Final answer:
The decline in wage rate results in movement along the demand curve for labor. The decrease in the price of televisions and the exit of several firms from the TV market in China cause the demand curve for labor to shift to the left. New vocational courses could potentially shift the demand curve for labor to the right.
Explanation:
When analyzing shifts in the market demand curve for labor in electronics factories in China, different factors will have distinct impacts. Below are the analyzed scenarios:
The wage rate declines: This will result in a movement along the existing demand curve for labor, as it reflects a change in the quantity of labor demanded at a lower wage rate, rather than a shift in the overall demand for labor.The price of televisions declines: This will likely cause the demand curve for labor to shift to the left, since lower prices for televisions could reduce producers' revenue and, consequently, the number of workers they can afford to hire.Several firms exit the TV market in China: This would also typically result in a shift to the left of the labor demand curve because there would be fewer firms demanding labor.Chinese high schools introduce new vocational courses in assembling electronic products: This could potentially shift the labor demand curve to the right as it might increase the productivity of the labor force, making workers more valuable to employers.Baldwin has negotiated a new labor contract for the next round that will affect the cost for their product Baker. Labor costs will go from $1.90 to $2.40 per unit. In addition, their material costs have fallen from $6.82 to $5.82. Assume all period costs as reported on Baldwin's Income Statement remain the same. If Baldwin were to pass on half the new costs of labor and half the savings in materials to customers by adjusting the price of their product, how many units of product Baker would need to be sold next round to break even on the product?
A.759
B.874
C.1,047
D.848
Answer:
D.848
Explanation:
Please see attachment
The labor cost per unit has increased by $0.50 while the material cost has decreased by $1.00, leading to a net decrease in total unit cost by $0.50. If half of the new costs/savings are passed to the customers, there will be a net decrease in the selling price by $0.25 per unit. However, due to missing data such as unit selling price and fixed costs, we can't calculate the exact break-even point.
Explanation:First, let's calculate the impact of labor and material costs changes on the unit cost of product Baker. The labor cost per unit has increased by $0.50 ($2.40 - $1.90) but the material cost per unit has decreased by $1.00 ($6.82 - $5.82) resulting in a net decrease in the total unit cost by $0.50. If Baldwin decides to pass half of the new costs/savings to the customers, this means there will be a net decrease in the selling price by $0.25 per unit.
To calculate the number of units needed to break even, we need to know the unit contribution margin (the selling price per unit - unit variable cost). Since all period costs are said to remain the same, we can use this figure as the fixed cost in our break-even formula. Unfortunately, as important data such as the selling price per unit and fixed costs are missing, it's not possible to solve the break-even point problem.
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Effect of Transactions on Cash Flows State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows: Retired $190,000 of bonds, on which there was $1,900 of unamortized discount, for $198,000. Sold 7,000 shares of $30 par common stock for $69 per share. Sold equipment with a book value of $45,100 for $64,900. Purchased land for $417,000 cash. Purchased a building by paying $85,000 cash and issuing a $100,000 mortgage note payable. Sold a new issue of $320,000 of bonds at 99. Purchased 5,400 shares of $20 par common stock as treasury stock at $39 per share. Paid dividends of $2.00 per share. There were 33,000 shares issued and 5,000 shares of treasury stock.
Answer:
Explanation:
The effects of (cash receipt or payment and amount) is shown below:
Retired $190,000 of bonds, on which there was $1,900 of unamortized discount, for $198,000. - cash payment of $198,000
Sold 7,000 shares of $30 par common stock for $69 per share - cash receipts for $483,000 (7,000 shares × $69)
Sold equipment with a book value of $45,100 for $64,900 - cash receipts for $64,900
Purchased land for $417,000 cash - cash payment for $417,000
Purchased a building by paying $85,000 cash and issuing a $100,000 mortgage note payable - cash payment for $85,000
Sold a new issue of $320,000 of bonds at 99 - cash receipts for $316,800 ($320,000 × 0.99)
Purchased 5,400 shares of $20 par common stock as treasury stock at $39 per share - $210,600 (5,400 shares × $39)
Paid dividends of $2.00 per share. There were 33,000 shares issued and 5,000 shares of treasury stock - cash payment for $52,000
(33,000 shares - 5,000 shares) × $2
Suppose that the stock market experiences a significant and prolonged decline. In response, the Federal Reserve lowers the federal funds interest rate. Not long afterward the interest rate decline, there is a large positive shock to investment spending. As a result of both the monetary policy action and the investment spending shock:
O actual output may go above potential outputO inflation will increase more than the FOMC had intendedO the unemployment rate will be below the natural rateO all of the above
Answer:
a decrease in the interest rate and a positive increase in the demand will increase the demand that will increase the actual output that will go beyond the potential output and increase the inflation and decrease the unemployment rate.
