Answers
Answer: Please refer to explanation
Explanation:
The Loanable Find model attempts to explain the movement in interest rate as a function of supply and demand.
Now, if more people are looking for loans (demand increases) and supply remains the same, the demand curve is forced to shift to the right. This increases the Equilibrium interest rate.
This increased Interest rate then leads to a CROWDING OUT effect because the private sector will reduce it's borrowing as it cannot borrow at such high rates.
This is what will happen should the French government borrow such a large amount especially if the economy is operating at FULL CAPACITY. They will INCREASE the demand for loans and therefore CROWD OUT the private sector.
I have included a graph to explain it more.
If you have need for any clarification do react or comment.
The French government's borrowing to finance a budget deficit can lead to a reduction in public savings and crowd out private investment, demonstrated through the loanable funds model where increased government demand for loanable funds raises interest rates and reduces the investment by private firms.
Explanation:When the French government runs a budget deficit and finances it by borrowing $20 billion, this process is illustrated using the loanable funds model. In this scenario, there is a decline in public savings due to the government's need to borrow funds to cover its deficit. This borrowing competes with private sector demand for loanable funds, resulting in an increase in interest rates.
The loanable funds model depicts that as the government enters the market to borrow, the demand curve for financial capital shifts to the right from Do to D1. With the increased competition for funds, the interest rates are driven up from 5% to 6%. This higher interest rate can crowd out private investment because firms may find it more expensive to borrow, thereby reducing their investment activities.
As interest rates rise, some private investments that were profitable at lower interest rates might not be undertaken, leading to a decrease in overall private investment. Over time, this effect can lead to decreased economic growth and potential inefficiencies in the allocation of resources.
Related Questions
Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.
Answers
Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred.The Total cost recorded to get the ready to use: $ 147,780
Explanation:
From the above question we get the following information
Equipment cost: 132,000 x (1 - 1%) = 130,680
shipping cost: 3,200
special wiring connections 11,200
installation cost 2,700
Total cost to get the machinery ready to use: $ 147,780
It is important to note that the cost incurred to get the equipment ready for usage and production must be included while calculating the equipment cost.
Which most accurately characterizes the method used to calculate inflation? Bureaucrats evaluate changes in the price of a nation's currency in terms of other prominent world currencies. Economists measure change in the prices of three goods (gasoline, gold, and wheat) thought to be important determinants of the health of the economy. Analysts measure the cost of a bundle of goods representative of overall spending at two points in time and compare the difference in cost. Government workers poll households to find out how much change there is in the prices that they are paying. Researchers observe the interest rate at two points in time and infer the rate of inflation from the difference.
Answers
Answer:
Analysts measure the cost of a bundle of goods representative of overall spending at two points in time and compare the difference in cost.
Explanation:
Inflation refers to a situation in which there is a rise in the price level of the goods in an economy at a particular point of time.
For determining inflation, we need to compare the cost of buying certain baskets of goods in the current year and the cost of buying same basket of goods in the previous year. So that we are able to find the exact rise in the price level of the goods.
We need to analyse the cost of the same basket of goods for the two different periods. Hence, we will get the most appropriate values of the inflation.
Final answer:
Inflation is typically measured using the Consumer Price Index (CPI), which compares the cost of a representative bundle of goods and services at different points in time. The CPI is considered the standard measure of inflation, although it is important to acknowledge some of its limitations and biases.
Explanation:
Measuring Inflation
The method that most accurately characterizes the calculation of inflation is where analysts measure the cost of a bundle of goods representative of overall spending at two points in time and compare the difference in cost. This approach is embodied in the calculation of the Consumer Price Index (CPI), which is the most commonly cited measure of inflation. The CPI is crafted by statisticians at the U.S. Bureau of Labor Statistics and uses a basket of goods and services that reflects the purchases of an average family. Despite the prominence of the CPI, it's important to consider the distinction between the cost of living and the CPI, as well as addressing biases such as the substitution bias and the quality/new goods bias. Additionally, other measures like the GDP deflator and the Core Inflation Index provide alternative views on price changes in the economy.
Suppose a typical automobile tire cost $50 in the base year and had a useful life of 40,000miles. Ten years later, the typical automobile tire cost $75 and had a useful life of 75,000 miles. If no adjustment is made for mileage, the CPI would *
Answers
Answer:
Overestimate inflation between the two years.
Explanation:
If there is an increase in the cost of automobile tire and no adjustment is made in the mileage, and then CPI would be overestimated between the two years. This is because as there is no improvement in mileage and hence it is estimated that there is no increase in variable costs in the process of improving the quality.
Therefore, the correct answer is overestimate inflation between the two years.
Franklin Manufacturing provided the following information for the month ended Marchâ 31:
Sales Revenue $ 19,000
Beginning Finished Goods Inventory 15,000
Ending Finished Goods Inventory 12,500
Cost of Goods Manufactured 18,600
Required:
a. Compute cost of goods sold.
Answers
Answer:
a. Cost of Goods Sold (COGS) amounts to $21,100
Explanation:
a.
