Answer: 1.3 million
because i know
Answer:
1.3 million hoops
Explanation:
took the test
Pasha Company produced 50 defective units last month at a unit manufacturing cost of $30. The defective units were discovered before leaving the plant. Pasha can sell them"as is" for $20 or can rework them at a cost of $15 and sell them at the regular price of $50. Which of the following is not relevant to the sell-or-rework decision? A.$30 manufacturing costB. $20 selling price of defective unitsC. $15 for reworkD. $50 regular selling priceE. all of these
Answer:
The $30 Manufacturing cost (Sunk Cost)
Explanation:
The manufacturing cost isn't relevant to the scenario as it's a sunk cost (historic cost) and has been incurred and can't be changed. Thus this cost should be disregarded when it comes to the relevant costing decision making. The selling price of defective units, the cost of the rework and the regular selling price is all relevant
Three years ago, James Matheson bought 300 shares of a mutual fund for $23 a share. During the three-year period, he received total income dividends of 0.70 per share. He also received total capital gain distributions of $0.80 per share during the three-year period. At the end of three years, he sold his shares for $26 a share. What was his total return for this investment
Answer:
1350
Explanation:
(300 x 0.70) + (300 x 0.80) + (300 x 26)
= 210+240+7800
=8250
8250- (300 x 23)
8250-6900 = $1350
Therefore his total return for this investment is 1350
Answer:
$1,350
Explanation:
his total returns per share = (sales price - purchase price) + dividends received + capital gains distributions received = ($26 - $23) + $0.70 + $0.80 = $4.50 per share
total returns of the investment = total number of shares x total returns per share = 300 shares x $4.50 per share = $1,350
Suppose that consumers' incomes increased, such that more video games were demanded at each price level. After the increase in demand, the new equilibrium price is _____, where both supply and demand equal _____.
Answer:
After the increase in demand, the new equilibrium price is $160, where both supply and demand equal 300.
Explanation:
When the income level of customers increases, the demand curve shifts to the right, increasing the quantity demanded at every price level.
If the quantity demanded for a good increases as its customers' income increases, it is called a normal good.
In this case, the previous equilibrium quantity was 200 units and the equilibrium price was $50. Since the demand curve shifted to the right, both the quantity demanded increased from 200 units to 300, and the equilibrium price increased from $50 to $160.
Galena is a new agent for a financial services company. She decides to join the local chamber of commerce, the local association of businesswomen, and the local chapter of the United Way organization. Galena is attempting to use ________ to generate leads.
Answer:
Galena is attempting to use Networking to generate leads.
Explanation:
Networking is a term that describes the socioeconomic business activity in which business or finance-oriented people like Galena (in the question) form business relationships in order to seek potential partners for ventures, share information as well as create or act upon business opportunities.
By joining the local association of businesswomen and local chamber of commerce, Galena is networking with a view to generating finance leads and achieving other aims stated in the first paragraph.
Red Baron Pizza discovered that if it reduced the retail price of its pizzas by 25% from $8 to $6, the demand for its pizzas increased 50% from 2 million to 3 million pizzas. Based on this experience they concluded that the elasticity of demand for their pizza products was:
Answer:
Elasticity of demand for their pizza products was 2
Explanation:
The formula for calculating elasticity of demand is given as:
Percentage change in quantity demanded divided by the percentage change in price.
From the question above, we are given the following:
Percentage change in quantity demanded = 50%
Percentage change in price = 25%
Therefore:
Elasticity of demand = 50% / 25%
Elasticity of demand = 2
If the price is below average total cost, then in the short run a perfectly competitive firm should: A. raise price. B. continue to produce to minimize losses. C. shut down. D. There is not enough information given to answer this question.
Answer:
B. continue to produce to minimize losses.
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. Buyers and sellers are price takers Because they cannot set prices of products.
If in the short run, price is below average variable cost, the firm should shut down.
If price is below average total cost in the short run, the firm should continue production.
I hope my answer helps you
Trio Company reports the following information for the current year, which is its first year of operations. Direct materials - $ 15 per unit Direct labor - $ 16 per unit Overhead costs for the year Variable overhead - $ 80,000 per year Fixed overhead - $ 160,000 per year Units produced this year - 20,000 units Units sold this year - 14,000 units Ending finished goods inventory in units - 6,000 unitsCompute the cost per unit using variable costing.
