The Introduction of new products with limited associated advertising is is not a function of public relations.
A public relations is a department that helps to maintain the favorable public image of a company.
A public relations helps building excitement for a new product launches.
The department ensures that the firm’s message gets to the mass audiences very quickly.The department also defending, improving the firm’s image as well as providing value-added customer services.
In conclusion, the Option C is correct because Introduction of new products with limited associated advertising is is not a function of public relations.
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Below is selected financial information for Panettone, Inc. Balance Sheet ($ in Millions) Income Statement ($ in Millions) Assets Liabilities and Equity Sales 4100 Current Assets Current Liabilities Cost of Goods Sold 2743 Cash 200 Accounts Payable 300 Administrative Expenses 557 Accounts Receivable 600 Notes Payable 500 Depreciation 251 Inventory 600 Total Current Liabilities 800 Earnings Before Interest and Taxes 549 Total Current Assets 1400 Long-Term Liabilities Interest Expense 20 Long-Term Debt 100 Taxable Income 529 Fixed Assets Total Long-Term Liabilities 100 Taxes 52 Property, Plant and Equip. 2100 Net Income 477 Less Acc. Depreciation 1300 Owners' Equity Dividends 328 Net Fixed Assets 800 Common Stock ($1 Par) 100 Addition to Retained Earnings 149 Capital Surplus 200 Retained Earnings 1000 Other Information Total Owners' Equity 1300 No. of Shares Outstanding (Millions) 100 Total Assets 2200 Total Liab. and Equity 2200 Price per Share 20 What is the company's Days sales in Inventory?
Answer:
11.63%
Explanation:
The company's Days sales in inventory is the return on sales
Return on sales = Net income / Sales
Return on sales = 477 / 4100
Return on sales = 0.11634
Return on sales = 11.63%
Finkel sold merchandise to a customer in exchange for a four-year, noninterest-bearing note for $10,000. An equivalent loan would have a 10% interest rate. Finkel would record sales revenue on the date of sale equal to:
a. $0
b. $10,000
c. The present value of $10,000, discounted at a 10% discount rate for four years
d. $9,000, equal to $10,000 â (10% Ã $10,000)
Questions:
a. What is the present value amount?
b. What is the journal entry for the sale?
c. Assume that the transaction took place on the last day of the year, what is the journal entry on the last day of the following year?
Answer:
Correct answer is
c. The present value of $10,000, discounted at a 10% discount rate for four years
Question
a. Present value
$6,830
b. Journal Entry for sale
Dr. Note Receivable $10,000
Cr. Discount on Note $3,170
Cr. Sales $6,830
c. Journal Entry on last day of following year
Dr. Discount on Note $792.5
Cr. Interest revenue $792.5
Explanation:
a.
As there is no Interest will be received on this note, Only face value will be received after 4 years.
Use Following present value form
PV = FV / (1 + i%)^n
PV = $10,000 / ( 1 + 10%)^4
PV = $6,830
b.
Amount of Sale Is calculated by taking present value of the future cash flows associated with the note. Receivable of $10,000 will be recorded and the difference will be recorded as unearned revenue, which will be recognized every year until the maturity.
c.
The interest revenue is recognized against the discount on note value recorded earlier.
Puffy Shirt Inc's common stock has a beta of 1.2. If the risk free rate of return is expected to be 4% and the market risk premium is 11%, what is the required return on Puffy Shirt's common stock
Answer:
The required rate of return is 17.2%
Explanation:
To calculate the required rate of return, we will use the CAPM or Capital asset pricing model. The formula for the required rate of return (r) is:
r = rRF + Beta * (rpM)
Where,
rRF is the risk free rate.Beta is the measure of the riskrpM is the market risk premiumRequired rate of return for Puffy Shirt Inc's stock is:
r = 0.04 + 1.2 * 0.11
r = 0.172 or 17.2%
Fast Co. produces its product through two processing departments. Direct materials are added at the start of production in the Cutting department, and conversion costs are added evenly throughout each process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory-Cutting account has a balance of $84,300 as of October 1, which consists of $17,100 of direct materials and $67,200 of conversion costs. record the transfer of goods to next department. transferred out
Answer:
Explanation
since the direct materials falls under assets and now in this case are being transferred out of fast co. they must be credited because they are no longer resources or owned by fast co
Answer:
See the answer in the explanation below
Explanation:
Date: The Work in Process Inventory-Cutting account
October 1 Direct material $17,100
Conversion cost $67,200
Balance 84,300
Transfer to next department
Debit Credit
Conversion cost 67200 Direct material 17100
Consider the data in the Excel file Consumer Price Index. Use simple linear regression to forecast the data. What would be the forecasts for the next two months? (Your regression equation should be look like CPI = a + b T. The T is year and 1990=1; 1991=2; 1992=3; 1993=4; 1994=5; 1995=6; 1996=7; 1997=8; 1998=9; 1999=10) Year CPI 1990 169.3 1991 170.0 1992 172.4 1993 175.3 1994 177.2 1995 176.8 1996 179.1 1997 180.1 1998 ? 1999 ?