Computing the Cost of Goods Available for Sale as:
Cost of Goods Available for Sale = Beginning Finished Goods Inventory + Cost of Goods Manufactured
where
Cost of Goods Manufactured is $18,600
Beginning Finished Goods Inventory is $15,000
So, putting the values above:
Cost of Goods Available for Sale = $18,600 + $15,000
Cost of Goods Available for Sale = $33,600
Computing the COGS (Cost of Goods Sold) as:
Cost of Goods Sold (COGS) = Cost of Goods Available for Sale - Ending Finished goods Inventory
where
Cost of Goods Available for Sale is $33,600
Ending Finished goods Inventory is $12,500
So, putting the values above:
Cost of Goods Sold (COGS) = $33,600 - $12,500
Cost of Goods Sold (COGS) = $21,100
Prepare the journal entries to record the following transactions for Blossom Company, which has a calendar year end and uses the straight-line method of depreciation. On September 30, 2022, the company sold old equipment for $124,200. The equipment was purchased on January 1, 2020, for $259,200 and was estimated to have a $43,200 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2021.
Answers
Answer:
Dr. Cash $124,200
Dr. Accumulated Depreciation $118,800
Dr. Loss on Disposal $16,200
Cr. Equipment $259,200
Explanation:
Depreciation is the recording of asset expense due to its use. It is due to use of fair value of the asset after use. The expense value reduces the asset value over useful life period.
As per given data
Cost of Asset = $259,200
Useful life= 5 years
Salvage Value = $43,200
Asset is purchased on January 1, 2020 and on September 30, 2022 depreciation of only 2 years and 9 months has charged.
Depreciation per year = (Cost of Asset - Salvage Value) / Useful life = ($259,200 - $43,200) / 5 = $43,200
Accumulated Depreciation as on September 30, 2022 = ($43,200 x 2) + $43,200 x 9/12 = $118,800
Book value of the asset is the net of accumulated depreciation of the asset. The accumulated depreciation on September 30, 2022, is as follow:
Net Book value of Asset = 259,200 - $118,800 = $140,400
Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 8 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?
Answers
Final answer:
The question asks for the percentage price change of bonds with coupon rates of 5% and 11% when interest rates rise by 2%. Bond prices fall when interest rates rise, with bonds having lower coupon rates being more affected. Exact calculations require more information and complex financial formulas.
Explanation:
The question asks about the percentage price change of two bonds with different coupon rates when the interest rates rise by 2 percent. Both bonds have the same years to maturity and yield to maturity (YTM), but because Bond J has a lower coupon rate of 5% and Bond K a higher coupon rate of 11%, their sensitivity to interest rate changes will differ.
When interest rates increase, the price of existing bonds typically falls. This is because new bonds are issued at the new higher rates, making the existing bonds with lower rates less attractive. Since Bond J has a lower coupon rate, it is more sensitive to interest rate changes, and its price will decrease more significantly than Bond K's, which has a higher coupon rate.
To determine the exact percentage price change, you would need to perform a bond price calculation using the new yield to maturity, which would be the original YTM plus the 2% increase. However, this requires additional information and more complex financial formulas which go beyond the scope of this explanation.
Which of these is NOT one of the items that can provide useful assistance to a project team to define the activities of a project? a. the major milestones from the Project Charter b. schedules from similar, previous projects c. issue logs d. templates or checklists for projects of the same type
Answers
Option C
issue logs is one of the items that can provide useful assistance to a project team to define the activities of a project
Explanation:Activities in a project are the process to recognize and document the exercises that are available to produce the project deliverables. The essential advantage of this method is that it crumbles work units into program activities that present a source for evaluating, cataloging, completing, monitoring, and managing the project work.
The issue log, seldom also identified as an issue register, is a project document where all issues that are negatively altering the project are documented and tracked. This will not be beneficial compensation in defining activities of the project.
The item that does not provide assistance to a project team in defining the activities of a project is the issue logs. While they are important for risk management, they do not directly aid in outlining project tasks or deliverables.
Explanation:When defining the activities of a project, there are certain items that are useful resources specific to project management. These include things like major milestones from the Project Charter, schedules from similar, previous projects, and templates or checklists for projects of the same type. These provide structured, specific frameworks that can guide the project team in planning and executing the project.
However, issue logs do not necessarily provide assistance to a project team when defining activities. While they provide valuable context and shed light on potential problems that may arise during the course of a project, they do not directly serve the purpose of detailing project tasks or deliverables. Instead, they are a tool for risk management.
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Pisa Pizza, a seller of frozen pizza, is considering introducting a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of new pizza will be $20 million per year. While many of these sales will be to new customers, Pisa Pizza estimaes that 40% will come from customers who switch to the new, healthier pizzai nstead of buying the original version.
a) Assume cusotmer will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza?
b) Suppose that 50% of hte cusomters who will switch from Pisa Pizza's orignial pizza to its healthier pizza will switch to another brand if Pisa PIzza does not introduce a healthier pizza. What level of incremental sales is associated with introducing the new pizza in this case?
