Rina has a dominant strategy to choose Left. There is a single Nash equilibrium where Musashi chooses Right and Rina chooses Left.
The question provided describes a simultaneous-move game with a payoff matrix, which is a concept from game theory in economics and mathematics. To find the dominant strategy and the Nash equilibrium, we compare the payoffs to each player for their possible moves.
Examining the payoff matrix:
If Musashi chooses Left, Rina has a higher payoff choosing Left (3 vs. 1).If Musashi chooses Right, Rina still has a higher payoff choosing Left (6 vs. 4).This shows that Rina has a dominant strategy: always choose Left, as it gives her a higher payoff regardless of Musashi's choice. Now, let's examine Musashi's best responses:
If Rina chooses Left, Musashi's best response is Right (7 vs. 4).If Rina chooses Right, Musashi's best response is also Right (4 vs. 6).Musashi does not have a dominant strategy since his best response depends on Rina's choice. However, given that Rina's dominant strategy is to choose Left, Musashi's best response to that is to choose Right.
The Nash equilibrium is the outcome where each player's strategy is the best they can do, given the other player's strategy. Since Rina will choose Left, and Musashi's best response to Left is Right, the Nash equilibrium for this game is:
Musashi chooses RightRina chooses LeftThis Nash equilibrium is not unique if we were only considering best responses; however, because Rina has a dominant strategy, this guides Musashi's choice, resulting in a single Nash equilibrium.
Branch Company, a building materials supplier, has $17,800,000 of notes payable due April 12, 2014. At December 31, 2013, Branch signed an agreement with First Bank to borrow up to $17,800,000 to refinance the notes on a long-term basis. The agreement specified that borrowings would not exceed 85% of the value of the collateral that Branch provided.
At the date of issue of the December 31, 2013, financial statements, the value of Branch's collateral was $19,400,000. On its December 31, 2013, balance sheet, Branch should classify the notes as follows:
a.$2,670,000 short-term and $15,130,000 current liabilities.
b. $17,800,000 of long-term liabilities.
c. $16,490,000 long-term and $1,310,000 current liabilities.
d. $17,800,000 of current liabilities.
Answer:
17800000 total liabilities
19400000 * 0.85 = 16490000 = long term liabilities
17800000 - 16490000 = 1310000 = current liabilities
Hence option C is correct.
$16,490,000 long-term and $1,310,000 current liabilities.
A reward system for project management should be: a) based on the money saved managing the project b) differentiated from normal functional rewards c) greater than rewards for process management d) based on the money generated by the project.
Answer:
The correct answer is letter "B": differentiated from normal functional rewards.
Explanation:
Project management teams are those formed by groups of employees that are believed to be capable of creating an innovative plan to generate more benefits for the organization as a whole. At the moment of setting rewards for this group there should be extra incentives compared to the ones provided to workers under regular production conditions. The reason for that relies on the fact that project team members must push themselves to their limits to translate those efforts into a feasible project.
Noah graduated with his B.A. in early childhood education in December, but public schools are not hiring until spring.
Factors that are important to Noah are working with children in a classroom, providing educational opportunities, working close to home, and finding a full-time job by fall.
Noah is finally offered four jobs for which he is qualified. Which job is the best fit for Noah?
======================================
Job #1: Para-educator in a kindergarten class
Close to home
$29,400 per year
Part-time position
Positive school culture
Networking with administrators
Job #2: Substitute Teacher in several schools
Up to $26,830 per year
Different school every day
Potential to work every day
Experience with many children
Up to 1 hour commute one way
Networking with many administrators
Job #3: Home Child Care Worker and Tutor
$30,000 per year
Help with homework
Drive children to after school activities
Work with one family's children
Job #4: After Care Provider
Close to home
Minimum Wage
Hours: 3-7pm on weekdays
Opportunities for Creativity
Experience with many children
Job #1
Job #2
Job #3
Job #4
Answer:
Job #1
Explanation:
Job #1 is best suited according to Noah's preference. She wants to work near home, have experience working with children and provide educational opportunities. The Job #1 offers her para- educator in kindergarten class. This job is close to her home and has positive school culture. This job provides her opportunity for networking with administrators and the pay is also good. Therefore Noah should select job #1.
(Debt Securities) 2 Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2012, for $108,660. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/12 $108,660 12/31/13 $7,000 $5,433 $1,567 107,093 12/31/14 7,000 5,354 1,646 105,447 12/31/15 7,000 5,272 1,728 103,719 12/31/16 7,000 5,186 1,814 101,905 12/31/17 7,000 5,095 1,905 100,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Amortized cost $107,093 $105,447 $103,719 $101,905 $100,000 Fair value $106,500 $107,500 $105,650 $103,000 $100,000 Instructions (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2012, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2013. (c) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2015. (d) Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are classified as available-for-sale. (e) Prepare the journal entry(ies) related to the available-for-sale bonds for 2013. (f) Prepare the journal entry(ies) related to the available-for-sale bonds for 2015.
