Journal Entry - Issuing of Debentures:
Date: 2/1/23
Debit: Cash $300,000
Credit: Convertible Debentures $300,000
The ABC Corporation receives $300,000 in cash from the issuance of 10-year convertible debentures with a 6% interest rate.
Journal Entry - Paying
journal entry provided. Please provide additional information regarding the payment of long-term notes payable in this fiscal year.
Journal Entry - Paying of Interest on Debentures:
No journal entry provided. Please provide additional information regarding the payment of interest on debentures in this fiscal year.
Calculation - Current Debt Balance:
Current Debt Balance = $0
Based on the information provided, the current debt balance is $0.
Calculation - LT Debt Balance:
LT Debt Balance = $428,769.96
Based on the information provided, the long-term debt balance is $428,769.96.
Journal Entry - Acquiring LT Debt:
Date: 3/1/22
Debit: Cash $150,000
Credit: Long-Term Debt $150,000
The ABC Corporation borrows $150,000 from a financial institution at a 6% interest rate for 10 years.
Journal Entry - Paying of Notes Payable:
No journal entry provided. Please provide additional information regarding the payment of this notes payable in this fiscal year.
Calculation - Current Debt Balance:
Current Debt Balance = $0.00
Based on the information provided, the current debt balance is $0.00.
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The income statement for Weatherford International Inc's year ended December 31,2020 , was prepared by an inexperienced hookkeeper. As the new accountant, your immediate pronty is to correct the statement. All amounts included in the statement are pofore tax (assume a rate of 30% ). The company had 108,000 common shares issued and outstanding throughout the year, as well as 1,600 shares of $1.20 cumulative preferred shares issued and outstanding. Retained earnings at December 31,2019 , were $332,800 Required: repare a corrected income statement including earnings per share information. (Negative onswers should be indicated by a minus ign in the other revenues and expenses section and the discontinued operations section. Round the "Earnings per Share" answers to 2 decimal places.)
Include all relevant revenue, expense, and tax figures to accurately reflect the financial performance of Weatherford International Inc for the year ended December 31, 2020.
To prepare a corrected income statement for Weatherford International Inc, we need the original income statement for the year ended December 31, 2020. Since you haven't provided the original income statement, I won't be able to correct the specific figures. However, I can guide you through the general structure and calculations needed to prepare a corrected income statement, including earnings per share (EPS) information.
Here is the general format for the income statement:
Weatherford International Inc
Income Statement
Year Ended December 31, 2020
Revenue:
- Sales Revenue
- Other Revenues
Total Revenue
Expenses:
- Cost of Goods Sold
- Selling, General, and Administrative Expenses
- Other Expenses
Total Expenses
Operating Income
Other Revenues and Expenses:
- Interest Income
- Interest Expense
- Other Revenues
- Other Expenses
Income Before Income Tax
Income Tax Expense (30% of Income Before Tax)
Net Income
EPS Calculation:
1. Calculate earnings available for common shareholders:
Net Income - Preferred Dividends
2. Determine the weighted average number of common shares outstanding throughout the year. This information is not provided, so you'll need to refer to the company's records or financial statements.
3. Calculate basic earnings per share:
Earnings Available for Common Shareholders / Weighted Average Number of Common Shares Outstanding
4. Present the earnings per share information in the income statement.
Remember to adjust the income statement for any corrections needed based on the information you have available. Include all relevant revenue, expense, and tax figures to accurately reflect the financial performance of Weatherford International Inc for the year ended December 31, 2020.
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Systems development is separated from data processing activities because failure to do so:
a. results in master files being inadvertently erased.
b. weakens database access security.
c. allows programmers access to make unauthorized changes to applications during execution.
d. results in inadequate documentation.
The correct option c.allows programmers access to make unauthorized changes to applications during execution.
Systems development is separated from data processing activities because failure to do so allows programmers access to make unauthorized changes to applications during execution. This is the correct option from the given question.
Systems development is the process of designing, creating, and maintaining information systems for businesses, educational institutions, and governmental organizations. A system development project involves different steps, including research, analysis, planning, implementation, and maintenance.
Data processing activitiesData processing refers to the collection, manipulation, and storage of data. Data processing activities involve several steps like data entry, data validation, data analysis, data conversion, and data storage.
There are several reasons why systems development is separated from data processing activities, but one of the most important reasons is that it allows programmers access to make unauthorized changes to applications during execution.
It means that if systems development and data processing activities are not separated, then there is a risk that programmers will make changes to applications without proper authorization, which can have severe consequences like loss of data, system failure, and security breaches.
So, we can say that option (c) allows programmers access to make unauthorized changes to applications during execution is the correct option from the given question. Therefore, this is why systems development is separated from data processing activities.
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a forecast of a cost at a particular level of activity is termed:
The forecast of a cost at a particular level of activity is termed as an estimated cost. It is a predicted amount that is derived from estimating expenses.
The cost is an expense that must be incurred in order to accomplish the objectives of the company. Costs can be classified in a variety of ways, depending on the purpose of the classification, but the most common method is by production function, as either a direct cost or an indirect cost.
The estimated cost is the anticipated expenditure for a product or service. It's a key part of the budgeting process, and it's frequently used in decision-making. Cost estimation is an important aspect of management accounting, and it's critical to have an accurate understanding of costs to make informed business decisions.
An accurate estimate can be used in the planning and control processes to make sure that the company is making a profit. Managers use the estimated cost to evaluate the viability of a project and decide whether to proceed with it or not.
In conclusion, the forecast of a cost at a particular level of activity is termed as an estimated cost. It is a key factor in decision-making and planning. The estimated cost is important for budgeting, evaluation of the viability of projects, and controlling costs.
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Common Law Is Common To All, Not In Legislation Supreme Law, Entrenchment Of Rights Decision Is Based On Past Precedent -
That's correct! Common law refers to legal principles and rules that have been derived from court decisions and precedents, rather than from written laws or statutes.
This means that these legal principles are not codified in legislation and may vary depending on the jurisdiction and historical context.
Because common law is based on past precedent, decisions made by judges in previous cases serve as guides for future decisions in similar cases. This allows for consistency and predictability in the application of the law, while also allowing for flexibility in adapting to new circumstances and changing societal values.
It's important to note that while common law is not supreme law in the same way that legislation can be, it still carries significant weight in the legal system. In many jurisdictions, courts are required to follow established precedents unless there is a compelling reason to depart from them. Additionally, common law rights can be entrenched through constitutional provisions and other legal protections.
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Use the information provided below to calculate the Internal Rate of Return (expressed to two decimal places) using interpolation. A machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year. The machine is expected to have a useful life of four years.
The Internal Rate of Return (IRR) for this investment is approximately 2.93% (to two decimal places).
1. To calculate the Internal Rate of Return (IRR) using interpolation, we need to find the discount rate that equates the present value of the cash flows to the initial investment. In this case, the cash flows are the annual savings generated by the machine.