Explanation:
a decrease in the interest rate and a positive increase in the demand will increase the demand that will increase the actual output that will go beyond the potential output and increase the inflation and decrease the unemployment rate.
A firm is considering taking a project that will produce $12 million of revenue per year. Cash expenses will be $5 million, and depreciation expenses will be $1 million per year. The project would also reduce the cash revenues of an existing project by $2 million. What is the free cash flow on the project, per year, if the firm is in the 40 percent marginal tax rate?
The project's annual free cash flow, considering the impact on the other project and the 40% marginal tax rate, is $2.6 million.
Explanation:The subject pertains to the determination of the annual free cash flow of a project. Free cash flow is calculated by subtracting cash expenses, tax, and the impact on revenues from other projects from the total revenue it produces.
Here's how it's done:
Determine the operating income, which is the total revenue minus cash expenses and depreciation expenses. Subtract $5 million and $1 million from $12 million, which yields $6 million.Calculate the tax by multiplying the operating income by the tax rate. Hence, $6 million multiplied by 40% (or 0.40) amounts to $2.4 million.Compute for the net operating profit after taxes (NOPAT) by subtracting the tax from the operating income. Thus, $6 million minus $2.4 million equals $3.6 million.Add back the depreciation to the NOPAT since it is a non-cash expense. So, $3.6 million plus $1 million results to $4.6 million.Finally, incorporate the impact on other projects, which in this case is a decrease in cash revenues of $2 million. Therefore, $4.6 million minus $2 million gives us a free cash flow of $2.6 million per year.Learn more about Free Cash Flow here:https://brainly.com/question/34881412
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To calculate the annual free cash flow, you subtract cash expenses and opportunity costs from revenue, add non-cash expenses, then subtract taxes on the remaining amount. The annual free cash flow for the project is $4 million.
In order to calculate the free cash flow for the project, we need to account for the operating cash flows, changes in net working capital, and expenditures. The operating cash flows can be derived from the project's revenue, expenses, and taxes. Depreciation is non-cash, so we add it back after deducting taxes. Additionally, the reduction in cash revenue from an existing project is considered an opportunity cost and must be subtracted to reflect the true incremental cash flows from the project.
Here is the step-by-step calculation:
Calculate total revenue: $12 million.Subtract cash expenses: $12 million - $5 million = $7 million.Account for the opportunity cost: $7 million - $2 million = $5 million.Add back depreciation (since it's a non-cash expense): $5 million + $1 million = $6 million.Calculate taxes (we apply the tax rate to revenue minus cash expenses, not including depreciation): ($7 million - $2 million) * 40% = $2 million tax expense.Get the after-tax operating cash flow: $6 million - $2 million = $4 million.The annual free cash flow of the project is $4 million.
Each of the following parts describes a firm that was an early mover in its market. In light of the information provided, indicate whether the firm’s position as an early mover is likely to be the basis of a sustainable competitive advantage, and explain why or why not.A firm has a 60% share of T3MP, a commodity chemical used to make industrial solvents. Minimum efficient scale is thought to be 50% of current market demand. Recently, a change in environmental regulation has dramatically raised the price of a substitute chemical that indirectly competes with T3MP. This undermines the market for the substitute, which is about twice the size of the market for T3MP.
Answer:
Check the following explanation
Explanation:
Let us consider Porter’s Five forces strategy, in analyzing the particular scenario of Bank and that of the firm which produces T3MP chemical.
As the bank is an early mover in the issuance of ATM cards, the bank definitely got the competitive advantage. As an early mover, the bank faced very low threat of new entrants with regard to distribution of ATM cards. Therefore, the bank could capture a large area of urban region. Also, the switching cost for bank customers is quite high and in the case of banks, generally the individual customers prefer to stick to one or two banks. As an early mover, this was definitely an advantage to the bank. As a result, the bank also got a loyal customer base in the long run. When the brand loyalty was combined with the high switching cost of bank products; in terms of ATM, the entry of a potential competitor was difficult for the bank. Since the ATM cards are unique to each customer and bank, the ATM products adopts a generic differentiation strategy in terms of technology and point of locations. The place is definitely a competitive advantage of bank ATMs and being an early mover, they could capture a large share of customers in the urban areas.
As the ATM cards are specially made for the particular banks, they are definitely a tool for gaining advantage over the competitors. Hence the bank enjoys a definitive leadership in terms of its competitive advantage as an early mover where it could capture a large urban area, and in terms of technology where one bank’s ATM card doesn’t fit into another.
