Consumers know that some fraction x of all new cars produced and sold in the market are defective. The defective ones cannot be identified except by those who own them. Cars do not depreciate with use. Consumers are risk-neutral and value nondefective cars at $10,000 each. New cars sell for $5,000 and used ones for $2,500. What is the fraction x

Answer:

x = 2/3

Explanation:

From the question, we have:

Probability of a defective car = x

Probability of a nondefective car =  1 - x

Value of defective car = Price of used cars = $2,500

Value of a nondefective car = $10,000

Expected value = Price of a new car = $5,000

The formula for calculating the expected value is given as follows:

Expected value = (Probability of a defective car * Value of defective car) + (Probability of a nondefective car * Value of a nondefective car) .......... (1)

Substituting all the relevant values into equation (1) and solve for x, we have:

$5,000 = (x * $2500) + (1 - x)$10,000

5,000 = 2500x + 10,000 - 10,000x

5000 - 10000 = 2500x - 10000x

-5000 = - 7500x

x = -5000 / - 7500

x = 2/3

Fiona is a manager who believes in Theory Y of leadership. What does she assume about her employees according to this theory? A. Employees have to be reprimanded for bad ideas. B. Employees are self-motivated in their work. C. Employees need constant supervision. D. Employees are always ready to leave the company.

First National Bank of America has more than 75% of its assets in first residential fixed-rate mortgages that mature in more than 5 years. Suppose that a 12-month Gap Analysis predicts a decrease in 2021 interest income of $3 million if there is a sudden 1% drop in market interest rates. From your knowledge of the practical flaws in gap analysis, a realistic simulation analysis would predict that:_______.
1. Interest income will drop by more than $3 million for a sudden 1% drop in market interest rates
2. Interest income will drop by less than $3 million for a sudden 1% drop in market interest rates

what is the role of education to become a manager ?​

Teal Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $3,420,000 on March 1, $2,280,000 on June 1, and $5,700,000 on December 31. Teal Company borrowed $1,900,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $3,800,000 note payable and an 11%, 4-year, $6,650,000 note payable. Compute avoidable interest for Teal Company. Use the weighted-average interest rate for interest capitalization purposes

Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 7.5 ounces $ 8.00 per ounce $ 60.00 Direct labor 0.9 hours $ 19.00 per hour $ 17.10 Variable overhead 0.9 hours $ 8.00 per hour $ 7.20 The company reported the following results concerning this product in June. Originally budgeted output 2,900 units Actual output 2,500 units Raw materials used in production 19,500 ounces Purchases of raw materials 22,400 ounces Actual direct labor-hours 4,700 hours Actual cost of raw materials purchases $ 41,400 Actual direct labor cost $ 12,900 Actual variable overhead cost $ 3,450 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for June is: Multiple Choice $1,386 U $6,000 U $6,000 F

The CEO is considering your recommendations, and it will take time to make some of these changes. However, you know that it's not just the structure of the department that is stifling creativity. You believe that the culture could be significantly improved, and you want to start working on these issues ASAP. It will be a slow process to make some of these changes, but the time to get started is now. You have a lot of ideas, but only a few should be implemented initially. Which three do you think should be started immediately

Park Co. is considering an investment that requires immediate payment of $27,215 and provides expected cash inflows of $8,400 annually for four years. Assume Park Co. requires a 8% return on its investments. 1-a. What is the net present value of this investment

Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.4 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.

Required:
a. Prepare the journal entries on October 1, 2021, to record the issuance of the note.
b. Record the adjustments on December 31, 2021.
c. Prepare the journal entries on September 30, 2021, to record payment of the notes payable at maturity.

Bill Blumberg owns an auto parts business called Bill's Auto Parts. The following transactions took place during July of the current year.
July 5 Purchased merchandise on account from Wheeler Warehouse, $4,300.
8 Paid freight charge on merchandise purchased, $230.
12 Sold merchandise on account to Big Time Spoiler, $3,500. The merchandise
cost $2,500.
15 Received a credit memo from Wheeler Warehouse for merchandise, $670.
22 Issued a credit memo to Big Time Spoiler for merchandise returned, $820.
The cost of the merchandise is $550.
Required:
1. Journalize the above transactions in a general journal using the periodic inventory method.
2. Journalize the above transactions in a general journal using the perpetual inventory method.

