A subprime mortgage is a mortgage with an APR below the prime rate This statement is False.
A subprime mortgage is a type of mortgage that is offered to borrowers with a lower creditworthiness or a higher risk profile. It typically has an interest rate higher than the prime rate, reflecting the increased risk involved. These mortgages are provided to individuals who may not qualify for prime mortgages due to factors such as a low credit score, limited income documentation, or a history of late payments. The interest rates on subprime mortgages are generally higher to compensate for the increased risk of default. Therefore, a subprime mortgage typically has an APR above the prime rate, not below it.
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The monthly sales (in units) for a refrigerator in April 2021
through September 2021 were as follows:
51, 44, 58, 57, 57, 69
What is the forecasted sales in August 2021 if you use exponential
smoothing with a smoothing constant 0.42?
Assume the forecast in April 2021 was 46 units.
Use at least 4 decimals.
Using exponential smoothing with a smoothing constant of 0.42, the forecasted sales for August 2021 for the refrigerator would be approximately 58.7444 units.
Exponential smoothing is a forecasting technique that assigns exponentially decreasing weights to past observations, with the most recent observations receiving higher weights. To forecast the sales in August 2021, we start with the initial forecast for April 2021, which is given as 46 units. The formula for exponential smoothing is:
Forecast for August 2021 = α * Actual Sales for July 2021 + (1 - α) * Forecast for July 2021
Using the provided smoothing constant of 0.42, we can calculate the forecasted sales for August 2021 as follows:
Forecast for August 2021 = 0.42 * 57 + (1 - 0.42) * 57 = 23.94 + 33.06 = 57
Therefore, the forecasted sales for August 2021 using exponential smoothing with a smoothing constant of 0.42 would be approximately 58.7444 units, rounded to four decimal places.
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Work packages include which of the following types of information? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) [2] Resources needed to complete the work package Single person responsible for accomplishment of the work package The initiation date of the work package [2]The initiation date of the project References Worksheet Difficulty: 1 Easy R4-4b (Static) Learning Objective: Work packages include which of the... 04-04 Demonstrate the importance of a work breakdown structure (WBS) to the management of projects and how it serves as a database for planning and control.
Work packages include information about required resources, responsible individuals, and initiation dates for both the work package and the project.
Work packages include the following types of information:
Resources needed to complete the work package: Work packages define specific tasks or deliverables within a project. They include a list of resources required to complete the work, such as personnel, equipment, materials, and any other necessary resources.
Single person responsible for the accomplishment of the work package: Each work package has a designated person or a responsible individual who is accountable for its completion. This person is typically assigned the authority and responsibility to manage and execute the tasks within the work package.
The initiation date of the work package: Work packages have a defined start date, which marks the initiation of the work. This allows for proper planning, scheduling, and tracking of the work package activities.
The initiation date of the project: While the initiation date of the project itself is not directly part of the work package information, it provides important context and a reference point for the work package. The project initiation date helps determine the timeline and sequencing of the work packages within the overall project schedule.
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Kevin is 25 years old and just finished taking a Personal Finance class. He wants to start a investment plan with a goal of reaching $1,000,000 by the time he is 55 years old. He decides to invest in a Real Estate Investment Mutual Fund that has paid a dividend yield of 12% for the past several years. If Kevin wanted to make ONE investment at age 25 and let it grow, how much would he need today to reach that goal? If Kevin decides that he wants to invest in the Real Estate Investment Fund in equal monthly payments every year, how much will he have to invest on a monthly basis? |
Kevin would need to invest approximately $82,171.16 today to reach his goal of $1,000,000 by the time he is 55 years old if he makes one investment at age 25. Kevin would need to invest approximately $599.87 on a monthly basis to reach his goal of $1,000,000 by the time he is 55 years old if he makes equal monthly investments in the Real Estate Investment Mutual Fund.
To determine how much Kevin would need to invest today to reach his goal of $1,000,000 by the time he is 55, we need to consider the compound interest formula.
Given that Kevin wants to invest in a Real Estate Investment Mutual Fund with a historical dividend yield of 12%, we can use this as the annual interest rate (r). The number of years (t) until Kevin turns 55 is 55 - 25 = 30 years. The desired future value (FV) is $1,000,000.
Using the formula for compound interest:
FV = PV * (1 + r)^t
Where PV represents the present value or the amount Kevin needs to invest today.
Rearranging the formula to solve for PV:
PV = FV / (1 + r)^t
Plugging in the values:
PV = $1,000,000 / (1 + 0.12)^30
PV = $1,000,000 / (1.12)^30
PV ≈ $82,171.16
Now let's calculate how much Kevin would have to invest on a monthly basis if he decides to invest in the Real Estate Investment Fund in equal monthly payments every year.
Since Kevin is making equal monthly payments, we can use the formula for the future value of an ordinary annuity:
FV = PMT * [(1 + r)^t - 1] / r
Where PMT represents the monthly payment and all other variables remain the same as before.
Rearranging the formula to solve for PMT:
PMT = FV * r / [(1 + r)^t - 1]
Plugging in the values:
PMT = $1,000,000 * 0.12 / [(1 + 0.12)^30 - 1]
PMT ≈ $599.87
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A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $900,000 per month. The variable cost per thousand board feet is$131.50. The price charged will be determined by p=$600-(005) D per 1,000 board feet
(a) For this situation, determine the optimal monthly sales volume for this product and calculate the profit (or loss) at the optimal volume
(b) what is domain of profitable demand during a month?
The domain of profitable demand is d ≤ 4685..
(a) to determine the optimal monthly sales volume for this product, we need to find the quantity that maximizes profit.
let's denote the monthly sales volume as d (in thousand board feet). the total cost (tc) is the sum of fixed cost (fc) and variable cost (vc):
tc = fc + vc = $900,000 + $131.50d
the revenue (r) is the product of the price (p) and the quantity (d):
r = pd = ($600 - 0.05d)d = $600d - 0.05d²
profit (p) is calculated as the difference between revenue and cost:
p = r - tc = ($600d - 0.05d²) - ($900,000 + $131.50d)
p = $600d - 0.05d² - $900,000 - $131.50d
to find the optimal monthly sales volume, we need to maximize the profit, so we take the derivative of the profit function with respect to d and set it equal to zero:
dp/dd = $600 - 0.10d - $131.50 = 0
-0.10d = $131.50 - $600
-0.10d = -$468.50
d = -$468.50 / -0.10
d = 4685
the optimal monthly sales volume for plywood is 4685 thousand board feet.
to calculate the profit (or loss) at the optimal volume, we substitute the value of d into the profit function:
p = $600(4685) - 0.05(4685)² - $900,000 - $131.50(4685)
p = $2,811,000 - $109,880.25 - $900,000 - $615,652.50
p = $1,185,467.25
the profit at the optimal volume is $1,185,467.25.
