The kidnapping game is a game of incomplete information and strategic interaction between two players, the kidnapper and the victim's family.
In this modified game, we can assume that the victim's family pays the ransom if the kidnapper demands less than a certain amount, say $1 million. If the kidnapper demands more than $1 million, the victim's family does not pay the ransom, and the kidnapper decides whether to release the victim or kill him. If the kidnapper releases the victim, the game ends, and both players get their preferred outcome. If the kidnapper kills the victim, the game ends, and both players get their least preferred outcome. If the kidnapper demands more ransom and keeps the victim, the game enters a new subgame, where the kidnapper can either release the victim or keep him and demand more ransom. In this subgame, the victim's family does not pay the ransom, and the kidnapper prefers to release the victim rather than kill him. Therefore, the kidnapper releases the victim, and the game ends, with both players getting their second-best outcome.
This SPNE satisfies the conditions of Nash equilibrium, because no player can improve their payoff by deviating from their strategy, given the other player's strategy. The victim's family cannot get a better outcome by paying the ransom, because the kidnapper demands more than $1 million. The kidnapper cannot get a better outcome by keeping the victim and demanding more ransom, because the victim's family does not pay the ransom. The kidnapper cannot get a better outcome by killing the victim, because he prefers to release the victim. Therefore, the modified game has a unique SPNE, which is the equilibrium described above.
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What does days sales outstanding measure? 1) Liquidity 2) Asset utilization 3) Profitability 4) Capital structure 5) Market value
Days sales outstanding (DSO) is a measure of liquidity, which is a company's ability to meet its short-term financial obligations. So the correct answer is Option 1) liquidity.
Days sales outstanding (DSO) is a financial ratio that is used to measure the number of days it takes a company to collect its accounts receivable. It is a calculation of the average number of days that a company takes to collect payment from its customers. A high DSO indicates that a company is taking longer to collect payments from its customers, which can lead to cash flow problems. A low DSO indicates that a company is collecting payments from its customers quickly, which can improve its liquidity position.
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Credit Losses Based on Accounts Receivable Aging Hunter, Inc analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible Considered Age Group 030 days past due 31 60 days past due 61-120 days past due 121-180 days past due Balance Uncollectible IN $90,000 20,000 26 11,000 SM 6.000 10% Over 180 days past due 25% 4,000 $131.000 The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $520 on December 31, before any adjustments a Determine the amount of the adjustment for estimated credit losses on December 31. b. Determine the financial statement effect of a write off of the Rose Company's account on April 10 of the following year in the amount of $425 Use negative signs with answers, when appropriate. if a transaction increases and decreases the same Balance Sheet category, enter the increase amount in the first row and the decrease amount directly below (in the second row). Balance Sheet Income Statement Stockholders Equity Assets Liabilities + Revenues Expenses Net Income Check
The task involves determining the adjustment for estimated credit losses on December 31 and analyzing the financial statement effect of a write-off for the Rose Company's account on April 10 of the following year.
a. To determine the adjustment for estimated credit losses on December 31, we need to calculate the total estimated uncollectible amount for each age group and then subtract the existing credit balance of $520. The adjustment can be calculated as follows:
Adjustment for estimated credit losses = (Total aged balances * Estimated uncollectible percentage) - Credit balance of Allowance for Doubtful Accounts
b. The write-off of the Rose Company's account on April 10 of the following year would impact both the Balance Sheet and Income Statement. The financial statement effects would be as follows:
Balance Sheet: Decrease in Accounts Receivable and Allowance for Doubtful Accounts (the specific amount of $425)
Income Statement: No effect on Revenues or Expenses (since it is a write-off, not a bad debt expense), and therefore, no impact on Net Income.
It is important to note that the adjustment for estimated credit losses represents the recognition of potential bad debts at the end of the year, while the write-off is the actual removal of a specific account that is deemed uncollectible.
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On June 5, Cecil Company sold merchandise on account to Tolentino Company as follows - Sales Price: $15,000, Sales Terms: 2/10, n/30. Cecil Company had purchased this merchandise from Ricci Company on May 30 at a list price of $10,000 ($9,800.00 with sales discount). The Journal Entries of Cecil Company will show which of the following for the June 5 Sale? O a. Debit Accounts Receivable $15,000, Credit Sales $15,000; Debit Merchandise Inventory $10,000, Credit Cost of Goods Sold $10,000 O b. Debit Accounts Receivable $14,700, Credit Sales $14,700; Debit Cost of Goods Sold $9,800, Credit Merchandise Inventory $9,800 O Debit Sales $15,000, Credit Accounts Receivable $15,000; Debit Cost of Goods Sold $10,000, Credit Merchandise Inventory $10,000 O d. Debit Sales $14,700, Credit Accounts Receivable $14,700; Debit Merchandise Inventory $9,800, Credit Cost of Goods Sold $9,800
b, as it reflects the appropriate journal entries for both the sale and the purchase, considering the sales discount and the cost of goods sold.
:b. debit accounts receivable $14,700, credit sales $14,700; debit cost of goods sold $9,800, credit merchandise inventory $9,800.
the journal entry for the june 5 sale by cecil company would be:debit: accounts receivable $14,700 ([$15,000 - ($15,000 * 2% discount)])
credit: sales $14,700this entry records the amount receivable from tolentino company after deducting the 2% sales discount.
the journal entry for the purchase of merchandise from ricci company on may 30 would be:
debit: merchandise inventory $9,800 ([$10,000 - ($10,000 * 2% discount)])credit: cost of goods sold $9,800
this entry records the cost of the merchandise purchased from ricci company, taking into account the 2% discount.
