and cannot be recovered. These are generally incurred and then not regarded for decision making as irrespective of decision being viable or not this cost cannot be avoided.
In the given instance, Damon Rutton Purchased the ticket of $70
This is the only cost which has already been incurred, else other costs of parking and food will only be incurred if he visits the game of Sarasota Shippers.
When he spend some time with his wife sunk cost will be = $70
A coin sold at auction in 2017 for $9,786,000. The coin had a face value of $15 when it was issued in 1794 and had previously been sold for $140,000 in 1973. a. At what annual rate did the coin appreciate from its first minting to the 1973 sale? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What annual rate did the 1973 buyer earn on his purchase? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. At what annual rate did the coin appreciate from its first minting to the 2017 sale? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
(A) 5.24%
(B) 10.13%
Explanation:
To solve this we are going to use the the formula for compound interest
[tex]$$Principal * (1 + rate)^{time} =$ Ammount[/tex]
We are going to post the know values to get the rate
time = 1,973-1,794 = 179
[tex]15 * (1 + rate)^{223} =$ 140,000 = 1.052395485[/tex]
rate = 5.2395%
and for the second period we are going to do the same
time = 2017 - 1973 = 44
[tex]140,000 * (1 + rate)^{44} =$ 9,786,000 = 1.101336254[/tex]
rate = 10.1336%
The annual rate of appreciation for the coin from its minting in 1794 to the 1973 sale, from 1973 to the 2017 sale, and from 1794 to the 2017 sale, can be calculated using the compound interest formula with the respective values for initial price, final price, and the number of years.
To calculate the annual rate of appreciation for the coin from 1794 to 1973, we apply the formula for compound interest: V = P(1 + r)^n, where V is the final value, P is the initial value, r is the annual interest rate, and n is the number of years. We rearrange the formula to solve for r, giving us r = (V/P)^(1/n) - 1. By plugging in the values: P = $15, V = $140,000, and n = 1973 - 1794 = 179 years, we can calculate the annual rate.
To find the annual rate of appreciation from 1973 to 2017, we use the same formula with different values: P = $140,000, V = $9,786,000, and n = 2017 - 1973 = 44 years.
Finally, to calculate the rate from 1794 to 2017, we use the initial value of $15 and the final value of $9,786,000 over 223 years (2017 - 1794).
Because of a chronic water shortage in California, new athletic fields must use artificial turf or xeriscape landscaping. If the value of the water saved each quarter is $3,500, how much can a private developer afford to spend now on artificial turf provided he must recover his investment in 5 years. Use an interest rate of 9% per year, compounded continuously?
To calculate the amount a private developer can spend on artificial turf, we use the concept of present value. Given an interest rate of 9% per year, compounded continuously, we determine the present value of the future cash flows from water savings. The amount a private developer can afford to spend is approximately $1,511.06.
Explanation:To calculate how much a private developer can afford to spend on artificial turf, we will use the concept of present value. Given an interest rate of 9% per year, compounded continuously, we need to determine the present value of the future cash flows generated by the water saved each quarter.
Using the formula for continuous compounding, we can calculate the present value:
Present Value = Future Value / e^(interest rate * time)
where e is Euler's number (approximately 2.71828), and time is the number of quarters (5 years = 20 quarters).
Plugging in the values, the present value of the water saved is:
Present Value = $3,500 / e^(0.09 * 20)
Calculating this value, a private developer can afford to spend approximately $1,511.06 on artificial turf now.
Gordon Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2017. The truck is expected to have a salvage value of $2,000 at the end of its 5-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.
The annual depreciation for the first year under the declining-balance method is $6,200, and for the second year is $4,960.
Explanation:The declining-balance depreciation method is an accelerated depreciation method that allows companies to depreciate the cost of an asset more heavily in the earlier years of its useful life. To calculate the annual depreciation for the first year, you would use the double the straight-line rate, which is 1/5 or 20%. So, 20% of $31,000 is $6,200. For the second year, you would apply the same rate to the remaining balance after the first year's depreciation. The remaining balance after the first year's depreciation is $31,000 - $6,200 = $24,800. Therefore, the second year's depreciation would be 20% of $24,800, which is $4,960.
