Answer:
The interest rate, to the nearest percent, used in discounting this purchase transaction 8%.
Explanation:
The interest rate can be calculated using the following RATE function in Excel:
Interest rate = RATE(nper,pmt,-pv,fv,type)*n .............(1)
Where;
nper = number of periods = number of years to maturity * number of semiannual in a year = 5 * 2 = 10
pmt = semiannual payments = $63,101 = 63101
pv = present value = fair value balance = fair value - immediate down payment = $675,803 - $164,000 = $511,803 = 511803
fv = future value = desired cash balance after last payment = 0
type = when payments are due (0 = end of period. 1 = beginning of period) = 0
n = number of compounding period per year = number of semiannual in a year = 2
Substituting the values into equation (1), we have:
Interest rate = RATE(10,63101,-511803,0,0)*2 .................. (2)
Inputting =RATE(10,63101,-511803,0,0)*2 into an excel sheet (Note: as done in the attached excel file), the Interest rate is obtained as 8.00%.
Therefore, the interest rate, to the nearest percent, used in discounting this purchase transaction 8%.
Grey Corp owns 100% of Blue Company. On January 1, 2017 Grey sold Blue a machine for $66,000. Immediately prior to the sale, the machine was recorded on Grey's books at a net book value of $25,000. Prior to the sale, Grey was depreciating the machine on a straight-line basis with 9 years of remaining life and no salvage value. Blue plans to adopt the same depreciation assumptions as Grey. What elimination adjustments with respect to this sale must be made to consolidated net income in 2018 (ignoring income tax effects)
Answer:
Journal 1 - Eliminate gain on sale :
Debit : Other Income ($66,000 - $25,000) $41,000
Credit : Machinery $41,000
Journal 2 - Eliminate the unrealized profit from the sale :
Debit : Accumulated depreciation $4,556
Credit : Depreciation $4,556
Explanation:
Grey Corp and Blue Company are in a group of Companies. Grey Corp is the Parent and should prepare Consolidated Financial Statements . Blue Company is a subsidiary (Grey owns more that 50 % of voting rights in Blue Company).
When preparing Consolidated Financial Statements, intragroup transaction must be eliminated. As they happen, a Company trades within its-self that is the reason they should be eliminated.
Concerning the sale of machine by Grey (Parent) to Blue (Subsidiary), we must first eliminate the Income (gain on sale) in Parent as well as the asset that sits in the Subsidiary.
Debit : Other Income ($66,000 - $25,000) $41,000
Credit : Machinery $41,000
Also, we have to eliminate the unrealized profit on the gain of the asset sold.
Debit : Accumulated depreciation $4,556
Credit : Depreciation $4,556
Deprecation calculation :
Deprecation = $41,000 ÷ 9 = $4,556
Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 41,796 games next year (an increase of 9,396 games, or 29%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year
Question Completion:
Magic Realm, Inc., has developed a new fantasy board game. The company sold 32,400 games last year at a selling price of $67 per game. Fixed expenses associated with the game total $567,000 per year, and variable expenses are $47 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 41,796 games next year (an increase of 9,396 games, or 29%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year?
Answer:
Magic Realm, Inc.
1-a. Contribution-Format Income Statement
For the last year ended December 31
Sales revenue $2,170,000 (32,400 * $67)
Variable costs 1,522,800 (32,400 * $47)
Contribution $647,200 (32,400 * $20)
Fixed expenses 567,000
Net operating income $80,200
1-b. Degree of Operating Leverage = Contribution/Net operating income
= 8.07
The expected percentage increase in net operating income for next year
= 235.3%
Explanation:
a) Data and Calculations:
Last year's figures:
Sales = 32,400 games
Selling price per game = $67
Variable cost per game = $47
Fixed expenses = $567,000 per year
1-a. Contribution-Format Income Statement
For the last year ended December 31
Sales revenue $2,170,000 (32,400 * $67)
Variable costs 1,522,800 (32,400 * $47)
Contribution $647,200 (32,400 * $20)
Fixed expenses 567,000
Net operating income $80,200
1-b. Degree of Operating Leverage = Contribution/Net operating income
= $647,200/$80,200 = 8.07
2. Next year:
Sales = 41,796 games
Sales revenue = $2,800,332 (41,796 * $67)
Variable cost = 1,964,412 (41,796 * $47)
Contribution = $835,920
Fixed costs = 567,000
Net operating income $268,920
The expected percentage increase in net operating income for next year
Increase in net operating income = $188,720 ($268,920 - $80,200)
= $188,720/$80,200 * 100 = 235.3%
Good interpersonal communication skills can prevent negativity, confusion, conflict and
profitability
an adverse affect to the company's bottom line
low turnover
Answer:
an adverse effect on the company's bottom line
Explanation:
Given that profitability means the company is making success in terms of sales, and low turnover means, the company is having a lower number of employees leaving the company over a specific period compared to the number of employees recruited.