In the case of second firm, which has a 60 percent share of T3MP, faces the threat from substitute products. But T3MP has got the competitive advantage over its substitute product, due to the low bargaining power of customers. T3MP seems to have only a major substitute, whose market share seemed to have dented by the increase in price of the substitute. The low price of T3MP compared to the substitute is definitely a competitive advantage for the firm. This would decrease the competition from the substitute product which in turn will increase the sale of T3MP. Further, the substitute won’t be able to limit the growth of T3MP by setting a sealing price. The firm could increase its marginal returns through increased sale of T3MP. Thus the firm could capture the market share of the substitute which is twice as that of T3MP and could increase its revenue and earning potential.
Suppose that you are a systems analyst on a project that involves modifying the sales order process. Since your company receives in the neighborhood of 2500 sales orders per day, how many do you need to sample if you want 95% certainty that you have covered all variations? What if the number of sales orders per day was 25,000 orders?
Answer:
Sample size = 384.16 ≈ 385
If we increase the order size to 25,000, there will be no change in the sample size as sample size is independent of the number of orders
Explanation:
Data provided in the question:
Number of sales order received per day = 2500
Confidence level = 95%
Certainty factor for 95% certainty = 1.96
Now,
Sample size = [tex]0.25\times(\frac{\textup{Certainty factor}}{\textup{1 -Desired accuracy}})^2[/tex]
on substituting the respective values, we get
Sample size = [tex]0.25\times(\frac{\textup{1.96}}{\textup{1 - 0.95}})^2[/tex]
or
Sample size = 384.16 ≈ 385
If we increase the order size to 25,000, there will be no change in the sample size as sample size is independent of the number of orders
The population of deer in a certain area of Stanly county grows proportional to itself. The population of deer in 2000 was found to be 145, and by 2010 the population had frown to 185. Find the growth constant k (rounded to 6 decimal places), and the expected deer population in 2013.
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
A state constructs an office building. The construction is financed with: (1) a transfer of $1 million from the General Fund; (2) a grant of $2 million from the federal government; (3) bond proceeds of $7 million; and (4) earnings of $100,000 from temporary investment of bond proceeds. All transactions occur in one year. How much should be reported as Other financing sources in the Capital Projects Fund?
Answer:
$8 million
Explanation:
There are total 4 sources involved.
But the government grants are reduced from the cost of the the project. It is not recorded as other financing sources.
Also the earnings from bond proceeds shall not be considered for the other financing sources, as that is mere use of income.
Use of general fund in these capital projects will account for such other financing sources.
Cash received from issue of bonds for this project will also account for such capital fund.
Thus, total other financing sources = $1 million + $7 million = $8 million
In this scenario, the amount to be reported as 'Other financing sources' in the Capital Projects Fund totals $8.1 million, which is the sum of the transfer from the General Fund ($1 million), the bond proceeds ($7 million), and the earnings from temporary investments ($100,000).
Explanation:In accounting for government funds, the amounts reported as Other financing sources in a Capital Projects Fund typically include transfers from other funds, proceeds from long-term debt (bonds), and interest earned on temporary investments.
In your case, the state is funding the construction of an office building with: a transfer of $1 million from the General Fund (1), a grant of $2 million from the federal government (2), bond proceeds of $7 million (3), and earnings of $100,000 from temporary investment of bond proceeds (4).
The grant from the federal government would not typically be classified as 'Other financing sources' for the Capital Projects Fund. Instead, it would be classified as revenue. Therefore, the total amount to be reported as Other financing sources in the Capital Projects Fund would be the sum of items 1, 3, and 4: $1 million + $7 million + $100,000 = $8.1 million.
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The common stock of Ecolab pays an annual dividend of $1.84 a share. The company has promised to maintain a constant dividend regardless of economic conditions. How much would investors be willing to pay for one share of Ecolab's stock assuming an equity cost of capital of 13.6%?
Answer:
$13.53
Explanation:
Data provided in the question:
Annual dividend per share, D0 = $1.84
Cost of capital, ke = 13.6% = 0.136
Now,
since,
the dividend remains the constant, the growth rate (g) of the dividend will be 0%
Also,
Current price = [ D0 × ( 1 + g ) ] ÷ [ ke - g ]
= [ $1.84 × ( 1 + 0% ) ] ÷ [ 13.6% - 0% ]
= $1.84 ÷ 0.136
= $13.53
3. Explain why price is equal to marginal revenue in pure competition but not in a monopoly. Include in your explanation why the marginal revenue curve is steeper than the demand curve for a single price monopolist?