Answer:
CPI(1998) = 182.32
CPI(1999) = 183.94
Explanation:
1.
Using excel regression analysis, the regression results are below:
This gives regression equation as: CPI = 167.73 + 1.62T
Kindly check the attached image below for the step by step explanation.
In order to find CPI values for 1998 and 1999, substitute value of T = 9 and 10 respectively
This gives:
CPI(1998) = 182.32
CPI(1999) = 183.94
To forecast the data using simple linear regression, we can calculate the regression equation and use it to predict the CPI for the next two months. The equation is CPI = 104.176 + 2.729T, where T represents the year. The forecast for 1998 is CPI = 134.215, and the forecast for 1999 is CPI = 136.944.
Explanation:To forecast the data using simple linear regression, we need to calculate the regression equation and then use it to predict the CPI for the next two months. Using the given data, we can calculate the regression equation using the formula: CPI = a + bT, where T represents the year. Using the data points provided, we calculate the equation to be CPI = 104.176 + 2.729T. To find the forecast for the next two months, we substitute T = 11 for 1998 and T = 12 for 1999 into the equation. Therefore, the forecast for 1998 is CPI = 104.176 + 2.729(11) = 134.215, and the forecast for 1999 is CPI = 104.176 + 2.729(12) = 136.944.
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1. Almost all dissatisfied guests complain. Group of answer choices True False
2. About 13 to 16 guests out of every 100 are purposefully out to scam us and get something for free. True or False
3. If you solve a guest problem efficiently, quickly, and delightfully...that guest may be even more likely to use your product or service again than if he or she ever had a problem in the first place. True or False
4. Dr. Ricci gave two examples of excellence in guest service from which organizations? A. Walt Disney World, Universal Studios B. Publix, Pet Supermarket C.Publix, JetBlue D.Marriott, Hilton
5. It is only likely for a guest to receive outstanding service at luxury brands. That's why Ritz-Carlton, Mandarin Oriental, Four Seasons, and others are the best at what they do. True or False
WILL GIVE 10 STARS
Answer:
1. Almost all dissatisfied guests complain.
FALSE, ONLY ABOUT 5-10% OF DISSATISFIED CUSTOMERS ACTUALLY COMPLAIN. SOMETIMES THAT RATIO IS EVEN LOWER DEPENDING ON THE INDUSTRY.
2. About 13 to 16 guests out of every 100 are purposefully out to scam us and get something for free.
FALSE
3. If you solve a guest problem efficiently, quickly, and delightfully...that guest may be even more likely to use your product or service again than if he or she ever had a problem in the first place.
TRUE, ABOUT 95% OF THE GUESTS WHOSE PROBLEMS WERE SOLVED IMMEDIATELY AND DELIGHTFULLY GENERALLY RETURN OR HAVE A VERY POSITIVE OPINION ABOUT THE HOTEL.
4. Dr. Ricci gave two examples of excellence in guest service from which organizations?
C) Publix, JetBlue
5. It is only likely for a guest to receive outstanding service at luxury brands. That's why Ritz-Carlton, Mandarin Oriental, Four Seasons, and others are the best at what they do.
FALSE
Ekmark Corporation uses the following activity rates from its activity based costing to assign overhead costs to products: Activity Cost Pools Activity Rate Assembling products $6.56 per assembly hour Processing customer orders $65.38 per customer order Setting up batches $82.84 per batch Data for one of the company's products follow: Product P59G Number of assembly hours 240 Number of customer orders 48 Number of batches 64 How much overhead cost would be assigned to Product P59G using the activity based costing system
Answer:
The correct answer is $10,014.40.
Explanation:
According to the scenario, computation of the given data are as follows:
Total cost of assembling = $6.56 × 240 = $1,574.40
Total cost of processing customer order = $65.38 × 48 = $3,138.24
Total cost of setting up batches = $82.84 × 64 = $5,301.76
So, we can calculate the total overhead cost by using following formula:
Total Overhead = $1,574.40 + $3,138.24 + $5,301.76
= $10,014.40
Obviously, since you do not manage your neighbors, you won’t be using a __________ (a. functional team/b. cross-functional team/c. project team). But since you want formal representation from your homeowner’s association, your local law-enforcement agency, and the businesses on your street, you think that you might start with a ____________ (a. cross-functional team/b. command team/c. functional team). Whatever type of team you choose, you know that more diversity will bring you _________ (a. more/ b. fewer) ideas.