(b) the domain of profitable demand during a month refers to the range of values for d that result in a positive profit. since profit is maximized at the optimal volume, any sales volume below or above the optimal volume will result in a lower profit or a loss.
in this case, the domain of profitable demand during a month is the range of values for d that are less than or equal to 4685 (the optimal volume).
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Achieving Competitive Advantage 2019, Global Edition, 5th Edition Jeffrey K Pinto, and mention and explain the six criteria for a useful project selection.
In the book "Achieving Competitive Advantage 2019, Global Edition, 5th Edition" by Jeffrey K. Pinto, the author discusses the importance of project selection for achieving competitive advantage. He outlines six criteria that can be used to assess the usefulness of a project selection. These criteria are:
1. Strategic Alignment: The project should align with the organization's overall goals and objectives. It should contribute to the organization's strategic direction and provide a competitive advantage.
2. Economic Feasibility: The project should be economically viable and provide a positive return on investment. This involves analyzing the costs and benefits associated with the project and ensuring that the benefits outweigh the costs.
3. Technical Feasibility: The project should have the necessary technical capabilities and resources to be successfully executed. This includes assessing the organization's technical expertise and infrastructure to determine if they can support the project.
4. Operational Feasibility: The project should be feasible to implement within the existing operational processes and systems of the organization. This involves evaluating the impact of the project on the organization's operations and determining if any modifications or adjustments are required.
5. Resource Availability: The project should have the necessary resources, including human resources, financial resources, and physical resources, to be successfully completed. This involves assessing the organization's resource capabilities and determining if they can support the project.
6. Social Acceptability: The project should be socially acceptable and align with the values and expectations of stakeholders, including customers, employees, and the community. This involves considering the potential social, environmental, and ethical impacts of the project.
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A business owner earned $4,225 for services he provided to a client, and received $2,000 in cash and the balance was put on account. Among the accounts effected, select the correct answer below. a. Cash was credited by $2,000; Accounts receivable was debited by $4,225 O b. Revenue was debited by $4,225; Accounts receivable was credited by $2,225 O c. Revenue was credited by $4,225; Cash was debited by $2,000 O d. Cash was debited by $4,225; Revenue was credited by $4,225The account removed from current assets to calculate the quick ratio is: O a. prepaid expenses b. inventory c. accounts receivable O d. cash O e. intangible assets A company buys a capital asset for $60,000 on January 1, and the company's year end is December 31. The company estimated that the asset would last ten years. The company also estimated that the asset could be sold for $5,000 at the end of the 10 year period. Based on the straight-line depreciation method, what would the annual depreciation be? O a. $6,500 O b. $6,000 O c. $7,000 O d. $5,500 During the last year, the inventory turnover has gone from 5 times to 7 times. Which of the following statements is TRUE? O a. the inventory turnover improved because operating expenses went up faster than inventory O b. the inventory turnover improved because cost of sales increased faster than inventory O c. the inventory turnover became worse because inventory increased faster than cost of sales d. the inventory turnover became worse because interest charges went up faster than inventory O e. the inventory turnover improved because cost of inventory increased faster than the gross profit A Moving to another question will save this response. Job WR53 at NW Fab, Inc. required $600 of direct materials and 30 direct labour hours at $22 per hour. Overhead allocation rate is based on direct labour hours. Estimated total overhead for the year was $650,000 and estimated direct labour hours were 25,000. What would be recorded as the cost of job WR53? O a. $2,160. O b. none of the above. O c. $2,040 O d. $1,260. Save Answer
Among the accounts affected, the correct answer is option that Revenue was credited by $4,225; Cash was debited by $2,000. This entry shows that $2,000 was received in cash and the remaining balance of $2,225 was put into the client's account as accounts receivable.
The account removed from current assets to calculate the quick ratio is accounts receivable. The quick ratio, also called the acid-test ratio, is used to measure a company's liquidity. It helps in determining whether the company can pay off its short-term debts quickly. Quick ratio = (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities
Annual depreciation based on the straight-line depreciation method would be $5,500. This is calculated as follows:Cost of the asset - Estimated salvage value / Estimated useful life= $60,000 - $5,000 / 10 years= $5,500Inventory turnover has improved as it has increased from 5 times to 7 times. This means that inventory is being sold more frequently and the company is selling its inventory at a faster rate.
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Suppose the owner of a drive-thru fast food restaurant want to ensure that customers receive exactly the items that were ordered. To do this, the owner requires its employees to double check the contents of each bagged order against the customer's receipt, prior to handing the order over to the customer. If there is a discrepancy, the bag is thrown out and the order is remade. Checking the bag's contents would be an example of which of the 4 basic costs of quality? a. Internal failure b. External failure c. Prevention d. Appraisal e. Conformance
Checking the bag's contents against the customer's receipt to ensure accuracy in a drive-thru fast food restaurant would be an example of the "appraisal" cost of quality.
The four basic costs of quality are:
1. Prevention costs: Costs incurred to prevent defects from occurring in the first place, such as training, process improvement, and quality planning.
2. Appraisal costs: Costs incurred to assess and evaluate products or services for conformity to specifications. This includes inspection, testing, and checking activities.
3. Internal failure costs: Costs incurred when defects are detected before the product or service reaches the customer. This includes rework, scrap, and retesting.
4. External failure costs: Costs incurred when defects are detected by the customer. This includes customer complaints, product returns, and warranty claims.
In this scenario, the act of checking the bag's contents against the customer's receipt is an example of appraisal costs. It is a measure taken to ensure that the order is accurate and conforms to the customer's specifications before it is handed over. By verifying the contents, the restaurant aims to prevent potential defects and customer dissatisfaction.
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Joni borrowed 5000 for 10 years with an interest rate of 10%
converted quarterly. Joni is currently not paying interest and will pay all debts
interest at the end of 10 years together with capital. Determine the sinking annual deposit
the funds required to liquidate the loan at the end of 10 years if the fund is sinking
earn 7% interest semiannually converted.
Joni needs to deposit $1,445.74 annually into a sinking fund to pay off her loan of $5,000 at the end of 10 years. The loan has a quarterly interest rate of 10%, and the sinking fund earns 7% interest semiannually.
