Answer:
Assurance of future profits
Explanation:
Budgeting refers to estimating a future cost or revenue as on today so as to reduce business uncertainty and achieve planned goals. For example, budgeted costs reveal the estimated costs that would be incurred in the near future.
Budgeting is based upon past figures and current trends so as to estimate the future prospects of an activity under consideration. Such an activity reveals the course of action and aids better planning for the future.
For instance, a cash budget reveals the cash surplus or defict which shall arise in the near future and such a budget draws a firm's attention towards the funds it will require in the near future and from what sources those can be raised.
Since budgeting is an estimate and cannot account for unforeseen business events whose indications did not exist at the time of preparing such budgets, it's results cannot guarantee or assure future profits to a business. It's purpose is to reduce uncertainity, it cannot altogether eliminate uncertainity.
Choose the appropriate stage of the venture life cycle in which the following activities would occur.
Transition from one-person leadership to team management leadership
New-product development
Search for capital Increased competition
Venture assessment Attempts to acquire other firms
Consumer indifference to the entrepreneur's goods or services
Accumulation of resources
Major changes in entrepreneurial strategy
Development of an effective entrepreneurial team
Answer:
Transition from one-person leadership to team management leadership - GrowthNew-product development - Innovation or declineSearch for capital - Start-upIncreased competition - StabilizationVenture assessment - New-Venture DevelopmentAttempts to acquire other firms - Innovation or declineConsumer indifference to the entrepreneur's goods or services - StablizationAccumulation of resources - New-Venture DevelopmentMajor changes in entrepreneurial strategy - GrowthDevelopment of an effective entrepreneurial team - Start-upSuppose that in the last year the variation in the real exchange rate was −5% and that all this variation was due to the imposition of a tariff by the US to the imports of Chinese manufacturing goods. Assume that, absent the tariff, the law of one price held for both goods:_______
Answer:
Country with fallen exchange rate (fall - 5%) , will face domestic Inflation.
Explanation:
Law of One price suggests that goods cost same in two countries, when their prices are converted into common currency based on exchange rate.
International Price of a good = Domestic Price x Exchange Rate
So maintaining 'Law of one price' : Fall in exchange rate is accompanied by Increase in domestic prices (Inflation). And, Increase in exchange rate is accompanied by Decrease in domestic prices (Deflation).
Given : Fall in real exchange rate by 5%. So, corresponding domestic currency prices will inflate.
On January 2, 2009, L Co. issued at par $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. No bonds were converted during 2009. Throughout 2009, L had 1,000 shares of common stock outstanding. L's 2009 net income was $2,000. L's income tax rate is 50%.No potential common shares other than the convertible bonds were outstanding during 2009.L's diluted earnings per share for 2009 would be :A. $1.00.B.$1.20.C. $1.40.D. $2.00.
Answer:
The correct answer is $1.2 per share.
Explanation:
According to the scenario, the computation of the given data are as follows:
Interest expense of Bonds = $20,000 × 4% = $800
Now, Interest expense of Bond, After tax = $800 × ( 1 - 50%) = $800 × 0.50
= $400
So, we can calculate the diluted earning by using following formula:
Diluted Earning = (Net income + Interest expense after tax) ÷ Total outstanding shares outstanding
Where, Total outstanding shares = 1,000 shares + 1,000 shares = 2,000 shares
By putting the value, we get
Diluted earning = ($2000 + $400 ) ÷ 2,000
= $1.2 per share
has $ 8 comma 400 cash on hand on October 1. The company requires a minimum cash balance of $ 7 comma 300. October cash collections are $ 548 comma 310. Total cash payments for October are $ 578 comma 140. Prepare a cash budget for October. How much cash, if any, will Howard need to borrow by the end of October?
Answer:
Borrowing of $29,040
Explanation:
Whether or not Howard needs to borrow at end of October can be ascertained by computing the cash excess or shortfall a shown below:
Opening cash balance $8,400
Cash collections $548,000
Cash available $556,400
Cash payments ($578,140)
Desired cash balance ($7,300)
Cash shortfall ($29,040)
The company has to borrow $29,040 in order to be able to make the desired cash payment and still have the desired cash closing balance of $7,300 at end of October
A homeowner sued a plumber for damages resulting from the plumber's allegedly faulty installation of water pipes in her basement, which caused flooding. At trial, the homeowner was prepared to testify that when she first detected the flooding, she turned off the water and called the plumber at his emergency number for help and that the plumber responded, "I'll come by tomorrow and redo the installation for free."
(A) Is the homeowner's testimony regarding the plumber's response admissible?