The organization type you won't use to manage neighbors is a project team. However, collaborating with your homeowner’s association, local law enforcement agency, and local businesses can be effectively achieved through a cross-functional team. Lastly, a more diverse team typically results in more ideas.
Explanation:Starting off with the first blank, you don't manage your neighbors, so you won't be using a project team, which are typically utilized for specific tasks or projects within an organization. Since you want representation from your homeowner’s association, your local law-enforcement agency, and the businesses on your street, you might find a cross-functional team useful. This type of team is composed of individuals with diverse expertise or functions and brings together a variety of perspectives, particularly useful in a community context. Lastly for diversity, it's generally accepted that more diversity will bring more ideas thanks to the variety of perspectives and experiences present in the team. This is due to the fact that team diversity can have a positive impact on performance, partly thanks to the broad range of skills and ideas that come from a diverse team.
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Calvin and Hobbes run a company that sells wallet chains and wallet decals. Calvin is faster at making decals than chains, and Hobbes is faster at making chains than decals. Which statements accurately describe the situation?
Answer:
Company output will be maximized if Calvin makes all the decals and Hobbes makes all the chains.
-Calvin has a comparative advantage for making decals.
-Hobbes has a higher opportunity cost for making decals than Calvin.
Explanation: Each partner should focus on the task where he has a comparative advantage.
In the situation of Calvins: if someone has a comparative advantage in producing something, that means he also has a lower opportunity cost in practicing that object.
In the situation of Hobbes: if he has a higher opportunity cost for making decals, then Calvin has a lower opportunity cost for making decals.
Answer:
The correct answers are letters "A", "B", and "C".
Explanation:
Comparative advantage is the advantage an individual, company or country has that allows them to produce at lower opportunity cost compared to rivals. It does not necessarily mean that they have an absolute advantage. Due to lower opportunity costs, a company can offer its products at lower prices generating more revenue.
In the case, as Hobbes is faster at making chains, Hobbes has a comparative advantage on chains over Calvin. Though, as Hobbes is slower in making decals, Hobbes has higher opportunity costs than Calvin on decals. In such a way, Calvin has a comparative advantage in making decals.
Therefore, the chains and decals output would be maximized if Calvin makes decals only and Hobbes makes chains only.
Bohemian Company has 500,000 shares of no par common stock with a stated value of $8 per share issued and outstanding as of January 1, originally issued for $14 per share. During 2018, Bohemian Company had the following transactions involving its own stock: On March 6, acquired 27,965 shares of treasury stock at a cost of $12 per share On April 18, resold 5,280 shares of treasury stock at $19 per share. On June 11, resold an additional 2,210 shares of treasury stock at $10 per share If Bohemian uses the cost method of accounting for treasury stock, what will be the balance in additional paid in capital from treasury stock as a result of these transactions?
Answer:
$32540
Explanation:
The balance in additional paid in capital treasury stock as a result of the transactions is $32540.
The beginning balance was set at 0.
March 6 Acquisition in the treasury stock = 27965 shares × $12
In additional paid capital it is 0.
April 6 Reissued in treasury stock = 5280 shares × $12 while in additional paid capital = 5280 shares × $7 (19-12).
Please kindly see attachment to see the step by step working and the answer.
Answer:
Amount paid for the treasury stock on March 6 = $12*27,965 = $335,580
Total Amount realized on the resale of Treasury stock
April 18 = 5280*$19 = $100,320
June 11 = 2210*$10 = $ 22,100
$122,420
cost of treasury stock sold
( $12 * 7,490) (89,880)
Balance in additional paid in capital from treasury stock $32,540
Explanation:
Bonds Payable. select between a.increase and decrease select between increase and decrease select between credit and debit b. Unearned Service Revenue. select between increase and decrease select between increase and decrease select between credit and debit c. Depreciation Expense. select between increase and decrease select between increase and decrease select between credit and debit d. Common Stock. select between increase and decrease select between increase and decrease select between credit and debit e. Buildings. select between increase and decrease select between increase and decrease select between credit and debit f. Rent Revenue. select between increase and decrease select between increase and decrease select between credit and debit
Answer:
Bonds Payable - Increase is credit, decrease is debit
Unearned Service Revenue - Increase is credit, decrease is debit
Depreciation Expense - Debit is increase, Credit is decrease
Common stock - Increase is credit, decrease is debit
Buildings - Debit is increase, Credit is decrease
Rent revenue - Increase is credit, decrease is debit
Explanation:
Bond payable and Unearned service revenue are liabilities.
Common stock is part of equity While rent revenue is income. A credit to a liability or an equity or an income account is to increase the balance.
Building and depreciation expense are assets and expense respectively. A debit to an expense or an asset is to increase it while a credit decreases it balance.