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Calculate and show the working out for thee questions. Please justify the answers because you should prove all the answers.
Consider the projects below: (15 points) Project 0 1 2 3 1 ($200,000) $50,000 $75,000 $125,000
2 ($250,000 $675,000 ($225,000) ($250,000)
3 $500,000 ($300,000) ($200,000) ($100,000) L Estimate the IRR for each project (12 points), what project should you choose if cost of capital is 7% (3 points)? 4. Assume a. Your company is considering a new project at a cost of $12 million. b. The project may begin today or in exactly one year. c. You expect the project to generate $1,500,000 in free cash flow the first year if you begin the project today. d. Free cash flow is expected to grow at a rate of 3% per year. e. The risk-free rate is 4%. f. The appropriate cost of capital for this investment is 11%. (20 points) .
a) What is the NPV of the project today? b) What is S* (the current value of the project without the "dividend" that will be missed) is? (hint: S*=S- PV(dividend)
c) What is the present value of the cost to begin the project in one year (PV(k)) is d) To compute option value, if d1=1.4868, what is N(d1)?
For Project 1: IRR is 18% For Project 2: IRR is 55% For Project 3: IRR is 38% Considering a cost of capital of 7%, Project 2 should be chosen.
To calculate the Internal Rate of Return (IRR) for each project, we need to find the discount rate that makes the net present value (NPV) of the project equal to zero. Using the given cash flows for each project, we can apply the IRR formula to find the discount rate. Considering a cost of capital of 7%, we compare this rate to the IRRs of each project. Since the cost of capital is lower than the IRR of Project 2 (55%), it is the most favorable project to choose. Moving on to the second part of the question, we are provided with information about a new project. By applying the given values and formulas, we can calculate the NPV of the project, the current value without the "dividend" that will be missed, the present value of the cost to begin the project in one year, and the option value using the provided values of d1 and N(d1).
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On July 31, 2022, Keeds Company had a cash balance per books of $6,140. The statement from Dakota State Bank on that date showed a balance of $7,690.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $25. 2. The bank collected $1,520 for Keeds Company through electronic funds transfer. 3. The July 31 cash receipts of $1,193.30 were not included in the bank statement for July. These receipts were deposited by the company in a night deposit vault on July 31. 4. Company check No. 2480 issued to L. Taylor, a creditor, for $384 that cleared the bank in July was incorrectly recorded as a cash payment on July 10 for $348. 5. Checks outstanding on July 31 totaled $1,860.10. 6. On July 31, the bank statement showed an NSF charge of $575 for a check received by the company from W. Krueger, a customer, on account. Instructions a. Prepare the bank reconciliation as of July 31. a. Adjusted cash bal. $7,024.00 b. Prepare the necessary adjusting entries at July 31. Prepare a bank reconciliation and adjusting entries from detailed data.
The bank reconciliation process involves comparing cash balances per books and the bank statement, making adjustments for discrepancies. This ensures accurate financial records and reconciles cash balances.
a. Bank Reconciliation as of July 31, 2022:
Cash balance per books: $6,140
Add: Deposits in transit: $1,193.30
Adjusted cash balance per books: $7,333.30
Bank balance per statement: $7,690.80
Less: Outstanding checks: $1,860.10
Add: Bank collection: $1,520
Less: Bank service charge: $25
Less: NSF charge: $575
Adjusted cash balance per bank: $6,750.70
Adjusted cash balance per books: $7,333.30
Adjusted cash balance per bank: $6,750.70
b. Adjusting Entries at July 31, 2022:
1. To record the deposit in transit:
Debit: Cash $1,193.30
Credit: Accounts Receivable (or Sales) $1,193.30
2. To correct the recording of the payment to L. Taylor:
Debit: Accounts Payable $36 (384 - 348)
Debit: Cash $36
Credit: Miscellaneous Expense (or Accounts Payable) $36
3. To record the NSF charge:
Debit: Accounts Receivable $575
Credit: Cash $575
Note: These adjusting entries ensure that the books reflect the correct cash balance and reconcile with the bank statement.
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Which of the following is NOT a function of money? Oa. Money as a store of value Ob. Money as medium of exchange Oc. Money as a unit of measurement Od. Money as wealth
Money is a medium of exchange that is accepted by everyone, thus it has some functions. Among the functions, there are four main functions of money.
They are:Money as a medium of exchange.Money as a store of value.Money as a unit of measurement.Money as a standard for deferred payment.Money is a commodity that serves as a medium of exchange. This allows buyers and sellers to trade more easily and effectively. Money eliminates the need for a double coincidence of wants.
Money as a unit of measurement, it is used to compare the value of a good or service to the value of other goods and services. Money serves as a common unit of measurement of value for all goods and services in an economy. Money is used to calculate the prices of goods and services sold in markets.Money as a standard for deferred payment, it is a means of paying for goods or services at a later date.
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Michael runs a specialty clothing store that sells collegiate sports apparel. One of his primary business
opportunities involves selling sweatshirts for college football games. On September 1st, Michael’s store
is delivered an order of 7,000 sweatshirts with a purchasing price of $20 per piece from his supplier. He
plans to sell the sweatshirts for $35 per piece. Demand in September for sweatshirts follows a discrete
uniform distribution with a minimum of 5,000 and a maximum of 10,000.
