Answer: Deciding whether or not to open a new store is a capital budgeting decision.
Capital budgeting is the process in which a enterprise is set about to measure possible leading investments.
∴ Deciding whether or not to open a new store is a capital budgeting decision.
"The risk‐free interest rate on one‐year debt is 7 percent and the return on the market is expected to be 13 percent. A stock with a beta of 1.2 pays no dividends over the next year. If it is currently priced at $15.00, what will its price be at the end of the year?"
Answer:
Price be at the end of the year = $17.13
Explanation:
Using the capital asset pricing model we have,
[tex]E(R) = R{_f} + \beta (R{_m} - R{_f})[/tex]
Where E(R) = Expected return on investment
R[tex]{_f}[tex] = Risk free rate of return = 7%
[tex]\beta[tex] = 1.2
[tex]R{_m}[tex] = Return on the market
Here we have
E(R) = 7% + 1.2(13 - 7)%
= 0.07 + 0.072 = 0.142
= 14.2%
Therefore price of share at year end = $15 + 14.2% = $17.13
That is current cost + expected return on this investment = $17.13
Target ROI is 19% Invested Capital is $527956 Full Cost per unit $1446 Expected sales volume is 748 units. If the company prices each unit to earn the target ROI, what amount of profit would be added to the cost of each unit? Round your answer to the nearest whole dollar . Don't use dollar signs or commas when entering your answer.
Answer:
The amount of profit that would be added to the cost of each unit is $134.
Explanation:
For taking out the amount of profit to be added , we will use formula -
PROFIT / EXPECTED SALES PER UNIT
In the question we have been given sales per unit ( 748 ) but profit is not given, so to calculate profit we will do -
INVESTED CAPITAL X ROI
= $527956 X 19%
= $100311.64
=$100312 (APPROXIMATELY)
Now we will put the value of profit and sales unit in the formula -
PROFIT / EXPECTED SALES PER UNIT
= $100312 / 748
= $134.106
= $134 (APPROXIMATELY)
A doctor for the Benson Family Practice performs a sports physical exam for Allison Smythe on February 1. The charge for the exam is $100; Smythe's insurance company, Cardinal Health, is billed for the entire $100 on February 1. Cardinal Health receives the invoice on February 2, and enters the amount into its payment system on February 4. Benson Family Practice receives the $100 payment from Cardinal Health on February 20. On which date would Benson Family Practice recognize the revenue for the Smythe's physical?
Answer:
On February 1st
Explanation:
The revenue is recognize in accounting when generated. Regardless of the payment date. This means, when the revenue is real and earned.
The services were perform and billed on february 1st. This is ground to recognize revenue.
This will be a case of Accrued revenue
Accrued revenue The cash receipts occurs after the billing and recognition of the revenue.
Revenue for Allison Smythe's physical would be recognized by the Benson Family Practice on February 1, the date of the service, according to accrual accounting principles.
In accounting principles. the revenue is recognised in accounting when generated. Regardless of the payment date. This means, when the revenue is real and earned. The Benson Family Practice would recognize the revenue for Allison Smythe's physical on the date the service was provided, which is February 1.
Thus, this is based on the accrual accounting principles, where revenue is recognized when earned, regardless of when the payment is actually received. Despite the payment from Cardinal Health being received on February 20, the revenue for the service is recorded on the date the service was provided to the patient.
An analytical procedure example is the comparison of:
Multiple Choice
a. Financial ratios of the current year to previous years.
b. Recorded amounts of major disbursements with appropriate invoices.
c. Results of a statistical sample with the expected characteristics of the actual population.
d. EDP generated data with similar data generated by a manual accounting system.
Answer:
The correct example of an analytical procedure is the comparison of A) financial ratios of the current year to previous year.
Explanation:
Analytical procedure is a type of financial audit process which is usually done by an auditor or a person who has extensive knowledge of the business and the industry. Through this process an auditor , is trying to understand the clients business and changes that are taking place in the industry , so that he or she can identify what are the potentially risky areas for the company.
