The current ratio of 1.20:1 means that for every dollar of current liabilities, a company has $1.00 of current assets. Option (b) is correct.
A liquidity ratio called the current ratio assesses a company's capacity to settle short-term debts or those that are due within a year. It explains to investors and analysts how a business can use its present assets to the fullest extent possible to pay down its current liabilities and other payables.
In general, an appropriate current ratio is one that is comparable to the industry norm or just a little bit higher. The likelihood of distress or default may be increased by a current ratio that is lower than the industry average.
Therefore, Option (b) is correct.
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Financial markets improve economic welfare because: A. they allow consumers to time their purchases better B. they channel funds from savers to investors C. they eliminate the need for financial intermediaries D. both A and B are correct E. all of the above are correct
Answer:
E
Explanation: All of the above
Financial markets boost economic welfare mainly because they channel funds from savers to investors and allow consumers to time their purchases better. So, both options A and B are correct.
The most correct answer is D: both A and B.
Explanation:Financial markets improve economic welfare primarily due to reason B: they channel funds from savers to investors.
This feature enables consumers and businesses to invest their savings in businesses that may generate wealth and contribute to economic growth.
However, option A: they allow consumers to time their purchases better, is also a valid point and contributes to economic welfare by providing consumers with flexibility.
Therefore, the most correct answer is D: both A and B are correct.
Option C, the elimination of financial intermediaries, is not typically a result of financial markets, making option E incorrect.
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Sunny Corporation began the year with cash of $ 141, 000 and land that cost $ 55, 000. During the year Sunny earned service revenue of $ 250 comma 000 and had the following expenses: salaries, $ 190 comma 000; rent, $ 80,000; and utilities, $ 28,000. At year-end Sunny's cash balance was down to $ 15 comma 000. How much net income (or net loss) did Sunny experience for the year?
Answer:
Net Loss experienced during the year = ($48,000)
Explanation:
Provided information we have,
Revenue for the year = $250,000
Costs incurred during the year
Salaries = $190,000
Rent = $80,000
Utilities = $28,000
Total cash cost = $298,000
Thus, net income or (loss) = Total Revenue for the year - Total cost for the year
Thus, Net Income or (Loss) = $250,000 - $298,000 = ($48,000)
Therefore, Net Loss experienced during the year = ($48,000)
Excessive alcohol consumption can lead to liver failure, as well as deterioration of other organs. Suppose the government has opened several public clinics that try to help alcoholics reduce their alcoholic consumption. Now the government is trying to decide how to fund these clinics. One suggestion is to raise the funds for the public clinics with a liquor tax. This tax follows:
A. The benefits principle of tax fairness.
B. Neither the ability-to-pay nor the benefits principle.
C. The ability-to-pay principle.
Answer:
The answer is A. The benefits principle of tax fairness.
Explanation:
Financial markets a. facilitate the flow of funds from surplus to deficit units. b. facilitate the flow of funds from deficit to surplus units. c. are markets in which financial assets such as stocks and bonds can be purchased and sold. e. none of these choices are true.
Answer: Option C
Explanation: In simple words, financial markets refers to the market of stock, bonds and equities like securities in which the participant trade for the low transaction cost and easy availability of sellers and purchasers. Stock market is an example of financial markets.
The flow of funds from surplus to deficit is done by other financial institutions such as banks.
Hence the correct option is C.
Final answer:
Financial markets facilitate the flow of funds from surplus units to deficit units and include the trade of financial assets like stocks and bonds, playing a vital role in economic growth and investment.
Explanation:
Financial markets serve as a bridge connecting entities with excess funds, also known as surplus units, to those in need of funds or deficit units. This process primarily facilitates the flow of funds from surplus to deficit units, enabling savers to invest and earn a return, and allowing borrowers to access funds for various purposes like investment and growth. These markets include avenues for trading financial assets such as stocks, bonds, bank loans, and other types of financial investments.
Through these mechanisms, financial markets support entrepreneurship, investment, saving mobilization, and the overall national growth by ensuring an efficient allocation of resources based on supply and demand.
Jabari Manufacturing, a widgets manufacturing company, divides its production operations into three processeslong - Department 1, Department 2, and Department 3. The company uses a process costing system. Jabari incurred the following costs during the year to produce 4,600 units: Department 1 $18,000 Department 2 $8,000 Department 3 $4,000 If Jabari could sell only 3,400 units during the year, what will be the cost per unit of widget produced? (Round your answer to the nearest cent.)