Answers
Answer:
Part 1:
Level of incremental sales is associated with introducing the new pizza= $12 million
Part 2:
Level of incremental sales is associated with introducing the new pizza=$16 million.
Explanation:
Given Data:
Expected sales of new pizza=$20 million per year
Percentage of Loss on buying the original version=40%=0.40
Amount of Loss on buying the original version=0.40*$20 million
Amount of Loss on buying the original version=$8 million.
Required:
What level of incremental sales is associated with introducing the new pizza?What level of incremental sales is associated with introducing the new pizza in this case when 50% of the customers who to its healthier pizza will switch to another brand ?Solution::
Part 1:
Level of incremental sales is associated with introducing the new pizza= Expected sales of new pizza-lost sales of original
Level of incremental sales is associated with introducing the new pizza=$20 million-$8 million
Level of incremental sales is associated with introducing the new pizza= $12 million
Part 2:
Level of incremental sales is associated with introducing the new pizza=Expected sales of new pizza - lost sales from customers who do not Switched
Level of incremental sales is associated with introducing the new pizza=$20 million-0.5*$8 million
Level of incremental sales is associated with introducing the new pizza=$16 million.
During the most recent month, the following activity was recorded: a. Eleven thousand two hundred pounds of material were purchased at a cost of $2.90 per pound. b. The company produced only 1,120 units, using 10,080 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. Five hundred and forty eight hours of direct labor time were recorded at a total labor cost of $6,576.
Answers
Complete question:
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 4.6 pounds $ 2.50 per pound $ 11.50
Direct labor 0.2 hours $ 12.00 per hour $ 2.40
During the most recent month, the following activity was recorded:
a. Eleven thousand two hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,120 units, using 10,080 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c. Five hundred and forty eight hours of direct labor time were recorded at a total labor cost of $6,576.
Solution:
Direct Material price Variance
= (Actual Price - Standard price) x Actual Quantity
= ($2.90 - $2.50) x 10,080 = $4032 (F)
Standard Quantity = 1,120 x 4.6 = 5,152 pounds
Direct Material Quantity Variance
= (Actual Quantity - Standard Quantity) x Standard Price
= (10,080 - 5,152 ) x $2.50 = $12,320 (U)
Define project cost terms and tell how each is used in estimating project cost. Compare and contrast analogous, parametric, and bottom-up methods of estimating costs. Describe issues in project cost estimating and how to deal with each.
Answers
Answer:
The project cost is a cost required to procure all the needed products, services and resources to deliver the project successfully.
Explanation:
Analogous estimation: involves comparing a past similar project to your current project and the use of analogy to estimate cost.
Parametric Estimation: This estimation uses the historical data based on the real data and saves lots of time to calculate the cost estimation.
Bottom-up approach: also called definitive technique breaks up all activities of the project to the micro level in order to conduct comprehensive cost estimation.
The issues in project cost estimation include cost overruns, inefficiencies and project surprise. To effectively mitigated them, Bottom-up approach should be applied. It is an expensive but very reliable method.
On November 1, Wright Co. borrowed $20,000 cash from Third Bank by signing a 90-day, 6% interest-bearing note.
On December 31, Wright recorded an adjusting entry to interest expense of $200.
On January 30, the due date of the note, Wright will record the payment with a debit to Interest Expense in the amount of $ _______.
Answers
On January 30, the due date of the note, Wright will record the payment with a debit to Interest Expense in the amount of $100.
Explanation:
On November 1, Wright Co. borrowed $20,000 cash from the Third Bank by signing a 90-day, and 6% of interest-bearing note.On December 31, it was recorded an adjusting entry to interest expense of $200.On January 30, which is the due date of the note, Wright will record the payment with a debit to Interest Expense in the amount of $100.Interest expense is an expense which is known as a non-operating expense which is shown on the income statement. It also represents interest payable amount when it is borrowed. For Example, bonds,convertible debt, loans or lines of creditThe main difference between the interest expense and the interest paid is that the discount amount and this difference changes the net amount of bond liability. Interest expense is an amount determined by the interest rate on an account.E21A1. (Lessee Entries; Finance Lease with No Residual Value) (LO 1, 4) DU Journeys enters into an agreement with Traveler Inc. to lease a car on December 31, 2016. The following information relates to this agreement. 1.The term of the noncancelable lease is 3 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term. 2.The fair value of the car was $15,000 at commencement of the lease. 3.Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2017. The first payment is to be of an amount of $5,552.82, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $5,830.46 and the third and final payment will be $6,121.98). 4.DU Journeys' incremental borrowing rate is 8%. The rate implicit in the lease is unknown. 5.DU Journeys uses straightline depreciation for all similar cars. Instructions (a) Prepare DU Journeys' journal entries for 2016, 2017, and 2018. (b) Assume, instead of a constant rate of increase, the annual lease payments will increase according to the Consumer Price Index (CPI). At its current level, the CPI stipulates that the first rental payment should be $5,820. What would be the impact on the journal entries made by DU Journeys at commencement of the lease, as well as for subsequent years?