In this process an auditor would compare the financial statements of the company with the source of information or with previous years financial statements to see what re the areas in which company has improved or needs to be improved.
So it won't be wrong to say that an example of analytical procedure would be comparing the financial ratios of current year to previous year.
An increase in real GDP__________
a. increases the buying and selling of goods and increases the demand for money as a medium of exchange.
b. increases the buying and selling of goods and decreases the demand for money as a medium of exchange.
c. decreases the buying and selling of goods and increases the demand for money as a medium of exchange.
d. decreases the buying and selling of goods and decreases the demand for money as a medium of exchange.
Answer: Option A
Explanation: Real gross domestic product is the value of the goods and services produced in the economy stated in terms of base year prices. The real GDP is adjusted for the inflated prices, thus, it is seen as the more appropriate measure of valuing the GDP.
As, the value of GDP in real GDP is adjusted for base year prices we can conclude that if there is an increase in it then it must be due to the increase in the quantity of goods and services bought and sold and it will result in an increase in the demand for money.
Suppose that autonomous consumption is 1 comma 500, government purchases are 1 comma 500, planned investment spending is 1 comma 500, net exports are negative 500, and the MPC is 0.6. Equilibrium GDP is equal to $ nothing. (Enter your response as an integer.)
Answer: $2500 ⇒ Equilibrium GDP
Explanation:
Given that,
autonomous consumption ([tex]\bar{C}[/tex] )= 500
government purchases(G) = 500
planned investment spending (I) = 500
Net Exports (NX) = (-500)
Y = GDP
MPC (c) = 0.6
Consumption (C) = [tex]\bar{C}[/tex] + cY
= 500 + 0.6Y
Y = AD
Y = C + G + I + NX
Y = 500 + 0.6Y + 500 + 500 + (-500)
0.4Y = 1000
Y = [tex]\frac{1000}{0.4}[/tex]
Y = $2500 ⇒ Equilibrium GDP
A customer has come to your department with an urgent question. You promised her that you would collect information about her question and answer it by noon. It will take you at least 20 minutes to gather the information needed to provide an answer. It is now 11:50 a.m. Your supervisor just scheduled a 30-minute meeting to start at noon. This meeting is for all employees in your department. You decide to:
Answer: ask for permission to arrive about 12:15 in the afternoon to the meeting and reply the customer question first.
Explanation:
Most of the actions taken inside a company are directed to customers' satisfaction, they are an important part of all business, so they have to be a priority. In this case, the worker can explain to the supervisor the urgent necessity of replying to the customer and the previous promise that has done of replying by noon. The supervisor may understand the important situation and summarize for the worker the 10 first minutes of the meeting; in this way the worker won't miss the meeting and will keep his commitment with the customer.
Significant investment features for the purchaser of municipal bonds include all of the following EXCEPT: A interest is currently federal tax exempt B maturities and issues may be diversified C interest is currently state and local tax exempt D insured issues are available for customers wishing minimum credit risk
Answer: the correct answer is C interest is currently state and local tax exempt.
Explanation:
A municipal bond is a debt obligation issued by a non-profit organization.
The option C. offers regular or common features that's why it is the correct answer (they are not significant).
Final answer:
The significant investment feature that does NOT typically apply to municipal bonds is that interest is currently state and local tax exempt; exemptions on state and local taxes can vary depending on the investor's state of residence and the state that issues the bond.
Explanation:
The significant investment features for the purchaser of municipal bonds include tax exemptions on interest, potential diversification through different maturities and issues, and the availability of insured issues to minimize credit risk. However, the correct option that does NOT typically apply to municipal bonds is option C: interest is currently state and local tax exempt. While interest on municipal bonds is often federally tax-exempt, it is not always exempt from state and local taxes. This exemption depends on the state in which the investor resides and the state that issues the bond, meaning it is not a uniform feature across all municipal bonds.