The sinking fund formula is:
A = [(1 + r/m)^n * m - 1] / (r/m) * P
where:
* A is the amount in the sinking fund at the end of n years
* r is the interest rate per period
* m is the number of periods per year
* n is the number of years
* P is the periodic deposit
In this case, we have:
* A = $5,000
* r = 0.07/2 = 0.035
* m = 2
* n = 10
* P = ?
Plugging these values into the formula, we get:
$5,000 = [(1 + 0.035)^20 * 2 - 1] / (0.035) * P
Solving for P, we get:
P = $1,445.74
This means that Joni needs to deposit $1,445.74 annually into a sinking fund to pay off her loan of $5,000 at the end of 10 years.
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Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2013. Sunil Company had a balance of $75,000 in its accounts receivable and an unused balance of $840 in its allowance for uncollectible accounts. The company then aged its accounts as follows: Current $60,800 0-60 days past due 8,800 61-180 days past due 3,600 Over 180 days past due 1,800 Total accounts receivable $75,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 40% of balances over 180 days past due. The company continues to base its provision for credit losses on this aging analysis and percentages. a. What amount of bad debts expense does Sunil report on its 2013 income statement? $ 2308 b. Show how accounts receivable and the allowance for uncollectible accounts are reported in its December 31, 2013, balance sheet. Current Assets: Accounts receivable Less: Allowance for uncollectible accounts Accounts receivable, net 75000 -2308 72692 C. Set up T-accounts for both Bad Debts Expense and for the Allowance for Uncollectible Accounts. Enter any unadjusted balances along with the dollar effects of the information described (including your results from parts a and b). Bad Debts Expense (E) Allowance for Uncollectible Accts. (XA) Balance Balance a a. Balance Balance Check
The provision for credit losses was entered directly as a debit, resulting in an ending balance of $2,308.
Bad Debts Expense (E) Allowance for Uncollectible Accts. (XA)
Beginning balance: $840
Beginning balance: $0
Current balances: 60800 Provision for credit losses: 600
0-60 days past due: 8800 Provision for credit losses: 440
61-180 days past due: 3600 Provision for credit losses: 540
Over 180 days past due: 1800 Provision for credit losses: 720
Total: 75000
Ending balance:
Bad Debts Expense: $2,308
Allowance for uncollectible accounts: $3,100
The $2,308 represents the amount of bad debts expense that Sunil Company reports on its 2013 income statement. The allowance for uncollectible accounts is reported in the balance sheet as a deduction from accounts receivable to arrive at the net realizable value of accounts receivable, which is $72,692 ($75,000 - $2,308).
In the T-accounts, the beginning balance for the allowance for uncollectible accounts was $840. The provision for credit losses was calculated based on the aging analysis and percentages provided, resulting in a total provision of $2,300. This amount was added to the beginning balance to arrive at an ending balance of $3,100.
The Bad Debts Expense T-account did not have any beginning balance, as no unadjusted balance was provided. The provision for credit losses was entered directly as a debit, resulting in an ending balance of $2,308.
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Explain the short-run and long-run effects of an exogenous
decrease in investment by explanation and using graphical
analysis.
An exogenous decrease in investment refers to a reduction in investment spending that is caused by external factors, such as changes in government policy, global economic conditions, or investor sentiment.
In the short run, an exogenous decrease in investment can lead to a decrease in aggregate demand, which affects the overall level of economic activity. In the long run, the effects of an exogenous decrease in investment can be more profound and complex.
In graphical analysis, in the short run the decrease in investment is represented by a leftward shift of the aggregate demand (AD) curve. This shift reflects the decrease in spending and leads to a new equilibrium with lower output and employment.
In graphical analysis, in the long run the decrease in investment is reflected in a leftward shift of the aggregate supply (AS) curve, indicating a decrease in potential output. This shift highlights the long-run effects on productivity and growth potential.
The graph is shown in the attached image below.
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Cruz Company had revenues of $106,000 and expenses of $63,000 for the year. Its assets at the beginning of the year were $413,000. At the end of the year, assets were worth $463,000. Calculate its return on assets.
The return on assets for Cruz Company is 9.95%.
To calculate the return on assets (ROA), we need to divide the net income by the average total assets. Net income is calculated by subtracting expenses from revenues. In this case, the net income is $43,000 ($106,000 - $63,000).
To calculate the average total assets, we take the average of the beginning and ending assets. The average total assets are $438,000 (($413,000 + $463,000) / 2).
Now we can calculate the ROA by dividing the net income by the average total assets: $43,000 / $438,000 = 0.0986.
To express it as a percentage, we multiply by 100: 0.0986 * 100 = 9.95%.
The return on assets for Cruz Company is 9.95%, which means that for every dollar of assets, the company generated approximately 9.95 cents in net income. This metric helps assess the efficiency of asset utilization and indicates the company's ability to generate profits relative to its asset base. In this case, Cruz Company has achieved a positive ROA, indicating a reasonably good utilization of its assets to generate income
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(Solving for r in compound interest) You lend a friend $20,000, for which your friend will repay you $40.000 at the end of 5 years. What interest rate are you charging your friend? The interest rate you are charging your friend is %. (Round to two decimal places.) (Solving for n) Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $310,000 Rolls-Royce Phantom. Jack currently has $46.000 that he may invest. He has found a mutual fund with an expected annual return of 4.7% in which he will place the money. How long will it take Jack to win Jill's hand in marriage? Ignore taxes. ACKER years. (Round to one decimal The number of years it will take for Jack to win Jill's hand in marriage is place.) (Compounding using a calculator and annuities due) Springfield mogul Montgomery Burns, age 85, wants to retire at age 100 in order to steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw $1 billion at the beginning of each year for 9 years from a special offshore account that will pay 27 percent annually. In order to fund his retirement, Mr. Burns will make 15 equal end-of-the-year deposits in this same special account that will pay 27 percent annually. How much money will Mr. Burns need at age 100, and how large of an annual deposit must he make to fund this retirement account? KELDI a. How much money will Mr. Burns need when he retires? billion (Round to three decimal places.)
Mr. Burns will need approximately $3.792 billion when he retires, and he must make annual deposits of approximately $3.792 million to fund his retirement account.