Determine the cost of ending finished goods inventory using variable costing.
Determine the cost of goods sold using variable costing.
Answer:
Finished Goods Inventory = $210,000
Cost of Goods Sold = $490,000
Explanation:
Unit Cost of Goods Manufactured - Variable Costing
Direct materials $ 15.00
Direct labor $ 16.00
Overhead costs :
Variable overhead - ($ 80,000/20,000) $ 4.00
Total $ 35.00
Finished Goods Inventory = 6,000 × $ 35.00
= $210,000
Cost of Goods Sold
Cost of Goods Sold = Opening Stock of Finished Inventory + Cost of Goods Manufactured - Closing Stock of Finished Inventory
Cost of Goods Sold Calculation
Opening Stock of Finished Inventory 0
Add Cost of Goods Manufactured (20,000× $ 35.00) $700,000
Available for Sale $700,000
Less Closing Stock of Finished Inventory ($210,000)
Cost of Goods Sold $490,000
Sarah, a manager at Ackles Inc, plays pranks on her subordinates in an attempt to make the workplace livelier. She trusts her subordinates and does not care much about the quality of their work. In the context of the Blake/Mouton leadership grid, which of the following leadership styles is Sarah using in this scenario?
A) The middle-of-the-road style
B) The country club style
C) The authority-compliance style
D) The impoverished style
Answer:
B) The country club style
Explanation:
Based on the scenario being described within the question it can be said that the leadership style being used is known as the country club style. This style focuses on showing most concern for employees and less concern for production processes, with the main idea that if individuals are happy with their job position then they will work harder which will in term, increase production.
Answer:
Sarah is using the country club style of leadership (option B)
Explanation:
According to Blake/Mouton leadership grid, the country club style of leadership is exhibited by leaders who prioritize their employees or subordinates needs and happiness over everything else.
Such leaders hold the belief that when their subordinates or employees are happy, they are inclined to work harder. What's more, such leaders or managers don't pay much attention to the quality of their subordinates output and rarely punish an erring employee.
A company’s normal selling price for its product is $30 per unit. However, due to market competition, the selling price has fallen to $25 per unit. This company's current inventory consists of 300 units purchased at $26 per unit. Replacement cost has fallen to $23 per unit. Calculate the value of this company's inventory at the lower of cost or market.
Answer:
value of this company's inventory at the lower of cost or market is $6,900
Explanation:
given data
selling price = $30 per unit
selling price fall = $25 per unit
current inventory consists = 300 units
purchased = $26 per unit
Replacement cost fall = $23 per unit
solution
As we know Under Cost or Market Price here lower price is Net realizable value is
lower price is Net realizable value = $23
so that value of company's inventory at the lower of cost will be
value of company's inventory = lower price is Net realizable value × Units in the inventory .....................1
put here value and we get
value of company's inventory = $23 × 300
value of company's inventory = $6,900
Chestelle Corporation, a sports equipment manufacturing company, borrows a considerable sum of money as loan from GRJ Bank, a private bank, at a time of financial crisis. The corporation has four years to repay the principal amount along with the interest to the bank. In this scenario, the money that Chestelle Corporation owes the bank represents its _____.
Answer:
Long term liability
Explanation:
Long term liability is defined as the amount of money a business owes that is due above a year. It is liabilities that do not affect the current liquidity of the business and its ability to do business.
In this scenario Chestelle Corporation has borrowed a large amount of money that is due in 4 years. It is due in over a year so it is a long term liability.
Long term liabilities are usually used to purchase capital assets or to make long term investment
Answer:
A. Long term liabilities.
Explanation:
Liabilities are defined as money owed by a business usually incured for the purchase of an asset. They represent a company's or an organization's legal debt or obligations. It can either be long term, short term or sometimes intermediate term liabilities. In this case however, it is a long term liability.
Long term liabilities are liabilities that are due in payment more than one year in the future. They are obligations and debt payable by an organization after a period of one year. In this case, the loan Chestelle corporation from the bank is payable in and within four years.
In the current year, Wilma (who files as a head of household) reported regular taxable income of $150,000. She itemized her deductions, deducting $10,000 in charitable contributions and $2,000 in state income taxes. What is Wilma's alternative minimum taxable income
Answer:
152,000
Explanation:
In this question, we are asked to calculate Wilma’s alternative minimum taxable income.