Answer: The correct answer is YES it is admissible as evidence of the plumber's fault.
Explanation: An Evidence has probative value if it tends to prove an issue. The testimony of the homeowner of the regarding the plumber's response is a party admission. It is admissible as a hearsay exemption under Rule 801(d)(2)(A) which explains that a statement or statemens made by a party in a case cannot be excluded as hearsay when offered against him by the opponent. As such, the statement is a probative evidence.
Yes, the homeowner's testimony regarding the plumber's response could be admissible evidence in a trial as it can be seen as a tacit admission of negligent work by the plumber. However, rules for admissibility of evidence can vary, hence a consultation with a legal expert is advised.
Explanation:The subject matter pertains to the admissibility of evidence in a legal proceeding or trial. Specifically, it pertains to whether the homeowner's testimony regarding the plumber's response is admissible.
In most court rooms, an admission of defective installation can be a potential evidence to be used in court against the defendant, in this case, the plumber. In this situation, the plumber's admission of his fault and the promise to fix it can be seen as a tacit admission of negligent work. This can be interpreted as the acceptance on his part that the installation he did was faulty. Hence, the homeowner's testimony regarding the plumber's response can be considered admissible in a trial, subject to other evidentiary rules.
The rules for admissibility of evidence can vary depending on the jurisdiction and certain other factors, though. Therefore, a consultation with a legal expert is necessary for specifics of the case.
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Jerry knows that Lucy has coveted his classic car for quite some time. Finally willing to sell it, he sends a letter to Lucy offering to sell the car for $15,000. Lucy responds by saying she needs time to arrange financing. Lucy offers Jerry $100 to keep the offer open for two weeks. Jerry agrees, taking the $100. Three days later, Roberta contacts Jerry saying she is interested in buying the car and has the cash to buy it outright. Jerry is concerned that if he doesn't sell the car to Roberta now, she may not be interested later. Furthermore, Lucy may never be able to arrange financing. Jerry is afraid he may end up with no buyer at all. He comes to you for advice. What do you advise
Answer:
Explanation:
Despite the fact that it seems jerry can easily take a bow of the discussion with Lucy and forge ahead in selling the car to Roberta, he had certain restrictions that he should respect. Accepting $100 from Lucy, Jerry entered into what we know as an “Option” contract, giving an option to Lucy to buy the car in the next two weeks.
Irrespective of Lucy’s financial status, jerry should respect the contract that he has entered into. As a back-up, he can hold discussions with Roberta and can request her to wait for 2 weeks when the option period expires and he can sell the car to her at an outright payment
Jerry is bound by an option contract with Lucy which prevents him from selling the car to anyone else for two weeks, despite receiving a better offer from Roberta in the interim.
Jerry finds himself in a contractual predicament due to an agreement to sell his classic car. When Lucy offers Jerry $100 to keep the offer open for two weeks, and he accepts it, they enter into what is known as an option contract. This means Jerry is legally obligated to keep the offer open for the agreed period and cannot sell the car to someone else during that time, regardless of any other offers he receives or concerns about Lucy's ability to secure financing.
In this scenario, the ethical and legal course of action for Jerry would be to inform Roberta that he is currently bound by the terms of his contract with Lucy and thus unable to accept her immediate offer. Jerry can explain to Roberta that if Lucy does not complete the purchase within the two-week period, he would then be free to negotiate with Roberta or any other potential buyers.
The University of California has two bonds outstanding. Both issues have the same credit rating, a face value of $1,000 and a coupon rate of 4%. Coupons are paid twice a year. Bond A matures in 1 year, while bond B matures in 30 years.
The market interest rate for similar bonds is 9%.
1. What is the price of bond A?
2. What is the price of bond B?
3. Now assume that yields increase to 12%. What is the price of bond A?
4. What is now the price of bond B?
Answer:
1) price of Bond A=$953.18
2) price of Bond B=$484.05
3) price of Bond A= $ 926.66
4) price of Bond B= $ 353.54
Explanation:
According to the given data, we have two Bonds, Bond A and B with a face of value of $1,000 each of them, the coupon rate is of of 4%.
If The market interest rate for similar bonds is 9%, therefore the price of bond A and B would be calculated using the following formula:
PV(rate,nper,pmt,fv)
Hence, price of Bond A= PV(9%/2,1*2,40/2,1000)*-1
1) price of Bond A=$953.18
price of Bond B= PV(9%/2,30*2,40/2,1000)*-1
2) price of Bond B=$484.05
If that yields increase to 12%, therefore the price of bond A and B would be the following:
price of Bond A= PV(12%/2,1*2,40/2,1000)*-1
3) price of Bond A= $ 926.66
price of Bond B= PV(12%/2,30*2,40/2,1000)*-1
4) price of Bond B= $ 353.54
Answer:
1. $953.18
2. $484.05
3. $926.66
4. $353.54
Explanation:
Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Both of these cash flows discounted and added to calculate the value of the bond.