Answer:
Cost per unit of widget produced = $6.52
Explanation:
As for the provided information:
Total units produced = 4,600 units
Total cost of production = costs for Department 1 + Department 2 + Department 3
= $18,000 + $8,000 + $4,000 = $30,000
It does not matter how many units are sold as the cost of sales will include, selling and administrative cost also.
Therefore, all the cost will be considered.
Thus total cost of production = $30,000 for 4,600 units.
Cost per unit of widget = [tex]\frac{30,000}{4,600} = 6.52[/tex]
The cost per unit of widget produced by Jabari Manufacturing is $6.52.
Explanation:To calculate the cost per unit of widget produced, we need to divide the total cost by the number of units produced. In this case, Jabari Manufacturing incurred costs of $18,000 in Department 1, $8,000 in Department 2, and $4,000 in Department 3 to produce 4,600 units. However, they were only able to sell 3,400 units. To find the cost per unit, we add up the total costs: $18,000 + $8,000 + $4,000 = $30,000. Then, we divide this total cost by the number of units produced: $30,000 / 4,600 = $6.52 per unit (rounded to the nearest cent).
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If a CPA who is a member of the AICPA fails to abide by the Principles section of the AICPA’s Code of Professional Conduct, but otherwise acts in conformity with the Code, the CPA’s membership in the AICPA will potentially be:
a. Suspended for a period of up to 30 days
b. Suspended for a period of up to one year
c. Revoked, with the right to apply for reinstatement after one year
d. Not subject to any form of punishment regarding the license to practice accounting
Answer:
The correct answer is D. Not subject to any form of punishment regarding the license to practice accounting
Explanation:
The accounting professional should use their professional judgment to make their decisions, consult a guide such as the Code of Conduct, give some guidelines on what is the correct behavior, to apply the rules and reach correct conclusions.
However, when the professional acts fraudulently, he will be responsible to the competent authorities. When it does not follow the guidelines but still acts under the law, it cannot be sanctioned.
Staff-level briefings are conducted by the supervisor to introduce co-workers, clarify tasks, define the scope of work, describe sources of work supplies, and present the work schedule.
A) TRUE
B) FALSE
Answer:
A)TRUE
Explanation:
This type of briefings are normally conducted at the beginnig of an assignment and if it neccesary at any time that it is neccesary
Other kind of briefings are:
Field-Level BriefingSection-Level BriefingPizza is a normal good. If students' incomes at your college increase, the effect on pizza will be:
no change in the demand.
a decrease in the demand.
an increase in the demand.
an increase in the quantity demanded.
Answer:
the effect on pizza will be: an increase in the demand
Explanation:
Demand in economics is defined as consumers' willingness and ability to consume a given good.
Assume France and Mali can both produce grain and dates, and that the only limited resource is the farming labor force, meaning that land, water, and all other resources are plentiful in both countries.
Each farmer in France can produce 10 metric tons of grain or 5 metric tons of dates in a season. Each farmer in Mali can also produce 10 metric tons of grain or 25 metric tons of dates. Please answer the four questions below.
1. Which country has the absolute advantage in producing dates?
2. Which country has the absolute advantage in producing grain?
3. Which country has the competitive advantage in producing dates?
4. Which country has the comparative advantage in producing grain?
Answer:
In France:
Farmer can produce = 10 metric tons of grain or 5 metric tons of dates in a season
In Mali:
Farmer can produce = 10 metric tons of grain or 25 metric tons of dates.
(1) Mali has the absolute advantage in producing dates because Mali produces more metric tons of dates than France from the same level resources.
(2) No country has an absolute advantage in producing grain because same amount of grain were produced by both the countries with the same level of resources.
(3) Opportunity cost of dates in France = [tex]\frac{10}{5}[/tex]
= 2 grain
Opportunity cost of dates in Mali = [tex]\frac{10}{25}[/tex]
= 0.4 grain
Therefore, Mali's opportunity cost of producing dates is lower than France, so Mali has a comparative advantage in producing dates.
(4) Opportunity cost of grain in France = [tex]\frac{5}{10}[/tex]
= 0.5 dates
Opportunity cost of grain in Mali = [tex]\frac{25}{10}[/tex]
= 2.5 dates
Therefore, France's opportunity cost of producing grains is lower than Mali, so France has a comparative advantage in producing grains.