We proceed as follows;
Mathematically ;
Regular taxable income = 150,000
+ State income tax = 2,000
+ Exemptions = 0( no claims according to this particular question)
Total alternative minimum taxable income =
150,000 + 2,000 + 0 = 152,000
Answer:
C. $152,000
Explanation:
Given that
Regular taxable income = 150000
State income = 2000
Therefore
Wilma alternative minimum taxable income = regular taxable income + state income taxes
Thus
= 150000 + 2000
= $152000
NOTE that, charitable contributions are not part of taxable income. Taxable income refers to the amount of income used in calculating tax that ab individual would pay.
In the short run, a firm's total costs of producing the hundredth unit of output equal $9 comma 000. If it produces one more unit, its total costs will increase to $9 comma 200. What is the marginal cost of the 101st unit of output? $ nothing (Round your answer to the nearest cent.)
Answer:
Marginal cost = $200
Explanation:
Marginal cost is defined as the change in total cost when output changes by one unit. In the short run.
It is the amount by which total costs will increase as a result of producing additional one more unit of a product.
Marginal cost =$9200 - $9,000 = $200
Black Top Taxis is hiring new drivers. One of the key selection criteria for potential candidates is the ability to choose the right action quickly in response to several different signals and the ability to respond quickly to signaling information after it occurs. The selection criteria indicate that to be selected, a candidate must have the two psychomotor abilities ofA) perceptual speed and extent flexibility.B) control movement abilities and originality.C) visualization and gross motor coordination.D) response orientation and low response time.E) number facility and response orientation abilities
Answer:
The correct answer is letter "D": response orientation and low response time.
Explanation:
Response orientation refers to the ability individuals develop that allows them to choose rapidly between different alternatives portrayed. It does not only involves selecting an alternative quickly but choosing the correct option.
Low response time implies reacting in front of a given situation with the minimum delay possible. It shows how prepared an individual may be and how fast that person can provide solutions to face the event.
When a cherry orchard in Oregon adds a worker, the total cost of production increases by $24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:
A. $19.
B. $4,000.
C. $24,000.
D. $40
Answer:
D. $40
Explanation:
Given that
Total cost increased by $24000
Output increased by 600pounds
Recall that
Marginal cost = Change in total cost/change in total output
Thus
Marginal cost = 24000/600
Marginal cost = $40.
Therefore, marginal cost on the last pound of cherry produced is equal to $40
Final answer:
The marginal cost per pound of cherries when an additional worker is hired is $40, which is computed by dividing the increased cost of production by the additional cherry output.
Explanation:
The marginal cost of the last pound of cherries produced is obtained by dividing the increase in total cost by the increase in output. Therefore, the marginal cost per pound is calculated as $24,000 divided by 600 pounds, which equals $40 per pound. The correct answer to the question is therefore: D. $40.
Acme Global uses a software program to scan applications for minimum qualifications. If an applicant does not meet the minimum requirements for the job, the applicant is automatically rejected and no one at Acme Global has to review the application. This saves many hours for the human resource staff and is an example of a benefit of using ______ in recruiting.
Answer:
The correct answer is A. smart technology.
ExplanTation:
Smart technology, today it is sold in any type of electronic device, as well as a telephone, a computer, a TV, cooking utensils and household appliances in general.
This concept of intelligent technology, is justified mainly for the purpose of offering different electronic prototypes, a logical programming that reacts to stimuli that are attributed to its sensors. Something very similar to what occurs with a new brain that, in addition to receiving specific instigations, proceeds in an immediate way to generate the corresponding chords to the dictated call.
In this order of ideas, the electronic devices are endowed with sufficient capacity to understand messages such as, in the case of the cell phone or the television, the presence and use of this device by a person, as it proceeds to lower its performance by optimizing the energy that requires its operation.
While looking for ideas on how to craft a user-friendly dishwasher, the designers of a dishwasher-manufacturing company spent 10 days observing people as they used their dishwashers in their homes. In this instance, the designers were conducting ________. A. causal research B. survey research C. quantitative marketing research D. experimental research
Answer:
Option "C" is the correct answer to the following question.
Explanation:
Researchers observe the participants using qualitative method under ethnographic research.