Lean Accounting
The annual budgeted conversion costs for a lean cell are $180,000 for 2,000 production hours. Each unit produced by the cell requires 18 minutes of cell process time. During the month, 550 units are manufactured in the cell. The estimated materials costs are $32 per unit. Provide the following journal entries:
a. Materials are purchased to produce 600 units.
b. Conversion costs are applied to 550 units of production.
c. 500 units are completed and placed into finished goods.
a. Raw and In Process Inventory
Accounts Payable
b. Raw and In Process Inventory
Conversion Costs
c. Finished Goods Inventory
Raw and In Process Inventory
Answer:
Lean Accounting
Journal Entries
Sr. No Particulars Debit Credit
a. Raw Materials $ 19200
Accounts Payable $19200
Materials of $32* 600 units= $ 19200 are purchased on accounts.
a. Work in Process $ 19200
Raw Materials Inventory $ 19200
Raw Materials of $ 19200 are put to production
b. Conversion Costs Rate = $ 180,000/ 2000= $ 90 per hour
No of hours required for 550 units = 18* 550/3600= 9900/60= 165 hours
Conversion Costs for 550 units = $90 *165= $ 14850
Work In Process Inventory $14850
Raw Materials Inventory $ 14850
As we are unsure of the Manufacturing Overheads all the amounts is debited Raw materials inventory assuming all production hours were direct labor hours.
c. Finished Goods $ 29500
Work In Process $29500
All the completed units 500 are transferred to Finished Goods inventory.
Calculation of Finished Goods Inventory Costs.
Materials = 500 * $32= $ 16000
Conversion Costs = 500 units *18 mins /60= 150 hours *$ 90= $ 13500
Total = $16000+ $13500= $29500
You are considering an investment in 30-year bonds issued by Moore Corporation The bonds have no special covenants. The Wall Street ournal reports that one-year T-bills are currently earning 3.55 percent Your broker has determined the following information about economic activity and Moore Corporation bonds 50Real interest rate 2.75 percent Default risk premium-1.05 percent Liquidity risk premium 0.50 percent Maturity risk premium 1.85 percent What is the inflation premium?
Answer:
0.8%
Explanation:
Moore Corporation
T-bills are currently earning 3.55 %
Less Real interest rate 2.75%
Inflation premium 0.8%
Or
Expected IP = i - RFR = 3.55% - 2.75% = 0.8%
Therefore the inflation premium is 0.8%
Pete is a salesperson at the local Honda dealership. He frequently offers buyers $50 if they refer someone else to him who buys a new car.
Pete is attempting to get these people to act as his:
A. reconnaissance staff
B. spotters
C. bounce-backs
D. spiffs
E. steppers
Answer:
The correct answer is letter "B": spotters.
Explanation:
Spotters are individuals who act on behalf of a business without the need of being employees. Usually, the company engages in a regular sale relationship with these individuals and offers them rewards -in the form of discounts, for instance- in exchange for promoting the benefits of certain products or referring other potential buyers.
Spotters use word-to-mouth marketing to promote an entity.
Pete is using buyers as 'spotters' by incentivizing them to refer new customers to boost car sales through a grassroots marketing strategy.
Pete, a salesperson at a Honda dealership, offers buyers $50 when they refer someone else who purchases a new car. By doing this, Pete is trying to convert these buyers into his spotters. The term spotter refers to individuals who can identify potential customers and refer them to a salesperson or business. This tactic is a grassroots marketing strategy, where businesses rely more on word-of-mouth and personal referrals rather than formal advertising, which can be seen as a more authentic form of marketing.
Therefore, the appropriate answer is B. spotters.
The operations of Winston Corporation are divided into the Blink Division and the Blur Division. Projections for the next year are as follows: Blink Division Blur Division Total Sales $ 325,000 $ 186,000 $ 511,000 Variable costs 107,000 86,000 193,000 Contribution margin $ 218,000 $ 100,000 $ 318,000 Direct fixed costs 93,000 79,000 172,000 Segment margin $ 125,000 $ 21,000 $ 146,000 Allocated common costs 48,000 40,500 88,500 Operating income (loss) $ 77,000 $ (19,500 ) $ 57,500 If the Blur Division were dropped, Blink Division's sales would increase by 35%. If this happened, the operating income for Winston Corporation as a whole would be:A.$103,950.
B.$77,000.
C.$112,800.
D.$77,625.
Answer:
c. $112,800
Explanation:
The computation of operating income is shown below:-
= (Contribution margin of blink division × Increase sales percentage) - Fixed cost of blink division - Allocated common costs of blink division - Allocated common costs of blur division
= ($218,000 × 135%) - $93,000 - $48,000 - $40,500
= $294,300 - $93,000 - $48,000 - $40,500
= $112,800
Each oligopolistic firm recognizes that it must take into account the behavior of its competitors when it makes pricing decisions. This recognition is called: mutual dependence. mutual interdependence. monopolistic behavior. profit-maximization behavior.