Answer and Explanation:
The Journal entry is shown below:-
a. Investment in bonds Dr, $100,000
Premium on bonds Dr, $8,660
To Cash $108,660
(Being purchase of bonds above face value is recorded)
b. Cash Dr, $7,000
To interest revenue $5,433
To premium amortization $1,567
(Being interest revenue earned, received and premium on bonds amortization is recorded)
c. Cash Dr, $7,000
To interest revenue $5,354
To premium amortization $1,646
(Being interest revenue earned, received and premium on bonds amortization is recorded)
d. Cash Dr, $7,000
To interest revenue $5,272
To premium amortization $1,728
(Being interest revenue earned, received and premium on bonds amortization is recorded)
e. Investment in bonds Dr, $100,000
Premium on bonds Dr, $8,660
To Cash $108,660
(Being purchase of bonds above face value is recorded)
f. Investment in bonds Dr, $108,660
To Cash $108,660
(Being purchase of bonds above face value is recorded)
The respective entries for the purchase of bonds, whether classified as held-to-maturity or available-for-sale, are provided from 2012 through 2015. The general method involves debiting the cash and bond premium, and crediting the interest revenue and investment in bonds.
Explanation:To answer your queries a through f, I'll provide you with the journal entries that would have been made in each scenario.
(a): The journal entry to record the purchase of these bonds on December 31, 2012 would be:
Dr. Investment in Bonds $108,660
Cr. Cash $108,660
(b): The entries related to the held-to-maturity bonds for 2013 would be:
Dr. Cash $7,000
Dr. Bond Premium $1,567
Cr. Interest Revenue $5,433
Cr. Investment in Bonds $1,567
(c): The entries related to the held-to-maturity bonds for 2015 would be:
Dr. Cash $7,000
Dr. Bond Premium $1,728
Cr. Interest Revenue $5,272
Cr. Investment in Bonds $1,728
(d): The journal entry to record the purchase of these bonds, if they're classified as available-for-sale, would be the same as in part a.
(e): The entries related to the available-for-sale bonds for 2013 would be:
Dr. Cash $7,000
Dr. Bond Premium $1,567
Cr. Interest Revenue $5,433
Cr. Investment in Bonds $1,567
(f): The entries related to the available-for-sale bonds for 2015 would be:
Dr. Cash $7,000
Dr. Bond Premium $1,728
Cr. Interest Revenue $5,272
Cr. Investment in Bonds $1,728
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In a wildly successful first year in business that started and ended with no required cash, your firm has operating income of $989,000, net income of $637,000, current assets of $900,000, current liabilities of $659,000, net capital expenditures were $690,000, and depreciation was $460,000. The firm has never financed itself with debt. What was your equity valuation cash flow
Answer:
The correct answer is $166,000
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the Equity Valuation Cash Flow by using following formula:-
Equity valuation cash flow = Net income - (Change in non cash - Cash working capital) - (Capital expenditure - Depreciation) + (New debt issued - Debt repayment)
By putting the value, we get
= $637,000 - ($900,000 - $659,000) - ($690,000 - $460,000) + 0
= $637,000 - $241,000 - $230,000
=$166,000
According to the analysis, the equity valuation cash flow is $166,000.
Final answer:
The equity valuation cash flow for the company is $407,000, calculated by adding depreciation to net income and subtracting net capital expenditures.
Explanation:
To calculate the equity valuation cash flow for a company that started and ended with no required cash, operating income of $989,000, net income of $637,000, current assets of $900,000, current liabilities of $659,000, net capital expenditures of $690,000, and depreciation of $460,000, we need to adjust the net income for non-cash expenses and investments in long-term assets. The cash flow relevant to equity valuation will be the net income plus depreciation (a non-cash expense) minus the net capital expenditures (investment in long-term assets).
Let's calculate the equity valuation cash flow:
Start with net income: $637,000Add back depreciation: + $460,000 (non-cash expense)Subtract net capital expenditures: - $690,000 (investment in long-term assets)Equity Valuation Cash Flow = Net Income + Depreciation - Net Capital ExpendituresEquity Valuation Cash Flow = $637,000 + $460,000 - $690,000 = $407,000
A one-year bond has an interest rate of 5% today. Investors expect that in one year, a one-year bond will have an interest rate equal to 7%. Investors expect that in two years, a one-year bond will have an interest rate equal to 9%. According to the expectations theory of the term structure of interest rates, in equilibrium, a three-year bond today will have an interest rate equal to
Answer:
6%
Explanation:
Current interest rate on one year bond = 5%
Forward interest rate on one year bond = 7%
To Calculate the interest rate on two year bond we use this:
Interest rate = [Current interest rate on one year bond + Forward interest rate on one year bond]/2
Interest rate = [5 + 7]/2 = 12/2 = 6%
Therefore,
The interest rate on two-year bond is equal to 6%.
Answer:
A one-year bond has an interest rate of 5% today. Investors expect that in one year, a one-year bond will have an interest rate equal to 7%. Investors expect that in two years, a one-year bond will have an interest rate equal to 9%. According to the expectations theory of the term structure of interest rates, in equilibrium, a three-year bond today will have an interest rate equal to 7%.
Explanation:
The current interest rate on one year bond = 5%
The forward interest rate on one year bond = 7%
The forward interest rate on one year bond = 9%
We can now calculate the interest rate on a three-year bond as below:
Interest rate = [Current interest rate on one year bond + Forward interest rate (7%) on one year bond + Forward interest rate (9%) ]/3
Interest rate = [5 +7+9]/3 = 21/3 = 7%
Therefore,
The interest rate on a three-year bond is equal to 7%.