Answers
Answer:
(a) Prepare DU Journeys' journal entries for 2016, 2017, and 2018.
Date Account Title and Explanation Debit($) Credit($)
31/12/2016 Right of Use asset 15,000
Lease Liability 15,000
(to record lease of asset)
31/12/2017 Interest Expense 1,200
Lease Liability 4,352.82
Cash 5,552.82
(to record interest expense and lease payment)
31/12/2017 Amortization Expense 5,000
Right of use Asset 5,000
(to record amortization expense for right of use asset)
31/12/2018 Interest Expense 851.77
Lease Liability 4,978.69
Cash 5,830.46
(to record interest expense and lease payment)
31/12/2018 Amortization Expense 5,000
Right of use Asset 5,000
(to record amortization expense for right of use asset)
Date: 31/12/2016
Annual Payment: -
Interest Expense: -
Reduction of Lease Liability: -
Lease Liability: $15,000
Depreciation Expense: -
Date: 31/12/2017
Annual Payment: $5,552.82
Interest Expense: $1,200
Reduction of Lease Liability: 4352.82
Lease Liability: 10647.18
Depreciation Expense: $5,000
Date: 31/12/2018
Annual Payment: $5,830.46
Interest Expense: 851.7744
Reduction of Lease Liability: 4978.6856
Lease Liability: -44331.5056
Depreciation Expense: $5,000
Date: 31/12/2019
Annual Payment: $6,121.98
Interest Expense: -3546.520448
Reduction of Lease Liability: - 44331.5056
Lease Liability: 0
Depreciation Expense: $5,000
(b) Consumer Price index means: book the same amount year to year for payment. The increase in CPI may be booked as an expense when incurred.
The journal entries for DU Journeys' lease agreement pertain to recognizing the leased asset and liability, accounting for lease payments, interest expense, and depreciation. If payments were tied to CPI, they would be variable and changes would be accounted for in profit or loss in the period of the change.
Explanation:Based on the details of the problem, it seems we have a matter of accounting for a finance lease agreement with DU Journeys as the lessee. This question falls under the scope of financial accounting, more specially lease accounting. The calculations and entries would change if lease payments were tied to CPI, which would then mean that lease payments are variable and not fixed as in the given scenario.
For the year 2016, the first entry would be to record the right to use the leased car. On December 31, 2016, DU Journeys would debit 'Leased Vehicles' for $15,000 representing the fair value of the vehicle or leased asset, and Credit 'Obligation under Finance Lease' for $15,000. This establishes the initial recognition of the leased asset and the liability. For subsequent years 2017 and 2018, DU Journeys will need to make entries for lease payments, interest expense, and depreciation. However, without a clear understanding of the context and connections to the numbers and tables presented, more specific entries couldn't be made.
If instead, the annual lease payments were tied to CPI, it would be considered a variable lease payment. If lease payments are variable (i.e., tied to an index or rate such as CPI), then changes in lease payments due to changes in the index or rates are accounted for in profit or loss in the period of the change. Thus, the payments would not be included in the initial measurement of the lease liability and right-of-use asset, affecting the numbers DU Journeys would record.
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A firm experiences constant returns to scale when _______. A. the LRAC curve is upward sloping B. average total cost does not change when output changes C. the plant the firm uses and the quantity of labor the firm hires remain constant D. the LRAC curve is downward sloping
Answers
Answer:
B. average total cost does not change when output changes
Explanation:
A firm can experience increasing or decreasing return to scale and constant return to scale, it depends on various factors from the average total cost to output changes. If a firm experiences constant return to scale it means that the average total cost does not change when output changes. If the average total cost increases that mean increasing return to scale and if it decreases than decreasing return to scale
Assume that the won is the subsidiary’s functional currency. What balances does a consolidated balance sheet report as of December 31, 2017? a. Marketable equity securities = $16,000 and Inventory = $16,000. b. Marketable equity securities = $17,000 and Inventory = $17,000. c. Marketable equity securities = $19,000 and Inventory = $16,000. d. Marketable equity securities = $19,000 and Inventory = $19,000.
Answers
Complete Question :
A Clarke Corporation subsidiary buys marketable equity securities and inventory on April 1, 2017, for 100,000 won each. It pays for both items on June 1, 2017, and they are still on hand at year-end. Inventory is carried at cost under the lower-of-cost-or-net realizable rule. Currency exchange rates for 1 won follow:
January 1, 2017 $0.15 = 1 won
April 1, 2017 0.16 = 1
June 1, 2017 0.17 = 1
December 31, 2015 0.19 = 1
Assume that the won is the subsidiary’s functional currency. What balances does a consolidated balance sheet report as of December 31, 2017?
a. Marketable equity securities = $16,000 and Inventory = $16,000.
b. Marketable equity securities = $17,000 and Inventory = $17,000.
c. Marketable equity securities = $19,000 and Inventory = $16,000.
d. Marketable equity securities = $19,000 and Inventory = $19,000.