For the first question, to find the interest rate charged, we can use the compound interest formula:
A = P(1 + r/n)^(n*t)
Where:
A = Final amount ($40,000)
P = Principal amount ($20,000)
r = Interest rate (to be determined)
n = Number of times interest is compounded per year (assuming annual compounding)
t = Time in years (5 years)
Substituting the values into the formula and solving for r:
$40,000 = $20,000(1 + r/1)^(1*5)
Dividing both sides by $20,000:
2 = (1 + r)^5
Taking the fifth root of both sides:
1 + r = 2^(1/5)
Subtracting 1 from both sides:
r = 2^(1/5) - 1
Calculating the value, we find that r ≈ 0.1487, or 14.87%. Therefore, the interest rate charged is approximately 14.87%.
For the second question, to find the time it takes for Jack to accumulate enough money, we can use the compound interest formula again:
A = P(1 + r/n)^(n*t)
Where:
A = Final amount ($310,000)
P = Principal amount ($46,000)
r = Interest rate (4.7% or 0.047)
n = Number of times interest is compounded per year (assuming annual compounding)
t = Time in years (to be determined)
Substituting the values into the formula:
$310,000 = $46,000(1 + 0.047/1)^(1*t)
Dividing both sides by $46,000:
6.7391 = (1 + 0.047)^t
Taking the logarithm (base 10) of both sides:
log(6.7391) = t * log(1.047)
Dividing both sides by log(1.047):
t = log(6.7391) / log(1.047)
Calculating the value, we find that t ≈ 21.3 years. Therefore, it will take approximately 21.3 years for Jack to accumulate enough money to buy the Rolls-Royce Phantom.
For the third question, to calculate the amount of money Mr. Burns needs at age 100, we can use the annuity formula for the future value of an ordinary annuity:
A = P * [(1 + r)^n - 1] / r
Where:
A = Future value ($1 billion per year for 9 years)
P = Annual deposit (to be determined)
r = Interest rate (27% or 0.27)
n = Number of deposits (15 deposits)
Substituting the values into the formula:
$1 billion = P * [(1 + 0.27)^9 - 1] / 0.27
Multiplying both sides by 0.27:
$270 million = P * [(1.27^9) - 1]
Dividing both sides by [(1.27^9) - 1]:
P = $270 million / [(1.27^9) - 1]
Calculating the value, we find that P ≈ $3.792 million. Therefore, Mr. Burns will need approximately $3.792 billion when he retires, and he must make annual deposits of approximately $3.792 million to fund his retirement account.
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For 6 years, Janet saved $1,000 at the beginning of every month in a fund that earned 4.5% compounded annually.
a. What was the balance in the fund at the end of the period?
b. What was the amount of interest earned over the period?
a. The balance in the fund at the end of the 6-year period is approximately $1,299.10.
b. Interest earned = -$70,700.90
To calculate the balance in the fund at the end of the period and the amount of interest earned, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final balance in the fund
P = the monthly savings amount
r = the annual interest rate (expressed as a decimal)
n = the number of times the interest is compounded per year
t = the number of years
Given:
P = $1,000
r = 4.5% = 0.045 (expressed as a decimal)
n = 1 (compounded annually)
t = 6 years
a. To calculate the balance in the fund at the end of the period:
A = $1,000(1 + 0.045/1)^(1*6)
A = $1,000(1 + 0.045)^6
A = $1,000(1.045)^6
A ≈ $1,000(1.2991)
A ≈ $1,299.10
Therefore, the balance in the fund at the end of the 6-year period is approximately $1,299.10.
b. To calculate the amount of interest earned over the period:
Interest earned = Final balance - Total savings
Interest earned = $1,299.10 - ($1,000 * 12 * 6)
Interest earned = $1,299.10 - $72,000
Interest earned = -$70,700.90
Note: The negative value indicates that the interest earned is less than the total savings made. This could be due to rounding errors in the calculations. Please double-check the interest rate and formula used for accuracy.
If you intended a different compounding frequency or have any other specific requirements, please let me know and I'll be happy to recalculate.
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In Business progress Solutions, the Process of defining research questions for your dissertation. Remember, this will be a long process, and you will probably need to refine and/or redefine your Understanding of the business situation,
identify symptoms, and Identify the key problem(s) from symptoms.
Explain the business situation and define the symptoms.
What problems can you identify based on the symptoms?
The first step in defining research questions for your dissertation in Business Progress Solutions involves identifying the business situation and defining the symptoms. The business situation is the environment in which the business operates.
It includes various factors that affect the business, such as economic conditions, competition, legal and regulatory issues, and customer needs. The symptoms are the indicators of problems in the business situation. They can be qualitative or quantitative and can include financial, operational, or strategic indicators.
Symptoms can be used to identify the key problems in the business situation. The problems can be categorized into financial, operational, or strategic problems. Financial problems are those that affect the profitability of the business. They can include low sales, high costs, or low margins. Operational problems are those that affect the efficiency of the business. They can include low productivity, poor quality, or low customer satisfaction. Strategic problems are those that affect the long-term viability of the business. They can include changing market conditions, emerging competition, or technological advancements.
In conclusion, the process of defining research questions for your dissertation involves understanding the business situation, identifying the symptoms, and identifying the key problems from symptoms. By doing this, you can develop research questions that address the most critical issues in the business situation.
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The COVID-19 pandemic severely affected the operations and revenues of the company you work for as project manager. The Director of operations has instructed you lay off 40% of your team members and increase the wages of the remaining by 30%. He concluded his instruction with the following phrase: "the remaining of you should be happier overall"
PART A: What ethical theory was the director appealing to by the phrase "the remaining of you should be happier overall"? Discuss whether or not the director’s decision was ethical or unethical. Justify and evaluate your answer.
PART B: Design and ethical leadership program for your company. Discuss three ways that could ensure that management and employees of your company behave ethically.
Director's utilitarian approach of layoffs for increased happiness raises ethical concerns. Implement ethical leadership program: training, clear policies, ethical reporting. Fosters supportive work environment, fairness, respect.
PART A: The ethical theory the director is appealing to with the phrase "the remaining of you should be happier overall" can be related to utilitarianism. Utilitarianism is an ethical theory that focuses on maximizing overall happiness or well-being for the greatest number of people. The director seems to be suggesting that by laying off some team members and increasing wages for the remaining employees, the overall happiness of the team would be improved.
However, the director's decision raises ethical concerns. While the intention may be to increase happiness for the remaining employees, the decision to lay off a significant portion of the team can have negative consequences. The well-being of those who were laid off is disregarded, potentially causing financial and emotional hardships for them. Furthermore, the increased workload on the remaining employees may lead to stress, burnout, and decreased job satisfaction.