Therefore, Good interpersonal communication skills can prevent negativity, confusion, conflict and
an adverse effect on the company's bottom line.
They could increase Marco's motivation by:
A- Giving Marco the job title "Director of Strength and Conditioning"
B- Confirming that if more clients sign up with Marco, he'll get a bonus at the end of the year
C- Telling Marco he has more expertise than any other trainer at the gym
D- Reviewing fitness data on Marco's clients that show his work has been improving their health
Answer:
B
Explanation:
moneys always good motivation
Essence of Skunk Fragrances, Ltd., sells 5,750 units of its perfume collection each year at a price per unit of $445. All sales are on credit with terms of 1/10, net 40. The discount is taken by 35 percent of the customers.
Required:
What is the amount of the company's accounts receivable?
Answer:
The amount of the company's accounts receivable is $2,558,750.
Explanation:
Accounts Receivables are amounts owed to the company. They are measured at amounts that the company expects to be entitled to after a sale.
The sale journal is :
Debit : Accounts Receivables (5,750 units x $445) $2,558,750
Credit : Sales Revenue (5,750 units x $445) $2,558,750
nswer the question on the basis of the following cost data. Output Average Fixed Cost Average Variable Cost 1 $50.00 $100.00 2 25.00 80.00 3 16.67 66.67 4 12.50 65.00 5 10.00 68.00 6 8.37 73.33 7 7.14 80.00 8 6.25 87.50 If the firm closed down in the short run and produced zero units of output, its total cost would be Multiple Choice $0. $50. $150. $100.
Answer:
The correct answer is $50.
Explanation:
When the company produces zero units, the only costs that it would incur will be the fixed costs. We need to determine the total fixed costs:
Total fixed costs= Unitary fixed costs*number of units
Total fixed costs= 50*1= $50
Total fixed costs= 25*2= $50
Total fixed cost= 16.67*3= $50
Total fixed cost= 12.50*4= $50
And so on...
On a unitary basis, the fixed costs decrease with production. On a total basis, it remains constant.
Production= 0
Fixed cost= $50
if your credit card is $10,275 and you pay the full balance before the bill is due, how much will you pay in interest
Answer:
you do not pay interest on any money that does not carry over till the next month. if your balance is zero theres no interest
Explanation:
you only pay on a balance the % per dollar to the card . so if the card charges 10% on 100$ if your balance is 100$ you will owe 110$ on your next billing cycle
Brainstorming helps coworkers
feel respected
free to share their voice
all the answers are helpful in brainstorming
try out new ideas for validity
Answer:
free to share their voice
Explanation:
Brainstorming helps coworkers "free to share their voice."
This is because Brainstorming is an act in which people or coworkers or employees come together to share varying thoughts, ideas, and opinions about a particular topic or issue to solve the problem involved.
It is an informal way of getting ideas to solve issues.
is Company uses an ABC system. Which of the following statements is/are correct with respect to ABC? I. All cost allocation bases used in ABC systems are cost drivers. II. ABC systems are useful in manufacturing, but not in merchandising or service industries. III. ABC systems can eliminate cost distortions because ABC develops cost drivers that have a cause-and-effect relationship with the activities performed.