Ceteris paribus, a price-discriminating firm will charge less to the customers who: a. have the lowest incomes. b. have the least elastic demand for its product. c. are the most elastic in their demand for a product. d. are the most rational in making their decisions.
Answer:
. are the most elastic in their demand for a product.
Explanation:
Price discrimination is when a producer sells the same good at different prices to consumers.
Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
The more elastic demand is, the more sensitive demand is to changes in price.
The less elastic demand is, the less sensitive demand is to changes in price.
A price discriminating seller who wants to maximise profits would charge higher prices to the consumer with a less elastic demand and a lower price to a consumer with a more elastic demand.
I hope my answer helps you
Answer:
Option C is the correct one.
Are the most elastic in their demand for a product.
Explanation:
Ceteris paribus, a price-discriminating firm will charge less to the customers who are the most elastic in their demand for a product.
Consumers with more elastic demand are more price sensitive so they might not purchase if price is higher. Hence a less price is charged from consumers with elastic demand.
Wattan Company reports beginning inventory of 11 units at $65 each. Every week for four weeks it purchases an additional 11 units at respective costs of $66, $67, $70, and $75 per unit for weeks 1 through 4. Compute the cost of goods available for sale and the units available for sale for this four-week period. Assume that no sales occur during those four weeks.
Solution:
Activity Units Units cost Cost of Goods Available
Beginning Inventory 11 $65.00 $715
1st week purchase 11 $66.00 $726
2nd week purchase 11 $67.00 $737
3rd week purchase 11 $70.00 $770
4th week purchase 11 $75.00 $825
Units available for sale 55
Cost of goods available for sale $3,773
The Down and Out Co. just issued a dividend of $2.41 per share on its common stock. The company is expected to maintain a constant 5 percent growth rate in its dividends indefinitely. If the stock sells for $45 a share, what is the company's cost of equity? (Do not round your intermediate calculations.)
Answer:
Cost of equity = 10.6%
Explanation:
The value of a stock using the dividend valuation model, is the present value of the expected future dividends discounted at the required rate of return. The required rate of return is the cost of equity
The model is represented below:
P = D× (1+g)/ ke- g
Ke- cost of equity, g - growth rate, p - price of the stock
This model can used to work out the cost of equity, as follows:
Ke = D× (1+g)/p + g
D- 2.41, g- 5%, - p -45
Ke = 2.41 ×(1.05)/45 + 0.05
Ke = 0.10623 × 100 ( we convert to percentage by multiplying by 100)
Ke= 10.6%
Cost of equity = 10.6%
Answer:
0.1062 or 10.62%
Step by Step Explanation:
The cost of equity can be find using the dividend growth model.
The cost of equity is:
Ke = D× (1+g)/p + g
[$2.41(1.05)/$45] + 0.05
=($2.5305/$45) +0.05
=0.0562 +0.05
=0.1062 or 10.62%
Therefore the company's cost of equity is 0.1062 or 10.62%
The actual information pertains to the third quarter. As part of the budgeting process, the Duck Decoy Department ofWooden Figurines Incorporated had developed the following static budget for the third quarter. Duck Decoy is in theprocess of preparing the flexible budget and understanding the results.Actual Flexible StaticResults Budget BudgetSales volume (in units) 13,000 ______12,000Sales revenues $257,500 _______ $250,000Variable costs 154,000 ________ 175,000Contribution margin 103,500 ________ 75,000Fixed costs 50,500 $ ________ 49,500Operating profit $ 53,000 $_________ $ 25,5009) The flexible budget will report ________ for variable costs.A) $154,000B) $175,000C) $13,583D) $189,58310) The flexible budget will report ________ for the fixed costs.A) $49,500 FavorableB) $49,500C) $1,000 UnfavorableD) $50,500
Answer:
A. D) $189,583
B. B. $49,500
Explanation:
A. The computation of the flexible budget will report for the variable cost is shown below:-
= Static Variable cost ÷ Static sales volume × Actual sales volume
= $175,000 ÷ 12,000 × 13,000
= $189,583.33
B. The number of fixed costs in both flexible budget and static budget would be the same
= $49,500
So, flexible budget will report $49,500 for the fixed costs
8.28 Two roadway designs are under consideration for access to a permanent suspension bridge. Design 1A will cost $3 million to build and $100,000 per year to maintain. Design 1B will cost $3.5 million to build and $40,000 per year to maintain. Both designs are assumed to be permanent. Use an AW-based rate of return equation to determine (a) the breakeven ROR, and (b) which design is preferred at a MARR of 10% per year.
Answer:
Breakeven ROR is 12%
At MARR of 10% 1B design is preferred as it has a lower present value of cost of $3,900,000
Explanation:
The breakeven rate of return ,is the rate of return where the present value of cost incurred under both arrangements are the same as shown below"
present of value of 1A=$3,000,000+$100,000/r
Present value of 1B=$3,500,000+$40,000/r
thereafter,at breakeven rate of return,both PVs are the same
$3,000,000+$100,000/r=$3,500,000+$40,000/r
100,000/r-40,000/r=3,500,000-3,000,000
(100,000-40,000)/r=500,000
60,000/r=500,000
r=60,000/500,000=12%
At MARR
cost 1A=$3,000,000+$100,000/10%=$4,000,000
Cost 1B=$3,500,000+$40,000/10%=$3,900,000
The attractiveness test for evaluating whether diversification into a particular industry is likely to build shareholder value involves determining whether A. E) there are attractive strategic fits between the value chains of the company's present businesses and the value chain of the new business it is considering entering. B. B) the potential diversification move will boost the company's competitive advantage in its existing business. C. A) conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es). D. D) key success factors in the target industry are attractive. E. C) shareholders will view the contemplated diversification move as attractive.