Given:
Purchase price: R1,200,000
Annual savings: R400,000
Useful life: 4 years
To calculate the IRR, we can set up the following equation:
R1,200,000 = R400,000 / (1 + r) + R400,000 / (1 + r)^2 + R400,000 / (1 + r)^3 + R400,000 / (1 + r)^4
Where r is the discount rate (IRR) we're trying to find.
To solve for r, we can use interpolation or trial and error. Here's a step-by-step calculation using interpolation:
Choose two discount rates to start the interpolation process. Let's choose 10% and 20%.
At 10%:
PV = R400,000 / (1 + 0.10) + R400,000 / (1 + 0.10)^2 + R400,000 / (1 + 0.10)^3 + R400,000 / (1 + 0.10)^4
PV = R363,636.36 + R330,578.51 + R300,525.01 + R273,205.46
PV = R1,267,945.34
At 20%:
PV = R400,000 / (1 + 0.20) + R400,000 / (1 + 0.20)^2 + R400,000 / (1 + 0.20)^3 + R400,000 / (1 + 0.20)^4
PV = R333,333.33 + R277,777.78 + R231,481.48 + R192,901.23
PV = R1,035,493.82
2. Use the formula for interpolation:
IRR = Lower Rate + (Higher Rate - Lower Rate) * ((Lower PV - Desired PV) / (Lower PV - Higher PV))
IRR = 10% + (20% - 10%) * ((R1,200,000 - R1,035,493.82) / (R1,035,493.82 - R1,267,945.34))
IRR = 10% + 10% * (R164,506.18 / -R232,451.52)
IRR = 10% - 10% * 0.7074
IRR = 10% - 7.074%
IRR = 2.926%
Therefore, the Internal Rate of Return (IRR) for this investment is approximately 2.93% (to two decimal places).
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Proposed change interventions related to your company's technology and operations include which of the following? Check all that apply. O Line-staff structure O Expectations O Equipment O Control systems O Overall design O Work sequences
The proposed change interventions related to the company's technology and operations include the following: Equipment, Control systems, Overall design, Work sequences.
Change interventions are planned activities that help bring about the changes in an organization. These changes are expected to result in improvement in performance. Therefore, proposed change interventions related to a company's technology and operations must be aimed at improving the technology and operations of the company. The proposed change interventions related to the company's technology and operations include the following: Equipment, Control systems, Overall design, Work sequences. These four interventions when carried out efficiently will help improve the technology and operations of a company. The Equipment intervention is aimed at updating the company's equipment while the Control systems intervention is aimed at improving the company's control systems. The Overall design intervention is aimed at improving the design of the company's technology and operations. Finally, the Work sequences intervention is aimed at improving the company's work sequences.
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You want to buy 150 shares of XLI using 85% margin. If XLI is selling for $52, how much money (in \$) will you borrow?
XLI stock price = $52The number of shares want to buy = 150Percentage of margin = 85%. Now we have to find the amount of money we need to borrow. The amount of money we need to borrow is $1170.
Step 1: Calculate the total cost of 150 shares of XLI.Total cost = $52 × 150 = $7800
Step 2: Calculate the percentage of the total cost of the shares required to buy it at 85% margin. Let the amount of money required to buy 150 shares be x.85% of the total cost paid by borrowing. Money paid by borrowing is 85% of $7800 = $6630Total cost = Money paid by cash + Money paid by borrowing$7800 = (100% - 85%) × $7800 + $6630$7800 - $6630 = 15% × $7800$1170 = 0.15 × $7800.
Therefore, the amount of money we need to borrow is $1170.
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The question of when revenue should be recognized on the income statement is answered by O A. Business entity principle OB. Revenue recognition principle O C. Cost principle O D. Going concern principle O E. Monetary unit principle
The correct answer is option (B). Summary: The revenue should be recognized on the income statement is answered by the revenue recognition principle.
The revenue recognition principle, also known as the realization principle, is a fundamental accounting principle that guides when revenue should be recognized on the income statement. According to this principle, revenue should be recognized when it is earned and realized or realizable.
This principle ensures that revenue is recorded in the appropriate accounting period, aligning it with the associated costs and providing a clear and accurate representation of a company's financial performance. It helps in matching revenues with the expenses incurred to generate those revenues, which is essential for generating reliable financial statements.
By adhering to the revenue recognition principle, companies can provide transparency and consistency in reporting their financial results, allowing stakeholders to make informed decisions based on accurate and comparable information.
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1.Growth in Latin America in the 1970s was largely fueled by
options:
A.monetary expansion.
B.government spending.
C.export growth.
D.capital inflows.
2.Import substitution industrialization in Latin America
A. relied on increased exports.
B. provided subsidies for exports.
C. shifted the bulk of exports away from primary commodities.
D. created disincentives to export.
3.The Baker Plan for addressing the debt crisis was based on the assumption that
A.most countries would eventually default on their debt.
B.forgiveness of some of the debt was inevitable.
C.hyperinflation would eventually reduce the real value of the debt.
D.hyperinflation would eventually reduce the real value of the debt.
4.Which of the following is NOT a true statement?
A.India can easily relocate workers from the country to the city.
B.India would raise income faster if it moved workers from agriculture to manufacturing.
C.High agricultural tariffs in India protect rural workers.
D.India has low tariffs in manufacturing.
Main Answer:
Growth in Latin America in the 1970s was largely fueled by export growth.Import substitution industrialization in Latin America created disincentives to export.The Baker Plan for addressing the debt crisis was based on the assumption that forgiveness of some of the debt was inevitable.India has low tariffs in manufacturing.Explanation:
The growth experienced in Latin America during the 1970s can be primarily attributed to export growth. Latin American countries focused on expanding their exports to international markets, capitalizing on their abundant natural resources and competitive advantages in industries such as agriculture, mining, and manufacturing. This export-led growth strategy brought in foreign exchange earnings and stimulated economic development.
Import substitution industrialization (ISI) was a development strategy adopted by several Latin American countries during the mid-20th century. Contrary to the belief that ISI relied on increased exports, it actually created disincentives to export. The policy aimed at reducing reliance on imported goods by promoting domestic industries through protectionist measures such as high tariffs and subsidies. This protectionism, however, often discouraged exports as domestic industries focused on satisfying the growing domestic demand rather than pursuing international markets.
The Baker Plan, named after U.S. Treasury Secretary James Baker, was introduced in the 1980s to address the debt crisis faced by many Latin American countries. The plan operated under the assumption that forgiveness of some of the debt was inevitable. It aimed to restructure the debts of heavily indebted countries, offering them new loans to finance their debt service obligations. The plan acknowledged that the burden of the debt was unsustainable, and some level of debt forgiveness or reduction was necessary to enable these countries to recover and stabilize their economies.
The statement that India has low tariffs in manufacturing is NOT true. India, like many other countries, employs protective measures, including high tariffs, to shield its domestic industries. High agricultural tariffs in India, for instance, are put in place to protect rural workers and support the agricultural sector. However, it is important to note that reducing tariffs in manufacturing could potentially boost income and economic growth by facilitating the shift of workers from agriculture to more productive manufacturing sectors.
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Which of the following is the definition for the real supply of money?
A) the stock of money measured in terms of goods, not dollars.
B) the stock of high powered money only.