Answer:
I. All cost allocation bases used in ABC systems are cost drivers.
III. ABC systems can eliminate cost distortions because ABC develops cost drivers that have a cause-and-effect relationship with the activities performed.
Explanation:
I. is TRUE since the basis of ABC costing is determining, quantifying, and using cost drivers to allocate overhead costs.
III, is TRUE since the advantage of ABC costing is allocating costs based on cause and effect relationships.
II. ABC systems are useful in manufacturing, but not in merchandising or service industries. ⇒ FALSE
ABC costing can also be used for merchandising and service industries, although, it is mostly used in manufacturing businesses.Kampus Corporation had the following eight investment transactions or events:
Jan 1 Purchased Argon Co. bonds for $10,000 cash. (Purchase is considered a short-term investment in available-for-sale (AFS) debt securities.)
Jan 3 Purchased 1,200 shares of Elmer, Inc. for $36,000 cash. (Purchase is considered a long-term stock investment with insignificant influence.)
Mar 31 Received cash dividend of $0.25 per share from Elmer, Inc.
Jun 1 Purchased 5,000 shares of Logan, Inc. for $60 per share. These shares represent a 40% ownership in Logan, Inc.
Sep 30 Received cash dividend of $2 per share from Logan, Inc.
Dec 31 Logan, Inc. reported net income of $150,000 for the year.
Dec 31 As of December 31, the Argon Co. bond had a fair (market) value of $12,000.
Dec 31 As of December 31, the Elmer, Inc. stock had a fair (market) value of $25 per share.
Required:
Prepare the journal entries Kampus Corporation should record for these transactions and events.
Answer:
Kampus Corporation
Journal Entries:
Jan 1 Debit Bonds Receivable (Argon Co.) $10,000
Credit Cash $10,000
To record a short-term investment in available-for-sale (AFS) debt securities.)
Jan 3 Debit Investments (Long-term) in Elmer, Inc. $36,000
Credit Cash $36,000
To record the long-term investment (1,200 shares of Elmer, Inc. at $30 each.)
Mar 31 Debit Cash $300
Credit Dividend Received $300
To record dividend received from Elmer's investment
($0.25 per share of 1,200 shares).
Jun 1 Debit Investment in Logan, Inc. $300,000
Credit Cash $300,000
To record the investment in 5,000 shares of $60 per share, representing a 40% equity ownership.
Sep 30 Debit Cash $10,000
Credit Investment in Logan, Inc. $10,000
To record dividend received from investment in Logan, Inc. ($2 per share of 5,000 shares).
Dec 31 Debit Investment in Logan, Inc. $60,000
Credit Retained Earnings $60,000
To record 40% share of the Net income of $150,000 in Logan, Inc.
Dec 31 No Journal Required: Argon Co. bond had a fair (market) value of $12,000.
Dec 31 Debit Unrealized Loss from Investment in Elmer, Inc. $6,000
Credit Investment in Elmer, Inc. $6,000
To record $5 lost in the (market) value of $25 per share.
Explanation:
a) Data and Analysis:
Jan 1 Bonds Receivable (Argon Co.) $10,000 Cash $10,000
a short-term investment in available-for-sale (AFS) debt securities.)
Jan 3 Investments (Long-term) in Elmer, Inc. $36,000 Cash $36,000 1,200 shares of Elmer, Inc. at $30 each.
Mar 31 Cash $300 Dividend Received $300
$0.25 per share of 1,200 shares.
Jun 1 Investment in Logan, Inc. $300,000 Cash $300,000
5,000 shares of $60 per share, represent a 40% ownership.
Sep 30 Cash $10,000 Dividend Received $10,000
$2 per share of 5,000 shares.
Dec 31 Investment in Logan, Inc. $60,000 Retained Earnings $60,000
40% share of the Net income of $150,000 in Logan, Inc.
Dec 31 No Journal Required: Argon Co. bond had a fair (market) value of $12,000.
Dec 31 Unrealized Loss from Investment in Elmer, Inc. $6,000 Investment in Elmer, Inc. $6,000 (market) value of $25 per share.
What do Media Salespeople do?