1.
Bond A
According to given data
Face value of the bond is $1,000
Coupon payment = C = $1,000 x 4% = $40 annually = $20 semiannually
Number of periods = n = 1 years x 2 = 2 period
Market Rate = 9% annually = 4.5% semiannually
Price of the bond is calculated by following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond = 20 x [ ( 1 - ( 1 + 4.5% )^-2 ) / 4.5% ] + [ $1,000 / ( 1 + 4.5% )^2 ]
Price of the Bond = $953.18
2.
Bond B
According to given data
Face value of the bond is $1,000
Coupon payment = C = $1,000 x 4% = $40 annually = $20 semiannually
Number of periods = n = 30 years x 2 = 60 period
Market Rate = 9% annually = 4.5% semiannually
Price of the bond is calculated by following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond = 20 x [ ( 1 - ( 1 + 4.5% )^-60 ) / 4.5% ] + [ $1,000 / ( 1 + 4.5% )^60 ]
Price of the Bond = $484.05
Now Change the Market Interest rate to 12%
3.
Bond A
Price of the Bond = 20 x [ ( 1 - ( 1 + 6% )^-2 ) / 6% ] + [ $1,000 / ( 1 + 6% )^2 ]
Price of the Bond = $926.66
4.
Bond B
Price of the Bond = 20 x [ ( 1 - ( 1 + 6% )^-60 ) / 6% ] + [ $1,000 / ( 1 + 6% )^60 ]
Price of the Bond = $353.54
The operations manager at a chemical company that produces insecticide for use in commercial applications is attempting to set a safety stock level for a key ingredient that is used in their most powerful product. She believes that demand during lead time for this ingredient is normally distributed based on past data. In addition, she believes that future use is accurately depicted by these historical demand-duringlead-time data (in gallons): 55, 75, 75, 70, 80, 60, 50, 70, 60, and 85. She estimates the standard deviation of demand during the lead time to be 8.5 gallons.
a. What is the average demand during the lead time for this key ingredient?
b. What is the safety stock they need to provide a 95% service level?
c. What is the order point the company should use?
Answer:
a) Average demand during the lead time = Sum of all the historical demand during lead time / Number of periods
= (55+75+75+70+80+60+50+70+60+85) / 10
= 680 / 10
= 68 gallons
b) Standard deviation of demand during lead time(\sigmadL) = 8.5 gallons
At 95% service level,value of Z = 1.65
Safety stock = Z(\sigmadL) = 1.65(8.5) = 14.03 gallons
c) Reorder point = Average demand during the lead time + Safety stock
= 68 + 14.03
= 82.03 gallons
During 2016 Green Thumb Company introduced a new line of garden shears that carry a two-year warranty against defects. Experience indicates that warranty costs should be 2% of net sales in the year of sale and 3% in the year after sale. Net sales and actual warranty expenditures were as follows:
Net
sales Actual warranty expenditures
2016 $ 45,000 $ 1,000
2017 120,000 3,500
At December 31, 2017, Green Thumb should report as a warranty liability of:
a.$900
b.$1,250
c.$3,750
d.$4,500
Answer:
c. $3,750
Explanation:
Green Thumb Company provides two years warranty for any product defect. The provision needs to be made for the warranty expense and it should be reported in the balance sheet as warranty liability. The company budgets the warranty expense to be 2% in year of sales which is $2,400 ($120,000 * 2%) and 3% in the year after sale which is $1,350 ($45,000 * 3%). The total warranty liability for the year 2017 which will be reported at December 31, 2017 is $3,750.
Yakov lives in San Diego and runs a business that sells boats. In an average year, he receives $704,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Yakov does not operate this boat business, he can work as an accountant and receive an annual salary of $20,000 with no additional monetary costs. No other costs are incurred in running this boat business. Identify each of Yakov's costs in the following table as either an implicit cost or an explicit cost of selling boats. Complete the following table by determining Yakov's accounting and economic profit of his boat business. If Yakov's goal is to maximize his economic profit, he stay in the boat business because the economic he would earn as an accountant would be __________
Answer:
Yakov's explicit costs are the monetary costs that he pays while running his business:
Payment to manufacturer: $404,000
Wages and utility bills: $286,000
Total explicit costs: $690,000
Yakov's implicit costs are his opportunity costs, in other words, the things he gives up in order to run his business:
Rent he would get for his showroom: $3,000
Wage he would get as an accountant: $20,000
Total implicit costs: $23,000
Yakov's accounting profit is equal to revenue minus total explicit costs:
Accounting profit = $704,000 - $690,000
= $14,000
Yakov's economic profit is equal to revenue minus total costs (the sum of implic costs and explicit costs)
Economic profit = $704,000 - $713,000
= ($9,000)
Despite the fact that Yakov is not earning an economic profit selling boats, as an accountant, he would give up on the $704,000 that he is been making from selling boats. For that reason, he should keep the boat selling business.