On January 1, 2021, Gundy Enterprises purchases an office building for $305,000, paying $55,000 down and borrowing the remaining $250,000, signing a 9%, 10-year mortgage. Installment payments of $3,166.89 are due at the end of each month, with the first payment due on January 31, 2021.

Required:
a. Record the purchase of the building on January 1, 2021.
b. Complete the first three rows of an amortization schedule.
c. Record the first monthly mortgage payment on January 31, 2021.
d. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan?

Select the statement that best describes money's function as a standard of deferred payment.

a. The purchasing power of a currency is relatively stable over time
b. A currency is widely accepted in exchange for goods and services and therefore makes economic transactions easier.
c. A currency can be used to express the value goods and services that are both relatively expensive and goods and services that are relatively cheap.
d. People are willing to accept a currency in the future as compensation for debts accrued earlier

Help! Select the qualification that is best demonstrated in each example.

Melanie is a fitness instructor who encourages her students to achieve their goals. ____
1. Ability to handle money
2. Accuracy and attention to detail
3. Leadership skills
4. Organizational skills
Jacob counts and organizes cash at a casino. _____
1. Maintenance of safety
2. Communication skills
3. Teamwork skills
4. Ability to handle money
Adra is proud that she has never had an accident while running a ride at an amusement park. ______
1. Organizational skills
2. Leadership skills
3. Ability to operate equipment safety
4. Communication skills

Juan plans fun activities for groups of people. _____
1. Communication skills
2. Accuracy
3. Teamwork skills
4. Organizational

The common stock of Dayton Repair sells for $43.19 a share. The stock is expected to pay $2.20 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.25 percent annually and expects to continue doing so. What is the market rate of return on this stock

Two companies, A and B, both have $1 million in assets, earnings before interest and taxes (EBIT) of $160,000, and the same tax rate. Company A is all equity financed, and Company B is 50% debt financed and 50% equity financed. If Company B's pretax cost of debt is 8%, then Company A will have a ROA that is _____ and a ROE that is _____ than Company B's. a. Option D b. Option C c. Option B d. Option A

Sales promotions that provide consumers an incentive to buy a product, such as a cents-off coupons or a discount, are widely used, especially for the type of products we buy in the grocery store. For the company offering the discounts and coupons, one of the risks with such a strategy is that _______________.it is challenging to track usage of the couponsit will not provide a believable messageretailers are typically not interested in helping out with such campaignsconsumers who typically buy other brands will switch to the promoted brandit might only appeal to already loyal customers who stockpile the product when it is on sale for later consumption

In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $24,000 and ending work in process inventory of $29,000. During the month, the cost of units transferred out from the department was $159,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:

Budgeted Actual Sales volume 100 units 110 units Sales price $50 per unit $55 per unit Unit VC $30 per unit $33 per unit Input price for DL $10 per hour $12 per hour Input quantity per unit for DL 1.5 hours per unit 2 hours per unit Compute input efficiency variance for DL Group of answer choices $100 favorable $550 favorable $550 unfavorable 0.5 hours unfavorable $100 unfavorable

Some advertising campaigns aim to change consumer attitudes about a product. When a firm is trying to change attitudes, advertising campaign objectives are stated in ____ terms. Which of the following is not a public relations tool? a. News release. b. Publicity. c. Free samples d. Press conference e. Feature article Many trade sales promotion methods, such as temporary price reductions, encourage the marketing channel to "overload" the channel with inventory that will not be sold soon. Overloading can increase sales in the short run but hurt sales in the longer term. Which trade sales promotion method can fight channel overloading?

Indicate the effect each separate transaction has on investing cash flows.

a. Sold a truck costing $42,500, with $23,000 of accumulated depreciation, for $9,000 cash.
b. The sale results in a $10,500 loss. Sold a machine costing $11,600, with $8,500 of accumulated depreciation, for $6,000 cash.
c. The sale results in a $2,900 gain. Purchased stock investments for $16,500 cash. The purchaser believes the stock is worth at least $31,000.

Clementine Company makes skateboards. They prepare master and flexible budgets and then perform variance analysis after the budget plan period elapses. Their data is as follows: Budget Actual Selling price per unit $96 $104 Variable cost per unit $52 $55 Quantity sold 996 1,024 What is the Clementine's volume variance for SALES? If the variance is unfavorable put a minus sign in front of your answer. Enter your answer without commas or decimals.