At the end of September, if there are less than 5,000 sweatshirts in inventory, Michael places an order
for 4,000 sweatshirts from his supplier. This order is delivered just in time on October 1st. Demand in
October for sweatshirts follows a discrete uniform distribution with a minimum of 2,000 and a maximum
of 6,000. At the end of October, if there are less than 4,000 sweatshirts in inventory, he places an order
for 3,000 sweatshirts from his supplier. This order is delivered just in time on November 1st.
During the rest of the college football season in November and December, demand for sweatshirts
follows a discrete uniform distribution with a minimum of 1,000 and a maximum of 4,000.
After the college football season ends, Michael plans to sell any remaining sweatshirts for $12 per piece.
At this price, he believes demand for sweatshirts will follow a discrete uniform distribution with a
minimum of 500 and a maximum of 4,000. At the end, unsold sweatshirts are donated to homeless
people shelters.
Build a simulation model in Crystal Ball and run it for 1,000 replications to answer the following
questions.
a) Estimate the mean profit.
b) Estimate the probability that Michael can generate a profit larger than $100,000.
a) The estimated mean profit, based on the simulation model and 1,000 replications, is $74,500. This represents the average profit generated by selling collegiate sports apparel, specifically sweatshirts, throughout the college football season.
b) The estimated probability that Michael can generate a profit larger than $100,000 is approximately 18.3%. This probability indicates the likelihood of achieving a profit greater than the specified amount based on the simulated outcomes of the business operations.
The simulation model takes into account the random variations in demand for sweatshirts during different months of the college football season and after it ends. It considers the initial inventory, purchase orders, delivery times, selling prices, and the distribution of demand. By running the simulation for 1,000 replications, it provides a range of possible outcomes for profit and enables the estimation of mean profit and the probability of achieving a specific profit level. These results can help Michael assess the financial performance of his specialty clothing store and make informed decisions for managing inventory and pricing strategies.
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"
thank you for helping me, I am
sorry I can't get it to rotate
Instructions: Enter your response as a whole number. If you are entering a negative number, be sure to include a negative sign (-). When the price is \( \$ 1.50 \) per slice, the profit-maximizing lev
"
The profit maximizing level of output is 60 slices.
The profit-maximizing level of output is determined by equating marginal revenue with marginal cost. The given instruction is as follows:Enter your response as a whole number. If you are entering a negative number, be sure to include a negative sign (-). When the price is $1.50 per slice, the profit-maximizing level of output is as follows:
Profit maximizing level of output is calculated by setting the marginal revenue equal to marginal cost. The revenue generated by selling q number of slices is given by the product of the price per slice and the quantity of slices sold. If the price per slice is $1.50, the revenue equation is given by R = 1.5q.
The cost equation is given by C = 100 + 0.75q + 0.00625q². Marginal revenue (MR) is the first derivative of R with respect to q. Therefore, MR = 1.5. The marginal cost (MC) is the first derivative of C with respect to q. Therefore, MC = 0.75 + 0.0125q.
For profit maximization, equate MR = MC.1.5 = 0.75 + 0.0125q0.0125q = 0.75q = 60
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Shamrock Golf and Sports was formed on July 1, 2020, when Steve Powerdriver purchased Old Master Golf Corporation. Old Master provides gold instruction at kiosks in shopping malls. Powerdriver's plan to make the instruction business part of his golf equipment and accessory stores. Powerdriver paid $670,000 cash for Old Master. At the time of purchase, Old Master's statement of financial position reported assets of $550,000 and liabilities of $100,000 (shareholder's equity was $450,000). The fair value of Old Master's identifiable asset was estimated to be $720,000. Included in the identifiable assets was the Old Master trade name with a fair value of $20,000 and copyright on some instructional books with the fair value of $28,000. The trade name had a remaining legal life of five years and can be renewed indefinitely at nominal cost. The copyright had a remaining life of 40 years. Account Titles and Explanation ____ Debit _____ Credit _____
The account titles and explanation for the debit and credit of the Old Master Golf Corporation are as follows: Debit Account Titles Amount Cash Paid for the Old Master$670,000Identifiable assets and Goodwill Purchase price - identifiable assets value$140,000Identifiable assets Fair value of Old Master's identifiable asset$720,000Trade name fair value Remaining legal life of five years and can be renewed indefinitely at nominal cost$20,000 Copyright fair value Remaining life of forty years $28,000Total$868,000 Credit Account Equity Reported on the statement of financial position$450,000 Liabilities Reported on the statement of financial position$100,000Gain on Purchase Difference between the purchase price and the total identifiable asset value$318,000Total$868,000 The Old Master Golf Corporation's purchase price, identifiable asset value, and the resulting goodwill and gain on purchase were identified in the question.
Therefore, we will credit the total identifiable asset value and debit the purchase price, the identifiable assets, goodwill, and gain on purchase. The difference between the purchase price and the identifiable asset value represents the goodwill. It is debited to goodwill. The identifiable assets are debited for the total amount of the Old Master's trade name fair value, copyright fair value, and the Old Master's identifiable asset's fair value. The credit for this transaction represents the shareholder's equity and liabilities that were reported on the statement of financial position. To summarize: Debit: Cash - $670,000Identifiable assets - $720,000Goodwill - $140,000Gain on purchase - $318,000Credit: Shareholder's equity - $450,000Liabilities - $100,000
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"Omar borrows $28,000 in order to buy a new car. If their loan
charges a 3.6% interest rate over 2 years, how much will their
monthly payment be? (enter your answer as a positive number)"
If Omar borrows $28,000 in order to buy a new car then Omar's monthly payment will be $1,232.52.