Yakov's costs can be classified as explicit or implicit. Accounting profit is calculated by subtracting explicit costs from sales revenue, while economic profit considers both explicit and implicit costs. Yakov would have a negative economic profit if he worked as an accountant instead of running his boat business.
Explanation:Yakov's costs can be classified as either explicit costs or implicit costs. Explicit costs are direct monetary expenses that Yakov incurs in running his boat business, such as the wholesale cost of boats, wages, utility bills, and the rental cost of the showroom. On the other hand, implicit costs are opportunity costs associated with forgoing alternative opportunities. In this case, Yakov's implicit cost is the salary he would earn as an accountant if he didn't operate the boat business.
To calculate Yakov's accounting profit, subtract the explicit costs from the sales revenue. Accounting profit = sales revenue - explicit costs. Economic profit, on the other hand, considers both explicit and implicit costs. To calculate economic profit, subtract both the explicit and implicit costs from the sales revenue. Economic profit = sales revenue - explicit costs - implicit costs.
If Yakov's goal is to maximize his economic profit, he should stay in the boat business because the economic profit he would earn as an accountant would be negative (-$10,000 per year).
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Madrid Company plans to issue 9% bonds with a par value of $5,300,000. The company sells $4,770,000 of the bonds at par on January 1. The remaining $530,000 sells at par on July 1. The bonds pay interest semiannually on June 30 and December 31. 1. Record the entry for the first interest payment on June 30. 2. Record the entry for the July 1 cash sale of bonds.
Answer and Explanation:
The journal entry are as follows
1. Interest expense $214,650
To Cash $214,650
(Being the first interest payment is recorded)
The computation is shown below
= $4,770,000 × 9% × 6 months ÷ 12 months
= $214,650
For recording this we debited the interest expense as it increased the expenses while on the other hand the cash is paid which reduced the cash balance so it is credited
2. Cash $530,000
To Bond payable $530,000
(Being the cash sale of bond is recorded)
For recording this we debited the cash as cash is received that increased the cash balance and at the same time we credited the bond payable
Multiple Choice Question 92 Conversion cost per unit equals $9.00. Total materials costs are $81300. Equivalent units of production for materials are 27100. How much is the total manufacturing cost per unit? $12.00. $6.00. $9.00. $3.00.
Answer:
$3.00
Explanation:
Manufacturing cost per unit= Total material cost/Equivalent unit
Cost per Unit= $81300/$21700
Cost per unit = $3.00
Answer:
$ 12
Explanation:
Conversion cost per unit equals $9.00.
Total materials costs are $81300
Equivalent units of production for materials are 27100
MAterial Costs per unit = Total materials costs /Equivalent units of production
Material Costs per unit =$81300/ 27100= $ 3 per unit
Total manufacturing cost per unit= Conversion cost per unit +Material Costs per unit = $ 9+ $3= $ 12
We find the material costs per unit and add it with the conversion cost per unit to get the total manufacturing cost per unit
In 2017, Scranton, Inc. sold 2,000 carpets for $50 each. The carpets carry a two-year warranty for repairs. Scranton estimates that repair costs will average 3% of the total selling price. What amount would be recorded in the warranty liability account as a result of selling the carpets during 2017
Answer:
$3,000
Explanation:
Inventory Sold 2,000*$50=$100,000
Warranty Expense $100,000*3%=$3,000
Therefore $3,000 would be reported in warranty liability account.
When any claim for warranty is reported,the liability will be set off by debiting it and corresponding effect to inventory or stores will be taken.
Price floors and price supports set a minimum price below which a good or service cannot be sold. Minimum wage laws and agricultural price supports are common examples of such price controls. When price floors are used to keep prices above free-market levels in the agricultural industry, which of the following outcomes are common? Check all that apply.
A. Overinvestment in the agricultural industryB. A decrease in the future supply of agricultural goodsC. A surplus of agricultural goodsD. A problem of disposal of surplus agricultural goods
Price floors in the agricultural industry often result in C. a surplus of agricultural goods and a problem of disposal.