Taylor uses old t-shirts to make reusable shopping or grocery bags. People donate their old t-shirts. It takes her about 30 minutes per shirt to make the bag. She sells the bags at craft fairs and donates all of her profits to her favorite charity. Which of the following is true about Taylor’s supply chain?
a) Taylor is using a push model.
b) Taylor is using a pull model.
c) Taylor is experiencing the bullwhip effect.
d) Taylor has an accurate demand forecast.
Final answer:
Taylor's approach to making and selling reusable bags from donated t-shirts represents a pull model because her production is based on actual demand and donations, rather than forecasts of demand.
Explanation:
The question asks which of the following is true about Taylor’s supply chain as she uses old t-shirts to make reusable shopping or grocery bags, sells them, and donates her profits to charity. Taylor is using a pull model. In a pull model, production and supply chain decisions are based on actual demand rather than forecasts. Taylor makes bags as people donate t-shirts and presumably as demand for her bags exists at the craft fairs, indicating a demand-driven approach. This model contrasts with a push model, where products are made in anticipation of demand. The bullwhip effect, which involves fluctuating inventory levels and inefficient supply chains due to demand forecast inaccuracies, does not specifically apply here since Taylor’s operation is not described as having complex supply chains or inventory issues. Furthermore, Taylor’s model does not inherently include demand forecasting; she makes bags based on the t-shirts she receives and the demand at craft fairs, rather than predicting future demand.
Enna works at the grocery store and earns $9 an hour. She is busy with extracurricular activities and only works 20 hours during the week. However, she picks up an eight-hour Sunday shift once a month, for which she earns time and a half. Jenna also lives at home and has health insurance under her mom's plan. She is expected to pay for her own car repairs, maintenance and gas, as well as her auto insurance, which costs $1,000 a year. Jenna wants to take a trip to Mexico with her friends next year, which will cost $1,500. *Remember to compute net pay by taking 20% out for taxes.
Answer:
Jenna's net tax payment is $ 633.6
Explanation:
because;
$9 * 20 hour * 1 week = $180 h/w
$180 h/w * 4 week/ 1month = $720 h/m
$9 * 8 hours * 1 sunday = $72 h/s
$720 + $72 = $792 - 20% taxes = $633.6
$633.6 is jenna's basic salary
monthly expenses of $83.33
$633.6 - 83.33 = 550.27.
Monthly savings for the trip to Mexico is $125
Jenna earns $207 per week, summing up to an annual income of $10,764. After 20% tax deductions and anticipated expenses of $2,500, Jenna is left with $6,111.20 at the end of the year.
Explanation:First, let's calculate Jenna's weekly income. She earns $9 per hour for 20 hours which is $180. Once a month she works an 8-hour Sunday shift earning time and a half, so that amounts to $9 x 1.5 x 8 which is $108. Since it's only once a month, we should divide this by 4 to get an average weekly income from the Sunday shift which is $27. Thus her average weekly income is $180 + $27 which is $207.
Before we factor in her taxes and expenses, let's calculate her annual income. Since there are 52 weeks in a year, she earns $207 x 52 which is $10,764.
Jenna needs to account for taxes. If she pays 20% of her income in taxes, we calculate $10,764 x 0.20 which gives us $2,152.80. Subtracting this from her income, she's left with $10,764 - $2,152.80 which is $8,611.20.
To calculate her net income, we then subtract her total annual expenses: her auto insurance which is $1,000 and her trip to Mexico which will cost $1,500. This will be $8,611.20 - $1,000 - $1,500, leaving Jenna with $6,111.20 at the end of the year, after taxes and her expenses for car insurance and her trip to Mexico.
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If a business is losing money on the goods it is producing, this indicates that
A. the business is producing the goods at the lowest possible cost.
B. the resources used to produce the goods are too expensive and need to be subsidized in order to be used productively.
C. the resources would be used more productively producing other things.
D. the consumer values the goods highly relative to costs
If a business is losing money on the goods it's producing, it likely indicates that the resources would be used more productively in different areas. This means the goods aren't providing enough value to surpass their production costs.