A. They sell space at sport events.
B. They sell advertising space to different companies.
C. They sell-media related products online.
D. They sell websites to media companies.
Answer:
correct answer is B-they sell advertisement space to different companies
Explanation:
Identify a product you use every day. Assume you are the marketer of the product and want to convey the ways your product differs from competing products in the marketplace. Create a differentiation strategy to promote your product and create a competitive advantage
Answer:
Being a marketer for a product like Nike shoe, here, Nike shoe is different from other shoes as this shoe has unique brand value include swoosh logo, design of the shoe that could be customized, highly comfortable for various.
Job 412 was one of the many jobs started and completed during the year. The job required $9,500 in direct materials and 35 hours of direct labor time at a total direct labor cost of $10,400. If the job contained four units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer
Answer:
The appropriate answer is "$8,457,50".
Explanation:
The given values are:
Direct material cost,
= $9,500
Direct labor cost,
= $10,400
Units completed in job 412,
= 4
Now,
The total cost for completion of job 412 will be:
= [tex]Direct \ materials \ cost + Direct \ labor \ costs[/tex]
On substituting the values, we get
= [tex]9,500 + 10,400[/tex]
= [tex]19,900[/tex] ($)
Unit produced cost will be:
= [tex]\frac{19,900}{4}[/tex]
= [tex]4,975[/tex] ($)
70% of unit produced cost will be the profit margin, then
= [tex]70 \ percent\times 4,975[/tex]
= [tex]3,482.50[/tex] ($)
hence,
The price charged to the customer will be:
= [tex]Unit \ product \ cost + Profit \ margin[/tex]
On substituting the values, we get
= [tex]4,975 + 3,482.50[/tex]
= [tex]8,457,50[/tex] ($)
Satka Fishing Expeditions, Inc., recorded the following transactions in July
1. Provided an ocean fishing expedition for a credit customer, payment is due August 10
2. Paid Marine Service Center for repairs to boats performed in June. (In June, Satka Fishing Expeditions, Inc., had received and properly recorded the invoice for these repairs.)
3. Collected the full amount due from a credit customer for a fishing expedition provided in June.
4. Recelved a bill from Baldy's Bait Shop for bait purchased and used in July. Payment is due August 3
5. Purchased a new fishing boat on July 28, paying part cash and issuing a note payable for the balance. The new boat is first scheduled for use on August 5
6. Declared and paid a cash dividend on July 31
Indicate the effects that each of these transactions will have upon the following six total amounts in the company's financial statements for the month of July.
Choose I for increase, D for decrease, and NE for no effect in the column headings below to show the effects of the above transactions.
Answer:
Satka Fishing Expeditions, Inc.
Indication of the effects that each of these transactions will have upon the following six total amounts in the company's financial statements for the month of July:
Transaction Income Statement Balance Sheet
Revenue - Expenses = Net Income Assets = Liabilities + Equity
1. I NE I I I
Accounts Receivable and Sales Revenue
2. NE NE NE D D NE
Accounts Payable and Cash
3. NE NE NE NE (I and D) NE NE
Cash and Accounts Receivable
4. NE I D NE I D
Supplies Expenses and Accounts Payable
5. NE NE NE I/D I NE
Boat Purchased, Cash and Note Payable
6. NE NE D NE NE D
Retained Earnings and Cash
Explanation:
a) Data and Transaction Analysis:
1. Accounts Receivable and Sales Revenue
2. Accounts Payable and Cash
3. Cash and Accounts Receivable
4. Supplies Expenses and Accounts Payable
5. Boat Purchased, Cash and Note Payable
6. Retained Earnings and Cash
b)
Key:
I = increase
D = decrease
NE = no effect
No. 3 will increase the assets (cash) by the amount and decrease the assets (accounts receivable) by the same amount. Overall, there will be no effect as the increase cancels the decrease equally.
The _____ the distance between the time of the event and the time the client knows about the events, the greater _____. greater; the probability of achieving the project goals greater; the likelihood of satisfying the client lesser; the client's doubt in the project team's ability to do the task lesser; the frustration of the client greater; the client's frustration and mistrust
Answer:
greater; the client's frustration and mistrust.