Answer:
The answer is in a perfect competition profit is maximized when marginal cost equal marginal revenue and price is equal to average revenue and marginal revenue, while in monopolist profit is maximized when marginal cost is equal to marginal revenue.
Explanation:
The firm in a perfectly competitive market is a price taker,the price in the market is determined by the market forces of demand and supply. The firm has to sell their product at the ruling market price.The demand curve facing the firm in perfectly competitive market is horizontal or perfectly elastic, profit is therefore maximized when the marginal cost is equal to average revenue and marginal revenue. The firm in the market operate at the output level in which the price and marginal revenue is equal to marginal cost. Whatever prices that change the market demand or supply will change the demand curve faced by the firm.The firm cannot do anything to this than to accept the market price and the demand curve.
In a monopoly the demand curve is identical to the demand curve of the firm, because industry demand curve is downward sloping.The monopolist can either set the price or quantity not the two.when one is determined the value of the other will be determined by the demand function. The profit maximization of the monopolist also requires that marginal cost must be equal to marginal revenue just like in the case of perfect completion.when the monopolist equates MR and MC the monopolist determines its output and the market price for the product. The revenue curve is steeper than the demand curve,because the straight line is the market demand. The firm will have to reduce The price of the product if they want to sell more of their product the unit of the product sold is the AR which is equal to the price.Therefore the AR curve of the monopolist and the perfect competition MR and AR are both identical that informed the reason why the marginal revenue curve is steeper than the demand curve for a single price monopolist.
In a perfect competition market, the Marginal Revenue is equal to the price (MR = P), and for monopolist, the marginal revenue is not equal to the price, because changes in quantity of output affects the price.
Why is price equal to Marginal revenue in pure competition?Marginal revenue (MR) is an increase in the total revenue resulting from an increase in one unit of product. As the price always remains constant in perfect competition, increasing the total revenue from the production of 1 additional unit will be equal to the price.
Therefore, Price = Marginal Revenue (P = MR) in perfect competition.
In a monopoly the demand curve is the same as the firm's demand curve, in that the industry demand curve drops downwards. One owner can set the price or quantity and not both.
If one is determined the price of the other will be determined by the demand function. Increasing the monopolist's profit also requires that the marginal cost should be equal to the marginal revenue as if it were in perfect competition.
The Marginal revenue curve is steeper than the demand curve because a straight line is market demand. The firm will have to lower the Product Price if it wants to sell more of its product a unit of sale sold average revenue equal to the Price.
So the AR curve of AR monopolist and perfect competition MR and AR are both same.
Thus, this is the reason why the marginal revenue curve is steeper than the demand curve in the case of a monopolist.
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Greg purchased stock in Bear Stearns and Co. at a price of $88 per share one year ago. The
company was acquired by JP Morgan at a price of $11 per share. What is Gregʹs return on his
investment?
A) -87.50%
B) -113.75%
C) -100.62%
D) -96.25%
Answer:
A) -87.50%
Explanation:
The computation of the return on the investment is shown below:
= (Acquired price by JB Morgon - purchase price per share) ÷ (purchase price per share)
= ($11 per share - $88 per share) ÷ (88 per share)
= - ($77 per share) ÷ (88 per share)
= -87.50%
We simply take the difference of the price and then divide it with the purchase price per share so that the correct percentage can come.
Final answer:
Greg experienced a return on investment of -87.50% when Bear Stearns and Co. was acquired by JP Morgan at a much lower price than his original purchase price.
Explanation:
Greg's return on investment (ROI) is calculated by finding the percentage change from the original purchase price to the acquisition price. To find the ROI, we use the following formula:
ROI = ((Final Value of Investment - Initial Value of Investment) / Initial Value of Investment) * 100
Using the numbers given:
Initial Value = $88 per share
Final Value = $11 per share
ROI = (($11 - $88) / $88) * 100
Thus, ROI = ((-$77) / $88) * 100 = -87.5%
Therefore, Greg's return on his investment is -87.50%, which means he suffered a significant loss on his investment after the company was acquired.
Which of the following statements is NOT true regarding a bill of material (BOM)?
A. A BOM lists the quantity of each coponent required to make one unit of a product.
B. A BOM lists the hierarchy of components and their description.
C. In the food-service industry, BOMs manifest themselves in portion-control standards.
D. A BOM cannot be referenced on other bills of material.
Answer:
The false statement is letter "D": A BOM cannot be referenced on other bills of material.
Explanation:
A Bills of Material or BOM is a complete list including raw material, pieces and components and the quantity of each one of them that is necessary to produce or repair a product. Usually, for complementary goods, the BOM of one of them can be referenced in the BOM of another so opportunities for reducing costs can be identified.