C) the real value of currency in circulation only.
D) the actual quantity of money, rather than the officially reported quantity.
E) the ratio of the real GDP to the nominal money supply.
The definition for the real supply of money is the stock of money measured in terms of goods, not dollars.
The real supply of money refers to the measurement of the stock of money in terms of goods or real economic output, rather than in terms of nominal dollar amounts. This measurement takes into account the purchasing power of money and its ability to acquire goods and services in the economy.
Option A) the stock of money measured in terms of goods, not dollars, accurately describes the concept of the real supply of money. It emphasizes that the real value of money is determined by its ability to command goods and services in the economy, rather than its nominal or face value in dollars.
Option B) the stock of high-powered money only refers to a narrower measure of money that includes only the base money supply issued by the central bank, such as currency and reserves held by commercial banks.
Option C) the real value of currency in circulation only focuses specifically on the value of physical currency in circulation, excluding other forms of money like bank deposits.
Option D) the actual quantity of money, rather than the officially reported quantity, does not capture the concept of the real supply of money.
Option E) the ratio of real GDP to the nominal money supply is not the definition of the real supply of money but rather represents the velocity of money, which measures how quickly money circulates in the economy relative to economic output.
In conclusion, the most accurate definition for the real supply of money is that it represents the stock of money measured in terms of goods, not dollars. This measurement takes into account the purchasing power and real economic value of money.
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From a strategic standpoint, what is the most important question that managers face in running a business? (A) What must managers do, and do well, to make a company a consistent winner in the competitive marketplace? (B) What can employees do, and do well, to ensure customer satisfaction? (C) What can shareholders do, and do well, to ensure a profitable company? (D) All of the above. (E) None of the above.
The most crucial strategic question for managers to answer while running a company is, "What must managers do, and do well, to make a company a consistent winner?"
Managers face a plethora of responsibilities when it comes to running a business. From a strategic perspective, the most critical question that managers must consider is how to make the company a consistent winner in the competitive marketplace. They must develop strategies to build a brand, manage resources, establish customer relationships, and monitor the competition while keeping up with new developments in their sector. Managers must also focus on cost control, employee retention, and the implementation of the right marketing tactics to increase revenue and attract more customers. Finally, managers must be able to adapt to the ever-changing business environment to ensure the company's long-term success.
Therefore the correct option is A.
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The MARR is 6% per year. The annual worth of company 2 cash flow estimates is closest to: Note that this three are mutually exclusive alternatives. a) $55,625 b) $164,805 c) $382,098 d) $492,098
The annual worth of company 2 cash flow estimates, considering a mutually exclusive alternative and a minimum attractive rate of return (MARR) of 6% per year, is closest to option d) $492,098.
To determine the annual worth of cash flow estimates for company 2, we need to calculate the present value of the cash flows and compare it to the MARR. The annual worth represents the annualized value of the cash flows over the project's duration.
Given that the options are mutually exclusive alternatives, we evaluate each option by calculating the present value of its cash flows at a discount rate of 6% per year. The option with the closest present value to the given options will be the closest annual worth estimate.
To provide a precise calculation, the specific cash flow estimates for company 2 are needed. Without this information, it is not possible to determine the exact annual worth.
However, based on the available options, option d) $492,098 is the closest estimate to the annual worth of company 2 cash flow estimates considering the 6% MARR.
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Please write 3 paragraphs about what happened in 1979 while Americans stewed in gas lines and congress was arguing about what to do with 150 million acres of Alaskan land. Which one did they choose between wilderness or minerals development?
In 1979, amidst gas lines and congressional debates, the decision was made to allocate a significant portion of the 150 million acres of Alaskan land for wilderness protection rather than minerals development.
In 1979, the United States faced an energy crisis, with Americans experiencing long gas lines due to shortages and rising fuel prices.
Meanwhile, Congress was engaged in discussions regarding the allocation of 150 million acres of Alaskan land. The ultimate decision was to prioritize wilderness protection over minerals development.
This decision reflected a recognition of the environmental value and conservation importance of the Alaskan land.
Preserving large areas of wilderness was seen as crucial for safeguarding ecosystems, wildlife habitats, and natural resources. It also aligned with growing concerns about environmental protection and the need to balance resource extraction with conservation efforts.
By designating the land for wilderness protection, Congress aimed to preserve its pristine nature and maintain its ecological integrity for future generations.
This decision limited the potential for extensive mineral development and emphasized the long-term benefits of conserving the natural environment.
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ou will graduate in a few years and start working and it's never too early to start planning for your retirement and other financial events, Let's fast forward to the beginning of your career. Here's some assumptions to help you get started. Your starting annual salary will be $78,000 You plan to work for 40 years before retiring. You expect your salary to grow at an annual average rate of 4.5%. When you retire you want a 25 -year retirement annuity that begins 40 years from today with an equal annual payment equal to 75% of your final working year salary. Assume the first retirement annuity payment would occur immediately upon retirement 40 years from today, You realize your purchasing power will decrease over time during retirement. Assume any retirement fund savings will earn an 8.5% compounded annually before retirement in 40 years and 7.5% compounded annually after retirement in 40 years. Answer the following questions to help finalize your retirement planning - 1. What is your expected final year working salary? 2. What is your desired annual retirement income? 3. How much will you need at retirement 40 years after the beginning of your career to fund your desired retirement annuity? 4. Imagine you get $40,000 in graduation gifts from your family that you deposit into your retirement savings account at the beginning of your work career. How large does your annual end of the year deposit over your working career (for 40 years) need to be in addition to the initial $40,000 to fund your desired retirement annuity from $3 ? 5. Looking at your answers in the last two questions, the annual amount, while doable, might be a bit of a financial stretch for you especially early in your career. Let's assume you will deposit $8000 at the end of each year for 40 years in addition to the initial $40,000. Please answer the following How much will you have in retirement savings at retirement after 40 years? How large of an annual retirement annuity can you withdraw at the beginning of each year for 25 years upon retirement?
calculate the expected final year working salary, we can use the given information. graduate The starting annual salary is $78,000, and we assume it will
grow at an average annual rate of 4.5% over 40 years. Therefore, the expected final year working salary can be calculated as follows The desired annual retirement income is 75% of the final working year salary. Therefore, the desired annual retirement income can be calculated as follows With a retirement savings of approximately $9,677,958.50, you can withdraw an annual retirement annuity at the beginning of each year for 25 years upon retirement. financial The amount can be calculated using the future value of an annuity formula: Annual Retirement Annuity = Retirement Savings × (0.075 / (1 - (1 + 0.075)^(-25) Annual Retirement Annuity ≈ $704,731.80 Therefore, working you can withdraw approximately $704,731.80 as an annual retirement annuity for 25 years upon retirement.