Explanation:If a business is losing money on the goods it is producing, it can mean a few things. However, most typically this suggests that the resources would be used more productively producing other things - option C. This is because even if the resources used to produce the goods are expensive, if the value generated from selling the goods doesn't surpass the costs of production, then the use of these resources may be better allocated elsewhere. This can involve producing different goods, or changing the methods of production. This scenario also indicates that the pricing or cost strategies need to be reconsidered.
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A production possibilities frontier: A. shows how unlimited wants exceed the limited resources available to fulfill those wants. B. shows the market for a good or service. C. shows the maximum attainable combinations of two goods that may be produced with available resources. D. shows the act of buying and selling. E. shows how participants in the market are linked.
Answer:
The correct answer is C. Shows the maximum attainable combinations of two goods that may be produced with available resources.
Explanation:
The Production Possibilitiy Frontier (PPF) shows the most optimal usage of a a limited amount of resources to produce two separate goods and obtain the maximum production output possible. This theory is applicable only to the production of 2 products and demonstrates the concept of cost of opportunity. Producing more of one of the products means producing less of the other, as the resources are scarce.
Answer:
c
Explanation:
A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of four years or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method?
Answer:
Depreciation for year 2 = $18,667
Explanation:
Double declining depreciation rate = Depreciation rate as per straight line method [tex]\times[/tex] 2
Straight line method depreciation = [tex]\frac{Cost\ of\ asset\ -\ Salvage\ value}{life\ in\ years}[/tex]
= [tex]\frac{75,000 - 5,000}{4} = 17,500[/tex]
Depreciation rate = 17,500/75,000 = 23.33%
Double declining depreciation rate = 23.33 [tex]\times[/tex] 2 = 46.67%
Thus, depreciation in year 2 as per double declining method =
Value at end of year 1 = $75,000 - 46.66667% = $40,000
Depreciation for year 2 = $40,000 [tex]\times[/tex] 46.66667% = $18,667
The double-declining balance method of depreciation initially calculates straight-line depreciation, which is then doubled and applied to the asset's cost yielding the first year's depreciation. The same process is applied on the residual value for the next year, giving us $20,000 as the second-year depreciation for the given machine.
Explanation:The subject of this question is
depreciation
using the double-declining balance method. In this Business scenario, the initial value of the machine is $75,000, with a residual value of $5,000 and an estimated life of 4 years or 18,000 hours. The first step in the double-declining balance method is to calculate the straight-line depreciation rate. In this case, straight line depreciation would be (cost of the machine - residual value) / Life of the machine. $75,000 - $5000 = $70,000 / 4 years gives us $17,500 per year. This tells us that if we were using the standard approach the machine would depreciate by $17,500 each year. However, we are using the double-declining balance method, which doubles the straight-line depreciation rate. So for the first year, the depreciation would be $17,500 * 2 = $35,000. Now subtract that from the initial cost for a new book value at the start of second year : $75,000 - $35,000 = $40,000. Apply the same double-rate (2* straight-line depreciation) to the new book value. $40,000 * 50% (which is double the straight-line rate of 25%) gives us $20,000, which is the depreciation amount for the second year.
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What is the value of a stock that you believe will sell in three years for $67 a share and will pay $3.00 in dividends next year, and grow dividends at 4% in year 2, and 5% in year 3 assuming your required return is 15%?
Answer:
value of a stock is $51.18
Explanation:
given data
selling price S = $67
dividends 1st year = $3.00
dividends 2nd year = 4%
dividends 3rd year =5%
return = 15%
to find out
value of a stock that you believe will sell in three years
solution
we know here selling price in 3 year is $67
and dividend in 1st year is D1 = $3.00
so
Dividend in 2nd year is = $3.00 (1 + 0.04)
Dividend in 2nd year is D2 = $3.12
and
Dividend in 3rd year = $3.12 (1 + 0.05)
Dividend in 3rd year D3 = $3.28
so
value of a stock = [tex]\frac{D1}{r} + \frac{D2}{r^2} + \frac{D3}{r^3} + \frac{S}{r^3}[/tex]
value of a stock = [tex]\frac{3}{1.15} + \frac{3.12}{1.15^2} + \frac{3.28}{1.15^3} + \frac{67}{1.15^3}[/tex]
value of a stock is $51.18
On January 1, Read, a nongovernmental not-for-profit entity, received $20,000 and an unconditional promise of $20,000 for each of the next four calendar years to be paid on the first day of each year. The present value of an ordinary annuity for four years at a constant interest rate of 8% is 3.312. What amount of net assets with donor restrictions is reported in the year the promise was received?