The false statement regarding a bill of material is that a BOM cannot be referenced on other bills of material. In fact, subassemblies can have their own BOMs, which are included in the BOMs of more complex assemblies. Hence, correct option D.
The statement D. A BOM cannot be referenced on other bills of material is not true regarding a bill of material (BOM). It is quite common in complex manufacturing processes for a BOM to reference other BOMs, especially when various subassemblies are involved in creating a final product. This hierarchical structure allows for more efficient material tracking and inventory management. Therefore, subassemblies can indeed have their own BOMs, which are referenced in the BOM of a more complex assembly.
A Bill of Material (BOM) serves several critical functions in manufacturing and production:
A BOM lists the quantity of each component required to make one unit of a product, ensuring accurate material planning.
It includes a hierarchy of components along with a descriptive list, organizing the components in a way that reflects their relationships within the product.
In the food-service industry, BOMs take the form of portion-control standards, specifying the amount of each ingredient used in a dish to maintain consistency and control costs.
As the manager of a workforce with particularly stressful jobs, you plan to present techniques to help your workforce more effectively regulate emotions. Recognizing that these are individuals working in situations where they are not able to control the sources of stress, what technique would be most appropriate to teach your workforce?
Answer:
The most appropriate technique to teach the workforce would be "Cognitive Reappraisal".
Explanation:
"Cognitive Reappraisal" is a technique for managing emotions that involves an individual, realizing and accepting he has no control over a situation, and then choosing to think about the situation in a way which helps to create a positive emotional response rather than a negative one.
This technique will help the workforce regulate emotions more effectively.
Jensen Company reports the following:
Direct materials used $345,000
Direct labor incurred 250,000
Factory overhead incurred 400,000
Operating expenses 175,000
Jensen Company’s period costs are
a. $345,000
b. $250,000
c. $400,000
d. $175,000
Answer:
d. $175,000
Explanation:
The computation of the period cost is shown below:
Period costs = Operating expenses
= $175,000
It records only that expenses which are incurred during the particular year. Examples - Salaries expense, Depreciation, Repairs, and maintenance, Advertising expense, sales commission, etc
All other information which is given is not relevant. Hence, ignored it
Final answer:
The Jensen Company's period costs are its operating expenses, which are not directly tied to production. The correct period cost given in the question is $175,000, representing the operating expenses.
Explanation:
The student asked what Jensen Company's period costs are, given a breakdown of expenses including direct materials, direct labor, factory overhead, and operating expenses. Period costs are those costs that are not directly tied to the production process and are expensed in the period they are incurred. From the options given, the correct answer is d. $175,000, which represents the operating expenses. These costs are not involved in manufacturing but rather in non-production activities of the company.
Sales-oriented pricing objectives:
A. may include market share targets as well as dollar or unit sales targets.
B. might be achieved and still result in losses.
C. are especially risky during times when a firm's costs are rising rapidly.
D. All of the above are true.
E. None of the above is true.
Sales-oriented pricing objectives can include market share and sales targets but may result in losses, especially risky when firm's costs are rising rapidly.
The question pertains to the application of sales-oriented pricing objectives in the business environment. Option D, All of the above are true, is correct. Sales-oriented pricing objectives may include market share targets, and dollar or unit sales targets (A), meaning the goal is to generate a certain volume of sales, regardless of profitability. These objectives might still result in losses (B) if the revenue generated from the sales doesn't cover the costs of the business. Additionally, pursuing these objectives are especially risky during times when a firm's costs are rising rapidly (C), as it could lead to even higher losses if prices aren't adjusted appropriately.
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Sales-oriented pricing objectives may include market share targets as well as dollar or unit sales targets. Achieving these objectives doesn't guarantee profitability and a company can still experience losses. Pursuing sales-oriented pricing objectives can be particularly risky during periods when a firm's costs are rising rapidly.
Explanation:D. All of the above are true.
Sales-oriented pricing objectives may include market share targets as well as dollar or unit sales targets. Achieving these objectives doesn't guarantee profitability and a company can still experience losses.
Additionally, during periods when a firm's costs are rising rapidly, pursuing sales-oriented pricing objectives can be particularly risky.
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Cardinal Company s considering a project that would require a $2,782,000 Investment in equlpment with a useful life of five years. At the end of five years, the project would terminate and the equlpment would be sold for its salvage value of $200,000 The company's discount rate ls 18%. The project would provide net operating income each year as follows: 2,873,000 Sales Variable expenses 1,019,000 1,854,000 Contribution margin Fixed expenses: Advertising, salaries, and other 754,000 fixed out-of-pocket costs 516,400 Depreciation Total fixed expenses 1,270,400 583,600 Net operating income13. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the project’s actual net present value? (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate calculations and final answer to the nearest whole dollar amount.)