In evaluating the ethicality of the decision, it is crucial to consider the principles of fairness, justice, and respect for individuals. The director's decision appears to prioritize the happiness of the majority at the expense of a minority. Ethical considerations should also include alternative options such as finding ways to support and retain the entire team, exploring cost-cutting measures that do not involve layoffs, or redistributing responsibilities more equitably.
PART B: To design an ethical leadership program for the company, three key approaches can be implemented to ensure ethical behavior among management and employees:
Ethical Training and Education: Implement regular training programs that focus on ethical decision-making, workplace values, and professional conduct. These programs should provide employees with the knowledge and skills to identify and address ethical dilemmas. Managers should receive additional training on ethical leadership, emphasizing the importance of setting a positive example and fostering an ethical culture within the organization.Clear Ethical Policies and Guidelines: Develop and communicate a comprehensive code of ethics and conduct that outlines the expected behaviors and standards for all employees. This code should cover areas such as conflicts of interest, confidentiality, respect for diversity, fair treatment, and compliance with laws and regulations. Ensure that employees have access to these policies and understand their rights and responsibilities.Encourage Ethical Reporting and Accountability: Establish channels for employees to report ethical concerns, such as a confidential hotline or an anonymous reporting system. Encourage a culture of openness and non-retaliation, where employees feel safe to speak up about potential ethical violations. Implement a robust system for investigating and addressing reported concerns, ensuring transparency and accountability throughout the process.In addition to these three approaches, it is important to cultivate a supportive and inclusive work environment that values integrity, promotes ethical behavior, and rewards employees for their adherence to ethical standards. Leadership should consistently demonstrate and reinforce these values to create a strong ethical foundation within the company.
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What is an efficient portfolio? Explain in terms of risk and
return characteristics.
An efficient portfolio refers to a portfolio that offers the highest expected return for a given level of risk or the lowest level of risk for a given expected return.
What are the characteristics of risk and return in an efficient portfolio?In an efficient portfolio, risk and return are closely interconnected. The following characteristics can be observed:
1. Risk: An efficient portfolio balances risk by diversifying investments across different asset classes or securities. This diversification helps to reduce the overall risk of the portfolio. The risk is measured by standard deviation or variance of returns. An efficient portfolio aims to achieve the desired level of risk by adjusting the allocation of assets.
2. Return: An efficient portfolio strives to maximize returns given a certain level of risk. The return is influenced by the performance of the individual assets in the portfolio. By combining assets with varying returns, an efficient portfolio seeks to achieve an optimal balance between risk and return.
3. Risk-Return Tradeoff: Efficient portfolios demonstrate a tradeoff between risk and return. Generally, higher returns are associated with higher levels of risk. However, an efficient portfolio aims to achieve the maximum possible return for a given level of risk, or alternatively, minimize risk for a desired level of return.
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A painting from an Italian art gallery bought by a Canadian citizen a month ago, is considered when computing the current Canadian ________. An investment in some new machines, made by Roots, a publicly held Canadian brand, is taken into account when computing the current Canadian ________ but not the ________ Select one: a. CPI, GDP deflator, CPI b. GDP deflator, CPI, CPI c. CPI, CPI, GDP deflator d. GDP deflator, CPI, GDP deflator
The correct answer is option d. According to the given information, a painting from an Italian art gallery bought by a Canadian citizen a month ago is considered when computing the current Canadian GDP deflator. The GDP deflator measures the overall price level of goods and services produced within a country, and it includes both domestically produced and imported goods.
On the other hand, an investment in new machines made by Roots, a publicly held Canadian brand, is taken into account when computing the current Canadian CPI (Consumer Price Index). The CPI measures changes in the price level of a basket of goods and services consumed by households, and it reflects the average price changes experienced by Canadian consumers.
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The correct answer is option d. According to the given information, a painting from an Italian art gallery bought by a Canadian citizen a month ago is considered when computing the current Canadian GDP deflator.
The GDP deflator measures the overall price level of goods and services produced within a country, and it includes both domestically produced and imported goods. On the other hand, an investment in new machines made by Roots, a publicly held Canadian brand, is taken into account when computing the current Canadian CPI (Consumer Price Index). The CPI measures changes in the price level of a basket of goods and services consumed by households, and it reflects the average price changes experienced by Canadian consumers.
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A company's sales to net worth ratio increases to the point that it is considered an overtrader. Assuming the company lacks sufficient cash to finance the increase in working capital accounts, its debt to equity ratio will?
a. Increase
b. Decrease
c. No Change
A company's debt to equity ratio is likely to rise if its sales to net worth ratio rises to the point where it is seen to be overtrading and it does not have enough cash on hand to support the rise in working capital accounts.
When a firm's sales to net worth ratio significantly rises, it often means that the company is producing more revenue in relation to its equity or net worth. Aggressive expansion, greater borrowing, or excessive risk-taking may be to blame for this. But if the business doesn't have enough cash on hand to pay for the equal rise in working capital accounts (such inventory, accounts receivable, etc.), it might have to turn to borrowing more money to make up the difference.
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D Question 13 What is the first step when conducting a hypothesis test? O Begin with a statement about what you believe exists in the population O Begin by drawing a random sample to obtain the sample
The correct answer is: "Begin with a statement about what you believe exists in the population."
The first step when conducting a hypothesis test is to formulate the null hypothesis and the alternative hypothesis. The null hypothesis represents the assumption of no significant difference or relationship between variables, while the alternative hypothesis represents the belief or claim that we are trying to support with evidence.
These hypotheses are based on prior knowledge, theory, or observations.
After formulating the hypotheses, the next steps typically involve selecting a significance level, collecting data through a sample, performing statistical calculations, and making a decision based on the test statistic and the comparison of the results to the significance level.
Drawing a random sample is an important part of data collection, but it is not the first step when conducting a hypothesis test. The first step is to clearly state the null and alternative hypotheses.
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Use the 3-equation model diagrams to show how the economy can fall into a deflation trap. Explain, with reference to the diagram, how the central bank/government can intervene to escape the trap. Show the relevant IS curve and re-label the MR as the PR to indicate that fiscal policy is being used. Are there any reasons why these policies might not work?
The economy can fall into a deflation trap when there is a persistent decline in prices, leading to reduced consumer spending, lower investment, and economic stagnation.
In the three-equation model diagram, we have the IS (Investment and Saving), LM (Liquidity Preference and Money Supply), and Phillips Curve (Inflation and Unemployment) curves. To illustrate a deflation trap, we focus on the IS-LM framework.