Explanation:
Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.
The fundamentals of Project Management includes;
1. Project initiation
2. Project planning
3. Project execution
4. Monitoring and controlling of the project
5. Adapting and closure of project.
It is very important and essential that project managers in various organizations, businesses and professions adopt the aforementioned fundamentals in order to successfully achieve their aim, objectives and goals set for a project.
Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.
The greater the distance between the time of the event and the time the client knows about the events, the greater the client's frustration and mistrust. Thus, project managers are advised to reduce a client's frustration and enhance trust by reducing the distance between the time of the event and the time the client knows about the events i.e timely dissemination of informations to the client.
What do we call the principle that costs of production will increase by the inefficient reallocation of specialized resources for the production of additional goods for which there sources are not well suited?
A the law of natural economics
B the law of market regulation
C the law of macro-economic control
D the law of increasing opportunity costs
Answer:
the law of market regulation
Explanation:
i did this in my business class
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 350 Revenue ($390.00q) $ 136,500 Expenses: Wages and salaries ($11,100 + $120.00q) 53,100 Supplies ($5.00q) 1,750 Equipment rental ($2,500 + $25.00q) 11,250 Insurance ($4,100) 4,100 Miscellaneous ($520 + $1.42q) 1,017 Total expense 71,217 Net operating income $ 65,283 During May, the company’s actual activity was 340 diving-hours. Required: Prepare a flexible budget for May. (Round your answers to the nearest whole number.)
Answer:
Puget Sound Divers
Puget Sound Divers Planning and Flexible Budgets
For the Month Ended May 31
Planning Flexible
Budget Budget
Budgeted diving-hours (q) 350 340
Revenue ($390.00q) $ 136,500 $132,600
Expenses:
Wages and salaries 53,100 51,900
Supplies ($5.00q) 1,750 1,700
Equipment rental 11,250 11,000
Insurance ($4,100) 4,100 4,100
Miscellaneous 1,017 1,003
Total expense 71,217 69,703
Net operating income $ 65,283 $ 62,897
Explanation:
a) Data and Calculations:
Puget Sound Divers Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q) 350
Revenue ($390.00q) $ 136,500
Expenses:
Wages and salaries ($11,100 + $120.00q) 53,100
Supplies ($5.00q) 1,750
Equipment rental ($2,500 + $25.00q) 11,250
Insurance ($4,100) 4,100
Miscellaneous ($520 + $1.42q) 1,017
Total expense 71,217
Net operating income $ 65,283
Flexing the budget with actual activity of 340:
Revenue ($390.00q) $ 136,500/350 * 340 = $132,600
Expenses:
Wages and salaries ($11,100 + $120.00 * 340) = $51,900
Supplies ($5.00q) 1,750/350 * 340 = $1,700
Equipment rental ($2,500 + $25.00 * 340 = $11,000
Miscellaneous ($520 + $1.42 * 340 = $1,003
Budgeted amount: 0.5 machine hours per (MH) unit Variable overhead rate is $15 per MH Fixed overhead rate is $40 per MH Budgeted fixed overhead is $600,000 Actual amounts: Variable overhead incurred is $190,000 Fixed overhead incurred is $630,000 MH used is 11,000 Actual output is 20,000 units What is the Fixed Overhead Volume Variance
Answer:
Fixed overhead volume variance = $200,000 Favorable
Explanation:
The fixed overhead volume variance is the difference between the actual and budgeted production unit multiplied by the standard fixed production overhead cost per unit
Units
Budgeted units 15,000
Actual units 20,000
Variance 5,000
Fixed overhead rate per unit × $40
Fixed overhead volume variance $200,000
Blossom Company has the following inventory data: July 1 Beginning inventory 35 units at $22 $770 7 Purchases 124 units at $24 2976 22 Purchases 18 units at $26 468 $4214 A physical count of merchandise inventory on July 30 reveals that there are 57 units on hand. Using the LIFO inventory method, the amount allocated to ending inventory for July is
Answer:
Ending invenory= $1,298
Explanation:
Giving the following information:
July 1 Beginning inventory 35 units at $22 $770
July 7 Purchases 124 units at $24 $2,976
July 22 Purchases 18 units at $26 $468
A physical count of merchandise inventory on July 30 reveals that there are 57 units on hand.