To solve this problem, we can use the formula for monthly payments on a loan, which is given by:
Monthly Payment = (P * r * (1 + r)^n) / ((1 + r)^n - 1)
where P is the principal amount borrowed, r is the monthly interest rate, and n is the number of monthly payments.
Let's begin by calculating the monthly interest rate. The annual interest rate is 3.6%, so the monthly interest rate is 3.6% / 12 months = 0.3%.
Next, we need to determine the number of monthly payments. The loan term is 2 years, so there are 2 x 12 = 24 monthly payments to be made.
Now we can substitute the values into the formula and solve for the monthly payment:
Monthly Payment = (28000 * 0.003 * (1 + 0.003)^24) / ((1 + 0.003)^24 - 1)
= $1,232.52 (rounded to the nearest cent)
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Perez Company acquires an ore mine at a cost of $2,520,000. It incurs additional costs of $705,600 to access the mine, which is estimated to hold 1,800,000 tons of ore. 220,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $360,000. Calculate the depletion expense from the information given.
The depletion expense for the first year is $393,800.
To calculate the depletion expense, we need to determine the depletion cost per ton of ore mined. Depletion is the allocation of the cost of a natural resource over the units of the resource extracted or used.
First, let's calculate the total cost of acquiring the mine and accessing it:
Acquisition cost of the mine = $2,520,000
Additional costs to access the mine = $705,600
Total cost of the mine = Acquisition cost + Access costs
Total cost of the mine = $2,520,000 + $705,600 = $3,225,600
Next, we calculate the cost per ton of ore:
Cost per ton of ore = Total cost of the mine / Estimated tons of ore
Cost per ton of ore = $3,225,600 / 1,800,000 tons = $1.79 per ton
Now, we can calculate the depletion expense for the first year based on the tons of ore mined and sold:
Depletion expense = Tons of ore mined and sold * Cost per ton of ore
Depletion expense = 220,000 tons * $1.79 per ton
Depletion expense = $393,800
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outline what you see as the most important challenges facing
Canadian workers in the next 10 years.
The most important challenges facing Canadian workers in the next 10 years include technological disruption, economic uncertainty, skills mismatch, income inequality, and work-life balance.
Over the next decade, Canadian workers will face significant challenges due to technological advancements, which can lead to job displacement. Economic uncertainties, such as global market disruptions, can affect job security and wages. Workers will need to adapt to changing skill requirements and bridge the gap between their current skills and those in demand. Income inequality remains a pressing issue, and achieving work-life balance is becoming increasingly difficult. These challenges will shape the future of work in Canada.
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Starting one month from now, you need to withdraw $300 per month from your bank account to help cover the costs of your university education. You will continue the monthly withdrawals for the next four years. If the account pays 0.3% interest per month, how much money must you have in your bank account today to support your future needs?
To determine the amount of money required in your bank account to support your future needs when you will be withdrawing $300 per month for the next four years, we will use the formula fv = ( PMT × (1 + i) n – 1 ) ÷ i (1 + i) n.
Here, fv stands for future value, PMT is the payment or amount withdrawn every month, i is the interest rate per month, and n is the number of months.
To calculate the number of months in four years, we will multiply 4 years by 12 months/year, which gives us 48 months.
Using the formula mentioned above, we get fva = (300 × (1 + 0.003)⁴⁸ – 1 ) ÷ 0.003 (1 + 0.003)⁴⁸. Simplifying it further, we get fva = $2,466.63.
Therefore, you must have $2,466.63 in your bank account today to support your future needs when you will be withdrawing $300 per month for the next four years, considering the account pays 0.3% interest per month.
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If the money supply is growing at a rate of 8 percent per year, real GDP (real output) is growing at a rate of 2 percent per year, and velocity is constant, what will the inflation rate be? \%. (Enter your response as an integer value.) If the money supply is growing at a rate of 8 percent per year, real GDP (real output) is growing at a rate of 2 percent per year, and velocity is growing at 2 percent per year instead of remaining constant, what will the inflation rate be? \%. (Enter your response as an integer value.)
If the money supply is growing at a rate of 8 percent per year, real GDP (real output) is growing at a rate of 2 percent per year.
And velocity is constant, then the inflation rate will be 6%.If the money supply is growing at a rate of 8 percent per year, real GDP (real output) is growing at a rate of 2 percent per year.
And velocity is growing at 2 percent per year instead of remaining constant, then the inflation rate will be 10%.Explation:Velocity (V) of money is the average number of times money is spent in a year. As the velocity of money increases, the prices also increase.
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Suppose that the marginal propensity to consume (MPC) is 8 and there is an increase in investment spending of $100,000. As a result, equilibrium real Gross Domestic Product (GDP) would increase by OA. $500,000. O B. $800,000 O C. $20,000. OD. $100,000
The increase in equilibrium real GDP resulting from the increase in investment spending of $100,000 would be $500,000. This is because the multiplier effect amplifies the initial increase in spending,
To determine the increase in equilibrium real Gross Domestic Product (GDP) resulting from an increase in investment spending, we can use the concept of the multiplier effect. The multiplier effect represents the total impact on GDP resulting from an initial change in spending.
The formula for the multiplier is: Multiplier = 1 / (1 - MPC)
Given that the marginal propensity to consume (MPC) is 8, we can calculate the multiplier:
Multiplier = 1 / (1 - 0.8) = 1 / 0.2 = 5
The multiplier of 5 indicates that for every $1 increase in spending, GDP will increase by $5.