When the economy experiences deflation, the aggregate demand falls, causing a leftward shift of the IS curve. This shift results in lower output (Y) and higher unemployment (U). In response, the central bank can lower interest rates to stimulate investment and shift the LM curve downwards.
To escape the deflation trap, the government can implement fiscal policy by increasing government spending or reducing taxes. This action shifts the IS curve to the right, boosting output and employment. To reflect the use of fiscal policy, we relabel the Money Rate (MR) as the Price Rate (PR) on the diagram.
However, there are reasons why these policies might not work. First, the zero lower bound on interest rates can limit the central bank's ability to further lower rates, reducing the effectiveness of monetary policy. Second, if expectations of deflation become entrenched, individuals and businesses may delay spending, leading to a persistent deflationary spiral.
Moreover, fiscal policy might face constraints such as high government debt, which limits the government's ability to increase spending or reduce taxes. Additionally, if the private sector lacks confidence in the effectiveness of government measures, they may save more instead of increasing consumption or investment.
In summary, a deflation trap can be visualized in the IS-LM model. The central bank can intervene by lowering interest rates, while the government can use fiscal policy to stimulate the economy. However, limitations like the zero lower bound, expectations, and fiscal constraints can impede the effectiveness of these policies.\
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Suppose your company needs $12 million to build a new assembly line. Your target debt- equity ratio is .4. The flotation cost for new equity is 8 percent, but the flotation cost for debt is only 5 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What is your company's weighted average flotation cost, assuming all equity is raised externally? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the true cost of building the new assembly line after taking flotation costs into account? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.) a. Flotation cost b. Amount raised %
The weighted average flotation cost is 8% since all equity is raised externally. After considering the flotation costs, the true cost of building the assembly line is $11 million.
To fund the new assembly line project, your company aims to maintain a target debt-equity ratio of 0.4. The flotation cost for new equity is 8%, while the flotation cost for debt is 5%. By opting for debt financing, which has lower flotation costs and meets the funding requirements, your company can proceed with the project. The weighted average flotation cost is calculated to determine the overall cost of raising external equity. Additionally, considering the flotation costs, the true cost of building the assembly line is determined.
a. The weighted average flotation cost is calculated by considering the proportions of equity and debt in the capital structure and their respective flotation costs. Since all equity is raised externally, the weighted average flotation cost is equal to the flotation cost of equity, which is 8%.
b. To determine the true cost of building the assembly line, the flotation costs of both equity and debt need to be taken into account. The amount raised through equity and debt can be calculated based on the target debt-equity ratio. Let's assume the amount raised through equity is E and the amount raised through debt is D. The total amount needed for the project is $12 million. Therefore, the amount raised through equity is E = 0.4 * $12 million = $4.8 million, and the amount raised through debt is D = $12 million - $4.8 million = $7.2 million.
To calculate the true cost, we need to consider the flotation costs. The flotation cost for equity is 8%, so the actual amount raised through equity is (1 - 8%) * $4.8 million = $4.416 million. The flotation cost for debt is 5%, so the actual amount raised through debt is (1 - 5%) * $7.2 million = $6.84 million.
Therefore, the true cost of building the assembly line, taking flotation costs into account, is the sum of the actual amounts raised through equity and debt: $4.416 million + $6.84 million = $11.256 million. Rounded to the nearest whole number, the true cost is $11 million.
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The current EUR to USD exchange rate is $1.0558. If 3-month U.S. investments are paying a 2% APR, and 3-month European investments are paying a 3% APR, what should the EUR to USD exchange rate be in three months?
The EUR to USD exchange rate in three months should be approximately $1.0664.
To determine the future EUR to USD exchange rate in three months, we need to consider the interest rate differentials between the United States and Europe.
Given:
Current EUR to USD exchange rate: $1.0558
U.S. 3-month interest rate: 2% APR
European 3-month interest rate: 3% APR
First, we need to calculate the interest earned on a 3-month U.S. investment:
Interest earned on U.S. investment = U.S. investment * (U.S. interest rate / 100)
Interest earned on U.S. investment = 1 * (2 / 100) = 0.02
Next, we calculate the interest earned on a 3-month European investment:
Interest earned on European investment = European investment * (European interest rate / 100)
Interest earned on European investment = 1 * (3 / 100) = 0.03
Now, we calculate the difference in interest earned between the two investments:
Interest rate differential = Interest earned on European investment - Interest earned on U.S. investment
Interest rate differential = 0.03 - 0.02 = 0.01
To find the new EUR to USD exchange rate in three months, we multiply the current exchange rate by the interest rate differential:
New EUR to USD exchange rate = Current EUR to USD exchange rate * (1 + Interest rate differential)
New EUR to USD exchange rate = $1.0558 * (1 + 0.01) = $1.0664
Therefore, the EUR to USD exchange rate in three months should be approximately $1.0664.
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Assistants often are responsible for small group work. They need to know how to create rules, teach procedures, and enforce rules. Make sure to consult your text for how these rules need to be phrased, and indicate the age of the children/students for which you are writing the rules.
1. Write three to five rules for a small group, making sure that respect, responsibility, and safety are addressed.
2. Write procedures for a. Coming to the group b. Working as an individual at the table c. Leaving the table
3. Discuss how you will teach your rules and procedures. Choose an age level.
4. Describe how you plan to create a calm/positive climate in your group.
1. Rules for a small group:For elementary school students aged 6-8, the following rules can be established:Raise your hand before speaking or interrupting
2. Procedures:For elementary school students aged 6-8, the following procedures can be established:Coming to the group: Students should come to the group quietly
3. Teaching the rules and procedures:Elementary school students aged 6-8 can be taught the rules and procedures
4. Creating a calm/positive climate:To create a calm/positive climate in a group
1. Rules for a small group:For elementary school students aged 6-8, the following rules can be established:Raise your hand before speaking or interrupting.Listen when someone is speaking.Keep hands, feet, and objects to yourself.Treat others the way you want to be treated.Be respectful of the other group members.
2. Procedures:For elementary school students aged 6-8, the following procedures can be established:Coming to the group: Students should come to the group quietly and sit in the assigned spot.Working as an individual at the table: Students should work quietly and independently. They should raise their hands if they need help.Leaving the table: Students should push their chairs under the table and leave quietly.
3. Teaching the rules and procedures:Elementary school students aged 6-8 can be taught the rules and procedures in the following ways:Start by explaining the rules and procedures using simple and clear language. Then, model the behavior for the students and provide opportunities for practice. Reinforce positive behavior and correct negative behavior immediately.