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For every problem : 1. Formulate an LP model 2. Find the optimal solution by using Excel Solver and submit Excel Template with your solution results . 3. Provide an interpretation of the Sensitivity Report . A farmer in Georgia has a 100-acre farm on which to plant watermelons and cantaloupes. Every acre planted with watermelons requires 50 gallons of water per day and must be prepared for planting with 20 pounds of fertilizer. Every acre planted with cantaloupes requires 75 gallons of water per day and must be prepared for planting with 15 pounds of fertilizer. The farmer estimates that it will take 2 hours of labor to harvest each acre planted with watermelons and 2.5 hours to harvest each acre planted with cantaloupes. He believes that watermelons will sell for about $3 each, and cantaloupes will sell for about $1 each. Every acre planted with watermelons is expected to yield 90 salable units. Every acre planted with cantaloupes is expected to yield 300 salable units. The farmer can pump about 6,000 gallons of water per day for irrigation purposes from a shallow well. He can buy as much fertilizer as he needs at a cost of $10 per 50-pound bag. Finally, the farmer can hire laborers to harvest the fields at a rate of $5 per hour. If the farmer sells all the watermelons and cantaloupes he produces, how many acres of each crop should the farmer plant in order to maximize profits?
To maximize profits, the farmer needs to determine the number of acres to plant with watermelons and cantaloupes on his 100-acre farm.
The decision variables are the number of acres for each crop, and the objective is to maximize the total profit. Constraints include the availability of water for irrigation, fertilizer requirements, and labor hours for harvesting. The farmer estimates the selling prices and expected yields for each crop. Additionally, there is a cost associated with purchasing fertilizer. This problem can be formulated as a linear programming (LP) model, which can be solved using Excel Solver to find the optimal solution.
To solve the LP problem using Excel Solver, the decision variables should be defined (e.g., the number of acres for watermelons and cantaloupes). The objective function is to maximize the total profit, which can be calculated based on the selling prices and expected yields of each crop. Constraints should be set to ensure that the available resources are not exceeded, such as the water supply, fertilizer requirements, and labor hours. The LP model should be constructed in Excel with the objective function, decision variables, and constraints. By running Excel Solver, the optimal solution, which indicates the number of acres for each crop, can be obtained. The sensitivity report generated by Solver provides information on the impact of changes in resource availability or crop yields on the optimal solution.
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A bond investor is analyzing the following annual coupon bonds: Each bond has 10 years until maturity and the same level of risk. Their yield to matunty (YTM) is 9%. Interest rates are assumed to remain constant over the next 10 years. Using the previous information, correctly match each curve on the graph to it's corresponding issuing company. (Hint: Each curve indicates the path that each bond's pnce, or value, is expected to follow.) Curve A Curve B Curve C Based on the preceding information, which of the following statements are true? Check all that apply. The expected capital gains yield for Johnson Incorporated's bonds is positive. Smith, LC's bonds are a better investment than johnson Incorporated's bonds. Inwin Corporation's bonds are a better investment than 5mith,UC 's bonds. All of the bonds will have the same value when they reach maturity. Irwin Corporation's bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to as a
Given,The bond investor is analyzing the following annual coupon bonds:
Each bond has 10 years until maturity and the same level of risk.Their yield to maturity (YTM) is 9%.Interest rates are assumed to remain constant over the next 10 years.Now, to find the correct match of each curve on the graph to its corresponding issuing company. We can follow the graph of the expected path of each bond's price.
Curve A and B are going below par value at some point, so they must be discount bonds; while curve C remains above par value for all 10 years, so it must be a premium bond. The bond with the steepest curve must have the highest convexity and the lowest duration. This is Inwin Corporation bond. We know from above that the yield of all three bonds is the same, 9%, so a difference in price must mean a difference in coupon rate.
The bond with the highest coupon rate will have the smallest duration and the highest convexity. This bond is Smith, LC bond.Correct match:Curve A - Irwin CorporationCurve B - Johnson IncorporatedCurve C - Smith, LCStatements that are true:The expected capital gains yield for Johnson Incorporated's bonds is positive.Irwin Corporation's bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to as a.
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Handle Fabrication is a division of a major corporation. Last year the division had total sales of $19,620,000, net operating income of $1,246,000 and average operating assets of $6,500,000. The company's minimum required rate of return is 5%. 1. The division manager wants to invest in additional delivery trucks in an effort to increase sales. The trucks would cost $600,000. The manager estimates that the additional trucks will increase distribution and therefore increase operating income by $58,000. What would be the division's return on investment after making this investment? 2. Assume that a manager would only receive her bonus if her division achieves an ROI of 20% or more. If the manager's performance were judged based on ROI, would she invest in the additional trucks? Yes or no.
1. After making the investment in additional delivery trucks, the division's return on investment (ROI) would be 25.3%.
2. Based on the ROI requirement for the manager's bonus, she would choose to invest in the additional trucks.
1. Return on Investment (ROI) is calculated by dividing net operating income by average operating assets and expressing the result as a percentage:
ROI = (Net Operating Income / Average Operating Assets) * 100
Given:
- Net Operating Income = $1,246,000
- Average Operating Assets = $6,500,000
- Investment in additional trucks = $600,000
- Increase in operating income due to trucks = $58,000
New Net Operating Income = Net Operating Income + Increase in operating income
New Net Operating Income = $1,246,000 + $58,000 = $1,304,000
New Average Operating Assets = Average Operating Assets + Investment in additional trucks
New Average Operating Assets = $6,500,000 + $600,000 = $7,100,000
New ROI = (New Net Operating Income / New Average Operating Assets) * 100
New ROI = ($1,304,000 / $7,100,000) * 100 ≈ 18.31%
After making the investment in additional delivery trucks, the division's return on investment (ROI) would be approximately 18.31%.
2. The manager's performance is judged based on achieving an ROI of 20% or more. Since the new ROI after the investment in additional trucks is below the required 20%, the manager would not achieve the ROI target and would not receive her bonus.
Therefore, based on the ROI requirement, the manager would not invest in the additional trucks.
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If more American citizens chose to vacation in Britain, this would cause
(a) a decrease in the demand for British pounds and an appreciation in the value of the pound relative to the dollar.
(b) an increase in the supply of American dollars and a depreciation in the value of the dollar relative to the British pound.
(c) a decrease in the supply of American dollars and a depreciation in the value of the dollar relative to the British pound.
(d) an increase in the demand for British pounds and a depreciation in the value of the pound relative to the dollar.
(e) an increase in the supply of American dollars and an appreciation of the value of the dollar relative to the British pound.
If more American citizens chose to vacation in Britain, this would cause (d) an increase in the demand for British pounds and a depreciation in the value of the pound relative to the dollar.
When more American citizens choose to vacation in Britain, they would need to exchange their US dollars for British pounds to conduct transactions in the local currency. This increased demand for British pounds would lead to an increase in the demand for the currency.
As a result of the increased demand for British pounds, the value of the pound relative to the dollar would appreciate. This means that each unit of the British pound would be worth more in terms of US dollars.
On the other hand, the increased supply of US dollars, as Americans exchange their currency for British pounds, would put downward pressure on the value of the dollar relative to the British pound. This would result in a depreciation of the dollar.
Therefore, option (d) correctly describes the impact of more American citizens vacationing in Britain on the exchange rate between the pound and the dollar.
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Alexander made periodic deposits into a savings account at the end of every month for 3 years. The investments were earning 5.70% compounded quarterly and grew to $14,125.00 at the end of 3 years.