Answer:
Option B is correct one.
Mutual interdependence
Explanation:
Each oligopolistic firm recognizes that it must take into account the behavior of its competitors when it makes pricing decisions. This recognition is called mutual interdependence.
Mutual interdependence is a term in which a group of oligopolies all benefit from one another. They can benefit through market share, location in terms of geography, product differentiation, price allocation, etc.
Oligopolistic firms are engaged in a state of mutual interdependence where their pricing and economic decisions are heavily influenced by the actions of a few other dominant firms within the same market. This results in either strong competition, which can lead to minimal profits, or collusion, mimicking monopoly behavior with higher profits.
Explanation:In the context of oligopolies, each oligopolistic firm must consider the potential reactions and strategies of its competitors when making decisions about pricing or other economic variables. This strategic consideration is commonly referred to as mutual interdependence, where the firms' decisions regarding output, price, and advertising are interconnected with the decisions of the other firms within the same industry.
Whether oligopolists decide to compete fiercely or collude will significantly affect the outcomes in terms of profit levels and market prices. Collusion could lead to higher profits akin to a monopoly, while competition might drive profits down to zero as if they were perfect competitors. The essence of oligopolistic markets is this balance between competition and collusion, shaping the dynamic of mutual interdependence among the firms.
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Question 16 of 17 From the examples below, determine which best describes an international externality.
a. Global warming fears rise as a result of increased pollution in Singapore.
b. A small county raises money from local churches to create a scholarship for 1,000 low-income students in the state.
c. Japan reaches a new trade agreement between the United States that makes trade even easier between the two countries.
d. Increased traffic in American cities due to the rise of Uber
Answer:
Option (a) is correct.
Explanation:
Externality is the consequence of an activity which affects the third party either in a positive way or in a negative way.
There are two types of externalities are as follows:
(i) Positive externality: When the third party is positively affected by an economic transaction between the two parties.
(ii) Negative externality: When the third party is negatively affected by an economic transaction between the two parties.
In our case, there is an increase in the level of pollution created by Singapore which results in an increase in the global warming. This will affect the whole world in a negatively manner and also affect their level of GDP.
A new labor-saving technology will likely result in..... Group of answer choices Lower wage share of output and lower Gini coefficient in the short run. Higher wage share of output and higher Gini coefficient in the short run. Lower wage share of output and higher Gini coefficient in the short run. Higher unemployment, lower wage share of output, and higher Gini coefficient in the long run.
Answer:
Higher unemployment, lower wage share of output, and higher Gini coefficient in the long run.
Explanation:
Since less labor will be used, total unemployment will increase. Besides less labor being used, more capital will be used, so the share of labor in total output will decrease. Labor efficiency increases, since you need less labor to produce the same or even a larger amount of output.
New technologies tend to increase the wages of high skilled labor and management. Since the Gini coefficient measures income inequality, then higher wages for a few will increase inequality.
This is an example of what is happening in the US, where highly trained labor is getting paid better every time while unskilled labor is getting paid the same as many years ago or their wage has even decreased with time. This shows how important a college education is, and the difference will only keep increasing.
Majer Corporation makes a product with the following standard costs:Standard Quantity or Hours Standard Price or Rate Standard Cost Per UnitDirect materials 6.3 ounces $ 2.00 per ounce $ 12.60Direct labor 0.5 hours $ 10.00 per hour $ 5.00Variable overhead 0.5 hours $ 4.00 per hour $ 2.00The company reported the following results concerning this product in February.Originally budgeted output 4,900 unitsActual output 5,000 unitsRaw materials used in production 30,000 ouncesActual direct labor-hours 1,900 hoursPurchases of raw materials 32,400 ouncesActual price of raw materials $ 12.90 per ounceActual direct labor rate $ 22.40 per hourActual variable overhead rate $ 4.00 per hourThe company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.Required:1. The variable overhead efficiency variance for February is __________.
Answer:
variable overhead efficiency variance= $2,400 favorable
Explanation:
Giving the following information:
Standard:
Variable overhead = $4.00 per hour
Actual output of 5,000 units
Actual direct labor-hours 1,900 hours
To calculate the variable overhead efficiency variance, we need to use the following formula:
variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Standard quantity= 5,000 units* 0.5 hours= 2,500 hours
Actual quantity= 1,900 hours
variable overhead efficiency variance= (2,500 - 1,900)*4= $2,400 favorable
Newark liberty airport is a very busy airport. Continental airlines is one of the largest carriers at the airport. Their on-time rate is not bad but predicated on the weather. On a specific day the weather forecast is predicting snow conditions with probability of 25%, rain condition with 35% probability and cloudy but no precipitation with a 40% probability. If it snows there is an 83% probability the flight will be late, 75 % probability the flight is late if it rains and a 40% probability it is late under cloudy but no precipitation conditions. It is a rainy day, what is the probability the continental flight is late ?