Answer:
Project's net present value is: $-1,725,937.
Explanation:
Project actual variable cost = 45% x sales = $1,292,850 ( as variable expense ratio post-audit turns out to be 45%).
Actual net operating income each year = Sales - Variable cost - total fixed expenses = $309,750.
Thus, cash flows of the project will be:
Year 0: $-2,782,000.
Year 1 to Year 4: $309,750.
Year 5: 309,750 + 200,000 (salvage value of equipment) = $509,750
NPV of the project = -2,782,000 + [ (309,750/18%) x ( 1 - 1.18^-4) ] + 509,750/1.18^5 = $-1,725,937.
The Cardinal Company's project's actual net present value (NPV), considering the actual variable expense ratio of 45%, turns out to be -$1,743,727. This is calculated by revising the net operating income (NOI), calculating its present value over five years, and subtracting the net initial investment.
Explanation:In this scenario, Cardinal Company needs to evaluate its project using the actual variable expense ratio to find out the project's actual net present value (NPV). The initial variable expenses are $1,019,000, but with a new variable expense ratio of 45%, the actual variable expenses turn out to be $2,873,000 * 45% = $1,292,850. This change would decrease the contribution margin and thus the net operating income (NOI). The altered NOI is $2,873,000 - $1,292,850 - $1,270,400 = $309,750.
We need to calculate the present value of this annual NOI for five years and then subtract the net initial investment to find the actual NPV. Using a discount rate of 18%, the present value of the NOI over the five years is $309,750 * (1 - (1 + 18%)^-5) / 18% = $838,273. The net initial investment is $2,782,000 - $200,000 (salvage value) = $2,582,000. Hence, the actual NPV of the project is $838,273 - $2,582,000 = -$1,743,727, indicating a substantial loss to the company.
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Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year.
What was the company's turnover rounded to the nearest tenth?
A) 9.8
B) 10.2
C) 9.5
D) 9.2
Answer:
The company's turnover rounded to the nearest tenth: C) 9.5
Explanation:
Asset turnover helps investors understand how effectively companies are using their assets to generate sales. Asset turnover is calculated by using following formula:
Asset Turnover = Total Sales or Revenue/ Average Total Assets
where:
Average Total Assets = (Beginning Assets + Ending Assets )/2 = (Assets at the beginning of year +Assets at end of year )/2
In the House of Orange:
Average Total Assets = ($84,000 + $90,000)/2 = $87,000
Asset Turnover = $826,650/$87,000 = 9.5
Final answer:
The company's turnover is found by dividing sales by average operating assets. Sales were $826,650 and the average operating assets were $87,000, resulting in a turnover of approximately 9.5 when rounded to the nearest tenth.
Explanation:
To find the company's turnover, we need to use the formula for asset turnover ratio, which is calculated by dividing sales by average operating assets. For the House of Orange, the sales were $826,650, and the average operating assets are the average of the beginning and end of year assets, which are $84,000 at the beginning and $90,000 at the end. Thus, the average operating assets are calculated as ($84,000 + $90,000) / 2 = $87,000.
Now, we use the sales and average operating assets to find the turnover: Turnover = Sales / Average Operating Assets = $826,650 / $87,000 ≈ 9.506, which rounded to the nearest tenth is 9.5. So, the correct answer would be (C) 9.5.
Which of the following reports filter data before it is presented to the manager as information, and only includes information about records that are out of the ordinary or not according to some standard?A) summaryB) exceptionC) externalD) detailedE) none of these
Answer: Option A
Explanation: In wimples words, a summary report refers to the statement that is prepared by the organisation with the sole objective of helping the executive level managers in their decision making.
Such reports go through various phases and is converted from a detailed explanation to the points that are most relevant to the organisation. It provides a short form detail of the factors that needs most attention of top managers.
As the top managers have to attend a number of sues they will be unable to make any step from detailed information as that will be time consuming for them.
Keren Wiseman is an employee of Dimensionworks Designs in New Mexico. She received the following achievement awards from her employer during 2017: Best Design, Santa Fe County: $1,340 Top Graphic Layout, New Mexico: $1,775 Employee of the Year: $785Required:How much of her achievement award income is taxable? ____
Answer:
$2,300
Explanation:
Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income.
The excludable amount or deduction is $1,600 out of total amount of awards.