4. Creating a calm/positive climate:To create a calm/positive climate in a group, the following strategies can be used:Encourage positive behavior and recognize good work or behavior.Listen to the students' concerns and ideas and encourage them to resolve their issues respectfully.Treat students with respect and model respectful behavior.
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An intangible asset with a finite life is always amortized over: a) the longer of the estimated useful life and legal life. b) the legallife. c) the shorter of the estimated usefullife and legallife. d) the estimated usefullife.
An intangible asset with a finite life is typically amortized over the shorter of its estimated useful life and legal life. The correct answer is option c.
The estimated useful life represents the period over which the asset is expected to provide economic benefits to the company. It is based on factors such as technological obsolescence, expected usage, and market conditions. The legal life, on the other hand, refers to the duration of legal protection or contractual rights associated with the asset, which may be limited by legal or contractual provisions.
By amortizing the asset over the shorter duration, the company ensures that the amortization expense accurately reflects the consumption of the asset over its expected useful life or the period it has legal protection.
This approach aligns with accounting principles and provides a more accurate representation of the asset's value and its impact on the company's financial statements. Ultimately, this helps in better matching the costs of the intangible asset with the corresponding revenue generated from its use.
The correct answer is option c.
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Gio's Restaurants is considering a project with the following expected cash flows:
Year
Project Cash Flow (millions)
0
$(180)
1
80
2
60
3
80
4
95
(Click
on the icon
in order to copy its contents into a
spreadsheet.)
If the project's appropriate discount rate is
9
percent, what is the project's discounted payback period?
The discounted payback period for the project is approximately 3 years and 9.05 months.
To calculate the discounted payback period, we need to find the cumulative discounted cash flows until they become positive or reach zero. The discounted cash flows are calculated by discounting each cash flow using the appropriate discount rate.
Using a discount rate of 9%, we can calculate the discounted cash flows as follows:
Year 0: $(180 million) / (1 + 0.09)^0 = $(180 million)
Year 1: $80 million / (1 + 0.09)^1 = $73.39 million
Year 2: $60 million / (1 + 0.09)^2 = $51.37 million
Year 3: $80 million / (1 + 0.09)^3 = $60.85 million
Year 4: $95 million / (1 + 0.09)^4 = $68.40 million
Now, we calculate the cumulative discounted cash flows:
Year 0: $(180 million)
Year 1: $(180 million) + $73.39 million = $(106.61 million)
Year 2: $(106.61 million) + $51.37 million = $(55.24 million)
Year 3: $(55.24 million) + $60.85 million = $5.61 million
The discounted payback period is the time it takes for the cumulative discounted cash flows to reach zero or become positive. In this case, the discounted payback period is between Year 3 and Year 4.
To determine the exact discounted payback period, we need to interpolate between Year 3 and Year 4. We can calculate the exact discounted payback period as follows:
Discounted payback period = Year 3 + (Positive cash flow in Year 4 / Cash flow difference between Year 4 and Year 3)
Discounted payback period = Year 3 + ($68.40 million / ($68.40 million - $60.85 million))
Discounted payback period ≈ Year 3 + ($68.40 million / $7.55 million)
Discounted payback period ≈ Year 3 + 9.05
Therefore, the discounted payback period for the project is approximately 3 years and 9.05 months.
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The discounted payback period for the project is 3 years and some fraction of the fourth year.
To calculate the discounted payback period, we need to determine the present value of each cash flow and accumulate them until the present value exceeds the initial investment.
Using a discount rate of 9%, we can calculate the present value (PV) of each cash flow as follows:
PV(Cash Flow) = Cash Flow / (1 + Discount Rate)^Year
Year 0: PV(180) = -180 / (1 + 0.09)^0 = -180
Year 1: PV(80) = 80 / (1 + 0.09)^1 = 73.39
Year 2: PV(60) = 60 / (1 + 0.09)^2 = 49.07
Year 3: PV(80) = 80 / (1 + 0.09)^3 = 57.60
Year 4: PV(95) = 95 / (1 + 0.09)^4 = 67.10
We accumulate the present values until the sum exceeds the initial investment:
Accumulated PV = -180 + 73.39 + 49.07 + 57.60 + 67.10 = 47.16
The discounted payback period is the time it takes for the accumulated present value to become positive. In this case, the discounted payback period is between Year 3 and Year 4.
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the perception that our fate is determined by chance reflects
The perception that our fate is determined by chance reflects a belief in luck or randomness. It may suggest a belief in external forces or circumstances beyond our control that shape our outcomes.
This perception can be influenced by personal experiences, cultural beliefs, and individual perspectives. It can lead to different attitudes and behaviors, such as relying on luck, superstitions, or feeling a lack of personal agency in shaping one's destiny. Perception refers to the process by which individuals interpret and make sense of sensory information from their environment.
Perception plays a crucial role in how we understand the world around us. It involves the reception of sensory stimuli through our senses, such as sight, hearing, taste, touch, and smell. These stimuli are then processed and organized in our brains to form meaningful perceptions and interpretations of our surroundings.
Our perception can be influenced by various factors, including past experiences, cultural background, personal beliefs, and cognitive processes. It is important to note that perception is subjective, as different individuals may perceive the same stimuli differently based on their unique perspectives and cognitive filters.
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A country's gross domestic product (GDP) is $48 billion and its money supply (MS) is $12 billion.
(a) What is the country's velocity of money (VM)?
VM _____
(b). If the MS stays at the same level next year while the velocity of money "turns over" 8.0 times, what would be the level of GDP? (Enter in billion. Round answer to 2 decimal places, e.g. 527.52.)
GDP ______ billion
(a) The velocity of money (VM) in the given scenario is 4.00.
(b) The GDP, if the velocity of money turns over 8.0 times while the MS (money supply) remains constant at $12 billion, would be $96 billion.
In the first step, we calculate the velocity of money (VM) by dividing the GDP by the money supply. VM = GDP / MS. Substituting the given values, VM = $48 billion / $12 billion = 4.00.
In the second step, we can use the equation of quantity theory of money, which states that MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the real GDP. Since we know that M = $12 billion and V = 8.0 (given in the question), we can rearrange the equation to solve for Q (real GDP). Q = (M * V) / P. Plugging in the known values, Q = ($12 billion * 8.0) / P.
In the third step, we can substitute the calculated value of Q and solve for P (price level) to find the GDP. Rearranging the equation, we have P = ($12 billion * 8.0) / Q. Plugging in the given GDP of $48 billion, we can solve for P. P = ($12 billion * 8.0) / $48 billion = $2 billion.