21%
33%
41%
63%
To find the probability that the Continental flight is late on a rainy day, we need to use the given probabilities and calculate the conditional probability. The probability that the Continental flight is late on a rainy day is 75%.
Explanation:To find the probability that the Continental flight is late on a rainy day, we need to use the given probabilities and calculate the conditional probability. According to the information provided, the probability of rain is 35% and the probability of the Continental flight being late given rain is 75%. The formula for conditional probability is:
P(A|B) = P(A and B) / P(B)
Using the formula, the conditional probability of the Continental flight being late when it is raining is:
P(Late|Rain) = P(Late and Rain) / P(Rain) = (0.75 * 0.35) / 0.35 = 0.75
Therefore, the probability that the Continental flight is late on a rainy day is 75%.
To overcome possible problems with budgets that are developed only by top level managers, an alternative is to use: A. Mandatory budgets B. Flexible budgets C. Participative budgets D. Authoritative budgets
Answer:
Paticipative budgets
Explanation:
A budget can be defined as a financial plan which gives an estimate of income and expenditures. A budget is a tool that is utilized by different organisations to manage their resources inorder to achieve their various objectives and goals.
A budget shows the different costs incurred by the organisation within a particular period of time.
Participative budgets is a type of budget in which the low level management of an organization are involved in the preparation of budget. It helps to prevent top managers from unruly behaviours.
Participative budget enables the top level and low level managers to share information that will lead to the growth of the organisation.
(1) Suppose the world price of steel falls substantially. The demand for labor among steel-producing firms in Pennsylvania will _______. The demand for labor among automobile-producing firms in Michigan, for which steel is an input, will _______. The temporary unemployment resulting from such sectoral shifts in the economy is best described as _______ unemployment.
(2) Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply.
a. Improving a widely used job-search website so that it matches workers to job vacancies more effectively.
b. Increasing the benefits offered to unemployed workers through the government's unemployment insurance program.
c. Establishing government-run employment agencies to connect unemployed workers to job vacancies.
Answer:
1) reduce
2) increase
3) a, b
Explanation:
1. This would reduce the demand for steel workers because the steel serves as the company's output. Since low price of output means low profit, which leads to low demand for labor.
2. Increase in the demand for automobile workers would be observed because the cost of materials are now cheaper; Implying more profit for companies and thus more demand for labor.
3. Giving unemployment insurance benefits is one best method to reduce this type of unemployment. Also facilitating a widely used job-search website could help.
Answer:
Suppose the world price of steel falls substantially.
The demand for labor among steel-producing firms in Pennsylvania will DECREASE. The demand for labor among automobile-producing firms in Michigan, for which steel is an input, will INCREASE. The temporary unemployment resulting from such sectoral shifts in the economy is best described as FRICTIONAL UNEMPLOYMENT.
2. A. Improving a widely used job-search website so that it matches workers to job vacancies more effectively.
Explanation:
To tackle frictional unemployment and reduce it, matching of job seekers with job openings of should be carried out.
This can be thoroughly achieved through the transmission of information.
It should be noted tgat frictional unemployment is not related to economic policy and inflation.
What can only erase it is widespread transmission of information among job seekers regarding the availability of jobs.
With such, job seekers in Pennsylvania will get notified of job vacancies in steel-related jobs in Michigan.
The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 17 percent a year for the next 4 years and then decreasing the growth rate to 4 percent per year. The company just paid its annual dividend in the amount of $3.10 per share. What is the current value of one share of this stock if the required rate of return is 8.60 percent
Answer:
Using 8.60% ROR,we will have current stock of $156.51,option D is correct.
Answer:
The stock price will be: $109.39
Explanation:
* The stock price will be equal to the sum of present value of:
+ Positive Growth annuity in the next four years;
+ Positive growth perpetuity starting in year 5.
- Calculation of positive Growth annuity in the next four years:
+ Dividend in year 1 = 3.1 x 1.17 = $3.627
+ Present value of the annuity = [ 3.627 / ( 8.6% - 17%) ] x [ 1 - [ (1+17%) / (1+8.6%)]^4 ] = $14.99.
- Calculation of positive growth perpetuity starting in year 5:
+ Dividend in year 5 = 3.1 x 1.17^4 x 1.04 = $6.04;
+ Present value of the perpetuity = [ 6.04 / (8.6% - 4%) ] / 1.086^4 = $94.40
=> Share price = 14.99 + 94.40 = $109.39
Which of the following is true about the short-run aggregate supply curve.
Select the correct answer below:
A. It is vertical
B. It is always a horizontal line
C. It is downward sloping
D. It is upward sloping
Answer:
The correct answer is letter "D": It is upward sloping.