Answer:
A) conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es).
Explanation:
Remember, the key word here is about whether diversification into a particular industry would likely increase shareholders value.
Thus, any company wanting to test this out would consider whether conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es).
This option is better because improved profits implies better shareholder value.
The following is a list of metals and alloys:Plain carbon steel MagnesiumBrass ZincGray cast iron Tool steelPlatinum AluminumStainless steel TungstenTitanium alloy Select from this list the one metal or alloy that is best suited for each of the following applications, and cite at least one reason for your choice:a) The block of an internal combustion engine.b) Condensing heat exchanger for steam.c) Jet engine turbofan blades.d) Drill bit.e) Cryogenic (i.e. very low temperature) container.f) As a pyrotechnic (i.e. in flares and fireworks).g) High-temperature furnace elements to be used in oxidizing atmospheres
Answer:
(a) Gray cast iron would be the best decision for a engine block since it is generally simple to cast, is wear safe, has great vibration damping attributes, and is moderately cheap.
(b) Stainless steel would be the best decision for a heat exchanger to consolidate steam since it is consumption impervious to the steam and condensate.
(c) Titanium alloys are the best decision for fast airplane fly motor turbofan cutting edges since they are light weight, solid, and effortlessly created impervious to consumption. In any case, one downside is their expense.
(d) A tool steel would be the best decision for a driling bit since it is hard holds its hardness at high temperature and is wear safe, and, in this way, will hold a sharp front line.
(e) For a cryogenic (low-temperature) holder, an aluminum alloy would be the best decision; aluminum alloys have a FCC precious stone structure, and along these lines, are flexible at exceptionally low temperatures.
(f) As a pyrotechnic in flares and firecrackers, magnesium is the best decision since it touches off effectively and consumes promptly in air with a brilliant fire.
(g) Platinum is the best decision for high-temperature heater components to be utilized in oxidizing atmospheres since it is malleable, has a moderately high softening temperature, and is profoundly impervious to oxidation.
Suggestions for suitable materials for the mentioned applications include Gray cast iron for engine blocks, Stainless steel for condensing heat exchangers, Titanium alloy for jet engine turbofan blades, Tool steel for drill bits, Aluminum for cryogenic containers, Magnesium for pyrotechnics, and Tungsten for high-temperature furnace elements.
Explanation:The suitable metals or alloys for the given applications are as follows:
a) The block of an internal combustion engine can be made of Gray cast iron. This material is used frequently in engine block construction due to its great castability, machineability, superior wear resistance, and excellent damping capacity.b) Condensing heat exchanger for steam could use Stainless steel as a material because of its corrosion resistance properties, which allows it to withstand exposure to steam and other compounds.c) Jet engine turbofan blades are often made from Titanium alloy. This is due to the material's high strength-to-weight ratio, as well as its resistance to high temperatures.d) Drill bit could be made from Tool steel given its strength and hardness, making it an appropriate candidate to withstand the stress from drilling.e) Cryogenic (i.e. very low temperature) container can apply Aluminum due to its high thermal conductivity and lower heat capacity help to maintain the very low temperatures required in cryogenics.f) As a pyrotechnic (i.e. in flares and fireworks) Magnesium could be used as when it burns, it produces extremely bright, intense heat, and light, making it ideal for flares and fireworks.The g) High-temperature furnace elements to be used in oxidizing atmospheres often utilise Tungsten, due to its outstanding heat resistance. Tungsten has the highest melting point of any pure metal on the periodic table.Learn more about Materials Engineering here:https://brainly.com/question/33412089
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When Sony launched its new PS4 gaming system, the product was sold as a package that included the game console, game controllers, wireless headset, and one video game. This is an example of
Answer:
Bundling
Explanation:
Bundling a strategy in which two or more products are packaged together and sold as a single combined unit, often for a lower price than they would charge customers to buy each item separately.
This strategy has a distinct feature which entails that The products and services are usually related, but they can also consist of dissimilar items which appeal to one group of customers.
In the bundling marketing strategy, the strategy of companies offering discounts can stimulate demand, lifting revenues often at the expense of profit margins.
It enables companies roll out different productsat the same time and selling at a discounted price while still making huge profit.
Answer:
Explanation:
When Sony launched its new PS4 gaming system, the product was sold as a package that included the game console, game controllers, wireless headset, and one video game. This is an example of price bundling
Price bundling is putting together as a unit several products or services into a single comprehensive package for a total packaged reduced price. Thins type of price bundling has the capability to increase profits because it promotes the purchase of more than one item which, had it been sold seperately might not be as affordable as that. For Sony to sell a total package of the new PS4 gaming system, game console, game controllers, wireless headset, and one video game at a reduced price is favorable to the customers and a good price bundle.