a. $100,000b. $66,240c. $86,240d. $80,000
Answer:
amount of net assets with donor restrictions is $66240
correct option is B $66,240
Explanation:
given data
received = $20000
paid = $20000
interest rate = 8%
interest = 3.312
to find out
What amount of net assets with donor restrictions is reported
solution
we know here contributions received are accounted for at fair value
and fair value is $20000
so present value of the payments = $20000 × 3.312
present value of the payments = $66240
and here Unconditional promises for give cash amounts in the future
ans reported as donor-restricted support,
unless donor clearly intended support to current activities
so amount of net assets with donor restrictions is $66240
and amount $20000 receive on 1st January
increases net assets without donor restrictions
Retail giant Target has an internal creative department that handles the design of its weekly circulars, direct-mail pieces, in-store displays, promotions, and other marketing materials. This is an example of an in-house agency. True or false?
Answer:
True
Explanation:
In House agency: The agency in the work is done in a house, not outside the housing agency. The outsourcing of the work is also not considered in the in house agency, as the work is done at the outside of the house, not at the inside of the house.
In the given situation, the internal creative department handles its work internally, So it is an example of an in house agency
Which of the following statements supports multiple sourcing:
- an ongoing long-term contract exists with a preferred supplier.
- supply is plentiful and supply assurance is important.
- there is a patent involved.
- the order is small.
- concerns exist about supplier capacity for future volume.
Answer:
Concerns exist about supplier capacity for future volume.
Explanation:
The multisourcing is a method in which the supplier base is expanded increasing the actual number of suppliers, because the needs of the company are increasing.
Advantages:
-Alternative sources of materials in case of delivery stoppage by a supplier.
-Reduced probability of bottlenecks due to insufficient production capacity to meet peak demand.
- Increased competition mong suppliers leads to better quality, price, delivery, product innovation and buyer´s negociation power.
-More flexibility to reat to unexpected events that could endanger supplier´s capacity.
Disadvantages:
-Reduced efforts by supplier to match buyer´s requirements.
-Higher cost for the purchasing organization (greater number of orders, telephone calls, records, and so on).
The Coffee Collective is seeking to identify customers who want a unique coffee-drinking experience and are open to a loyalty rewards program. In doing so, the Coffee Collective is determining its ___________.
Answer: Market segment
Explanation: A market segment can be defined as group of potential customers of an organization. Such grouping is done by the organization on the basis of similar preferences of individuals. The organisations in the market do this to ensure their target market, so that they can enforce their marketing strategy in such markets.
In the given case, coffee collective is trying to identify customers that have a certain preference. Hence we can conclude that coffee collective is determining its market segment.
One of the diversity challenges managers have to deal with is that, in addition to differences in the employee groups that make up their staff, people are much more mobile in today's world. If an American manager, James, were to accept an assignment in Latin America, for example, he would need to be particularly aware of the _____________ of the workforce.
Answer:
cultural identity
Explanation:
According to my research on studies conducted by various sociologists, I can say that based on the information provided within the question he would need to be aware of the cultural identity of the workforce. In other words he would need to be accepted by the people in that workforce as well as James accepting them.
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A grocery store is trying to find a new vendor for carrots. Its three criteria are: 1. Freshness, 2. Lot Size, and 3. Cost, with factor weights of .6, .1, and .3, respectively. What would a vendor with ratings of 6, 8, and 10 in the three respective categories score as a weighted total?
Answer:
7.4
Explanation:
Let
Wi= weighted factor
Xi = ratings
Then,
Weighted total ratings = Sum of (Xi*Wi) / Sum of Wi
We know that the weights W1 =0.6, W2= 0.1, W3 = 0.3
Ratings X1 = 6 , X2 = 8, X3 = 10
Total of weights = 0.6+0.1+0.3 = 1
Total ratings = 0.6*6 + 0.1*8 + 0.3*10 = 3.6 + 0.8 + 3 = 7.4
Rating Score = Total ratings/ total weights
= 7.4/ 1
= 7.4
How did Ben Casnocha decide on a price for his product?
Answer:
We figured out how much the problem was costing the customer — and priced the product around that number.