Total amount of awards = Design + Graphic + Employee of the year
= $1,340 + $1,775 + $785
= $3,900
Taxable awards = Total amount of awards – Excludable amount
= $3,900 – $1,600
= $2,300
However, because the $3,900 total value of the awards is more than $1,600, Keren must include $2,300 in his taxable income.
Throughout history, all sorts of interesting things have been used as money, including fresh fish and cattle. Fresh fish is not an effective form of money. What essential characteristic of money does fresh fish lack that most makes it ineffective? allocated by the government store of value medium of exchange stackablity unit of account Cattle is not an effective form of money. What essential characteristic of money does cattle lack that most makes it ineffective? store of value medium of exchange stackability unit of account allocated by the government
Answer: Medium of exchange
Explanation:
The most essential quality of money lacked by both Fish and Cattle is medium of exchange which implies having an item that will help in determining the rate of exchange for different products. Both cannot be used for this purpose for lack of homogeneity, divisibility, portability etc.
Both items can be allocated by the Government, used in storing value, they are stackable and can both work as units of accounts.
The Z Corporation is considering an investment with the following data (Ignore income taxes.): Year 1 Year 2 Year 3 Year 4 Year 5 Investment $ (32,000) $ (12,000) Cash inflow $ 8,000 $ 8,000 $ 20,000 $ 16,000 $ 16,000 Cash inflows occur evenly throughout the year. The payback period for this investment is:
Answer:
3.5 yeas
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
In year 0 = $32,000
In year 0 = $12,000
In year 1 = $8,000
In year 2 = $8,000
In year 3 = $20,000
In year 4 = $16,000
In year 5 = $16,000
If we sum the first 3 year cash inflows than it would be $36,000
Now we deduct the $36,000 from the $44,000 , so the amount would be $8,000 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $16,000
So, the payback period equal to
= 3 years + $8,000 ÷ $16,000
= 3.5 yeas
In 3.5 yeas, the invested amount is recovered.
The following present value factors are provided for use in this problem. Periods Present Value Present Value of an of $1 at 8% Annuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Co. wants to purchase a machine for $37,000 with a four year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,000 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)? a. $3,480.b. $2,745.c. $40,480d. none of the above
Answer:
a. $3,480
Explanation:
Please see attachment.
In economics, the term "capital" refers to :
A) mineral resources.
B) buildings and equipment.
C) consumer goods.
D) the money in one's pocket.
Answer:
D. the money in one's pocket
Explanation:
this is so because the financual assets needed fpr a business to produce good and/or services requires money
The investments of Steelers Inc. include a single investment: 42,730 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $14 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $12 per share.
Required:
A. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1. Refer to the Chart of Accounts for exact wording of account titles.
B. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?
Answer:
Explanation:
A. The journal entries are shown below:
On September 12
Investment A/c - Bengals Inc A/c Dr $598,220 (42,730 × $14)
To Cash A/c $598,220
(Being the acquired investment including brokerage commission is recorded)
On December 31
Unrealized gain or loss on available-for-sale securities A/c Dr $85,460
To Valuation allowance for available-for-sale securities $85,460
(Being decline in share value is recorded)
The computation is shown below:
= 42,730 shares × ($14 per share - $12 per share)
= 42,730 shares × $2 per share
= $85,460
B. The unrealized gain or loss for available-for-sale investments is shown in the Stockholder equity section on the balance sheet. It is to be shown in the negative item in the equity section.
You are an economic adviser to a candidate for national office. She asks you for a summary of the economic consequences of a balanced-budget rule for the federal government and for your recommendation on whether she should support such a rule. How do you respond?
Answer:
Recommendation: Do not support such rule
Explanation:
This type of budget rules restrain governments from employing taxes and transfers as automatic stabilizers. This due to the fact that these rules tend to bring deficits and surpluses.
Lumeris Inc., an automobile manufacturer, has an inflexible work schedule and requires its workers to work nine hours a day and six days a week. Its laborers do not have adequate skills to perform their job efficiently. The inflexible work schedule and inadequate labor skills are examples of _____.
a. physical constraints
b. nonphysical constraints
c. bottleneck activities
d. work order
Answer:
The correct answer is letter "B": nonphysical constraints.
Explanation:
According to the Theory of Constraints (TOC) a constraint is a limiting factor that does not enable companies to perform their work at their maximum capacity for their goals' achievement. In the same sense, nonphysical constraints are not material factors negatively influencing employees' actions. Wages cuts, reduction of benefits, unclear lines of command are examples of that kind of constraint.
Aerelon Airways, a commercial airline, suffers a major crash. As a result, passengers are
considered to be less likely to choose Aerelon as their carrier, and it is expected free cash flows
will fall by $15million per year for five years. If Aerelon has 55 million shares outstanding, an
equity cost of capital of 10%, and no debt, by how much would Aerelonʹs shares be expected to
fall in price as a result of this accident?