Now, we know that there is an increase in investment spending of $100,000. Using the multiplier, we can calculate the increase in equilibrium GDP:
Increase in GDP = Multiplier * Increase in spending
Increase in GDP = 5 * $100,000 = $500,000
Therefore, the correct answer is:
A. $500,000
The increase in equilibrium real GDP resulting from the increase in investment spending of $100,000 would be $500,000. This is because the multiplier effect amplifies the initial increase in spending, leading to a larger overall impact on GDP.
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Preston, Incorporated, manufactures wooden shelving units for collecting and sorting mail. The company expects to produce 310 units in July and 380 units in August. Each unit requires 11 feet of wood at a cost of $1.40 per foot. Preston wants to always have 270 feet of wood on hand in materials inventory. Compute Preston's direct materials purchases budget for July and August.
The direct materials purchases budget is a budget that shows the estimated cost of the materials required for production. This budget is calculated by multiplying the required units of production by the direct material per unit cost.
To calculate the direct materials purchases budget for a specific period, such as July and August, there are a few steps that need to be taken.
Step 1 involves calculating the total direct material required for the two months by multiplying the required amount of wood per unit by the number of units to be produced. For example, the total direct material required for July is 11 feet of wood multiplied by 310 units, which equals 3,410 feet of wood. The total direct material required for August is 11 feet of wood multiplied by 380 units, which equals 4,180 feet of wood.
Step 2 involves adding the minimum required materials inventory to the total direct material required. The minimum required materials inventory is the amount of materials that a company needs to keep in stock to ensure that production can continue without interruption. For Preston, Incorporated, the minimum required materials inventory is 270 feet of wood. So, to get the total direct material required for July, we add the minimum required materials inventory to the total direct material required, which gives us 3,680 feet of wood. We do the same for August, which gives us 4,450 feet of wood.
Step 3 involves calculating the direct materials purchases budget for each month. To do this, we multiply the total direct material required by the direct material per unit cost, which in this case is $1.40. The direct materials purchases budget for July is $1.40 multiplied by 3,680 feet of wood, which equals $5,152. The direct materials purchases budget for August is $1.40 multiplied by 4,450 feet of wood, which equals $6,230.
Therefore, Preston, Incorporated's direct materials purchases budget for July and August is $5,152 and $6,230 respectively.
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Mean Companies? Lazy Employees? Why Telecommuting Is Off to a Rough Start
The idea of telecommuting–performing at least some of one’s job duties from home–has followed a peculiar trajectory over the past 40 years or so. In the 1980s it was generally viewed as a futuristic idea, something that could conceivably become common in a far-off, technologically advanced future. In the 1990s, as ordinary people began hooking their computers up to phone lines, telecommuting began to seem realistic. By the first decade of the new century, much sooner than most would have expected, the last of the serious technological impediments to telecommuting had largely been resolved and major companies began experimenting with allowing employees to work from home.
Today, however, telecommuting has seemingly regressed to being an idea that sounds great in theory but does not seem to work well in practice. Arguably, the most significant blow to telecommuting came in 2013 when Yahoo, an early adopter and proponent of telecommuting, decided to end the practice. The announcement was met with anger among media analysts, academics, labor groups, and, of course, some of Yahoo’s own employees. Some accused the company’s leadership of greed and insensitivity. Others blamed its telecommunicating employees for taking advantage of the highly unstructured arrangements, allowing themselves to become distracted and unproductive.
While there may be elements of truth to these accusations, neither greed nor laziness appears to be the problem. It is becoming increasingly apparent that at least some of the declines in productivity and (believe it or not) job satisfaction companies like Yahoo have witnessed can be linked to the loss of organizational structure caused by telecommuting. More specifically, when an employee telecommutes, they become at least partially detached from the organization’s structure. They no longer have unplanned discussions with coworkers in the hallways—discussions that often lead to new ideas and innovations. Their connections to other employees on the organizational chart remain the same, but their interpersonal connections may begin to deteriorate. The loss of (or detachment from) structure also has some more predicable consequences: The work life starts to invade the home life (since the workplace is the home), reducing job satisfaction, and home distractions start to invade the working day, reducing productivity.
This synopsis might lead you to wonder if maybe there is a balance to be struck somewhere between "no telecommuting" and "100% telecommuting." Perhaps organizations can allow employees the flexibility of telecommuting when it is needed without going as far as Yahoo did by allowing almost full-time telecommuting. Two studies suggest that this may be the solution. Both studies found evidence of a "curvilinear" relationship between telecommuting and those two key outcomes: job satisfaction and productivity. Unlike linear positive and negative relationships typically seen in management research, a curvilinear relationship changes direction at different levels of the independent variable. Both studies found positive relationships at low to moderate levels of telecommuting (about 20% of working hours, or roughly one day out of a five-day work week). Telecommuting appears to make employees happy and productive at these levels but starts to drop off as it nears 50% of working hours. Anything over 50% telecommuting had increasingly negative impacts on employees’ productivity and job satisfaction in both studies.
These studies suggest that hope for telecommuting is not lost. They also tell us that making it work is, like so much else in management, a matter of finding the right balance.
Discussion Questions
-Have you or a family member ever telecommuted for a job? If so, what did you or they like and dislike about it?
-What are some challenges employees are likely to face when they work from home? What can employees do to address them?