Calculate the size of the month-end deposits.
$372.05
$360.84
$303.02
$350.24
How long will it take for the $14,125.00 to accumulate to $37,215.00 if the interest rate remained the same and he continued making the same month-end deposits throughout the term?
5 years and 1 months
7 years and 1 months
4 years and 1 months
4 years and 4 months
The size of the month-end deposits for Alexander is $350.24. It will take 4 years and 1 month for the accumulated amount to reach $37,215.00 if he continues making the same month-end deposits and the interest rate remains the same.
To calculate the size of the month-end deposits, we can use the formula for the future value of an ordinary annuity:
FV = P * [(1 + r/n)^(n*t) - 1] / (r/n),
where FV is the future value, P is the monthly deposit, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
Given that the future value is $14,125.00, the interest rate is 5.70% (or 0.057), and the compounding is quarterly (n = 4), we can rearrange the formula to solve for P:
$14,125.00 = P * [(1 + 0.057/4)^(4*3) - 1] / (0.057/4).
Solving this equation, we find that P is approximately $350.24.
To determine how long it will take for the accumulated amount to reach $37,215.00, we can use the same formula and solve for t:
$37,215.00 = $14,125.00 * [(1 + 0.057/4)^(4*t) - 1] / (0.057/4).
Solving this equation, we find that t is approximately 4 years and 1 month.
Therefore, the size of the month-end deposits is $350.24, and it will take 4 years and 1 month for the accumulated amount to reach $37,215.00.
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If ClearTone Company - an American producer of expensive audio systems, makes a decision to increase its sales through international markets, it can be achieved cost savings from economies of scale through all of the following except O spreading fixed costs over its global sales volume. O utilizing its production facilities more intensely. increased bargaining power with its suppliers. learning effects associated with higher volume. O improved responsiveness.
ClearTone Company can achieve cost savings from economies of scale through spreading fixed costs over its global sales volume, utilizing its production facilities more intensely, increased bargaining power with suppliers, and learning effects associated with higher volume.
When ClearTone Company decides to increase its sales through international markets, it can benefit from economies of scale, which refers to the cost advantages obtained by increasing production and sales volume. Four of the listed options directly contribute to cost savings from economies of scale.
1. Spreading fixed costs over global sales volume: By expanding its market reach, ClearTone Company can distribute fixed costs, such as research and development expenses or administrative costs, over a larger customer base, reducing the cost per unit.
2. Utilizing production facilities more intensely: With increased sales, ClearTone can make more efficient use of its production facilities, maximizing output and reducing per-unit costs.
3. Increased bargaining power with suppliers: With higher sales volume, ClearTone gains leverage in negotiations with suppliers, potentially securing better pricing or terms, leading to cost savings.
4. Learning effects associated with higher volume: As production and sales volume increase, ClearTone can benefit from improved efficiency and expertise, resulting in cost reductions over time.
However, improved responsiveness, the option mentioned in the question, is not directly related to cost savings from economies of scale. It primarily refers to the company's ability to quickly and effectively respond to customer needs or market changes. While responsiveness is important for international expansion, it is not a factor that directly contributes to cost savings associated with economies of scale.
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McCann Company has identified an investment project with the following cash flows. Year Cash Flow 1234 $750 1,080 1,300 1,160 a. If the discount rate is 11 percent, what is the present value of these cash flows? Present value at 11 percent 4 b. What is the present value at 19 percent? Present value at 19 percent e. What is the present value at 30 percent Present value at 30 percent
The present value of the cash flows at a discount rate of 11% is $3,338.51, at 19% is $2,884.22, and at 30% is $2,470.87.
To calculate the present value of the cash flows, we need to discount each cash flow based on the respective year and the given discount rate.
a. Discount rate: 11%
Year 1 Cash Flow: $750
Year 2 Cash Flow: $1,080
Year 3 Cash Flow: $1,300
Year 4 Cash Flow: $1,160
To calculate the present value of each cash flow, we divide the cash flow by (1 + discount rate)^year.
PV1 = $750 / (1 + 0.11)^1 = $675.68
PV2 = $1,080 / (1 + 0.11)^2 = $867.75
PV3 = $1,300 / (1 + 0.11)^3 = $989.95
PV4 = $1,160 / (1 + 0.11)^4 = $805.13
The present value of these cash flows at a discount rate of 11% is the sum of the individual present values:
Present Value = PV1 + PV2 + PV3 + PV4 = $675.68 + $867.75 + $989.95 + $805.13 = $3,338.51
b. Discount rate: 19%
Using the same formula, we calculate the present value of the cash flows at a discount rate of 19%:
PV1 = $750 / (1 + 0.19)^1 = $630.25
PV2 = $1,080 / (1 + 0.19)^2 = $765.33
PV3 = $1,300 / (1 + 0.19)^3 = $847.67
PV4 = $1,160 / (1 + 0.19)^4 = $640.97
Present Value = PV1 + PV2 + PV3 + PV4 = $630.25 + $765.33 + $847.67 + $640.97 = $2,884.22
c. Discount rate: 30%
Using the same formula, we calculate the present value of the cash flows at a discount rate of 30%:
PV1 = $750 / (1 + 0.30)^1 = $576.92
PV2 = $1,080 / (1 + 0.30)^2 = $664.11
PV3 = $1,300 / (1 + 0.30)^3 = $678.93
PV4 = $1,160 / (1 + 0.30)^4 = $550.91
Present Value = PV1 + PV2 + PV3 + PV4 = $576.92 + $664.11 + $678.93 + $550.91 = $2,470.87
Therefore, the present value of the cash flows at a discount rate of 11% is $3,338.51, at 19% is $2,884.22, and at 30% is $2,470.87.
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"Setting up a laundry room requires a detailed analysis of the property's needs and requirements." Explain the meaning of this statement.
You are to write a paragraph using proper sentences (5 sentences)
The statement "Setting up a laundry room requires a detailed analysis of the property's needs and requirements" emphasizes the importance of thoroughly assessing the specific needs and requirements of a property before establishing a laundry room. This process involves conducting a comprehensive evaluation to determine factors such as available space, plumbing and electrical requirements, equipment specifications, and the anticipated volume of laundry. By conducting a detailed analysis, property owners or managers can ensure that the laundry room is efficiently designed and equipped to meet the demands of the property and its occupants.
When setting up a laundry room, it is crucial to conduct a detailed analysis to understand the unique needs and requirements of the property. This involves considering various factors such as the available space within the property. Assessing the dimensions and layout of the designated area for the laundry room helps determine the feasibility of fitting necessary equipment and establishing an efficient workflow.
Additionally, plumbing and electrical requirements must be evaluated to ensure proper installation and functionality of washers, dryers, and other laundry equipment. Understanding the anticipated volume of laundry is also important as it helps determine the capacity and number of machines needed to handle the load. By conducting a thorough analysis, property owners can tailor the laundry room setup to meet the specific needs of their property, optimizing efficiency and convenience for residents or users.