Explanation:A price floor is a government-imposed limit on how low a price can be set for a specific good or service. It is often used to ensure that the price does not fall below a certain level, protecting producers and workers. Price floors can lead to surpluses and market inefficiencies if set above the equilibrium price.
When price floors are used to keep prices above free-market levels in the agricultural industry, the common outcomes are a surplus of agricultural goods and a problem of disposal of surplus agricultural goods. Price floors can lead to an overproduction of agricultural goods, resulting in a surplus. This surplus then creates a challenge for farmers and the government to find ways to deal with the excess goods.
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A. Overinvestment in the agricultural industry, C. A surplus of agricultural goods and D. A problem of disposal of surplus agricultural goods are common examples of such price controls.
Price floors and price supports set a minimum price below which a good or service cannot be sold. Minimum wage laws and agricultural price supports are common examples of such price controls. When price floors are used to keep prices above free-market levels in the agricultural industry, several common outcomes can be observed:
Overinvestment in the agricultural industry: Farmers may invest more in production due to the guaranteed higher prices.A surplus of agricultural goods: The price floor set above the equilibrium price results in the quantity supplied exceeding the quantity demanded.A problem of disposal of surplus agricultural goods: With more production than consumption, disposing of or storing the surplus becomes an issue.Petra's basis was $50,000 in the PAM Partnership interest just before she received a proportionate nonliquidating distribution consisting of land held for investment (basis of $40,000, fair market value of $60,000) and inventory (basis of $40,000, fair market value of $40,000). After the distribution, Petra's bases in the land and inventory, respectively, are:a.$40,000 and $0.
b.$10,000 and $40,000.
c.$25,000 and $25,000.d.$40,000 and $10,000.
e.$40,000 and $40,000.
Answer:
b.$10,000 and $40,000.
Explanation:
Under the ordering rules for distributions, cash is distributed first, then followed by unrealized receivables and inventory; other assets are distributed last.
For Petra, the inventory is distributed first and takes a carryover basis of $40,000.
This reduces Petra's basis to $10,000. The land is distributed next and takes the $10,000 remaining basis
$50,000 (partnership interest) – $40,000 (inventory) = $10,000 (land distribution)
Sales $ 3,400,000 Net operating income $ 272,000 Average operating assets $ 850,000 The following questions are to be considered independently. Garrison 16e Rechecks 2019-01-10 2. The entrepreneur who founded the company is convinced that sales will increase next year by 60% and that net operating income will increase by 210%, with no increase in a
Answer:
The question is not complete ,find below complete part of the question:
The entrepreneur who founded the company is convinced that sales will increase next year by 60% and that net operating income will increase by 210 %, with no increase in average operating assets. What would be the company’s ROI? 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,100,000 increase in sales, requiring a $275,000 increase in average operating assets, with a resulting $107,800 increase in net operating income. What would be the company’s ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
ROI is 99.20%
ROI is 33.76%
Explanation:
ROI under the first scenario;
Return on Investment(ROI)=net income/average operating assets*100
sales forecast $3,400,000*(1+60%)=$5,440,000.00
net operating income forecast $272,000*(1+210%)=$843,200
average operating assets is $850,000
forecast ROI=$843,200.00/*$850,000*100
forecast ROI=99.2%
ROI under the second scenario:
sales forecast($3,400,00+$1,100,000)=$4,500,000
net operating income forecast ($272,000+$107,800)=$379,800
average operating assets ($850,000+$275,000)=$1,125,000
forecast ROI=$379,800/$1,125,000
=33.76%
During the current year, Mr. Jones made gifts to his son of the following items: A minivan with an adjusted basis of $13,000 and fair market value of $15,000. Bonds with an adjusted basis of $6,000 and fair market value of $18,000. Antique furniture with an adjusted basis of $12,000 and a fair market value of $35,000. An interest-free $10,000 loan on January 1, to buy a boat for his personal pleasure. His son repaid the loan in full on December 31. The applicable federal interest rate was 10%. Mr. and Mrs. Jones elect gift-splitting. What is the total amount of their taxable gifts to their son in the current year
Answer:
$38,000
Explanation:
Since the Jones elected gift splitting, each spouse will may give $15,000 worth of gifts to their son without paying taxes:
the total value of the gifts (must use fair market value) = $15,000 (minivan) + $18,000 (bonds) + $35,000 (furniture) = $68,000
taxable amount = $68,000 - $30,000 (combined tax free gifts) = $38,000
Larry and Susan work in an office near Tractor-ama and Tip Top Tractors, wholesale tractor sellers on the same block. Larry notices that both places are charging only $1500 for a base-model tractor, which is below the price of $2000 that a base-model tractor typically costs elsewhere in the city. Susan wonders if Tractor-ama and Tip Top Tractors are engaged in a price war. Over the past month, she has noticed that each store has lowered its prices each week, but that Tip Top Tractors always lowered its price first. She suggests that Tip Top Tractors is engaging in predatory pricing. Larry correctly replies that they cannot determine whether Tip Top Tractors is guilty of predatory pricing because:
Answer:
to prove Tip Top Tractors engaged in predatory pricing, you would need to prove that Tip Top Tractors priced a tractor below average variable cost with specified intention of driving Tractor-ama out of business.