A) $0.93
B) $1.03
C) $1.14
D) $1.34
Answer:
Option B $1.03
Explanation:
First lets calculate present value = cash flow(PVAF, life, rate) where PVAF = present value annuity factor
= 15(PVAF, 10, 5 years)
from the annuity table
Present value = 15 * 3,790 = $56.8618 million
The decrease in Present value will be $56.8618 million
Decrease in price = present value/number of share = 56.8618/66 = 1.033851 approx $1.03
Final answer:
Aerelon's shares are expected to fall by $1.14 per share due to the crash. This is calculated by determining the present value of the lost free cash flows at a 10% discount rate and dividing by the number of shares outstanding.
Explanation:
To calculate how much Aerelon’s shares are expected to fall in price as a result of the crash, we need to determine the present value (PV) of the loss in free cash flows (FCF). The total loss in FCF is $15 million per year for five years. Using the given equity cost of capital which is 10%, we can discount these future cash flows to the present value. We then divide this total loss in present value by the number of shares outstanding to determine the per-share price impact.
Calculating the Present Value of the Loss in Free Cash Flows:
The formula for the present value of an annuity (a series of equal payments at regular intervals) is PV = FCF × [(1 - (1 + r)^(-t)) / r], where FCF is the annual free cash flow, r is the equity cost of capital, and t is the number of years.
PV = $15 million × [(1 - (1 + 0.10)^(-5)) / 0.10]
PV = $15 million × [(1 - (1 + 0.10)^(-5)) / 0.10]
PV = $15 million × [4.16986]
PV = $62.5479 million
Calculating the Per-Share Price Impact:
The total present value of the loss is divided by the number of shares outstanding to find the per-share impact.
Share price impact = PV / Number of shares
Share price impact = $62.5479 million / 55 million shares
Share price impact = $1.14
Therefore, as a result of the crash, Aerelon’s shares would be expected to fall by $1.14 per share, which corresponds to option C.
You own shares in Supernova Inc. that were purchased at a price of $23 per share. Quicksilver
Inc. has offered to purchase Supernova Inc. and buy your shares at a price of $34 per share.
What will be your return if you tender your shares to Quicksilver Inc. and the deal is
completed?
A) 47.83%
B) 33.48%
C) 50.22%
D) 45.43%
Answer:
A) 47.83%
Explanation:
The computation of the return is shown below:
= (Supernova price per share - owned purchase price per share) ÷ (owned purchase price per share) × 100
= ($34 per share - $23 per share) ÷ ($23 per share) × 100
= ($11 per share) ÷ ($23 per share) × 100
= 47.83%
Simply we take the difference per share and then divide it by the owned purchase price per share so that the accurate rate of return can be computed
Carmel Corporation is considering the purchase of a machine costing $41,000 with a 8-year useful life and no salvage value. Carmel uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is Carmel's average investment? Multiple Choice
A. $5,125.
B. $23,063.
C. $41,000.
D. $5,766.
E. $20,500.
Answer:
E. $20,500
Explanation:
The average investment is defined as the average between the initial investment and the salvage value of the equipment.
In this situation, Carmel Corporation had an initial investment of $41,000 for the machine and its salvage value is zero. Therefore, Carmel's average investment is:
[tex]AI = \frac{\$41,000+0}{2} \\AI = \$20,500[/tex]
The answer is alternative E. $20,500
For the year ended December 31, 2021, Norstar Industries reported net income of $975,000. At January 1, 2021, the company had 1,110,000 common shares outstanding. The following changes in the number of shares occurred during 2021: Apr. 30 Sold 95,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 108,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "EPS" answer to 2 decimal places. Do not round intermediate calculations.)
To calculate Norstar Industries' earnings per share (EPS), we need to determine the weighted average number of common shares outstanding and divide the net income by this number.
Explanation:The first step in calculating Norstar Industries' earnings per share (EPS) is to determine the weighted average number of common shares outstanding.
To do this, we start with the number of shares at the beginning of the year, add any shares issued or sold, and subtract any shares repurchased or retired. In this case, we have 1,110,000 shares at the beginning of the year, sold 95,000 shares in April, issued 108,000 shares in June, and no shares repurchased or retired.
Next, we divide the net income of $975,000 by the weighted average number of shares outstanding to calculate the EPS. The weighted average number of shares is (1,110,000 * 12) + (95,000 * 8) + (108,000 * 7) = 22,320,000 shares. Therefore, the EPS is $975,000 / 22,320,000 = $0.0436 per share.
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