Answer:
Step 1 of 4
A business combination is the union of the small business units into one. The new combined unit is known as business combination. This is done for various purposes. A business combination generally increases the efficiency and productivity while reducing the costs.
Consolidated financial statements are those statements in which the financial statements of both the parent and all its subsidiaries are shown as a single entity.
Translated adjustments are those adjustments which are made in the income statement to incorporate the fluctuations in the exchange rates.
Step 2 of 4
The exchange rate is the exchange of the currencies of the two countries. There is a certain fee while changing the currency between two countries.
Translated adjustments are made because of the fluctuations in the different currencies. This generally affects all the aspects in the income statement and the balance sheet like assets, liabilities and equity. If the adjustment is positive then it means that the company is gaining from the currency fluctuations and vice versa.
Step 3 of 4
Since the functional currency is the foreign currency, hence the translation will be done at the current rate method. Hence, all the assets will be translated at the current rate. The current rate in this case is $0.19.
Step 4 of 4
[Find the attachments]
A firm just paid a dividend of $6 per share. Next year the dividend is expected to grow 8 percent, thereafter 10 percent forever. The present share price is $36. Calculate the required rate of return on the firm's equity. Express the response in decimal format
Answers
Answer:
26%
Explanation:
MV=Do(1+g)/(Ke-g)
Where MV is market value=$36
Do is current dividend per share=$6
g is growth rate=8%
Ke=?
By putting above values we get;
36=6(1+.08)/(Ke-.08)
36Ke-2.88=6+.48
36Ke=2.88+6+.48
Ke=9.36/36
Ke=26%
Retirement savings
A couple thinking about retirement decides to put aside $3,000 each year in a savings plan that earns 8% interest. In 5 years, they will receive a gift of $10,000 that also can be invested.
a. How much money will they have accumulated 30 years from now?
b. If the goal is to retire with $800,000 savings, how much extra do they need to save every year?
Answers
Answer:
a. $408,334.39
b. $3,457.40
Explanation:
r = rate per period = 8% = 0.08
P = Initial Value of Gift = $10,000
t = time = 30 - 5 = 25, As received after 5 years.
[tex]A = P (1 + r)^{t}[/tex]
[tex]A = $10,000 (1 + 0.08)^{25}[/tex]
[tex]A = $10,000 x 1.08^{25}[/tex]
A = $10,000 x 6.8485
A = $68,484.75
[tex]FV of annuity = P [\frac{(1 + r)^{n} - 1}{r} ][/tex]
P = Periodic Payment = $3,000
a.
n = number of periods = 30
[tex]FV of annuity = 3,000 [\frac{(1 + 0.08)^{30} - 1}{0.08} ][/tex]
[tex]FV of annuity = 3,000 [\frac{(1.08)^{30} - 1}{0.08} ][/tex]
[tex]FV of annuity = 3,000 [\frac{10.0627 - 1} {0.08} ][/tex]
[tex]FV of annuity = 3,000 [\frac{9.0627} {0.08} ][/tex]
FV of annuity = $3,000 x 113.2832
FV of annuity = $339,849.63
Accumulated value of money can be calculated as follows;
$68,484.75 + $339,849.63
$408,334.39
b.
If they wish to retire with $800,000 savings, they need to save additional amount of money every year to provide additional amount of money, as follows;
$800,000 - $68,484.75
$731,515.24
The extra annual savings can be calculated as follows;
[tex]731,515.24 = P [\frac{(1 + 0.08)^{30} - 1 }{0.08} ][/tex]
$731,515.24 = P x 113.28
Divide the above equation by 113.28 we get;
[tex]P = \frac{731,515.24}{113.28}[/tex]
P = $6,457.40
They are already paying $3,000, So the extra saving they need make every year is calculated as follows;
$6,457.40 - $3,000
$3,457.40
A manufacturing firm has discontinued the production of a certain unprofitable product line. Considerable excess production capacity was created as a result. Management is considering devoting this excess capacity to one or more of three products: X1, X2, and X3. Machine hours required per unit are: PRODUCT MACHINE TYPE X1 X2 X3Milling machine 8 2 3Lathe 4 3 0Grinder 2 0 1The available time in machine hours per week isMACHINE HOURS PER WEEKMilling machines 800Lathes 480Grinders 320The salespeople estimate they can sell all the units of X1 and X2 that can be made, But the sales potential of X3 is 80 units per week maximum.Unit profits for the three products are $20 (for X1), $6 (for X2), and $8 (for X3).Required:(a) Write the mathematical formulation to maximize the profit per week (Decision variables: Production amount of X1, X2, and X3).(b) Solve the mathematical formulation using Excel Solver. Show your work.(c) What is the optimal solution?
Answers
Answer:
Please kindly check explaination for the details.
Explanation:
a.
Decision variables:
Let
X1 = no of units of product X1
X2 = no of units of product X2
X3 = no of units of product X3
Objective function is to maximize profits
Max Z = 20X1 + 6X2 + 8X3
Constraints:
8X1 + 2X2 + 3X3 <= 800
4X1 + 3X2 <= 480
2X1 + X3 <= 320
X1, X2, X3>=0
b.
please see attachment for the excel solutions.
c.