Explanation:
The short-run Aggregate Supply Curve is upward sloping because it establishes a directly proportional relationship between quantity supplied and prices. It means, as soon as the quantity supplied increases so will the price. Besides, it considers production has a fixed factor which in most cases is capital.
The short-run aggregate supply curve is upward sloping because of inflexible input prices, temporary supply shocks, and changes in nominal wages. Firms are willing to produce more goods and services when their selling price increases in the short term.
Explanation:In the context of macroeconomics, the correct answer to the question about the short-run aggregate supply curve is D. It is upward sloping. The Short-run Aggregate Supply (SRAS) curve is upward sloping because of three primary reasons. These reasons include inflexible input prices, temporary supply shocks, and changes in nominal wages. Inflexible input prices mean that in the short-term, costs such as wages may not change immediately in response to changes in output levels. Temporary supply shocks, such as sudden changes in the price of an essential resource, can cause the SRAS to shift. Also, changes in nominal wages can affect the position of the SRAS curve. In the short-term, firms are willing to produce more goods and services when their selling price increases. Hence, the curve is upward sloping.
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Brief Exercise 9-13
Information related to plant assets, natural resources, and intangibles at the end of 2019 for Dent Company is as follows: buildings $1,100,000, accumulated depreciation—buildings $600,000, goodwill $410,000, coal mine $500,000, and accumulated depletion—coal mine $108,000.
Prepare a partial balance sheet of Dent Company for these items. (List Property, Plant and Equipment in order of Coal Mine and Buildings.)
Dent Company
Balance Sheet (partial)
___________________________
_______________________________________ $________
_____
_______________________________________ ________ $________
_______________________________________ ________
______
_______________________________________ _______ _________
_______________________________________________ $ ______________
_______________________________________________
_______________________________________________ $___________
Answer:
$1,302,000
Explanation:
Dent Company
Balance Sheet (partial)
As at December 31, 2019
Property, Plant, & Equipment
Buildings $1,100,000
Less: accumulated depreciation—buildings $(600,000)
Net book value of Buildings $500,000
Coal mine $500,000
Less: accumulated depletion—coal mine $(108,000)
Net Book value of Coal Mine $392,000
Total property, plant, and equipment $892,000
Intangible Assets
Goodwill $410,000
Total assets (Long-term Assets) $1,302,000
Here, we are going to prepare a partial balance sheet of Dent Company by using information given in the question.
DENT COMPANY
PARTIAL BALANCE SHEET
Property,plant and equipment
Coal Mine $500,000
Less: Accumulated depletion $108,000 $392,000
Buildings $1,100,000
Less: Accumulated depreciation $600,000 $500,000
Total Property, plant and equipment $892,000
Intangible assets
Goodwill $410,000
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The following data are available for two divisions of Solomons Company. North Division South Division Division operating profit $ 6,000,000 $ 40,000,000 Division investment 30,000,000 320,000,000 The cost of capital for the company is 8 percent. Ignore taxes. Required: a-1. Calculate the ROI for both North and South divisions. a-2. If Solomons measures performance using ROI, which division had the better performance? b-1. Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.) b-2. If Solomons measures performance using economic value added, which division had the better performance? c. Would your evaluation change if the company’s cost of capital was 16 percent? 1. When evaluated by ROI? 2. When evaluated by EVA?
Answer:
a-1. Calculate the ROI for both North and South divisions.
ROI North Division = net profit / cost of investment = $6,000,000 / $30,000,000 = 20%ROI South Division = net profit / cost of investment = $30,000,000 / $320,000,000 = 9.38%a-2. If Solomons measures performance using ROI, which division had the better performance?
North Division, since its ROI is much higherb-1. Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.)
North Division EVA = (net investment) x (actual return on investment – percentage cost of capital) = $30,000,000 x (20% - 8%) = $3,600,000South Division EVA = (net investment) x (actual return on investment – percentage cost of capital) = $320,000,000 x (9.38% - 8%) = $4,416,000b-2. If Solomons measures performance using economic value added, which division had the better performance?
It should choose South Division because its EVA is higher.c. Would your evaluation change if the company’s cost of capital was 16 percent?
1. When evaluated by ROI?
No it would not change because ROI doesn't consider cost of capital.2. When evaluated by EVA?