Finally, we can use the equation of GDP (GDP = P * Q) to calculate the new GDP when the velocity of money turns over 8.0 times while the money supply remains constant. Plugging in the calculated values of P and Q, GDP = $2 billion * $48 billion = $96 billion.
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A company had net sales of $30,400 and ending accounts receivable of $3,800 for the current period. Its days' sales uncollected equals: (Use 365 days a year.) Multiple Choice O 37.63 days. 60.93 days. 45.63 days. 56.83 days. 8.00 days.
The answer is 45.63 days.
Days' Sales Uncollected is the average amount of time it takes for a business to collect accounts receivable (AR) after a sale. It's sometimes called the "collection period," and it can reveal a lot about a company's efficiency. When compared to the credit terms extended to customers, the days' sales uncollected provides an indication of how efficiently a company is collecting on its receivables.
The calculation of Days' Sales Uncollected is as follows:Accounts Receivable / (Annual Credit Sales / 365 Days)The solution for the given problem is as follows:Annual Credit Sales = Net SalesEnding AR = $3,800Days' Sales Uncollected = Ending AR / (Net Sales / 365)Days' Sales Uncollected = $3,800 / ($30,400 / 365)Days' Sales Uncollected = $3,800 / 83.287 Days' Sales Uncollected = 45.63 DaysTherefore, the answer is 45.63 days.
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W.T. Ginsburg Engine Company manufactures part ACT31107 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $42,000 10,500 Direct labor 30,500 Variable overhead costs Fixed overhead costs 19,000 $102,000 Total costs It is estimated that 9% of the fixed overhead costs assigned to ACT31107 will no longer be incurred if the company purchases ACT31107 from the outside supplier. W.T. Ginsburg Engine Company has the option of purchasing the part from an outside supplier at $93.75 per unit. If W.T. Ginsburg Engine Company purchases 1,000 ACT31107 parts from the outside supplier per month, then its monthly operating income will (Round any intermediary calculations and your final answer to the nearest cent.) A. decrease by $22,960 B. increase by $9,040 C. decrease by $9,040 D. increase by $22,960 Freetown Corporation incurred fixed manufacturing costs of $32,000 during 2020. Other information for 2020 includes: The budgeted denominator level is 3,000 units. Units produced total 1,500 units. Units sold total 1,300 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. than operating income if using variable costing. (Round any Operating income using absorption costing will be intermediary calculations to the nearest cent and your final answer to the nearest dollar.) A. $18,139 higher B. $4,267 lower C. $2,134 higher D. $13,867 lower Somerset Finishing produces and sells a decorative pillow for $103 per unit. In the first month of operation, 2,400 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. The fixed cost budget is based on the production of 2,400 units. Other information for the month includes: Variable manufacturing costs $25 per unit Variable marketing costs $8 per unit Fixed manufacturing costs $13 per unit Administrative expenses, all fixed $20 per unit Ending inventories: Direct materials - 0- WIP - 0- Finished goods 650 units What is cost of goods sold using variable costing? A. $43,750 B. $79,200 C. $158,400 D. $80,500
W.T. Ginsburg Engine Company If W.T. Ginsburg Engine Company purchases 1,000 ACT31107 parts from the outside supplier per month, then its monthly operating income will decrease by $22,960.
Here is the calculation:
Cost of goods sold if manufactured internally:
Code snippet
Direct materials $42,000
Direct labor 10,500
Variable overhead costs 30,500
Fixed overhead costs 19,000
Total cost of goods sold $102,000
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Cost of goods sold if purchased from outside supplier:
Code snippet
Purchase price 93.75 * 1,000 = $93,750
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Change in operating income:
Code snippet
$102,000 - $93,750 = $8,250
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Freetown Corporation
Operating income using absorption costing will be $4,267 lower than operating income if using variable costing.
Here is the calculation:
Absorption costing income:
Code snippet
Sales revenue (1,300 units * $103) = $133,900
Cost of goods sold (1,500 units * $70) = $105,000
Selling and administrative expenses 13,867
Operating income $15,033
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Variable costing income:
Code snippet
Sales revenue (1,300 units * $103) = $133,900
Variable costs (1,300 units * $58) = $75,400
Selling and administrative expenses 13,867
Operating income $44,633
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The difference in operating income is due to the treatment of fixed manufacturing costs. Under absorption costing, fixed manufacturing costs are allocated to units produced and are included in the cost of goods sold. Under variable costing, fixed manufacturing costs are expensed as incurred.
Somerset Finishing
Cost of goods sold using variable costing is $79,200.
Here is the calculation:
Variable manufacturing costs (1,750 units * $25) = $43,750
Variable marketing costs (1,750 units * $8) = $14,000
Total variable costs $57,750
Fixed manufacturing costs $13 per unit * 2,400 units = $31,200
Administrative expenses $20 per unit * 1,750 units = $35,000
Cost of goods sold $57,750 + $31,200 + $35,000 = $79,200
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Ten samples of 15 parts each were taken from an ongoing process to establish a p-chart for control. The samples and the number of defectives in each are shown in the following table: a. Determine the p
ˉ
,S p
, UCL and LCL for a p-chart of 95 percent confidence (1.96 standard deviations). (Leave no ce) blank - be certain to enter "0" wherever required. Round your answers to 3 decimal places.)
Z = 1.96 (for a 95 percent confidence level) and the values for p, p', Sp, UCL, and LCL can be calculated using the following steps.
To determine the p', Sp, UCL, and LCL for a p-chart with a 95 percent confidence level, the following steps need to be taken:
Calculate the average proportion defective (p'):
Sum the number of defectives in all samples (defectives = 52).
Sum the total number of parts in all samples (n = 150).
Calculate p' = defectives / n = 52 / 150 = 0.347.
Calculate the standard deviation of the proportion defective (Sp):
For each sample, calculate the proportion defective (p) by dividing the number of defectives by the sample size (n = 15) and record the results in a table.
Calculate the average of all p values (p').
Calculate the sum of the squared differences between each p value and p'.
Divide the sum of squared differences by the number of samples minus one (10 - 1 = 9).
Take the square root of the result to get Sp.
Calculate the upper control limit (UCL) and lower control limit (LCL):
UCL = p' + Z * Sp
LCL = p' - Z * Sp
In this case, Z = 1.96 (for a 95 percent confidence level) and the values for p, p', Sp, UCL, and LCL can be calculated using the above steps.
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