X1 = 0
X2 = 160
X3 = 160
Z = 2240
An audience is first asked to write the last 2 digits of their social security number, and, second, to submit mock bids on items such as wine and chocolate. The half of the audience with higher two-digit numbers would submit bids that were between 60 percent and 120 percent higher than those of the other half. This is an example of:
Answers
Answer: Anchoring bias
Explanation: Anchoring bias is described as the tendency to focus on one value or idea known as the “anchor” and not adjust away from it sufficiently (the simple act of thinking of the first number strongly influences the second, even though there is no logical connection between them); It is also defined as the tendency of people to place subsequently refined answers to a given question close to the initially estimated answer, giving unduly weight to the initial answer, such as adjusting the initial estimate of 10% to 20% when 90% would have been more appropriate.
Some examples of anchors might include: real estate listing prices, initial cost estimates for development projects, salary of your last job etc.
Chamonix Chateau Rentals. You are planning a ski vacation to Mt. Blanc in Chamonix, France, one year from now. You are negotiating the rental of a chateau. The chateau's owner wishes to preserve his real income against both inflation and exchange rate changes, and so the present weekly rent of 9,800 (Christmas season) will be adjusted upward or downward for any change in the French cost of living between now and then. You are basing your budgeting on purchasing power parity (PPP). French inflation is expected to average 3.5% for the coming year, while US. dollar inflation is expected to be-2596.The current spot rate is $1.3620 What should you budget as the U.S. dollar cost of the 1-week rental?
a. Spot exchange rate (S/) $1.3620
b. Expected US inflation for coming year | 2.500%
c. Expected French inflation for coming year | 3.500%
d. Current chateau nominal weekly rent (E) 9,800.00
Answers
Answer:
The budgeted $ amount is $13,680.88
Explanation:
The purchasing power parity formula gives us an idea what an exchange spot rate would be in future period using the below formula:
Future spot rate=current spot rate*(1+US inflation)/(1+French inflation)
current spot rate=$1.3620
US inflation rate is 2.50%
French inflation is 3.50%
Future spot rate=$1.3620*(1+2.5%)/(1+3.5%)
future spot rate=$1.3488
The weekly cost of vacation would also be adjusted for inflation rate in France as follows:
Adjusted price=9800*(1+3.5%)=10143
Hence the cost of the one week rental would be 10143 multiplied by the future spot exchange rate of 1.3488 i.e $ 13,680.88 (10143*1.3488)
The Guitar Shoppe reports the following sales forecast: August, $110,000; September, $190,000. Total sales includes 30% cash sales, 55% credit sales collected in the month following sale, and 15% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.
Answers
Final answer:
To prepare a schedule of cash receipts for September, calculate the cash received from cash sales, credit sales collected in September, and credit sales written off. Cash receipts: $57,000 (cash sales) + $104,500 (credit sales collected) + $28,500 (written off) = $190,000 (total cash receipts).
Explanation:
To prepare a schedule of cash receipts for September, we need to calculate the cash received from different types of sales. According to the sales forecast, the total sales for September are $190,000. Based on the given information, 30% of the sales are cash sales. Therefore, the cash receipts from cash sales would be 30% of $190,000, which is $57,000.
For the credit sales, we know that 55% of them are collected in the month following the sale. So, the cash receipts from credit sales collected in September would be 55% of $190,000, which is $104,500.
Finally, 15% of the credit sales are written off as uncollectible. Therefore, the cash receipts from credit sales written off would be 15% of $190,000, which is $28,500.
Adding up all the cash receipts, the schedule of cash receipts for September would look like:
Cash sales: $57,000
Credit sales collected in September: $104,500
Credit sales written off: $28,500
Total cash receipts: $190,000
Which of the following are reported at fair value except trading securities: a) held-to-maturity securities b) available-for-sale securities c) all of these options are reported at fair value.
Answers
Answer:
B. Available for sale securities
Explanation:
Available for sale securities refer to debt or equity instrument. They are purchased with a pre defined aim of selling them before their maturity, for profit earning. Such profit is usually a 'quick capital gain'. Apart from profit, they also assist for liquidity, repaying needs of companies.
These equities are reported at 'fair value'. This implies that unrealised gains & losses are not included in earnings. They are rather recorded in a specific segregated item head 'accumulated other comprehensive income' of shareholder's equity.
Adams Corporation began fiscal Year 2 with the following balances in its inventory accounts. Raw Materials $ 54,600 Work in Process 83,400 Finished Goods 27,400 During the accounting period, Adams purchased $239,200 of raw materials and issued $248,600 of materials to the production department. Direct labor costs for the period amounted to $323,000, and manufacturing overhead of $46,300 was applied to Work in Process Inventory. Assume that there was no over- or underapplied overhead. Goods costing $611,700 to produce were completed and transferred to Finished Goods Inventory. Goods costing $601,100 were sold for $800,600 during the period. Selling and administrative expenses amounted to $70,200. Required Determine the ending balance of each of the three inventory accounts that would appear on the year-end balance sheet. Prepare a schedule of cost of goods manufactured and sold and an income statement.