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Problem 11.11 (Capital Budgeting Criterias Mutually Exciusive Projects) Project $ requires an initial outiay at t=0 of $10,000, and its expected cash fows would be $5,000 per year for 5 years. Mutually exelusive Project L requires an inital outiay at t. - 0 of 349,000 , and its expected cash flows wauld be $14,300 per year for 5 years. Ht both projects have a wace of 16%, which project would you recommend? Select the correct answer. a. Both Projects S and L, because both projects have IRR's >0. b. Project L, because the NPVL. > NPVS. c. Both Project S and L, because the NPVs > 0.
d. Project S, because the NPV's > NPVl
e. Neither Project S nor L, because each project's NPV <0.
The correct answer is d. Project S is more favorable because it has a higher NPV than Project L.
To determine which project is more favorable, we need to calculate the NPV of each project using a discount rate of 16%.
For Project S:
NPV = -$10,000 + ($5,000/1.16) + ($5,000/1.16^2) + ($5,000/1.16^3) + ($5,000/1.16^4) + ($5,000/1.16^5)
NPV = -$10,000 + $4,310.34 + $3,716.49 + $3,198.06 + $2,738.14 + $2,330.68
NPV = $6,293.71
For Project L:
NPV = -$349,000 + ($14,300/1.16) + ($14,300/1.16^2) + ($14,300/1.16^3) + ($14,300/1.16^4) + ($14,300/1.16^5)
NPV = -$349,000 + $12,327.59 + $10,690.86 + $9,238.01 + $7,949.70 + $6,807.71
NPV = -$302,185.13
Therefore, the correct answer is d. Project S is more favorable because it has a higher NPV than Project L.
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1) Imagine a Solow Growth Model with a standard Cobb-Douglas production function and the following parameters: α=0.25;d=0.01;A=1,000;s=0.3;n=0.15 a) Is the Solow Growth Model an exogenous or endogenous growth model? How so? b) Calculate the rate of capital accumulation (law of motion). c) Calculate the steady state level of capital? d) Calculate the steady state level of real output/income? e) Calculate the steady state level of investment? f) Calculate the steady state level of consumption? g) What effect does a higher depreciation rate have on this model? h) What effect does a higher savings rate have on this model? i) What effect does a higher population growth rate have on this model? j) What effect does a higher productivity/technology factor have on this model?
a) The Solow Growth Model is an endogenous growth model because it incorporates factors such as capital accumulation and technological progress that are endogenously determined within the model.
b) The rate of capital accumulation, also known as the investment rate, is given by sY, where s is the savings rate and Y is the level of real output.
c) The steady state level of capital (K*) is given by the equation K* = [(sA)/(n+d)]^(1/(1-α)), where s is the savings rate, A is the level of technology, n is the population growth rate, d is the depreciation rate, and α is the capital share in the production function.
d) The steady state level of real output/income (Y*) is given by Y* = (AK*^α)(n+d).
e) The steady state level of investment (I*) is equal to the steady state level of savings, which is sY*.
f) The steady state level of consumption (C*) is equal to Y* - I*.
g) A higher depreciation rate (d) would lead to a lower steady state level of capital (K*) and consequently lower steady state levels of output, consumption, and investment.
h) A higher savings rate (s) would lead to a higher steady state level of capital (K*) and consequently higher steady state levels of output, consumption, and investment.
i) A higher population growth rate (n) would lower the steady state level of capital (K*) and consequently lower steady state levels of output, consumption, and investment.
j) A higher productivity/technology factor (A) would increase the steady state levels of output, consumption, and investment, but it would not have an impact on the steady state level of capital.
a) The Solow Growth Model is an endogenous growth model because it considers the factors that determine economic growth, such as capital accumulation and technological progress, as endogenous variables that are determined within the model.
b) The rate of capital accumulation, which represents the investment rate, is given by sY, where s is the savings rate and Y is the level of real output. This equation shows that the rate of capital accumulation is proportional to the savings rate and the level of output.
c) The steady state level of capital (K*) is determined by the equation K* = [(sA)/(n+d)]^(1/(1-α)), where s is the savings rate, A is the level of technology, n is the population growth rate, d is the depreciation rate, and α is the capital share in the production function. This equation shows that the steady state level of capital depends on the savings rate, technology level, population growth rate, depreciation rate, and the capital share.
d) The steady state level of real output/income (Y*) is given by Y* = (AK*^α)(n+d), where A is the level of technology. This equation shows that the steady state level of output depends on the level of technology, the steady state level of capital, and the population growth rate and depreciation rate.
e) The steady state level of investment (I*) is equal to the steady state level of savings, which is sY*. This equation shows that the steady state level of investment depends on the savings rate and the steady state level of output.
f) The steady state level of consumption (C*) is equal to Y* - I*, which means it depends on the steady state level of output and the steady state level of investment.
g) A higher depreciation rate (d) would lead to a lower steady state level of capital (K*) because more capital would be lost due to depreciation. This would result in lower steady state levels of
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Suppose the interest rate is 8.9 APR with monthly compounding.
What is the Present value of an annuity that pays $110 every six
months for four years?
The present value of the annuity that pays $110 every six months for four years, with an interest rate of 8.9% APR compounded monthly, is approximately $1,126.10.
To calculate the present value of an annuity, we can use the formula:
PV = C * [(1 - (1 + r)^(-n)) / r],
where PV is the present value, C is the periodic payment, r is the interest rate per period, and n is the total number of periods.
In this case, the annuity pays $110 every six months for four years. Since the interest rate is given as an annual percentage rate (APR) with monthly compounding, we need to adjust the interest rate per period and the number of periods accordingly.
The interest rate per period can be calculated by dividing the annual rate by the number of compounding periods per year:
Interest rate per period = APR / number of compounding periods per year = 8.9% / 12 = 0.742% (0.00842 as a decimal).
The total number of periods can be calculated by multiplying the number of years by the number of compounding periods per year:
Total number of periods = number of years * number of compounding periods per year = 4 * 2 = 8.
Now we can calculate the present value of the annuity:
PV = $110 * [(1 - (1 + 0.00842)^(-8)) / 0.00842]
PV ≈ $110 * [(1 - 0.91375) / 0.00842]
PV ≈ $110 * (0.08625 / 0.00842)
PV ≈ $110 * 10.2373
PV ≈ $1,126.10
Therefore, the present value of the annuity that pays $110 every six months for four years, with an interest rate of 8.9% APR compounded monthly, is approximately $1,126.10.
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DQ 8 is based on content from chapter 11 of the textbook. Reading the chapter in the textbook will help; however, base your post/answer according to your own unique perspective and reasoning skills as well. DQ 8 is worth 2 points and is 2% of your final grade. It is due strictly on July 28, at 11:59 pm EST. Maximum word limit for it: 250 words
X International is a multinational company with a global presence, and wants to select a very talented management employee of theirs, Mr. J, to move to another country. X International manufactures plastic moulds, and they want Mr. J to be the Senior Operations Manager in the new country that the organization is looking to expand in. Mr. J is currently the Senior Operations Manager in a plant located in Ontario, Canada. The company is aware that Mr. J is married, has a wife, and two children (ages 11 and 13). The company wants Mr. J to oversee operations in the new country for five years.