In the following situation, the dishwasher company uses its dishwasher at different places for 10 days by common people. This is a good example of quantitative distribution research.
Final answer:
The designers were conducting naturalistic observation by watching people use their dishwashers at home, a method that involves observing subjects in their natural environment to gather genuine insights.
Explanation:
While looking for ideas on how to craft a user-friendly dishwasher, the designers of a dishwasher-manufacturing company spent 10 days observing people as they used their dishwashers in their homes. In this instance, the designers were conducting naturalistic observation. Naturalistic observation is a method used in descriptive research for collecting data, it involves observing subjects in their natural environment without any manipulation or control exerted by the researcher. The goal is to watch behavior in its natural setting, without the influence of artificial laboratory conditions or the potential biases of survey questionnaires.
Examples of naturalistic observation include a psychologist observing interactions between children on a playground, or biopsychologists watching animal behaviors in the wild. This methodology allows researchers to gather data that is not influenced by the subjects' awareness of being studied, thereby providing a more genuine insight into behaviors and interactions.
In his analysis of the Dell fraud for Forbes, Edward Hess comments: "Too often, the market's maniacal focus on creating ever-increasing quarterly earnings drives bad corporate behavior, as it apparently did at Dell. That behavior produces non-authentic earnings that obscure what is really happening in business. Short-termism can result in a range of corporate and financial games that may enrich management at the expense of market integrity and efficient investor capital allocation." Comment on Hess's statement from two(2) perspectives: earnings management and financial analysts earnings projections. Explain the difference between financial statement fraud and disclosure fraud. How did Dell use each one to produce materially misstated financial results
Answer:
As earnings naturally represent the managements ability and success, earnings is the item that is most prone to be misrepresented.
we know that projections are forecasts that are never 100% correct and these projections are extremely sensitive to macro environmental factors.
Financial statement fraud refers to intentional, fraudulent misrepresentations and miscalculations in the financial statement accounts, balances and cash flows. such fraudulent alterations are usually done at the accounts level and in those accounts and transactions.
Disclosure fraud refers to fraudulent activities and misrepresentations that are done by not including balances, hiding real figures and not disclosing essential and material items that are necessary to be disclosed.
Explanation:
Answer:
As earnings naturally represent the managements ability and success, earnings is the item that is most prone to be misrepresented.
we know that projections are forecasts that are never 100% correct and these projections are extremely sensitive to macro environmental factors.
Financial statement fraud refers to intentional, fraudulent misrepresentations and miscalculations in the financial statement accounts, balances and cash flows. such fraudulent alterations are usually done at the accounts level and in those accounts and transactions.
Explanation:
On october 1, steve's carpet service borrows $350,000 from first national bank on a 3-month, $350,000, 8% note. what entry must steve's carpet service make on december 31 before financial statements are prepared?
Final answer:
Steve's Carpet Service should record an interest expense by debiting Interest Expense and crediting Interest Payable for the three months' accrued interest on the $350,000 loan, calculated as $7,000.
Explanation:
Steve's Carpet Service needs to account for the interest that has accumulated on the loan taken from the First National Bank. Since the loan is for 3 months with an 8% annual interest rate, by December 31, three months of interest must be recognized on the balance sheet.
To calculate the interest for three months, we take the annual interest rate of 8%, divide by 12 to get the monthly rate, then multiply by 3 for the three months that have passed since October 1. The entry required on the balance sheet would be a debit to Interest Expense and a credit to Interest Payable for this interest amount.
The calculation goes as follows: Interest = Principal × Annual Interest Rate × Time (in years), so Interest = $350,000 × 0.08 × (3/12).
This yields an interest expense of $7,000 (which is $350,000 × 0.08 × 0.25). Therefore, Steve's Carpet Service should record a debit to Interest Expense for $7,000 and a credit to Interest Payable for $7,000.
Charles Malone recently renewed his card membership
at DiscountMania. The card has an annual $40 fee, but Charles believes that it
pays for itself because he receives good prices on electronics, contact lenses,
and even tires for his car. Shortly after renewing the card, Charles began
receiving calls from collection agencies claiming that he owed money. With the
help of others, he learned that another Charles Malone also owned a
DiscountMania card, and wrote checks with insufficient bank funds when making
purchases. DiscountMania had linked Charles’ personal information with the
other Charles Malone’s personal information. Charles experienced:_____________.