Part of the screening process when choosing which markets to expand to involves gathering information on local markets. One way to gain information is by participating in trade fairs and trade missions. However, companies will often need additional information on markets that require further research. Collecting primary data in foreign markets can present some challenges in researchers especially because of cultural and technical differences between the markets. Identify whether each statement about the research process is most kikely to be associated with cuftural differences between markets or technical differences.

a. The meaning of words can change from one region to another.
b. Research instruments may need to be translated.
c. Social desirability bias may exist.
d. Street signs may be unreadable.
e. Mail service may be unreliable.

1. Cultural Differences
2. Technical Differences

The following refers to units processed by a breakfast cereal maker in August. Compute the total equivalent units of production with respect to conversion for August using the weighted-average inventory method. Units of ProductPercent of Conversion Added Beginning Work in Process230,00060% Units started570,000100% Units completed620,000100% Ending Work in Process180,00070% Multiple Choice 758,000 800,000 620,000 746,000 884,000

Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the following statements​ is/are correct for a responsibility accounting​ system? I. In a cost​ center, managers are responsible for controlling costs but not revenue. II. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. III. To be​ effective, a good responsibility accounting system must help managers to plan and to control. IV. Costs that are allocated to a responsibility center are normally controllable by the responsibility center manager.

Ellis Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $475,000 Raw materials (all direct) requisitioned for use in production $476,000 Direct labor cost $640,000 Manufacturing overhead: Indirect labor cost $174,000 Other manufacturing overhead costs incurred $498,000 Cost of goods manufactured $1,469,000 Cost of goods sold (unadjusted) $1,430,000 6. The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is:

A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead): Plus Max Units produced 200 16,000 Batch size (units) 10 400 Number of setups 20 40 Direct labor hours per unit 5 5 Total direct labor hours 1,000 80,000 Cost per setup$1,080 Total setup cost$64,800 Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Plus and Max, respectively is:Multiple Choice$21.60; $.54.$60.00; $60.00.$108.00; $2.70.$54.00; $27.00.$200.00; $16,000.00

Worthington Machining must decide whether to purchase Process A with specialized metal folding equipment needing two employees to operate it or Process B with general purpose folding equipment requiring five employees. Process A requires a fixed cost of $1,430,000 and a variable cost of $14.32 per metal panel. Process B requires a fixed cost of $820,000 and a variable cost of $20.05. Process A is more automated than Process B. What is the break-even quantity between these two processes

Lester sold a warehouse with an original cost of $150,000 for $230,000. The warehouse had accumulated depreciation of $40,000. The recognized gain on the sale was $ . The amount of the gain that is unrecaptured Section 1250 gain is $ and will be taxed at a maximum rate of percent. The remaining $ will be taxed at a maximum rate of 20%.

You are considering a project in Honduras that would generate 1.5 million dollars in cash flows per year going forever. The cost of the project is 8 million dollars. The discount rate for the project is 12%. You believe that there is some probability of expropriation prior to the 4th year (after the 3rd cash flow). Which of the following fully describes when this is a good project?
a. This is a good project if the probability of expropriation is larger than 0.33
b. This is a good project if the probability of expropriation is smaller than 0.33
c. This is a good project if the probability of expropriation is smaller than 0.5
d. This is a good project if the probability of expropriation is smaller than 0.66 7.

Burbank Company owns the building occupied by its administrative office. The office building was reflected in the accounts at the end of last year as follows:
Cost when acquired …………………………………….…… $330,000
Accumulated depreciation (based on straight-line depreciation, an
estimated life of 50 years, and a $30,000 residual value) ………. 78,000
During January of this year, on the basis of a careful study, management decided that the total estimated useful life should be changed to 30 years (instead of 50) and the residual value reduced to $22,500 (from $30,000). The depreciation method will not change, i.e. they will keep using straight-line deprecation.
Required:
1. Compute the annual depreciation expense prior to the change in estimates.
2. Compute the annual depreciation expense after the change in estimates.
3. What will be the net effect of changing estimates on the balance sheet, net income, and cash flows for the year?

Waterhouse Company plans to issue bonds with a face value of $503,500 and a coupon rate of 8 percent. The bonds will mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)
Determine the issuance price of the bonds assuming an annual market rate of interest of 6 percent.