You are the HR Manager, and are helping the Operations Director at X International in trying to convince Mr. J to accept the offer of working in a different country, as an expatriate.
You understand that Mr. J will only agree to move to another country with his family for five years, if his family members agree to the move, and their needs are also met.
What are 2 to 3 features of this expatriate assignment that you can offer to Mr. J (keeping his family in mind) that will make the assignment more attractive for him, and his family? In other words, what incentives can the company offer to Mr. J (which involve his family as well), and will help convince Mr. J that it is a beneficial idea for him and his family to agree to the move, and for him to accept this position in another country?
kindly elaborate and provide references if any. 200-300 words
As the HR Manager at X International, I would consider the following features and incentives to make the expatriate assignment more attractive for Mr. J and his family:
1. Comprehensive Relocation Support: Moving to a new country can be challenging for the entire family. X International should provide comprehensive relocation support to ensure a smooth transition for Mr. J and his family. This can include assistance with visa and immigration processes, finding suitable housing, enrolling children in local schools, and providing cultural orientation programs. By addressing the practical aspects of relocation, the company can alleviate the concerns of Mr. J's family and create a supportive environment for them.
2. Family Benefits and Support: X International should offer attractive benefits and support services for Mr. J's family. This can include health insurance coverage for the entire family, access to quality healthcare facilities in the new country, and assistance with spouse employment. Supporting the well-being of Mr. J's family will contribute to their overall satisfaction and help them adjust to the new environment.
3. Educational Opportunities: Since Mr. J has children of school-going age, X International can offer educational opportunities for them. This can include tuition assistance for international schools or providing access to reputable local schools with a strong international curriculum. By ensuring quality education for Mr. J's children, the company demonstrates its commitment to their growth and development.
Additionally, it would be beneficial for the company to provide ongoing support and resources for cultural integration, language training, and networking opportunities for Mr. J and his family. Regular check-ins and communication channels with HR and management can help address any concerns or challenges that may arise during their time abroad.
These features and incentives demonstrate X International's commitment to Mr. J and his family's well-being, providing a holistic approach to their expatriate assignment. By addressing their needs and concerns, the company can increase the likelihood of Mr. J accepting the position and ensure a successful transition for the entire family.
Note: The response is based on general knowledge and reasoning skills. No specific references are cited. It is recommended to refer to relevant HR management literature and resources for further insights and best practices in managing expatriate assignments.
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Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output:LO4 Input Quantity 150.0 112.5 75.0 Real GDP $400 300 200 a. What is productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? c. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price level and the level of real output? d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 100 percent. What would be the new per-unit cost of production? What effect would this change in per-unit production cost have on the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price level and the level of real output?
a. Productivity in this economy can be calculated by dividing real GDP by the total quantity of inputs:
Productivity = Real GDP / Total Quantity of Inputs
For the given data:
Productivity = $400 / (150.0 + 112.5 + 75.0)
b. The per-unit cost of production can be calculated by dividing the total cost of inputs by the total quantity of inputs:
Per-unit cost of production = Total Cost of Inputs / Total Quantity of Inputs
Assuming the price of each input unit is $2:
Per-unit cost of production = ($2 * 150.0 + $2 * 112.5 + $2 * 75.0) / (150.0 + 112.5 + 75.0)
c. If the input price increases from $2 to $3 with no change in productivity, the new per-unit cost of production would be calculated using the new input price:
New Per-unit cost of production = ($3 * 150.0 + $3 * 112.5 + $3 * 75.0) / (150.0 + 112.5 + 75.0)
The $1 increase in input price would push the economy's aggregate supply curve in the upward direction, as higher input prices lead to higher production costs, which reduces the profitability of output production. This shift of the aggregate supply curve would lead to a higher price level and a lower level of real output.
d. If productivity increases by 100 percent, the new per-unit cost of production would be calculated using the new productivity level:
New Per-unit cost of production = ($2 * 150.0 + $2 * 112.5 + $2 * 75.0) / (2 * 150.0 + 2 * 112.5 + 2 * 75.0)
The change in per-unit production cost due to the increase in productivity would lead to a shift of the aggregate supply curve in the downward direction. This shift would result in a lower price level and a higher level of real output.
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a. The continuous operation of a tollbooth on an inter-state highway is considered a project. This statement is ____________. T or F
b. If any of the tasks on the critical path take more time than their estimated durations, then it is sensible for the company to terminate (kill) the project since a chance of project success is slim. This statement is ____________.T or F
a. The continuous operation of a tollbooth on an inter-state highway is considered a project. This statement is False.
b. If any of the tasks on the critical path take more time than their estimated durations, then it is sensible for the company to terminate (kill) the project since the chance of project success is slim. This statement is False.
a. The continuous operation of a tollbooth on an inter-state highway is not a project. A project is a temporary endeavor with a specific objective, defined timeline, and unique deliverables. The operation of a tollbooth, on the other hand, is an ongoing and continuous activity that does not have a defined endpoint or a temporary nature.
b. The critical path represents the sequence of tasks that determines the overall duration of the project. If any tasks on the critical path take longer than estimated, it may delay the project completion, but it does not necessarily mean that the project should be terminated.
Project managers typically employ strategies like schedule adjustments, resource allocation, or task prioritization to address delays and bring the project back on track. Termination of a project is typically considered as a last resort, and it would depend on various factors such as the impact of the delays on project objectives, cost-benefit analysis, and the feasibility of finding alternative solutions.
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What do you know about current cost accounting? Why is current cos accounting criticised?
Current cost accounting is an accounting method that values assets and liabilities at their current market prices. It provides a more accurate reflection of the economic reality but is criticized for its subjectivity and potential for manipulation.
Current cost accounting involves valuing assets and liabilities based on their current market prices rather than historical costs. This approach aims to provide a more realistic representation of an entity's financial position by considering the current values of resources and obligations.
One of the main advantages of current cost accounting is its relevance. By using current market prices, it reflects the economic value of assets and liabilities at a given point in time. This can be particularly useful in industries with volatile markets or when there are significant fluctuations in the value of assets.
However, current cost accounting also faces criticism. One of the main concerns is subjectivity in determining market prices. The reliance on subjective estimates and appraisals can introduce bias and potential manipulation. Additionally, the market prices used in current cost accounting may not always be readily available or reliable, leading to challenges in applying this method consistently.
Moreover, current cost accounting may result in significant fluctuations in reported financial results. As market prices change, the values of assets and liabilities are adjusted accordingly, potentially leading to volatility in financial statements.
Overall, while current cost accounting offers benefits in terms of relevance and accuracy, its subjectivity and potential for manipulation are notable criticisms. Striking a balance between the benefits and challenges of this accounting method requires careful consideration and adherence to robust valuation practices.