The Endot Manufacturing Company, a manufacturer and wholesaler of widgets, has provided you with the following financial information. The Company has asked you to make an analysis of the firm’s financial condition. In addition to the information given below, you have been informed that the firm has no lease payments but has principal payments of $2 million per year on its Long-term debt. Endot uses a 365-day year in preparing its ratios. Endot has 5,000,000 common shares outstanding. Endot’s financial statements are as follows:Balance Sheet as of December 31, 2014 (Millions of Dollars)Cash 45Accounts Payable 45Marketable Securities 33Notes Payable 45Accounts Receivable 66Other Current Liabilities 21Inventory 159Total Current Liabilities 111Total Current Assets 303Total Long Term Liabilities 24Total Liabilities135Gross Fixed Assets 225Less Depreciation 78Common Stock 114Net Fixed Assets 147Retained Earnings 201Total Shareholder Equity 315Total Assets 450Total Liabilities and Equity 450Statement of Income and Expenses for Year Ended December 31, 2014 (Millions of Dollars)Net Sales 795.0Costs of Goods Sold 660.0Gross Profit 135.0Fixed Expense 73.5EBITDA 61.5Depreciation Expense 12.0EBIT 49.5Interest Expense 4.5EBT 45.0Taxes (40%) 18.0Net Income 27.0What was Endot's Quick (Acid Test) Ratio? a. 0.37 b. 1.30c. 1.73d. 2.00e. 2.73
Quick ratio = 1.30 (Option C)
Explanation:
Quick ratio or acid test ratio is calculated as follows:
(Cash plus marketable securities plus accounts receivable ) divide by total current liabilities
In our question, we have been given with the data:
Cash = 45 million
Marketable securities = 33 million, accounts receivable = 66 million, total current laibailities = 111 million
So, let us now put the given values in the above stated formula:
Quick ratio = ( 45 plus 33 plus 66) divide by 111
After calculating we get, 1.30
Therefore, the quick ratio is 1.30
Home Remodelers, Inc., and Imogen enter into a contract for a sale of cabinets and countertops. Home Remodelers, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably
A. fit for the buyer's particular purpose.
B. fit for the ordinary purpose for which such goods are used.
C. suitable for resale at an acceptable price.
D. the best quality that money can buy.
Answer:
B. fit for the ordinary purpose for which such goods are used.
Explanation:
The implied warranty of merchantability means that the product should function well for the purpose it has. According to this, the answer is that under the UCC, this means that the goods are reasonably fit for the ordinary purpose for which such goods are used.
Answer: b. fit for the ordinary purpose for which such goods are used
Explanation: The Uniform Commercial Code (UCC) is the primary codification of warranty rules for commercial transactions, that is, it contains a comprehensive set of laws that governs commercial transactions in the United States. An implied warranty of merchantability under the Uniform Commercial Code means that the goods sold by Home Remodelers Inc. are fit for the ordinary purpose for which such goods are used.
Thanks to his firm's decentralization and use of responsibility accounting, Matt has more time to review a proposed new joint venture with one of the firm's business partners. What advantage of decentralization does this illustrate?
Answer:
Encourage the top echelon of the management focus on strategic decisions.
Explanation:
To begin, Decentralization is one of the tools of management aimed at delegating tasks to the lower level of staffs. Decision in an organization is often at:
1. Strategic level
2. Tactical level
3. Operational level
Strategic decisions are often reserved for the top management. However, being the top management, they are responsible for the activities done at all levels of decision taking. Hence, decentralization has become a tool through which management delegate otherwise important functions to trusted and competent staff.
Now, with the decentralization, Matt now has more time to review proposed new joint venture - a strategic function, with one of the business partners. This is one of the advantages of decentralization, as a competitive advantage has thus been created in the time and resources used in reviewing the new joint venture.
Answer:
It encourages top level management to concentrate and focus on strategic and profitable decisions.
Explanation:
As organizations expand, decentralization becomes very necessary and crucial. This is because responsibilities increase for top managers/group of managers who run the entire organization as a result of increase in products and services offered by the organization.
As organizations expand, the need for strategic decision-making for organization's progress increases. As decentralization plays in,
1. it helps to make quicker strategic decisions
2. develops performance measures
3. it motivates local managers who are given more responsibility and the control necessary to manage their responsibility
4. it helps to refocus top management on issues important to specific segment and on broader organization-wide issues.
5. it increases expertise as local managers who have expertise are delegated with decision-making authority in specific products.
As decentralization and responsibility accounting played in, Matt and one of the firm's business partners now had more time to strategically plan and make profitable decisions for the proposed new joint venture.
The government offers a $9 per-unit subsidy for buyers in this market. Compute consumer surplus, producer surplus, government revenue and deadweight loss in this new setting. Are firms better or worse off with the subsidy
Explanation:
Subsidies are meant to reduce the money paid by buyers for units of commodity from the producers, while also reducing the selling price imposed by the producers on their sellers.
For example, the initial cost per unit of a popular commodity is $19 and the government then offers a $9 per-unit subsidy for buyers.