To calculate the ending inventory using the LIFO (last-in, first-out) method, we need to use the cost of the firsts units incorporated into inventory:
Ending inventory= 35*22 + 22*24
Ending invenory= $1,298
School band members need to raise money for new uniforms. Some members want to sell energy drinks at a football game, but others want to organize a car wash in the school parking lot. Based on the concept of scarcity, which thoughts must drive their decision making process?
Answer:
the answer is D. Are there enough volunteers to work a car wash?
Explanation:
just took quiz
Answer:
D. Are there enough volunteers to work a car wash?
Explanation:
The 2017 and 2016 balance sheets of Rabb Corporation follow. The 2017 income statement is also provided. Rabb had no noncash investing and financing transactions during 2017. During the year, the company sold equipment for $15,100, which had originally cost $13,500 and had a book value of $10,500. The company did not issue any notes payable during the year but did issue common stock for $31,000. The company purchased plant assets and long-term investments with cash.
Requirements
1. Prepare the statement of cash flows for RabbRabb Corporation for 20172017 using the indirect method.
2. Evaluate the company's cash flows for the year. Discuss each of the categories of cash flows in your response.
Answer:
I looked for the missing information (IS & BS) since the information was missing
Statement of cash flows
Cash flows from operating activities:
Net income $183,500
Adjustments to new income
Depreciation $5,900
Gain on sale of equipment ($4,600)
Increase in accounts receivable ($3,200)
Decrease in inventory $6,500
Increase in prepaid insurance ($700)
Decrease in account payable ($2,600)
Decrease in wages payable ($4,400)
Increase in interest payable $2,100
Increase in taxes payable $5,400
Decrease in accrued expenses payable ($4,000)
Total cash flow provided by operating activities $183,900
Cash flow from investing activities:
Cash provided by sale of equipment $15,100
Cash paid for investments ($117,000)
Cash paid for P, P & E ($27,500)
Total cash flow from investing activities ($129,400)
Cash flow from financing activities:
Cash paid for long term debt ($34,000)
Dividends paid ($22,300)
Common stocks issued $31,000
Total cash flow from financing activities ($25,300)
Net increase in cash $29,200
Beginning cash balance $20,500
Ending cash balance $49,700
Which of the following statements is CORRECT?
a. Suppose you are managing a stock portfolio, and you have information that leads you to believe the stock market is likely to be very strong in the immediate future. That is, you are convinced that the market is about to rise sharply. You should sell your high-beta stocks and buy low-beta stocks in order to take advantage of the expected market move.
b. Collections Inc. is in the business of collecting past-due accounts for other companies, i.e., it is a collection agency. Collections' revenues, profits, and stock price tend to rise during recessions. This suggests that Collections Inc.'s beta should be quite high, say 2.0, because it does so much better than most other companies when the economy is weak.
c. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.
d. If the market risk premium remains constant, but the risk-free rate declines, then the required returns on low-beta stocks will rise while those on high-beta stocks will decline.
e. You think that investor sentiment is about to change, and investors are about to become more risk averse. This suggests that you should rebalance your portfolio to include more high-beta stocks
Answer: C. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.
Explanation:
From the options given, the correct option is option C "Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period".
Option A is wrong because when there is information that a particular stock will be strong in the future, one should not sell your high-beta stocks and buy low-beta stocks rather the low best stocks should be sold and high beta stocks should be bought.
Option B is wrong because during recession, collections' revenues, profits, and stock price tend to fall and not rise. During recession, there is decrease in economic growth, unemployment and other negative effects in the economy.
Option D and E are wrong as well as the reverse is the case in both situations. The correct option is C.
Kyle owned a small business that sold and repaired several styles of bicycles. Last month, Kyle had sales of $15,000 and the costs of operating his business were $12,300.