Telecommuting, once seen as a promising idea, has faced challenges in practice due to the loss of organizational structure and potential invasion of work into home life.
While telecommuting offers flexibility, the detachment from the organization's structure can hinder unplanned discussions, interpersonal connections, and innovative collaborations. Additionally, the blurring of boundaries between work and home can reduce job satisfaction and productivity. Studies suggest that a balance is needed, with moderate levels of telecommuting (around 20% of working hours) showing positive effects on job satisfaction and productivity, while excessive telecommuting can have negative impacts.
When working from home, employees may face various challenges. One common challenge is maintaining focus and productivity in a potentially distracting environment. To address this, employees can create a dedicated workspace, establish a routine, and minimize interruptions. Another challenge is maintaining effective communication and collaboration with colleagues. Employees can use technology tools for virtual meetings, regular check-ins, and clear communication channels. It is also important for employees to set boundaries and separate work and personal life to maintain a healthy work-life balance. Taking breaks, practicing self-care, and setting realistic expectations can contribute to overall well-being.
Furthermore, telecommuting may lead to feelings of isolation or limited career development opportunities. Employees can proactively seek virtual networking opportunities, engage in online professional development, and communicate their career goals and aspirations with supervisors to ensure growth and advancement. Additionally, maintaining clear expectations, deadlines, and deliverables with managers can help establish accountability and ensure work is aligned with organizational goals.
Overall, while telecommuting can bring benefits, it is essential for employees to address challenges by creating structure, fostering communication, and maintaining a healthy work-life balance to maximize the advantages of remote work.
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Explain the reason/s for Nike Inc. to have a mission statement?
i need a unique answer
Nike Inc. has a mission statement for several reasons:
1. Guiding Purpose: A mission statement helps establish the guiding purpose and identity of the company. It serves as a concise declaration of Nike's reason for existence, encapsulating its core values, aspirations, and the ultimate goal it seeks to achieve. It provides a sense of direction and clarity to all stakeholders, including employees, customers, investors, and the wider community.
2. Strategic Focus: Nike operates in a highly competitive and dynamic industry. A mission statement enables the company to maintain a strategic focus by outlining its specific target market, product offerings, and unique value proposition. It helps Nike align its resources, capabilities, and activities towards fulfilling its mission, ensuring that all decisions and actions are in line with the desired direction.
3. Stakeholder Communication: Nike's mission statement serves as a communication tool to engage and inform its stakeholders. By clearly articulating its purpose and values, the mission statement helps build trust, transparency, and credibility among customers, employees, and the broader community. It conveys Nike's commitment to delivering products and experiences that resonate with its target audience while addressing societal and environmental concerns.
4. Differentiation and Brand Identity: A well-crafted mission statement distinguishes Nike from its competitors by highlighting its unique selling propositions and brand identity. Nike's mission statement emphasizes its focus on innovation, performance, and empowering athletes, which sets it apart in the sportswear industry. It helps consumers understand the brand's ethos and creates an emotional connection that goes beyond just products.
5. Inspiring and Motivating Employees: A mission statement acts as a source of inspiration and motivation for Nike's employees. It defines the higher purpose and impact of their work, instilling a sense of pride and commitment. By aligning individual efforts with the overall mission, employees are more likely to be engaged, dedicated, and motivated to contribute to Nike's success.
In summary, Nike's mission statement serves as a compass for the company, providing strategic direction, engaging stakeholders, differentiating the brand, and inspiring employees to work towards a common goal. It encapsulates the essence of Nike's purpose and values, guiding its actions and decisions in the pursuit of success and societal impact.
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As you read "Twilight at Easter" from Jared Diamond's Collapse, can you draw any connections between text chapter 1's discussion, or the Econ Notes' comments concerning limits, PPFs, Economic Growth, Opportunity Costs=Op C and what happened at Easter Island?
Yes, there are several connections between the text chapter 1's discussion, or the Econ Notes' comments concerning limits, PPFs, Economic Growth, Opportunity Costs=Op C, and
what happened at Easter Island as discussed in "Twilight at Easter" from Jared Diamond's Collapse.
Below are some of the connections:
1. Limits: The text Chapter 1 discusses limits as a critical factor in the economy. Diamond uses the limited resources on Easter Island to support the idea of limits. According to him, the Islanders overexploited the island's natural resources without considering their limits. They eventually ran out of resources, which led to their collapse.
2. PPFs: The Production Possibility Frontier (PPF) explains the idea that an economy's production is limited to its resources. The people on Easter Island also overexploited the island's resources, which led to the exhaustion of these resources. They had no other way of producing what they needed for survival, which led to their collapse.
3. Economic Growth: According to the Econ Notes' comments, economic growth is necessary for an economy to progress. On Easter Island, the Islanders failed to adopt sustainable ways of managing their resources, which led to the collapse of their economy. The lack of economic growth led to their downfall.
4. Opportunity Cost: According to the Econ Notes' comments, Opportunity Cost (Op C) is what an individual gives up when they make a choice. The people on Easter Island did not prioritize their long-term goals and instead opted for short-term benefits.
For instance, they cut down trees to create statues instead of using them to build boats, which would have helped them in fishing and trading activities. This shortsightedness resulted in their collapse.
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Suppose a State of Texas bond will pay $1,000 six years from now. If the going interest rate on these 6-year bonds is 7%, how much is the bond worth today? $755.76 $666.34 $528.10 $934.58
The bond is worth $755.76 today.
To calculate the present value of the bond, we need to discount the future cash flow of $1,000 that will be received in six years. The discount rate is the going interest rate on similar bonds, which is 7%.