Answers
Answer:
Adams Corporation
a) Ending Balances of:
i) Raw Materials:
a) Opening balance = $54,600
b) Purchases = $239,200
Cost of Available Raw Materials = $293,800 (a+b)
less c) Cost of Raw Materials Issued = $248,600
Closing Raw Materials = $45,200
ii) Work in Process (WIP):
a) Opening WIP = $83,400
b) Materials Issued = $248,600
c) Labour applied = $323,000
d) Overhead applied = $46,300
Total cost of WIP available for production = $701,300 (a+b+c+d)
less Cost of Finished Goods = $611,700
Closing WIP = $89,600
iii) Finished Goods:
a) Opening Finished Goods = $27,400
b) Cost of Finished Goods = $611,700
c) Finished Goods available for sale = $639,100 (a+b)
d) less Cost of Goods Sold = $601,100
e) Closing Finished Goods = $38,000
B-1) A schedule of Cost of Goods Manufactured
Opening Inventory of Materials = $54,600
Opening WIP = $83,400
Purchases of Materials = $239,200
Labour = $323,000
Overhead = $46,300
Total Cost = $746,500
Less Closing Inventory of Materials = $45,200
Less Closing WIP = $89,600
Total Cost of Finished Goods = $611,700
B-2) Schedule of Cost of Goods Sold:
a) Opening Finished Goods = $27,400
b) Cost Finished Goods = $611,700
c) Cost of Goods Available for sale = $639,100 (a+b)
d) less Closing Finished Goods = $38,000
e) Cost of Goods Sold = $601,100 (c - d)
B-3) Income Statement
Sales = $800,600
less cost of sales = $601,100
Gross Profit = $199,500
less Selling and Administrative Expenses = $70,200
Net Income before Interests and Taxes = $129,300
Explanation:
a) Closing Inventory of Raw Materials, WIP, and Finished Goods can be obtained by adding opening inventory to purhcases, transferred to production, or finished goods to obtain the costs of raw materials available for production, cost of materials in WIP, and cost of finished goods available for sale respectively.
b) With the costs of materials in WIP, labour and overhead costs are applied to obtain the costs of production.
c) When the closing WIP is subtracted from (b) above, we have the cost of finished goods for the period.
d) The difference between Sales and Cost of Sales is the Gross Profit.
e) The Selling and Administrative expenses are then deducted from the gross profit to get the net income or profit before interests and taxes.
The production department in a process manufacturing system completed 80,000 units of product and transferred them to finished goods during a recent period. Of these units, 24,000 were in process at the beginning of the period. The other 56,000 units were started and completed during the period. At period end, 16,000 units were in process.Prepare the department’s equivalent units of production with respect to direct materials under each of three separate assumptions using the Weighted -average method for process costing.
Answers
Answer:
See explaination
Explanation:
The detailed step by step solution of the given problem is sent across as an attached file.
please kindly check attachment
g "Your Company sells goods to customers for $1,200 cash. You also collect sales taxes of $96. The journal entry to record this transaction is: Group of answer choices
DR Sales Tax Payable $96; CR Cash $96.
DR Cash of 1,296 ; CR Revenue $1200 ; CR Sales Tax Payable $96
DR Cash $1,296; CR Revenue $1,296.
DR Cash of $1,296 ; CR Revenue $1,200 ; CR Sales Tax Expense $96."
Answers
Answer: DR Cash of 1,296 ; CR Revenue $1200 ; CR Sales Tax Payable $96
Explanation:
When accounting for taxes paid on revenue, you must account for them separately.
You add the tax to the sales and DEBIT it to Cash then you take just the sales figure without the tax and CREDIT Revenue. The tax is sent to the Sales Tax Payable Account as a CREDIT.
You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars): Years from Now After-Tax CF 0 –30 1–9 15 10 30 The project's beta is 1.9. Assuming rf = 4% and E(rM) = 14% a. What is the net
Answers
To calculate the net present value (NPV) of the project with given after-tax cash flows and beta
Explanation:The net after-tax cash flows for the project are as follows:
Year 0: -30 million dollarsYear 1-9: 15 million dollarsYear 10: 30 million dollarsTo calculate the net present value (NPV) of the project, we need to discount these cash flows by the project's required rate of return, which can be calculated using the Capital Asset Pricing Model (CAPM) formula:
r = rf + beta * (E(rM) - rf)
Given rf = 4%, beta = 1.9, and E(rM) = 14%, we can calculate the required rate of return (r) and then apply it to the cash flows to determine the NPV.
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To calculate the net after-tax cash flows for the project, multiply each cash flow by (1 - tax rate).
Explanation:In order to calculate the net after-tax cash flows for the project, we need to consider the cash flows for each year and apply the tax rate. The given cash flows are: Year 0: -30 million, Year 1-9: 15 million, Year 10: 30 million.