A. Buyer myopia
B. Database fraud
C. Information trafficking
D. Identity theft
Answer:
D. Identity theft
Explanation:
Identity theft is the use of a persons identity to make transactions and payment after acquiring the personal or financial information of that person. The person whose identity was used would suffer the consequences of the defaulters action. This information include a persons name, finger print, credit card number, pin number, password, date of birth and so on for the aim of accessing the person finances.
The issue Charles Malone experienced is known as Identity theft. This occurred when DiscountMania erroneously linked his personal information to that of another individual with the same name, leading to debt collection calls directed towards him wrongfully. D. Identity theft.
Explanation:In the case presented, Charles Malone experienced D. Identity theft. Identity theft refers to the deliberate use of someone else's identifying information, usually for financial gain, resulting in potential harm to the individual whose identity has been stolen. This can be achieved through various methods, one of which includes having one's personal information mixed up with another person's, as experienced by Charles.
In this situation, DiscountMania, unfortunately, linked his information to that of another person named Charles Malone who had been issuing checks without sufficient funds. The errors in the database led to Charles receiving calls from collection agencies for the debt of the other Charles Malone, acting as a stressful and potentially damaging case of identity theft.
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An industry battle between incompatible product formats can occur if competing firms selling sets of ___ substitutable networkable complementary products fail to take into account ___ feedback substitution network effects.
Answer:
The correct answer is complementary, network.
Explanation:
The only condition for the battle between different products to emerge is that they are complementary, which suggests discrepancies between conditions established by different companies that entail a distance that usually benefits the buyer. This process requires feedback in order to achieve convenient results in the market, which means reaching agreements in the medium and long term considering the market conditions.
As a real estate agent, you learn that the home you are trying to sell resides in a low-lying frequently flooded area. The seller has not disclosed the information, and the buyer has only seen the property on "dry" days. Choose your best ethical choice:
Answer:
You disclose the information to the potential buyer and inform the seller of your action. You are risking the sale of the property
Explanation:
The reason is that not disclosing the matter would be fraudulent action, because if I didn't disclosed the issue to the buyer then I had datched the person by not disclosing the matter which has potential for altering the decision making of the buyer. So the right course of action would be disclosing the matter to the buyer and seller and encouraging ethical relationship.
In the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price, the computation would:
Answer:
be antidilutive
Explanation:
The term antidilutive securities refers to financial instruments that are not in the form of common stock, but when converted into common stock will increase earnings per share.
A transaction can have an antidilutive effect on the earnings per share calculation if the proportional increase to the number of shares outstanding is smaller than the proportional increase to earnings
In the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price, the computation would BE ANTIDILUTIVE.
Antidilutive is a term that describes the effects of certain actions, such as securities retirement, securities conversion, or other corporate actions for example, acquisitions made through the issuance of common stock or other securities on the earnings per share (EPS) or voting power of existing shareholders.
A country opens up to trade and becomes an exporter of wheat. In the wheat market, domestic consumer surplus will ________, domestic producer surplus will ________, and total surplus will ________. decrease; increase; decrease increase; decrease; increase remain unchanged; increase; increase decrease; increase; increase
Final answer:
When a country opens up to trade and becomes an exporter of wheat, domestic consumer surplus will decrease, domestic producer surplus will increase, and total surplus will likely increase due to gains in producer surplus outweighing consumer losses.
Explanation:
When a country begins to export wheat, the economic impacts can be analyzed through changes in producer surplus and consumer surplus. By becoming exporters, domestic producers are able to sell their wheat at higher prices on the global market, which leads to an increase in producer surplus. Producer surplus is represented by the area below the price and above the supply curve. Meanwhile, domestic consumers now face higher prices for wheat because domestic supply is partially redirected to foreign markets, causing a decrease in consumer surplus. Consumer surplus is the area below the demand curve and above the price.
However, when we consider the change in total surplus, which is the sum of consumer and producer surplus, it is likely to increase. This is because the gains in producer surplus from higher prices and access to larger markets usually outweigh the losses experienced by consumers in the domestic market. As a result, the total welfare, measured by the total surplus, often increases when a country becomes an effective exporter of a good.