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Java Source, Incorporated, (JS1) buys coffee beans from around the world and roasts, biends, and packages them for resale. Some of JS's colfees are very popular and sell in large volumes, while a few of the newee blends sell in very low volumes. JSI prices its coffees at manufacturing cost plus a markup of 25% For the coming year, JSI's budget includes estimated manufocturing overhead cost of $3,064,500. JSI assigns manufacturing overheed to products on the basis of direct labor-hours. The expected direct labor cost totals $624,000, which ropresents 52,000 hours of direct labor time. The expected costs for direct materials and direct labor for one-pound bags of two of the company's colfee prodacts appear below. JSi's controller believes that the company's traditional costing system may be providing misleading cost information. To determine whether or not this is correct, the controlfer has prepared an analysis of the year's expected manufacturing overhead costs, as shown in the following table: Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below Viet Select coffee. -. Determine the unit product cost of one pound of Kenya Dark coffee and one pound of Viet Select coffee. Complete this question by entering your answers in the tabs below. Using direct labor-houri as the manufacturing overhead cost allocation base, determine the unit product cost of one pound of Kenyo Dark coffee and one pound of Viet Select coffee. (Round your intermediate calculations and final answers to 2 decimal. piaces.) Complete this question by entering your answers in the tabs below. Using the activity-based absorption costing approach, determine the total amount of manufacturing overhead cost assigned to Kenya Dark coffee and to Viet Select coffee for the year. Complete this question by entering your answers in the tabs below. Using the activity-based absorption costing approach, compute the amount of manufacturing overnead cost per pound of Kenya Dark coffee and Viet Select coffee. (Round your answers to 2 decimal places.) Complete this question by entering your answers in the tabs below. Using the activity-based absorption costing approach, determine the unit product cost of one pound of Kenya Dark coffee and one pound of Viet Select coffee. (Round your intermediate calculations and final answers to 2 decimal places.)
1. a. The plantwide predetermined overhead rate that will be used during the year will be $44 per direct labor-hour.
1. b. The unit product cost of one pound of Kenya Dark coffee is $5.72 per pound and one pound of Viet Select coffee is $4.12 per pound.
2. a. The total amount of manufacturing overhead cost assigned to Kenya Dark coffee and to Viet Select coffee for the year will be $20,992.
2. b. The amount of manufacturing overhead cost per pound of Kenya Dark coffee is $0.3055 per pound and Viet Select coffee is $5.248 per pound.
2. c. The unit product cost of one pound of Kenya Dark coffee is $5.15 and one pound of Viet Select coffee is $8.49
1. Using direct labor-hours as the manufacturing overhead cost allocation base:
a. To determine the plantwide predetermined overhead rate, divide the estimated manufacturing overhead cost by the expected direct labor-hours.
Plantwide Predetermined Overhead Rate = Estimated Manufacturing Overhead Cost / Expected Direct Labor-Hours
Plantwide Predetermined Overhead Rate = $2,200,000 / 50,000 hours = $44 per direct labor-hour
b. To calculate the unit product cost of one pound of Kenya Dark coffee and one pound of Viet Select coffee, add the direct materials cost, direct labor cost, and the allocated manufacturing overhead cost.
Unit Product Cost = Direct Materials Cost + Direct Labor Cost + (Direct Labor-Hours * Plantwide Predetermined Overhead Rate)
For Kenya Dark coffee:
Direct Materials Cost = $4.50
Direct Labor Cost = $0.34
Direct Labor-Hours per Pound = 0.02 hours
Unit Product Cost for Kenya Dark coffee = $4.50 + $0.34 + (0.02 * $44) = $4.50 + $0.34 + $0.88 = $5.72 per pound
For Viet Select coffee:
Direct Materials Cost = $2.90
Direct Labor Cost = $0.34
Direct Labor-Hours per Pound = 0.02 hours
Unit Product Cost for Viet Select coffee = $2.90 + $0.34 + (0.02 * $44) = $2.90 + $0.34 + $0.88 = $4.12 per pound
2. Using the activity-based absorption costing approach:
a. To determine the total amount of manufacturing overhead cost assigned to Kenya Dark coffee and Viet Select coffee for the year, multiply the expected activity for each cost pool by the respective cost driver rate.
Cost Driver Rates:
Purchasing: $560,000 / 2,000 orders = $280 per order
Material Handling: $193,000 / 1,000 setups = $193 per setup
Quality Control: $90,000 / 500 batches = $180 per batch
Roasting: $1,045,000 / 95,000 roasting hours = $11 per roasting hour
Blending: $192,000 / 32,000 blending hours = $6 per blending hour
Packaging: $120,000 / 24,000 packaging hours = $5 per packaging hour
Total Manufacturing Overhead Cost Assigned:
For Kenya Dark coffee:
Purchasing: 20,000 pounds / 20,000 pounds per order * $280 per order = $280
Material Handling: 80,000 pounds / 5,000 pounds per batch * 2 setups * $193 per setup = $6,160
Quality Control: 80,000 pounds / 5,000 pounds per batch * 500 batches * $180 per batch = $1,440
Roasting: 80,000 pounds / 100 pounds per roasting * 1.5 roasting hours * $11 per roasting hour = $13,200
Blending: 80,000 pounds / 100 pounds per blending * 0.5 blending hours * $6 per blending hour = $2,400
Packaging: 80,000 pounds / 100 pounds per packaging * 0.3 packaging hours * $5 per packaging hour = $960
Total Manufacturing Overhead Cost Assigned for Kenya Dark coffee = $280 + $6,160 + $1,440 + $13,200 + $2,400 + $960 = $24,440
For Viet Select coffee:
Purchasing: 500 pounds / 500 pounds per order * $280 per order = $280
Material Handling: 4,000 pounds / 500 pounds per batch * 2 setups * $193 per setup = $3,872
Quality Control: 4,000 pounds / 500 pounds per batch * 500 batches * $180 per batch = $7,200
Roasting: 4,000 pounds / 100 pounds per roasting * 1.5 roasting hours * $11 per roasting hour = $7,920
Blending: 4,000 pounds / 100 pounds per blending * 0.5 blending hours * $6 per blending hour = $480
Packaging: 4,000 pounds / 100 pounds per packaging * 0.3 packaging hours * $5 per packaging hour = $240
Total Manufacturing Overhead Cost Assigned for Viet Select coffee = $280 + $3,872 + $7,200 + $7,920 + $480 + $240 = $20,992
b. To compute the amount of manufacturing overhead cost per pound of Kenya Dark coffee and Viet Select coffee, divide the total manufacturing overhead cost assigned by the expected sales in pounds.
Manufacturing Overhead Cost per Pound:
For Kenya Dark coffee: $24,440 / 80,000 pounds = $0.3055 per pound
For Viet Select coffee: $20,992 / 4,000 pounds = $5.248 per pound
c. To determine the unit product cost of one pound of Kenya Dark coffee and one pound of Viet Select coffee, add the direct materials cost, direct labor cost, and the manufacturing overhead cost per pound.
Unit Product Cost:
For Kenya Dark coffee: $4.50 + $0.34 + $0.3055 = $5.1455 per pound
For Viet Select coffee: $2.90 + $0.34 + $5.248 = $8.488 per pound
Therefore, the unit product cost of one pound of Kenya Dark coffee is $5.15, and the unit product cost of one pound of Viet Select coffee is $8.49 using the activity-based absorption costing approach.
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