Explanation:
i was writing a paper and had this in my notes
Answer:
Ben Casnocha is a young entrepreneur and venture capital investor who has written 2 books (The Alliance, and The Start-Up of You). You could say he hit the jackpot with his Comcate software that provides local governments with CRM solutions.
On his management book, The Alliance, he explains how he priced his software and it was fairly simple: he first calculated how much money his customer's could save with his software and then priced his product below that amount.
This logic is very simple and can be used by everyone, e.g. my customer has a problem that is costing them $10, and I can sell them a solution for $8.
The subcontracting or contracting out of activities to external organizations that had previously been performed by the firm is called:
A) Offshoring
B) Insourcing
C) Outsourcing
D) Homesourcing
Answer:
C) Outsourcing
Explanation:
Outsourcing -
It is a business strategy first recognized in 1989 .
It is the business practice for the process of hiring party outside the company to create goods and provide services which were performed by the company's staff and employees .
Outsourcing is a practice which is performed as a cost - cutting measure .
It can also affect many jobs , from customer to office .
Volcanic peaks that are below sea level but rise more than 1 kilometer above the deep-ocean floor and have a pointy top like an upside-down ice cream cone are called ________.
Answer:
Seamounts
Explanation:
According to my research on studies conducted by various geologists, I can say that based on the information provided within the question the term being described are called Seamounts. This term (like mentioned in the question) are underwater mountains that rise hundreds or thousands of feet from the seafloor. They are believed to be extinct volcanoes that created piles of lava when they were active.
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__________data, or the facts and figures that have already been collected about the Coffee Collective prior to the research at hand, would include information relating to budgets, previous marketing activities, sales and customer communications.
A. Situation analysis
B. Primary
C. Secondary
D. Response rate
E. Qualitative researc
Final answer:
Secondary data is the term used to describe existing facts and figures that have already been collected by someone else, such as budgets, previous marketing activities, sales, and customer communications. It is an important source of information for research purposes.
Explanation:
The correct answer is C. Secondary data is the term used to describe the facts and figures that have already been collected by someone else, prior to the current research. It includes information such as budgets, previous marketing activities, sales, and customer communications. Examples of secondary data sources include government databases, organizational records, and data collected by other researchers. Secondary data analysis is a cost-effective way to gather information when primary data collection is too expensive or impractical.
The provision of accounting information for internal users is known as
a. accounting.
b. accounting for planning and control.
c. information provision. d. financial accounting.
e. managerial accounting.
Answer: Option (E) is correct.
Explanation:
Managerial accounting aka cost accounting is known as the procedure of analyzing, measuring, determining and communicating data and information to the top hierarchy of the organization. Managerial accounting collects information which is targeted and aimed towards helping managers within an organization to make useful decisions.
Managerial accounting provides accounting information for internal users, aiding in business decision-making. Unlike financial accounting, it is tailored to meet the needs of internal stakeholders.
Explanation:The provision of accounting information for internal users is referred to as e. managerial accounting. Managerial accounting is used by managers and employees within an organization to make informed business decisions. It's different from financial accounting, which is primarily for external stakeholders, such as investors or regulators. Examples of managerial accounting information may include budgets, forecasts, and internal performance reports.
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Michael McNamee is the proprietor of a property management company, Apartment Exchange, near the campus of Penscola State College. The business has cash of $8,000 and furniture that cost $9,000 and has a market value of $13,000. The business debts include accounts payable of $6,000. Michael's personal home is valued at $400,000, and his personal bank account has a balance of $1,200. Identify the principle or assumption that best matches the situation:
a. Michael's personal assets are not recorded on the Apartment Exchange's balance sheet.
b. The Apartment Exchange records furniture at its cost of $9,000, not its market value of $13,000.
c. The Apartment Exchange reports its financial statements in U.S. dollars.
d. Michael expects the Apartment Exchange to remain in operations for the foreseeable future.
Answer:
a. Michael's personal assets are not recorded on the Apartment Exchange's balance sheet - the economic entity assumption.
b. The Apartment Exchange records furniture at its cost of $9,000, not its market value of $13,000 - the cost principle.
c. The Apartment Exchange reports its financial statements in U.S. dollars - the monetary unit assumption.
d. Michael expects the Apartment Exchange to remain in operations for the foreseeable future - the going concern assumption.