Yes it would change because South Division's EVA would be negative, while North Division's will decrease but remain positive.North Division EVA = (net investment) x (actual return on investment – percentage cost of capital) = $30,000,000 x (20% - 16%) = $1,200,000
South Division EVA = (net investment) x (actual return on investment – percentage cost of capital) = $320,000,000 x (9.38% - 16%) = -21,184,000
Answer:
Solomons Company
North and South Divisions
North/South Divisions:
Operating Profit = $6,000,000/$40,000,000
Investment = $30,000,000/$320,000,000
Cost of Capital (WACC) = 8%
a-1) ROI for both North and South Divisions:
ROI = Return on Investment
= Operating Profit/Investment x 100
North's ROI = 6/30 x 100 = 20%
South's ROI = 40/320 x 100 = 12%
a-2) If Solomons measures performance using ROI, the North division had the better performance.
b-1) Calculation of EVA for both North and South divisions:
EVA = Economic Value Added.
EVA = Net Operating Profit After Taxes minus (Invested Capital x WACC)
North's EVA = $6,000,000 - ($30,000,000 x 8%) =6m - 2.4m = $3,600,000
South's EVA = $40,000,000 - ($320,000,000 x 8%) = 40m - 25.6m = $14,400,000
b-2) If Solomons measures performance using economic value added, the South division had the better performance.
c) 1. When ROI is evaluated using 16% cost of capital, the North division had a better performance. So the evaluation changes based on the 16% cost of capital. Whereas, North makes 20% ROI as against 16% cost of capital, the South manages 12% ROI as against 16% cost of capital.
c) 2. When performances are evaluated by EVA with 16% cost of capital:
North's EVA = $6,000,000 - ($30,000,000 x 16%) = 6m - 4.8m = $1,200,000
South's EVA = $40,000,000 - ($320,000,000 x 16%) = $40m - $51.2m = ($11,200,000)
When evaluated by EVA using 16% cost of capital, my evaluation would favour the North instead of the South.
Explanation:
ROI or Return on Investment is a financial performance measure which measures the profitability of an investment in a simple way. It compares the return on an investment relative to its cost. It is expressed as a percentage.
EVA or Economic Value Added is also a financial performance measure which subtracts the cost of capital from the operating profit in order to gauge in dollars terms the value created by the firm.
Lillie, a team leader, observes that some of her team members have a tendency to participate in teamwork much less than the others. They seemed uninterested and content to let others do their share of the work. In this scenario, the slacking nature of the team members best illustrates
A. groupthink.
B. social loafing.
C. group-hate.
D. risky shift.
Answer: B. social loafing.
Explanation:
As a college student or indeed just a student, you have probably seen this happen a lot.
This action is known as SOCIAL LOAFING. It is described as someone putting in less effort in a group as opposed to working alone. They are content with letting others do work for them and this has been known to damage the effectiveness of groups.
Lillie's team members who seem uninterested and content to let others do their share of the work are engaging in Social loafing.
Answer:
B. social loafing.
Explanation:
social loafing is the phenomenon of a person exerting less effort to achieve a goal when he or she works in a group than when working alone and is seen as one of the main reasons groups are sometimes less productive than the combined performance of their members working as individuals.
A firm has fixed operating costs of $253,750, a sales price per unit of $100, and a variable cost per unit of $65. The firm's operating breakeven point in dollars is ________.
Answer:
$725000
Explanation:
The break-even point is the point at which the firms total expenses is equal to its total revenue and it neither makes a profit nor a loss. At any point before this, the firm makes a loss and at any point after this, the firm is making a profit. This is because, it has got to a point where after the unit variable costs are covered from the revenue, there is enough to cover fixed costs as well because the firm’s fixed costs are now being spread over a greater number of units.
The break-even point is calculated as:
Fixed costs / (Selling price per unit - variable cost per unit)
Hence, in this case : $253750 / ($100 - $65) = 7250 units.
In dollars, this would be...
Revenue : 7250 x $100 = $725000
Expenses : $253750 + ($65 x 7250) = $725000
Fill in the blanks with given options.
Most economists believe that real economic variables and nominal economic variables behave independently of each other in the long run. For example, an increase in the money supply, a ________ variable, will cause the price level, a _________ variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a _________ variable. The notion that an increase in the quantity of money will impact the price level but not the output level is known as _________ .
Options:
a. real
b. nominal
c. price neutrality
d. monetary neutrality
e. the quantity theory
Which of the following differences would result in future taxable amounts? Expenses or losses that are tax deductible after they are recognized in financial income. Revenues or gains that are taxable before they are recognized in financial income. Revenues or gains that are recognized in financial income but are never included in taxable income. Expenses or losses that are tax deductible before they are recognized in financial income.
Answer: Expenses or losses that are tax deductible before they are recognized in financial income.
Explanation:
Future taxable amounts arise as a result of a difference between the way an asset or liability is recorded due to the company's financial accounting principles and the way it should be recorded due to taxation principles of the government.
When this happens you will find that some things are not taxed as they should be, but rather as the company records them to be. These differences are only temporary though and correct themselves as time goes on.
An example of such are expenses of losses. Some expenses for instance may be taxable immediately but are instead only taxed in the business over the term of the expense.