Which of the following is true about Kyle's business?
•
The business earned a profit.
•
The business should focus on expansion.
•
The business experienced a loss.
•
The business is not capitalizing on a need
Answer:
The business earned a profit.
Perez Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 2,200 pagers. Unit-level manufacturing costs are expected to be $32. Sales commissions will be established at $2.20 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($72,000), rent on the manufacturing facility ($62,000), depreciation on the administrative equipment ($15,600), and other fixed administrative expenses ($77,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 6,200 modems and 2,200 pagers). Required a. Determine the per-unit cost of making and selling 2,200 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Assuming the pagers could be sold at a price of $46 each, should Perez make the pagers
Answer and Explanation:
a. The computation of the per unit cost is shown below:
= Manufacturing cost per unit + sales commission per unit
= $32 + $2.20
= $34.20
Here we just add the two cost so that the per unit cost could come
b. Yes it should make the pagers as the cost per unit would be lower than the selling price i.e, $46
Therefore the above should be relevant for the given situation
What is the the impact of corruption on business cycle
Answer:
Corruption diverts talent and resources, including human resources, towards “lucrative” rent-seeking activities, such as defence, rather than productive activities. business, ultimately raising production costs and reducing the profitability of investments. human capital.
Sunland Company just began business and made the following four inventory purchases in June: June 1 153 units $1071 June 10 204 units 1632 June 15 204 units 1836 June 28 153 units 1530 $6069 A physical count of merchandise inventory on June 30 reveals that there are 204 units on hand. Using the average cost method, the amount allocated to the ending inventory on June 30 is
Answer:
the ending inventory is $1,734
Explanation:
The computation of the amount allocated to the ending inventory is shown below:
But before that the average per unit is
= Total amount ÷ total units
= $6,069 ÷ (153 + 204 + 204 + 153)
= $8.5
Since the ending inventory units is 204 units
So, the ending inventory is
= $8.5 ×204 units
= $1,734
hence, the ending inventory is $1,734
The total cost of producing q units of a certain product is described by the function C = 4,000,000 + 300q + 0.01q2 where C is the total cost stated in dollars. (1) How many units should be produced in order to minimize the average cost per unit? (2) What is the minimum average cost per unit? (3) What is the total cost of production at this level of output? Make sure to include appropriate units.
Answer:
(1) 20,000 units should be produced in order to minimize the average cost per unit.
(2) The minimum average cost per unit is $700 per unit.
(3) The total cost of production at this level of output is $14,000,000.
Explanation:
The given total cost function is correctly stated as follows:
C = 4,000,000 + 300q + 0.01q^2 …………………………… (1)
(1) How many units should be produced in order to minimize the average cost per unit?
AC = Average cost per unit = C / q
Substituting for C from equation (1), we have:
AC = (4,000,000 + 300q + 0.01q^2) / q …………………. (2)
Marginal cost can be obtained by taking the derivative of equation (1) as follows:
MC = C’ = 300 + (2 * 0.01)q
MC = 300 + 0.02q …………………………………………. (3)
AC is minimum when MC = AC. Therefore, equate equations (2) and (3) and solve for q as follows:
300 + 0.02q = (4,000,000 + 300q + 0.01q^2) / q
(300 + 0.02q)q = 4,000,000 + 300q + 0.01q^2
300q + 0.02q^2 = 4,000,000 + 300q + 0.01q^2
300q + 0.02q^2 - 300q - 0.01q^2 = 4,000,000
0.01q^2 = 4,000,000
q^2 = 4,000,000 / 0.01
q^2 = 400,000,000
q = 400,000,000^(1/2)
q = 20,000 units
Therefore, 20,000 units should be produced in order to minimize the average cost per unit.
(2) What is the minimum average cost per unit?
Substituting q = 20,000 into equation (2), we have:
AC = (4,000,000 + (300 * 20,000) + (0.01 * 20,000^2)) / 20,000
AC = $700 per unit
Therefore, the minimum average cost per unit is $700 per unit.
(3) What is the total cost of production at this level of output?