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Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company’s activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours $ 5.55 per direct labor-hour Batch processing Number of batches $ 107.00 per batch Order processing Number of orders $ 275.00 per order Customer service Number of customers $ 2,463.00 per customer The company just completed a single order from Interstate Trucking for 1,000 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.25 direct labor-hours. The selling price was $20 per unit, the direct materials cost was $8.50 per unit, and the direct labor cost was $6.00 per unit. This was Interstate Trucking’s only order during the year. Required: Prepare a report showing the customer margin on sales to Interstate Trucking for the year.
Answer:
Report Showing Customer Margin
Interstate Trucking
Sales value for 1,000 custom seat cushion = $20 X 1,000 $20,000
Less: Direct material = $8.5 X 1,000 units ($8,500)
Less: Direct labor = $6 X 1,000 units ($6,000)
Less: Batch processing $107 X 2 batches ($214)
Less: Direct labor hours = 1 hour/0.25 = 4 units in an hour
Total = ($1,000/4) X $5.55 per labor hour ($1,387.5)
Less: Order processing, cost per order ($275)
Less: Customer service, per customer ($2,463)
Profit on this customer $1,160.5
Customer margin = ( $1,160.5/$20,000 )* 100 = 5.80%
The calculate the customer margin on sales is 5.80%.
How to calculate the customer margin on sales?From the information given, the following can be deduced:
Sales value for 1,000 custom seat cushion = $20 × 1,000 = $20,000
Less: Direct material = $8.5 × 1,000 units = $8500
Less: Direct labor = $6 × 1,000 = $6000
Less: Batch processing = $107 × 2 = ($214)
Less: Direct labor hours = 1 hour/0.25 = 4 units in an hour
Total = ($1,387.5)
Less: Order processing cost = ($275)
Less: Customer services = ($2,463)
Therefore, the profit on this customer will be $1,160.5. Then, the customer margin will be:
= $1,160.5/$20,000 × 100
= 5.80%
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A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:
Answer:
88,000 equivalent units for the period
Explanation:
one way : work on beginning + started - incomplete ending
20,000 x (1 - 0.2) = 16,000 units work on BI WIP during the period
90,000 units started
30,000 x (1- 0.4) = (18,000) unfinished equivalent units
88,000 equivalent units for the period.
Other way: work on beginning + start and trasnferred + work on ending
20,000 x (1 - 0.2) = 16,000 units work on BI WIP during the period
60,000 started and transferred-out
30,000 x .4 = 12,000 work on ending WIP
88,000 equivalent units for the period.
Other way: transferred out + work on ending - previous work on beginning
80,000 transferred out
30,000 x .4 = 12,000 work on ending WIP
20,000 x .2 = (4,000) previous work on beginning
88,000 equivalent units for the period.
The equivalent units of production with regard to direct labor, using the weighted-average method, is 76,000 units.
Explanation:In the weighted-average method, we need to calculate the equivalent units of production with respect to direct labor. To do this, we need to consider the units that were in process at the beginning and add them to the units started and completed during the period. In this case, the beginning units were 20,000 units that were 20% complete, so the equivalent units for direct labor is 20,000 * 0.20 = 4,000 units. Additionally, 60,000 units were started and finished during the period, so the equivalent units for direct labor is 60,000 units.
Next, we consider the units that were in process at the end of the period. There were 30,000 units that were 40% complete, so the equivalent units for direct labor is 30,000 * 0.40 = 12,000 units.
Finally, we add up all the equivalent units: 4,000 (beginning) + 60,000 (started and finished) + 12,000 (ending) = 76,000 equivalent units of production with regard to direct labor.