We can use the formula for present value of a single cash flow:
PV = FV / [tex](1 + r)^n[/tex]
Where:
PV = Present value
FV = Future value
r = Interest rate
n = Number of periods
Substituting the values into the formula, we have:
PV = $1,000 /[tex](1 + 0.07)^6[/tex]
Calculating the present value, we find:
PV ≈ $1,000 / 1.485946
PV ≈ $672.74
Therefore, the bond is worth approximately $755.76 today, rounded to the nearest cent.
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Determine the amount on 2,000 at 6% compounded annually for 6
yrs
amount
interest
The interest earned on $2,000 at 6% compounded annually for 6 years is approximately $835.85.
To calculate the amount on $2,000 at 6% compounded annually for 6 years, we can use the formula for compound interest:
Amount = Principal * (1 + Rate/100)^Time
Here, the principal (P) is $2,000, the interest rate (R) is 6%, and the time (T) is 6 years.
Plugging in the values, we have:
Amount = $2,000 * (1 + 6/100)^6
= $2,000 * (1.06)^6
≈ $2,835.85
So, the amount on $2,000 at 6% compounded annually for 6 years is approximately $2,835.85.
To calculate the interest earned, we can subtract the principal from the amount:
Interest = Amount - Principal
= $2,835.85 - $2,000
≈ $835.85
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Hotel rooms in Smalltown go for $100, and 1000 rooms are rented on a typical day. a. To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $108, and the number of rooms rented falls to 900 . Calculate the amount of revenue this tax raises for Smallown and the deadweight loss of the tax. (Hint: The arca of a triangle is 1/2× base x height) b. The mayor now doubles the tax to $20. The price rises to $116, and the number of rooms rented falls to 800 . Calculate tax revenue and deadweight loss with this larger tax. Do they double, more than double, or less than double? Explain.
a. The deadweight loss is $400. b. The deadweight loss with the larger tax is $3200, which is less than double the deadweight loss in part (a) which was $400.
a. The mayor decides to charge hotels a tax of $10 per rented room to raise revenue. The original price of a hotel room in Smalltown is $100. When the tax is imposed, the price of the hotel room rises to $108 and the number of rooms rented falls to 900.Now, to calculate the tax revenue, we can use the following formula:
Tax revenue = (price after tax - original price) × quantity of rooms rented
Tax revenue = ($108 - $100) × 900
Tax revenue = $7200
Thus, the amount of revenue this tax raises for Smalltown is $7200.
To find the deadweight loss, we use the formula of a triangle, where the base is the quantity change (100) and the height is the price change ($8).
deadweight loss = 1/2 × base × height
deadweight loss = 1/2 × 100 × $8
deadweight loss = $400
b. Now, the mayor doubles the tax to $20. The new price is $116 and the number of rooms rented falls to 800.We can use the formula used in part (a) to calculate the new tax revenue.Tax revenue = ($116 - $100) × 800Tax revenue = $12,800Now, we need to find the new deadweight loss. Using the formula of a triangle, where the base is the quantity change (200) and the height is the price change ($16).
deadweight loss = 1/2 × base × height
deadweight loss = 1/2 × 200 × $16
deadweight loss = $3200
Therefore, the deadweight loss with the larger tax is $3200, which is less than double the deadweight loss in part (a) which was $400. This is because when the tax is doubled, there is a greater decrease in the quantity of rooms rented compared to the price increase. This indicates that the demand for hotel rooms in Smalltown is relatively inelastic.
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Archie Dong is looking to purge out people from his database to be sure that his promotional costs are coming down. What kind of factors might he use to determine is someone should be purged from his database?
a. Based on how often they were promoted
b. Deceased
c. If they live in an unresponsive neighborhood
d. Live in a high rise apartment building
Archie Dong can consider factors such as the frequency of promotions, whether the individuals are deceased, residing in unresponsive neighborhoods, or living in high-rise apartment buildings.
Archie Dong may consider multiple factors to decide whether someone should be purged from his database. One factor could be based on how often individuals were promoted. If certain individuals have not been targeted or responded to promotions for a long time, they may be considered for removal to reduce promotional costs.
Another factor to consider is whether individuals are deceased. Maintaining records of deceased individuals in the database can lead to unnecessary costs, and removing such records would be appropriate.
The responsiveness of the neighborhood where individuals live can also be a factor. If a specific neighborhood consistently shows low response rates to promotions, it may be efficient to purge individuals from that area.
Additionally, living in a high-rise apartment building could be considered as a factor. Depending on the target audience or marketing strategy, Archie Dong may choose to exclude individuals from certain residential areas to optimize promotional costs.
Overall, Archie Dong can evaluate these factors to streamline his database, reduce costs, and focus his promotional efforts on more responsive and profitable segments.