Substituting q = 20,000 into equation (1), we have:
C = 4,000,000 + (300 * 20,000) + (0.01 * 20,000^2)
C = $14,000,000
Therefore, the total cost of production at this level of output is $14,000,000.
Interest rates and decisions
Suppose that a firm is facing an upward-sloping yield curve and needs to borrow money to invest in production. Does this mean that the firm should consider borrowing only at short-term rates?
a. No, the firm needs to take the volatility of short-term rates into account.
b. No, an upward-sloping yield curve means that the firm will get a lower interest rate if it uses long-term financing
c. Yes, using short-term financing will give the firm the lowest possible interest rate over the life of the project.
Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine whether yields will increase or decrease and whether it will be more expensive or less expensive, as compared to other players in the market, for a company to borrow money from the bond market.
Scenario Impact on Yield Cost of Borrowing Money
from Bond Markets
ABC Real Estate is a commercial real estate firm that primarily uses short-term financing, while its competitors primarily use long-term financing. Interest rates have recently increased dramatically. Decrease More expensive Ziffy Corp.’s credit rating was downgraded from AAA to A. Bellgotts Inc. has increased its market share from 15% to 37% over the last year while maintaining a profit margin greater than the industry average. Previously, Ferro Co. had only used short-term debt financing. The company now finances its current assets such as inventories and receivables with short-term debt, and it finances its fixed assets such as buildings and equipment with long-term debt.
Answer:
a. No, the firm needs to take the volatility of short-term rates into account.
Explanation:
Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.
Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $226,445, net annual cash flows $40,500, and present value factor of cash inflows for 10 years is 5.89 (rounded). (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).) Determine the net present value, and indicate whether the investment should be made.
Answer:
Hsung Company
a. The net present value is:
= $12,100.
b. Since the investment could yield a net present value of $12,100, the investment should be made.
Explanation:
a) Data and Calculations:
Cash cost of proposed capital investment = $226,445
Net annual cash inflows = $40,500
Present value factor of cash inflows for 10 years = 5.89 (rounded)
Present value of net annual cash inflows = $238,545 ($40,500 * 5.89)
The net present value of the proposed capital project = Present value of net annual cash inflows minus the initial investment cost
= $12,100 ($238,545 - $226,445)
Answer:
12100
Explanation:
40500*5.89=238545
238545-226445=12100
12100
Prepare a bank reconciliation for Cole Co. assuming the following as of May 31. Use the worksheet provided in the Ch 7 Module: 1) The company's cash account as a debit balance of: $95,250 2) The bank statement shows a balance of: $82,500 3) April 30 outstanding checks: $11,317 5) A credit memorandum was received by the bank, but not recorded by Cole Co. by May 31 a) Cash collected by the bank: $18,000 b) Collection fee deducted by bank: $45 6) Check 1115 was written and drawn for $1,350 but was erroneously entered in the accounting records as $1,050. The check was for rent. 7) May 31st daily cash sales were deposited but did not appear on the May 31 bank statement. $41,750 8) Interest earned, but not recorded:
Answer:
Cole Co.
Bank Reconciliation Statement
Balance as per cash account adjusted $112,933
add uncredited deposits 11,317
less Outstanding checks -41,750
Balance as per bank statement $82,500
Explanation:
a) Data and Calculations:
Cash account debit balance = $95,250
Bank statement balance = $82,500
Outstanding checks = $11,317
Credit memorandum $18,000
Collection fee $45
Check 1115 for Rent Expense of $1,350 transposed as $1,050 = $300 ($1,350 - $1050)
Uncredited deposits = $41,750
Interest earned = $28
Cash Account Adjustment:
Cash account debit balance $95,250
Debit:
Credit memorandum 18,000
Interest earned 28
Credit:
Collection fee -45
Rent Expense (understated) -300
Adjusted cash account balance $112,933
b) The bank reconciliation statement above was prepared after adjusting the cash account with items that were recorded by the bank but not recorded by Cole Co. and other misstatements. With the adjusted cash account balance, the bank reconciliation was then carried out with the items that were not recorded by the bank. The resulting figure should agree with the bank statement balance.