Consumer surplus= $9
Producer surplus= 10+9=$19
On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 77,000 shares authorized, issued, and outstanding $ 770,000 Paid-in capital in excess of par value, common stock 241,000 Retained earnings 904,000 Total stockholders’ equity $ 1,915,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 5,500 shares of its own common stock at $30 per share on October 11. Sold 1,125 treasury shares on November 1 for $36 cash per share. Sold all remaining treasury shares on November 25 for $25 cash per share. 2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
Answer:
See the explanation below:
Explanation:
1. Prepare journal entries to record the following transactions for Sherman Systems
a. Purchased 5,500 shares of its own common stock at $30 per share on October 11.
Details Dr ($) Cr ($)
Treasury Stock (5,500 × 30) 165,000
Cash 165,000
To record the repurchase of own common stock
b. Sold 1,125 treasury shares on November 1 for $36 cash per share.
Details Dr ($) Cr ($)
Cash (1,125 × 36) 40,500
Treasury Stock (1,125 × 30) 33,750
Paid-in Capital from Sale of Treasury Stock 6,750
To record the sale of treasury stock.
c. Sold all remaining treasury shares on November 25 for $25 cash per share.
Details Dr ($) Cr ($)
Cash (4,375 × 25) 109,375
Paid-in Capital from Sale of Treasury Stock 6,750
Retained Earnings 15,125
Treasury Stock 99,000 (4,375 × 30) 131,250
To record the sale of the remaining treasury shares
Kindly note that there is a balance of $6,750 in the Treasury Stock Paid-in Capital account. Since it is utilized, the remaining deficit will show in Retained Earnings.
2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
Details $
77,000 issued authorized common stock–$10 par value 770,000
Paid-in capital in excess of par value, common stock 241,000
Retained earnings 904,000
Treasury stock (165,000)
Total stockholders’ equity 1,750,000
1. Here, we are preparing the journal entries to record the following transactions for Sherman Systems
a. Date Account titles and Explanation Debit Credit
Treasury Stock (5,500 * 30) $165,000
Cash $165,000
(To record the repurchase of own common stock)
b. Date Account titles and Explanation Debit Credit
Cash (1,125 × 36) $40,500
Treasury Stock (1,125 × 30) $33,750
Paid-in Capital from Sale of T. Stock $6,750
(To record the sale of treasury stock)
c. Date Account titles and Explanation Debit Credit
Cash (4,375 × 25) $109,375
Paid-in Capital from Sale of T. Stock $6,750
Retained Earnings $15,125
Treasury Stock (4,375 × $30) $131,250
(To record the sale of the remaining treasury shares)
2. Particulars Amount
issued authorized common stock (77,000*$10) $770,000
Paid-in capital in excess of par value $241,000
Retained earnings $904,000
Treasury stock ($165,000)
Total stockholders’ equity $1,750,000
Windsor, Inc. sells merchandise on account for $3700 to Morton Company with credit terms of 2/10, n/30. Morton Company returns $800 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Windsor, Inc. make upon receipt of the check?
Answer:
Dr. Cash $2,842
Dr. Discount Expense $58
Cr. Account Receivable $2,900
Explanation:
Terms 2/10, n/30 means there is a discount of 2% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.
Sales = $3,700
Returns = $800
Amount Due = $3,700 - $800 = $2,900
As the payment is made within discount period, so discount will be availed
Discount = $2,900 x 2% = $58
Cash Paid = $2,900 - $58 = $2,842
LaMont works for a company in downtown Chicago. The firm encourages employees to use public transportation (to save the environment) by providing them with transit passes at a cost of $270 per month.
a. If LaMont receives one pass (worth $270) each month, how much of this benefit must he include in his gross income each year?
b. If the company provides each employee with $270 per month in parking benefits, how much of the parking benefit must LaMont include in his gross income each year?
Answer:
a) $180
b) $180
Explanation:
Employee Fringe Benefits is a form of payment by an employer other than money. The limit for employee fringe benefit is often decided by the IRS every year. The statutory limit for the year 2016 was $255, 2019 was $265 and the new statutory limit for the year 2020 is $270.
In the question provided, since the particular year was not stated, we will assume that the year is 2016 of which the limit for employee fringe benefit was $255.
a. The cost of transit pass qualifies as employee fringe benefit. Based on 2016 statutory limits, LaMont excludes $255.
Therefore his amount of transit pass benefit to be included in gross income
= ($270 - $255)×12
= $180
b. The cost of parking benefits qualifies as employee fringe benefit. Based on 2016 statutory limits, LaMont excludes $255.
Therefore his amount of parking benefit to be included in gross income
= ($270 - $255)×12
= $180
LaMont must include $3,240 in his gross income each year for both the transit pass benefit and the parking benefit.
Explanation:a. To calculate the total amount of the transit pass benefit that LaMont must include in his gross income each year, we need to multiply the monthly value of the pass ($270) by the number of months in a year (12 months). Therefore, LaMont must include a total of $3,240 ($270 x 12) in his gross income each year.
b. For the parking benefit, the calculation is the same. Since the company provides LaMont with $270 per month in parking benefits, he must include a total of $3,240 ($270 x 12) in his gross income each year for the parking benefit.
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If Jack bought 21 DVDs last year when his income was $30,000 and he buys 23 DVDs this year when his income is $35,000, then his income elasticity of demand is ______________ which means that DVDs are a(n) ______________ good for Jack.