Explanation:
Predatory pricing is a strategy to cut prices and set a price really low to gain new customers. This strategy is also used to stop entering other firms into business and create monopoly or Drive competitors out of their business. Tip Top Tractors has also adopted this strategy and has lowered the prices of tractor to $1500 which is below that the $2000 which is normal price in the city. To prove that Tip Top Tractors has adopted predatory pricing, we require proof that the prices are set below average variable cost.
Ashley is currently consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers cost $2.50, is Ashley consuming the correct quantities of these two goods to be in consumer equilibrium?
Answer:
Possible options;
a.No, she should consume more hamburgers and fewer hot dogs.
b.No, she should consume more hot dogs and fewer hamburgers.
c.Yes, so there is no need to change her eating habits.
d.There is not enough information to answer the question.
Answer is C
Explanation:
Imagine that your boss is someone whom you and your coworkers have very little respect for, but you and others continue to do what s/he asks because s/he has control over allocating year-end bonuses, promotions, etc. Presuming that your boss is aware of this-i.e., s/he feels disrespected but is aware of his/her formal position-how is your boss likely to respond/behave?
A. Minimize contact with his/her peers
B. Behave in an authoritarian way
C. Spend a lot of time politicking
D. Place excessive restrictions on employees
E. Hold back talented employees
F. Focus on promoting conflict
Answer:
The correct answer is letter "B" and "E": Behave in an authoritarian way.; Hold back talented employees.
Explanation:
Disrespected bosses tend to use their authority to let others know their ideas since they transmit no inspiration because of who they are. It is the only form they can get subordinates' attention. Besides, when subordinates start to show leadership skills or special talents, the disrespected boss would minimize that individual in an attempt to keep his or her power and not to be replaced by that subordinat
Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $169,000 Credit sales, $469,000 Selling and administrative expenses, $129,000 Sales returns and allowances, $49,000 Gross profit, $509,000 Accounts receivable, $295,000 Sales discounts, $33,000 Allowance for doubtful accounts credit balance, $3,100 Flyer prepares an aging of accounts receivable and the result shows that 3% of accounts receivable is estimated to be uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded
Answer:
$5,750
Explanation:
The computation of the balance in the allowance for doubtful accounts after bad debt expense is shown below:
= Account receivable × estimated percentage - credit balance of Allowance for doubtful accounts
= $295,000 × 0.03 - $3,100
= $8,850 - $3,100
= $5,750
By deducting the credit balance from the estimated amount we can find out the balance in the allowance for doubtful accounts
Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha Division $60,000 Cost of capital 14% Target return on investment (ROI) 16% Margin for Alpha Division 21% If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be
Answer:
15.79%
Explanation:
Current Average operating asset = $500,000
Decrease in asset base will make average operating asset $380,000 [500000 - 120000]
ROI = Operating Income / New operating asset base
=$60,000 / $380,000
= 15.78947...% = 15.79%
Hence, the correct answer is 15.79%
A company has outstanding 11.00 million shares of $3.00 par common stock and 2.4 million shares of $7.00 par preferred stock. The preferred stock has an 8% dividend rate. The company declares $480,000 in total dividends for the year. Which of the following is correct if the preferred stockholders only have a current dividend preference?
a. Preferred stockholders will receive the entire $480,000, and they must also be paid $80,000 before the end of the current accounting period. Common stockholders will receive nothing.
b. Preferred stockholders will receive the entire $480,000, and they must also be paid $80,000 sometime in the future before common stockholders will receive anything.
c. Preferred stockholders will receive $38,400 or 8% of the total dividends. Common stockholders will receive the remaining $441,600.
d. Preferred stockholders will receive the entire $480,000, but will receive nothing more relating to this dividend declaration. Common stockholders will receive nothing.
Preferred stockholders will receive the entire $480,000, but will receive nothing more relating to this dividend declaration. Common stockholders will receive nothing. Thus, the correct answer is option d.