The principle or assumption that best matches the situation is that Michael's personal assets are not recorded on the Apartment Exchange's balance sheet
Explanation:The principle or assumption that best matches the situation described is option a. Michael's personal assets are not recorded on the Apartment Exchange's balance sheet.
According to the information provided, Michael's personal home and personal bank account are not included in the assets of the Apartment Exchange on its balance sheet. Only the cash, furniture, and accounts payable of the business are considered. The value of Michael's personal assets is not relevant to the financial position of the business.
You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $7,000 per month for the next two years, or you can have $5,700 per month for the next two years, along with a $31,000 signing bonus today. Assume the interest rate is 6 percent compounded monthly.
Requirement 1:
If you take the first option, $7,000 per month for two years, what is the present value? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Requirement 2:
What is the present value of the second option? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Answer:
Requirement 1: The present value of the first option is P≈$87,852.50.
Requirement 2: The present value of the second option is P≈$102,537.04.
Explanation:
Making use of the present value concept is a useful way to compare cases where money is to be received in the future. Generally, the higher the present value, the better.
In this case, we are given two different salary arrangements, each one with an annuity involved; that is, in each arrangement we get an equal amount of money every month.Since there is an annuity involved, we can make use of the next formula to calculate the present value of each case:[tex]P=A[\frac{(1+i)^{n}-1 }{i(1+i)^{n} } ][/tex]
Where P: Present value (what we are required to calculate),
A: Annuity (the amount of money to be received every month; that is, $7,000 for the first option, and $5,700 for the second option),
i: Interest rate to be used (6%, or 0.06), and
n: Number of periods of time that will pass (in both cases, we are talking about 2 years, but since the 6% interest rate is compounded monthly, we have to consider the months involved, as shown below).
[tex]n=2 years*12\frac{months}{year}\\n=24months[/tex]
Now we can proceed to determine the present value of each case by substituting all the known values that we have.
Requirement 1: If you take the first option, $7,000 per month for two years, what is the present value?
[tex]P=A[\frac{(1+i)^{n}-1 }{i(1+i)^{n} } ]\\\\P=7000*[\frac{(1+0.06)^{24}-1}{0.06*(1+0.06)^{24}} ]\\\\P=7000*[\frac{(1.06)^{24}-1}{0.06*(1.06)^{24}} ]\\\\P=7000*[\frac{4.04893-1}{0.06*4.04893} ]\\\\P=7000*[\frac{3.04893}{0.24294} ]\\\\P=7000*[12.55036]\\\\P=87852.50269[/tex]
So, the present value of the first option, where we get $7,000 every month for 2 years, is P≈$87,852.50.
Requirement 2: What is the present value of the second option?
In this case, we get $5,700 per month for two years, plus a $31,000 bonus today. Since we get this bonus exactly today, it adds directly into the present value, so we should now calculate the present value of the annuity (just like we did in the first case), and add it to the $31,000 bonus.[tex]P=31000+A[\frac{(1+i)^{n}-1 }{i(1+i)^{n} } ]\\\\P=31000+5700*[\frac{(1+0.06)^{24}-1}{0.06*(1+0.06)^{24}} ]\\\\P=31000+5700*[\frac{3.04893}{0.24294} ]\\\\P=31000+5700*[12.55036]\\\\P=31000+71537.03791\\\\P=102537.03791[/tex]
So, the present value of the second option, where we get $5,700 every month for 2 years, along with a $31,000 bonus, is P≈$102,537.04.
It goes without saying that, given our calculations, the second option is much better than the first one.
_____ refer(s) to fiscal policy that is caused by the deliberate action by policy makers rather than rules. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices Automatic stabilizers A cyclically adjusted budget balance Discretionary fiscal policy Intentional expand/contract controls
Answer: Discretionary fiscal policy
Explanation: Discretionary fiscal policy is a tool of fiscal policy used by the government to expand or shrink the economy as per the need. While performing such policy the government changes the level of tax collection or the amount of expenditure done on the economy.
It is a deliberate action by the policy makers and do not automatically accelerates while during inflation or deflation.
Marsha is a sole proprietor of a small quilting shop. She has considered changing her business structure, but she cannot find an alternative structure that would give her the main advantage she enjoys as a sole owner. The major advantage is that she
a. receives all the profits.
b. assumes very limited risk.
c. receives dividends.
d. is taxed as a corporation