Answer:
If Jack bought 21 DVDs last year when his income was $30,000 and he buys 23 DVDs this year when his income is $35,000, then his income elasticity of demand is 0.571 which means that DVDs are a(n) normal good for Jack.
Explanation:
Ei = ⌂Q/Q /⌂I/I
⌂Q = 23-21 = 2
⌂I = 35000-30000 =5000
I = 30000
Q=21
Ei=⌂Q/⌂I * I/Q = 2/5000 * 30000/21 = 2*6/21 =12/21 = 0.571
The income elasticity of demand is 0.571
Answer: 0.57; Normal good
Explanation:
Income elasticity of demand is an economic term that depicts the connection that exist between the income of a consumer and the consumer's demand of a product. When there is an increase or decrease in the income of a consumer, the consumer's income elasticity of demand will show if he will buy a product or not.
After the calculation which is shown in the attached file, the income elasticity of demand gotten is 0.57. This means that DVD is a normal good to Jack. For a normal good, the income elasticity of demand is positive but less than one.
Logistics Solutions provides order fulfillment services for dot merchants. The company maintains warehouses that stock items carried by its dot clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 120,000 items were shipped to customers using 4,100 direct labor-hours. The company incurred a total of $11,480 in variable overhead costs. According to the company’s standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.85 per direct labor-hour. Required: 1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 120,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost per hour to 2 decimal places.)
Solution:
Number of items shipped 120,000
Standard direct labor-hours per item x 0.03
Total direct labor-hours allowed 3,600
Standard variable overhead cost per hour x 2.85
Total standard variable overhead cost 10,260
Actual variable overhead cost incurred 11,480
Total standard variable overhead cost (above) 10,260
Total variable overhead variance 1220 (Favourable)
etrus Framing's cost formula for its supplies cost is $1,760 per month plus $10 per frame. For the month of March, the company planned for activity of 616 frames, but the actual level of activity was 624 frames. The actual supplies cost for the month was $8,420. The activity variance for supplies cost in March would be closest to:
Answer:
$80 U
Explanation:
Flexible budget [$1,760 + ($10 × 624)]
$1,760+$6,240= $8,000
Planning budget [$1,760 + ($10 × 616)]
$1,760+$6,160= $7,920
Flexible budget-Planning budget= Activity variance
$8,000-$7,920=$80
Activity variance $80 U
Therefore the flexible budget is greater than the planning budget, the variance is unfavorable (U)
A machine purchased three years ago for $309,000 has a current book value using straight-line depreciation of $187,000; its operating expenses are $38,000 per year. A replacement machine would cost $235,000, have a useful life of nine years, and would require $8,000 per year in operating expenses. It has an expected salvage value of $64,000 after nine years. The current disposal value of the old machine is $72,000; if it is kept 9 more years, its residual value would be $18,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced
Answer:
a)
Opportunity Cost (Purchase value less Salvage Value)
Old Machine = $72,000 - $18,000 = $54,000
New Machine =$235,000 - $64,000 = $171,000
Operating Costs
Old Machine = $38,000 * 9 = $342,000
New Machine = $8,000 * 9 = $72,000
Total Cost = Opportunity cost + Operating Cost
Old machine Total Cost = $54,000 + $342,000 = $396,000
New Machine Total Cost = $171,000 + $72,000 = $243,000
b)
Should the old machine be replaced? YES
The cost of keeping the old machine is more than the cost of buying and operating the new machine, therefore it is advisable to replace the old machine.
Answer:
the machine should be replaced
Explanation:
First, the cost of old machinery is sunk cost and no more relevant for our calculations as it would not affect our decision making at this point.
The following numbers hold value for the purpose of taking a decision as to whether the company should keep or replace the old machinery with a new one at this point and time.
Cost of a new machinery (if purchased)
Change in operating expenses (if machine is replaced)
Current disposal value of old machine
The company must see whether there is positive change to net income with the replacement. If there is a negative change it will not be replaced.
Step 2
1. Cost of new machinery= $ 235000
2. Changes in the operating expense/s=
Operating expense with old machine=$38000 per year for 9 years= 38000 x 9= 342000
Operating expense with new machine= $ 8000 per year for 9 years = 8000 x 9= 72000
Hence the savings in operating expenses is = $ 342000- $72000= $270000
3. Current Disposal value of old machine= $ 72000
Step 3
Putting together the numbers calculated in step 2-
Items----- --------------------------------Effect ----------------------------------Amount in $
Cost of new machine--- cash outflow -235000
Saving in operating expenses--- Cash inflow 270000
Current disposal value of old machine----- Cash inflow 72000 answer 107000
From the above calculation, it can be seen that there is a positive / net income flow of $ 107000 which is favourable to the company
In conclusion we can therefore, the machinery should be replaced with the new machinery.
Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
Sales are budgeted at $320,000 for November, $330,000 for December, and $310,000 for January.
Collections are expected to be 40% in the month of sale and 60% in the month following the sale.
The cost of goods sold is 75% of sales.
The company desires an ending merchandise inventory equal to 20% of the cost of goods sold in the following month.
Payment for merchandise is made in the month following the purchase.
The November beginning balance in the accounts receivable account is $67,000.
The November beginning balance in the accounts payable account is $254,000.