To calculate the after-tax cash flows, we multiply each cash flow by (1 - tax rate). Let's assume the tax rate is 20%. The after-tax cash flows will be: Year 0: -30 million, Year 1-9: 15 million * 0.8 = 12 million, Year 10: 30 million * 0.8 = 24 million.
Therefore, the net after-tax cash flows for the project are: Year 0: -30 million, Year 1-9: 12 million, Year 10: 24 million.
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Match the following terms to their definition: 1. expected value 2. liquidity 3. fixed assets 4. point of sales terminals 5. self-liquidating assets 6. trade credit 7. level production Rank the options below. Assets that are assumed to be long-term in nature. Assets that are assumed to be long-term in nature. Open choices for matching Assets that are converted into
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Answer:
1.A representative quantity from a probability distribution arrived at by multiplying each outcome times the associated probability and summing up the products.
2.The relative convertibility of short-term assets to cash.
3.Assets that are assumed to be long term in nature.
4. Computer terminals in retail stores that may be used for inventory control or other purposes.
5. Assets that are converted to cash within the normal operating cycle of the firm.
6.Financing provided by sellers or suppliers in the normal course of business.
7.Equal monthly production used to smooth out production schedules and employ manpower and equipment more efficiently.
Explanation:
Barbara Muller Services (BMS) pays its employees monthly. The payroll information listed below is for January 2018, the first month of BMS's fiscal year. Assume none of the employees' earnings reached $7,000 during the month. Salaries $ 80,000 Federal income taxes to be withheld 16,000 Federal unemployment tax rate 0.80 % State unemployment tax rate (after FUTA deduction) 5.40 % Social security tax rate 6.2 % Medicare tax rate 1.45 % The journal entry to record payroll for the January 2018 pay period will include a debit to payroll tax expense of:
Answers
Answer:
$13,296
Explanation:
Federal unemployment tax rate = 0.8% of 96,000 = 768
State unemployement tax rate = 5.4% of 96,000 = 5,184
Social security tax rate+medicare tax rate = 6.2%+1.45% = 7.65%
7.65% of 96,000 = 7,344
So total tax expense = 768+5,184+7,344 = $13,296
So answer is $13,296
Mike started a calendar-year business on September 1st of this year by paying 12 months of rent on his shop at $1,450 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method?
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Answer:
$4,000 under accural method and $12,000 under cash method.
Explanation:
Monthly rent = $1,000
A) In accural method, Mike can only deduct up to 4 months rent. Revenue is to be recognised on accural basis, not on receipt. ==> 4 x $1,000 ==> $4,000
B) In cash method, Mike can deduct 12 months rent when he applies 12 month concept. ==> 12 x $1,000 ==> $12,000
Answer:
$5,800 under accural method and $17,400 under cash method.
Explanation:
Monthly rent = $1,450
A) In accural method, Mike can only deduct up to 4 months rent. Revenue is to be recognised on accural basis, not on receipt. ==> 4 x $1,450 = $5,800
B) In cash method, Mike can deduct 12 months rent when he applies 12 month concept. ==> 12 x $1,450 ==> $17,800.
Suppose the CPI was 140 last year and is 168 this year. a. What is this year’s rate of inflation? Instructions: Enter your response as a percentage rounded to one decimal place. Use a minus sign if necessary. b. In contrast, suppose that the CPI was 140 last year and is 134 this year. What is this year’s rate of inflation? c. What term do economists use to describe this second outcome?
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Answer:
a) Inflation = = 20%
b) Inflation = -4.3
c) Deflation
Explanation:
The rate of change in the consumer price index is used to measure the movement in price level . An increase in the price level is termed inflation and a decrease is termed deflation.
a)
Inflation =( Current CPA/previous CPI) -1 × 100
= (168/140) - 1 × 100
= 20%
b)
Inflation = (134-140)/140 × 1 = -4.3%
c) The second outcome is called deflation
The answer provides calculations for the rates of inflation in two scenarios and explains the term economists use for the second outcome.
a. What is this year’s rate of inflation?
Calculation: Rate of Inflation = ((CPI This Year - CPI Last Year) / CPI Last Year) x 100Rate of Inflation = ((168 - 140) / 140) x 100 = 20%b. What is this year’s rate of inflation?
Calculation: Rate of Inflation = ((CPI This Year - CPI Last Year) / CPI Last Year) x 100Rate of Inflation = ((134 - 140) / 140) x 100 = -4.3%c. What term do economists use to describe this second outcome?
DeflationWall Drugs offered an incentive stock option plan to its employees. On January 1, 2016, options were granted for 60,000 $1 par common shares. The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2019, and expire December 31, 2020. Each option has a fair value of $1 based on an option pricing model. What is the entry to record the expiration of 10% of the options on December 31, 2020?
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Answer:
See the explanation below.
Explanation:
Fair value of expired option = 60,000 * $1 * 10% = $6,000
Journal entries will be as follows:
Details Dr ($) Cr ($)
Paid-in capital - stock options 6,000
Paid-in capital - expiration to stock options 6,000
To record the expiration of stock option