If the government changes taxes without changing government spending to eliminate the recessionary gap, will the minimum required change in taxes be greater than, smaller than, or equal to the minimum required change in government spending?
Answer:
Explanation:
If the government changes taxes without changing government spending to eliminate the recessionary gap, will the minimum required change in taxes be greater than, smaller than, or equal to the minimum required change in government spending?
The minimum required change in taxes will be greater than that of the minimum required change in government spending
tax multiplier (mpc/mps = 0/8/0.2=0.4) is smaller than the government spending multiplier (1/mps= 1/.2=5) because of the initial increase in disposable income caused by the decrease in income tax will be saved rather than spent
Final answer:
To close a recessionary gap, the required change in taxes needs to be greater than the change in government spending due to different impacts of the multiplier effect, especially during times when the economy is not near full employment.
Explanation:
When the government changes taxes without changing government spending to eliminate a recessionary gap, the minimum required change in taxes will be greater than the change in government spending. This is due to the multiplier effect associated with government spending, which is larger compared to the tax multiplier. Specifically, a reduction in taxes increases disposable income, leading to higher consumption but not on a one-to-one basis. However, direct government spending enters the economy completely, potentially having a larger initial impact on closing the recessionary gap. The effectiveness of tax cuts also depends on how close the economy is to full employment. In a recession, tax cuts can shift the aggregate demand (AD) rightwards effectively but may lead to inflation if the economy is near full employment.
Which is NOT a positive reason for using a credit card to finance purchases? You will get charged high interest. You can buy something you need now and pay for it after pay day. You can get rewards and discounts. Paying it off on time can help build your credit history
Answer:
You Can get rewards or discounts
Explanation:
The option that is NOT a positive reason for using a credit card to finance purchases is being charged high interest. Credit cards can offer convenience and help build credit, but high-interest rates for carrying a balance are a significant downside.
You will get charged high interest is correct as while credit cards can be beneficial for their convenience, rewards, and credit-building potential, the high-interest rates associated with carrying a balance from month to month are a major drawback. Using a credit card wisely involves spending conservatively, paying off the full balance each month, not spending up to your limit, and ensuring others cannot use your card.
It's important to avoid using a credit card for purchases that you cannot afford to pay off promptly, such as unnecessary luxury items. However, in some emergencies, like unemployment and needing to purchase essentials, credit card debt can be a temporary solution until financial stability is regained. Yet, it's essential to understand that every month a balance is carried, the cardholder is charged interest on the owed amount, quickly escalating the debt.
The Embargo Act:_______
a) led Napoleon to repeal his economic decrees—but too late.
b) especially hurt New England's port cities.
c) was a last resort after undeclared naval war had failed.
d) was widely evaded and thus had little impact on the U.S. economy
Answer:
B
Explanation:
Especially hurt New England's port cities
The Embargo act of 1807 was Enacted by the US on all foreign national with the intention of harming the United kingdom and France. The effect of this was to force these two nations to cease impressments and respect the US neutrality.
The act posed hardship on U.S. farmers and on New England and New York port cities. It had little effect on Europe.
Like many other professional organizations and businesses, the American Marketing Association has developed a formal, written guideline to help its members make better ethical decisions. This document is called a:
Answer:
Code of Ethics
Explanation:
All professional bodies, companies have CODE OF ETHICS that guide its members.
Code of Ethics is a guide of principles and rules used by individuals and organizations designed to help professional conduct, decision making process, act with integrity etc.
Members of a professional body or staff of an organization are punished accordingly if they fail to abide by their existing code of ethics
Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000, but would cost an extra $80 per year in lost production. Jan’s can reduce cash holdings to $6,000 if it hires an armored car service to pick up cash more frequently for a fee of $120 per year. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings to $4,000. Jan’s plans on purchasing government bonds paying a 5% interest rate with any cash holding reductions. What is Jan’s optimal money holding?
Final answer:
Jan's optimal cash holding is to use the computerized cash management service, which reduces cash holdings to $4,000, allowing the rest to be invested in government bonds. This results in the highest net annual gain of $120 after considering the costs associated with reducing cash holdings.
Explanation:
To determine Jan's optimal cash holding, we need to calculate the cost of holding cash versus the potential interest earned from investing the reduced cash in government bonds at a 5% interest rate. The decision involves comparing the costs associated with different levels of cash holding to the interest income from investing the excess cash. Let's break it down for each scenario:
No change in cash holding: $10,000 held, $0 saved, $0 extra cost, $0 earned interest.