Prepare a Schedule of Expected Cash Collections for November and December.
Answer:
Explanation:
Schedule of expected cash collection is a form of budgeted that list the time frames and the amount of payment expected from customers for the purpose of efficient planning.
Account receivables
60% * October sales = 67,000
November sales
40% * 320000 (November sales) = $128,000
$195000
December cash collection
60%*320000 (November sales) = 192000
40%*330000 (December sales)= $132000
$324,000
Final answer:
To calculate the expected cash collections for November and December for Capes Corporation, figures from the current and previous months' sales are used based on the given collection pattern. For November, the expected collections total to $195,000, and for December, the total expected collections amount to $324,000.
Explanation:
To prepare the schedule of expected cash collections for November and December for Capes Corporation, we'll analyze the data given and calculate the collections based on the sales and the company's collection pattern.
November Sales Collections:Current Month Collections (40% of November sales):
0.40 × $320,000 = $128,000
Previous Month Collections (60% of October sales): Since we don't have October's sales, we'll assume it to be equivalent to the beginning accounts receivable balance: $67,000
December Sales Collections:Current Month Collections (40% of December sales):
0.40 × $330,000 = $132,000The expected cash collections for November is the sum of collections from both the current and previous month, which is $128,000 (current) + $67,000 (previous) = $195,000.
Similarly, the expected cash collections for December is $132,000 (current) + $192,000 (previous) = $324,000.
In the consumer buying decision process, the information search stage yields a group of brands that a buyer views as possible alternatives. involves a buyer becoming aware of the need for a product. is not necessary when the buyer is involved in extensive decision making. occurs immediately after evaluation of alternatives. is lengthy for routine response buying behavior.
Answer:
The correct answer is letter "A": yields a group of brands that a buyer views as possible alternatives.
Explanation:
The consumer buying decision process explains the steps individuals follow at the moment of buying goods and services. Those steps are five (5): need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.
After the need that must be covered is identified, individuals make an information search. In this stage, people gather all the data possible of the sources that can satisfy the need mainly based on features such as price and product quality.
In the consumer buying decision process, the information search stage
is lengthy for routine response buying behavior.
This stage is more extensive when consumers are engaging in routine or habitual buying behavior because they are less likely to engage in an extensive search for information when they have established brand preferences or have less involvement in the purchase decision.
The information search stage in the consumer buying decision process is the phase where individuals seek out information about products or services to aid in their purchase decision. For routine response buying behavior, which involves low-involvement purchases of frequently bought items this stage is typically brief.
In contrast, for more complex or high-involvement purchases, such as buying a car or a new computer, the information search stage can be lengthy. In these cases, buyers want to gather as much information as possible to make an informed decision.
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Bonita Industries purchased a new machine on October 31, 2020. A $4900 down payment was made and three monthly installments of $820 each are to be made beginning on November 30, 2020. The cash price would have been $47000. Bonita paid no installation charges under the monthly payment plan but an $820 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2020 would be:______
Answer:
$47,820
Explanation:
1.Cash price of the machine $47,000
Add Installation cost $820
Total$47,820
Therefore the amount to be capitalized as the cost of the machine on October 31, 2020 would be: $47,820
When employees are hired for their experience, Maxene Raices, senior consultant at Wilson Learning, suggests the focus be on getting these individuals up to speed with what they need to know about the company. One way to do this is through _______.
Answer:
Employee orientation
Explanation:
Employee orientation is a systematic approach used by organizations to provide relevant information to new recruits so that they can familiarize themselves with the new environment. This process exposes them to the organizational culture, norms, codes of conduct as well as their work colleagues. This process not only allows employees to work more efficiently and faster by providing them with all the relevant background information to begin their job but also makes them feel valued and provides a sense of belongingness.
June sales were $30,000, while projected sales for July and August were $52,000 and $74,000, respectively. Sales are 60% cash and 40% credit. All credit sales are collected in the month following the sale. Calculate expected collections for July.
Answer:
Collections for July = $43200
Explanation:
Sales on cash are generally collected immediately, hence if the sale occurs in June, it would be collected in June itself. Sales on credit on the other hand, is where the debtor can pay for the goods or services on a later date. In this case, it is paid in the next month after the sale.
According to the information cash collections are 60%. Hence in July, 60% of $52,000 would be obtained, which is - $52,000 x 60% = $31,200.
At the same time, the sales on credit made in June would be collected in July. Since sales on credit amount to 40% of total sales of the month, it would be - $30,000 x 40% = $12,000.
Total collections for July = $12,000 + $31,200 = $43,200.
"The Total collections for July is = $12,000 + $31,200 = $43,200. To understand more calculation check below".
Calculation of Collections of Sales
Sales on cash are generally collected immediately, thus, if the sale occurs in June, it would be collected in June itself. When the Sales on credit, on the different pointer, is where the debtor can pay for the goods or services at a later date. In case of, it is paid in the next month after the sale.
According to the information cash collections are 60%. Therefore, in July, 60% of $52,000 would be obtained, which is - $52,000 x 60% = $31,200.
At the same time, When the sales on credit made in June would be collected in July. When the sales on credit amount to 40% of total sales of the month, it would be - $30,000 x 40% = $12,000.
Therefore, the Total collections for July is = $12,000 + $31,200 = $43,200.
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