Who are preferred stockholders?Preferred shareholders have priority over a company's income, meaning they are paid dividends before common shareholders.
Preferred Stockholders are entitled to the dividend as follows:-
= 2,400,000 shares * $7.00 * 8%
= $1,344,000
They are entitled to $1,344,000 in dividends, but because the dividends declared do not total that amount, they will accept the entire amount declared.
However, because preferred stockholders only have a current dividend preference and not a cumulative dividend preference, they cannot claim the remaining balance in any other year. As the preferred stockholder takes the entire $480,000, common shareholders receive nothing this year.
Therefore, option D is correct if the preferred stockholders only have a current dividend preference.
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Joe runs a restaurant. He pays his employees $200,000 per year. His ingredients cost him $50,000 per year. Prior to running his restaurant, Joe was a lawyer earning $150,000 per year. If Joe's restaurant earns $600,000 per year in revenue, Joe's accounting profits are ________ and his economic profits are __________.
Answer:
Accounting profit= $350,000
Economic profit= $200,000
Explanation:
Giving the following information:
Restaurant:
Earnings= 600,000
Employees= (200,000)
Ingridients= (50,000)
Lawyer:
Earnings= 150,000
The difference between the economic and accounting profit is that the first one includes the opportunity cost of not working as a lawyer.
Accounting profit= 600,000 - 250,000= $350,000
Economic profit= 600,000 - 250,000 - 150,000= $200,000
Joe's restaurant has an accounting profit of $350,000, which is calculated by subtracting the cost of employees and ingredients from the revenue. The economic profit, which additionally subtracts the opportunity cost of Joe not working as a lawyer, is $200,000.
Explanation:Joe runs a restaurant and his accounting profits and his economic profits are calculated from his annual activities. First, to calculate accounting profit, we subtract the explicit costs of employees ($200,000) and ingredients ($50,000) from his revenue ($600,000). This gives us an accounting profit of $600,000 - $200,000 - $50,000 = $350,000. Next, to find economic profit, we consider not only the explicit costs but also the opportunity cost of Joe's next best alternative to running the restaurant, which was his previous job as a lawyer earning $150,000 per year. Therefore, the economic profit is $350,000 (accounting profit) minus the opportunity cost of $150,000, resulting in $200,000.
Joe's Hardware is adding a new product line that will require an investment of $ 1,512,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $ 310,000 the first year, $ 270,000 the second year, and $ 230,000 each year thereafter for eight years. Compute the payback period. Round to one decimal place.
Answer:
6.05 years
Explanation:
Payback period is the time in which a project returns back the initial investment in the form of net cash flow. For this purpose we use the net cash flows to calculate the payback.
Payback working is attached with this answer please find it.
For each of the following scenarios, determine the effect on aggregate supply.
a. There is an unexpected decrease in oil prices.
___ This will cause a movement along the aggregate supply curve to the left, showing a decrease in the quantity of real GDP supplied.
___ This will cause a decrease in aggregate supply, shifting the aggregate supply curve to the left.
___ This will cause an increase in aggregate supply, shifting the aggregate supply curve to the right.
___ This will cause a movement along the aggregate supply curve to the right, showing an increase in the quantity of real GDP supplied.
b. Suppose the government increases the amount that all producers are required to contribute to health insurance coverage
___ This will cause a movement along the aggregate supply curve to the right, showing an increase in the quantity of real GDP supplied.
___ This will cause a decrease in aggregate supply, shifting the aggregate supply curve to the left.
___ This will cause a movement along the aggregate supply curve to the left, showing a decrease in the quantity of real GDP supplied.
___ This will cause an increase in aggregate supply, shifting the aggregate supply curve to the right.
An unexpected decrease in oil prices increases aggregate supply by shifting the aggregate supply curve to the right, while a mandated increase in health insurance contributions by producers leads to a decrease in aggregate supply, shifting the curve to the left.
For each of the following scenarios, the effect on aggregate supply can be determined based on the changes in production costs and other relevant factors:
a. There is an unexpected decrease in oil prices.The rationale behind these effects is that a decrease in oil prices reduces production costs, allowing firms to supply more at the same price levels, thereby shifting the curve to the right. Conversely, an increase in mandatory health insurance contributions raises production costs, leading to a reduced quantity of goods and services supplied at the same price levels, which shifts the aggregate supply curve to the left.
On March 9, 2009, the Dow Jones Industrial Average reached a new low at a close of 7,447.50, which was down 98.34 that day. What was the return (in percent) of the stock market that day?
Answer: -1.26%
Explanation:
We can solve for this using the following formula.