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Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. Which of the following statements regarding economic surplus in each market structure is true? Under perfectly competitive conditions, economic surplus is maximized. Under monopoly conditions economic surplus is less than under perfect competition and there is a deadweight loss. Under perfectly competitive conditions, economic surplus is equal to consumer surplus; there is no producer surplus because firms are price-takers. Under monopoly conditions, economic surplus is equal to producer surplus. Under perfectly competitive conditions, economic surplus in this industry is maximized. Under monopoly conditions economic surplus is minimized. Under perfectly competitive conditions, economic surplus in this industry equals consumer surplus plus producer surplus. Under monopoly conditions, some consumer surplus is transferred to producer surplus, but economic surplus is the same as it was under perfectly competitive conditions.
Answer:
The economic surplus is maximized under perfect competition. Under monopoly, the total economic surplus is less than perfect competition because there is some dead weight loss involved.
Explanation:
The economic surplus is a sum of producer surplus and consumer surplus. In the perfect competition, the economic surplus is maximized as the price is equal to equilibrium price.
In the monopoly market, the consumer surplus gets reduced and producer surplus increases. But since there is dead weight loss involved, the overall economic surplus is less than what it is in perfect market.
Under perfect competition, economic surplus is maximized, while under monopoly conditions, economic surplus is less than under perfect competition with a deadweight loss.
Explanation:In a hypothetical case where an industry transitions from perfect competition to monopoly, the statement that economic surplus is maximized under perfectly competitive conditions is true. Under perfect competition, economic surplus is equal to both consumer surplus and producer surplus, as firms are price-takers and there is no deadweight loss. However, under a monopoly, economic surplus is reduced compared to perfect competition, and there is a deadweight loss due to the higher prices set by the monopolist.
Therefore, the correct statement is: Under perfectly competitive conditions, economic surplus in this industry equals consumer surplus plus producer surplus. Under monopoly conditions, economic surplus is less than under perfect competition, and there is a deadweight loss.
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A number macroeconomic variables decline during recessions. One of these variables is the GDP. a) What other variables, besides real GDP, tend to decline during recessions? Given the definition of real GDP and its components, explain the declines in these economic variables which are to be expected. b) Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend in spite of the cycles?
Answer:
(a )Besides real GDP, consumption spending and investment spending decline during recessions.
(b) GDP grows in long run because of continuous increase in production because of population growth.
Explanation:
(a) During recessions, there is a general slow down in the economic activities. People stop spending on the things that are not necessary. There is a decline in consumption spending. Investment spending also falls. There is a fall in employment.
(b) In the long run though, the real GDP shows an upward trend as population is continuously increasing and so is the need for goods and services. To fulfill these needs, the production of goods and services is rising continuously. This contributes in the growth of GDP in the long run, despite business cycles and fluctuations.
Final answer:
Macroeconomic variables that decline during recessions include real income, employment, industrial production, and wholesale-retail sales, due to reduced consumer and business spending. Real GDP in the United States shows a long-term upward trend despite business cycles, thanks to technological advancements, productivity improvements, population growth, and capital investments.
Explanation:
Macroeconomic Variables During Recessions-
During recessions, several macroeconomic variables tend to decline besides real GDP. According to the National Bureau of Economic Research (NBER), key indicators include real income, employment, industrial production, and wholesale-retail sales. During a recession, consumer and business spending often decrease, leading to a reduction in real income. In turn, businesses reduce production and cut down on labor, causing unemployment rates to rise and industrial production to fall. Likewise, with lower consumer confidence and reduced incomes, spending on both wholesale and retail goods diminishes.
Real GDP Trend in the United States-
Describing the long-term increase in U.S. GDP requires understanding of the business cycle. Despite periods of expansion and contraction, technological advancements, productivity improvements, population growth, and capital investments have driven the long-term upward trend in real GDP. These factors contribute to the economy's expansion over time, even though it experiences short-term fluctuations due to the business cycle.