Midday deposit reduces cash to $8,000: Saves $2,000, $80 extra cost per year, interest earned from investment $2,000 * 5% = $100.
Armored car service reduces cash to $6,000: Saves $4,000, $120 extra cost per year, interest earned from investment $4,000 * 5% = $200.
Computerized cash management reduces cash to $4,000: Saves $6,000, $180 extra cost per year, interest earned from investment $6,000 * 5% = $300.
To find the optimal cash holding, subtract the extra costs from the interest earned for each scenario and compare:
Midday deposit: $100 interest - $80 cost = $20 net gain.
Armored car service: $200 interest - $120 cost = $80 net gain.
Computerized cash management: $300 interest - $180 cost = $120 net gain.
As we can see, the computerized cash management service provides the highest net gain of $120. Therefore, Jan's optimal money holding is to keep $4,000 on hand and invest the rest in government bonds.
Final answer:
The optimal money holding strategy for Jan's Dry Cleaning is to employ a computerized cash management service, which reduces cash holdings to $4,000 with a net benefit of $120 after the annual fee, by leveraging the 5% interest on reduced cash holdings.
Explanation:
Jan's Dry Cleaning is evaluating optimal money holding strategies to balance day-to-day cash requirements with potential interest earnings. Jan's currently holds an average of $10,000 each day, while $2,000 is deemed essential for business operations. The options under consideration involve reducing cash holdings and investing the excess cash in government bonds that yield 5% interest annually. There are three alternatives to reduce cash holdings:
Making a midday deposit to reduce cash holdings to $8,000 at an annual cost of $80.Hiring an armored car service to reduce cash holdings to $6,000 at an annual cost of $120.Using a computerized cash management service to reduce cash holdings to $4,000 at an annual cost of $180.To determine the optimal strategy, we calculate the interest earned on the reduced cash holdings for each option and deduct the respective costs. This will provide the net benefit for each option, allowing us to select the strategy that offers the maximum net benefit.
Option 1 Calculation:
Interest earned on $2,000 reduction = $2,000 * 0.05 = $100
Net benefit = $100 - $80 = $20
Option 2 Calculation:
Interest earned on $4,000 reduction = $4,000 * 0.05 = $200
Net benefit = $200 - $120 = $80
Option 3 Calculation:
Interest earned on $6,000 reduction = $6,000 * 0.05 = $300
Net benefit = $300 - $180 = $120
By analyzing the net benefits, the strategy with the highest net benefit is employing a computerized cash management service, which gives a net benefit of $120. Therefore, Jan's optimal money holding strategy is to use the computerized cash management service and reduce cash holdings to $4,000.
According to Henry Mintzberg, the realized strategies of a firm: a.are a combination of deliberate and emergent strategies are decisions determined by both analysis and predicted b.environmental developments, anticipated resource constraints, and/or changes in managerial preferences c.are a combination of deliberate and differentiation strategies d.are decisions determined only by analysis
Answer:
A) are a combination of deliberate and emergent strategies
Explanation:
Minztberg differentiated the companies strategies and classified them into:
deliberate strategies: intended and planned, when properly carried out the results should be the planned ones. emergent strategies: when a deliberate strategy cannot be fulfilled due to changes in the company's environment, they must be adjusted to the company's new reality.Libertarians believe that:a) monetary policy is more important than monetization policy. b) Keynesian economics is preferable to demand-side economics.c ) government action on the economy should be kept to a minimum.d) only public goods matter to the smooth functioning of an economy.
Answer:
c. government action on the economy should be kept to a minimum.
Explanation:
Libertarians believe that government action on the economy should be kept to a minimum.
Libertarians are strongly inclined to a process view of distributive justice than an end-state view.
Libertarianism involves the belief that government's only concern should be to assure a fair process of distribution without assuring a particular outcome.
Answer:
C) government action on the economy should be kept to a minimum.
Explanation:
Libertarians are called that way because they seek to maximize the individual freedom of people and decrease the roles carried out by the different levels of government. According to them, less government intervention = more freedom. Libertarians dislike authority and state power, and prefer freedom and autonomy. They favor laissez-faire capitalism and a smaller government.