Return on Stock Market = Down figure of Index / ( Close figure of Index - down figure of Index)
So calculating we have,
Return on Stock Market = -98.34 / ( 7,447.50 - (-98.34))
Return on Stock Market = -98.34 / 7,545.84
Return on Stock Market = - 0.0126
Return on Stock Market = -1.26%
The return of the stock market that day was approximately -1.31%.
To calculate the return of the stock market that day, we can use the formula for percentage return:
[tex]\[ \text{Percentage Return} = \left( \frac{\text{Change in Price}}{\text{Initial Price}} \right) \times 100 \][/tex]
Given that the Dow Jones Industrial Average was down by 98.34 points from the previous day's close to 7,447.50, we can calculate the initial price by adding the loss to the closing price:
[tex]\[ \text{Initial Price} = \text{Closing Price} + \text{Change in Price} \] \[ \text{Initial Price} = 7,447.50 + 98.34 \] \[ \text{Initial Price} = 7,545.84 \][/tex]
Now, we can calculate the percentage return:
[tex]\[ \text{Percentage Return} = \left( \frac{-98.34}{7,545.84} \right) \times 100 \] \[ \text{Percentage Return} = -0.01304 \times 100 \] \[ \text{Percentage Return} \approx -1.304\% \][/tex]
Rounding to two decimal places, the return of the stock market that day was approximately -1.31%.
This line consists of single-machine stations and is almost balanced (i.e. station rates are nearly equal). A manufacturing engineer has estimated the bottleneck rate of the line to be 1,000 fans per 20-hour day and the raw process time to be 50 minutes. The line has averaged 850 fans per 20-hour day, and the cycle time has averaged 2.8 hours. What would you estimate the WIP level to be
Answer:
119 fans
Explanation:
The computation of the estimated WIP is shown below:
= Average fans per hour × average hours
where,
Average fans per hour is
= 850 fans ÷ 20 hours
= 42.5 fans
And, the average hours is 2.8
So, the estimated WIP is
= 42.5 × 2.8
= 119 fans
We assume we have to find out the average estimated WIP level
Present value of an ordinary annuity: Dynamics Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $22,500 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this investment
Answer:
$75,423.49
Explanation:
Present value is the sum of discounted cash flows.
Present value can be calculated using a financial calculator.
Cash flow each year from year one to five = $22,500
I = 15%
Present value = $75,423.49
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
The present value of the investment is approximately $74,789.01.
Explanation:To calculate the present value of the investment, we need to use the formula for the present value of an ordinary annuity. The formula is: PV = CF x (1 - (1 + r)^-n) / r, where PV is the present value, CF is the cash flow per period, r is the discount rate, and n is the number of periods.
In this case, the cash flow is $22,500 per year, the discount rate is 15% (or 0.15), and the number of periods is 5 years. Plugging these values into the formula, we get: PV = $22,500 x (1 - (1 + 0.15)^-5) / 0.15 = $74,789.01 (rounded to two decimal places).
Therefore, the present value of this investment is approximately $74,789.01.
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Garcia Co. owns equipment that cost $81,200, with accumulated depreciation of $43,000. Garcia sells the equipment for cash. Record the sale of the equipment under the following three separate cases assuming Garcia sells the equipment for (1) $50,300 cash, (2) $38,200 cash, and (3) $33,100 cash.
Answer and Explanation:
The journal entries are as follows
1. For sale of equipment at $50,300
Cash Dr $50,300
Accumulated depreciation $43,000
To Equipment $81,200
To Gain on sale of equipment $12,100
(Being the sale of equipment is recorded)
Since the equipment is sold for $50,300 which increased the assets so cash account is debited along with it the accumulated depreciation is debited and the cost of equipment is credited plus the balancing figure is transferred to gain on sale of equipment because the sale value is more than the book value
2. For sale of equipment at $38,200
Cash Dr $38,200
Accumulated depreciation $43,000
To Equipment $81,200
(Being the sale of equipment is recorded)
Since the equipment is sold for $38,200 which increased the assets so cash account is debited along with it the accumulated depreciation is debited and the cost of equipment is credited
The book value and the sale value is equal so there is no loss or no gain recognized in this case
3. For sale of equipment at $33,100
Cash Dr $33,100
Accumulated depreciation $43,000
Loss on sale of equipment $5,100
To Equipment $81,200
(Being the sale of equipment is recorded)
Since the equipment is sold for $$33,100 which increased the assets so cash account is debited along with it the accumulated depreciation is debited and the cost of equipment is credited plus the balancing figure is transferred to loss on sale of equipment because the sale value is less than the book value