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A simple trip to the dry cleaners changed Robert Byerley's career path. When the Dallas businessman picked up his cloths, he discovered that the cleaner had ruined one of his expensive shirt. He would have been satisfied if the owner of the cleaner had offered to replace his shirt, but he did not. He didn't even apologize to Byerley and that's when Byerley decided to do something. Although the Dallas market was crowded with dry cleaning establishments, Byerley left his corporate job to launch Bibbentuckers, a dry cleaning operation that offers Dallas residents better quality and better service at higher prices than other dry cleaning establishments. He suspected that a segment of the market would be willing to pay premium prices for a cleaner that offered convenient location, superior quality and service and extra amenities. Byerley didn't rely on his instinct alone, however. Before starting Bibbentuckers, Byerley did plenty of research and put together a business plan to guide his entrepreneurial venture. He started with the vision he had for his business. One night when he couldn't sleep, Byerley began listing the characteristics he wanted his dry cleaners to exhibit. Based on his negative experience with his former dry cleaner, Byerley listed "standing behind our work" first. He listed nine other items, including a drive-up-service with curbside delivery, a computerized system that would track clothes through the entire process and would use bar code scanners to read customer's cleaning preferences and a cleaning process that used the most current, environmentally friendly equipment and materials. The one item that was not on his list; low prices. "The things I wanted in a perfect dry cleaner were incompatible with a discount operation, "he explains. Byerley's next step was to research the industry and the market potential for his venture. He spent a solid week in the library, where he learned all about the dry cleaning industry a $1.6 billion a year business dominated by small independent operators who competed primary on the basis of price. He also discovered that dry cleaning establishments accounted for a large number of customer complaint? "Cleaners didn't stand behind what they did, "says Byerley with a smile. He also learned about legislation that was about to take effect that would change the way cleaners handled their cleaning solvents. As he assembled his plan, Byerley realised he could use his environmentally friendly approach to cleaning as a marketing tool, something that very few operators were doing. He researched the existing competition in Dallas and discovered that several dry cleaners were taking a premium approach to the market. Realising that he had to differentiate his business from his competitors, Byerley gave his outlets a unique and appealing design. The free-standing stores' professionally appointed decor included attractive awnings and drive through lanes as well as television screens and free refreshments. "I wanted a place that people would feel comfortable leaving their best clothes, a place that paired five-star service with an establishment that didn't look like a dry cleaner," he says. One key question to be answered, of course, was "Would customers be willing to pay for quality, service and convenience?" To find out, Byerley hired a marketing firm and conducted focus groups of potential customers who discussed everything from the look of the company's building to its name. Byerley even took clothes to the 15 best cleaners in town and let the members of the focus groups critique them to learn exactly what customers' expectations were. His goal was to exceed their expectations. After synthesizing all of his research into a plan, Byerley launched Biientuckers in the Dallas suburb of Plano. From his research, he knew that the typical dry cleaner generates $250,000 in revenue a year. Byerley knew his research and planning had paid off when his first store was on track to surpass $1 million in sales in its first year and began earning a profit after just four months. He opened two more stores before stepping out of the daily operation of the company to serve as chairman of the board. He is now involved in another business start-up and he and his co-founders are taking the same approach to researching the industry and the business before they are ready to launch. In fact, a team of 13 people has already spent a year researching the venture to be sure they get it right the first time. (Zimmerer, T.W., & Scarborough, M.N.(2020), Essentials of Entrepreneurship and Small Business Management (pp. 133-134). Pearson Prentice Hall.) 1. Explain the importance of industry and market research to entrepreneurs before launching a business.
Industry and market research provide entrepreneurs with crucial information and insights needed to make informed decisions, validate their business ideas .
Industry and market research is crucial for entrepreneurs before launching a business for several reasons:
1. Understanding the Industry: Researching the industry provides entrepreneurs with valuable insights into the dynamics, trends, and competitive landscape of the specific industry they plan to enter. It helps them gain a comprehensive understanding of the industry's size, growth potential, profitability, and key success factors. This knowledge enables entrepreneurs to assess the feasibility and viability of their business idea within the industry.
2. Identifying Market Opportunities: Market research allows entrepreneurs to identify and evaluate potential market opportunities. By analyzing customer needs, preferences, and behaviors, entrepreneurs can identify target market segments that are underserved or have unmet needs. This information helps entrepreneurs tailor their products or services to effectively meet customer demands, increasing the chances of success in the market.
3. Assessing Market Demand: Researching the market helps entrepreneurs gauge the demand for their product or service. They can identify the size of the target market, the potential customer base, and the existing competition. By understanding market demand, entrepreneurs can make informed decisions about pricing, marketing strategies, and sales forecasts, ensuring that there is sufficient demand to support their business venture.
4. Competitive Analysis: Researching competitors is essential to understand their strengths, weaknesses, market positioning, and strategies. This analysis helps entrepreneurs differentiate their business and identify ways to create a competitive advantage. By identifying gaps or shortcomings in competitors' offerings, entrepreneurs can develop unique value propositions and create a compelling offering for their target customers.
5. Mitigating Risks: Industry and market research help entrepreneurs identify potential risks and challenges associated with their business idea. They can assess factors such as regulatory requirements, market saturation, technological advancements, and economic conditions. This understanding enables entrepreneurs to develop contingency plans, mitigate risks, and make informed decisions to navigate challenges effectively.
6. Developing an Effective Business Plan: Research findings serve as the foundation for a well-developed business plan. Entrepreneurs can use the insights gained from industry and market research to define their target market, develop marketing strategies, set realistic financial projections, and create a roadmap for success. A comprehensive business plan increases the chances of securing funding, attracting investors, and guiding the business's growth and operations.
In summary, industry and market research provide entrepreneurs with crucial information and insights needed to make informed decisions, validate their business ideas, identify opportunities, understand customer needs, and develop effective strategies for launching and growing a successful business.
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14. Calculate the required rate of return for Hope Inc., assuming that (1) investors expect a 2.0% rate of inflation in the future, (2) the real risk-free rate is 3.5%, (3) the market return on S&P 500 Index is 8.5%, (4) the firm has a beta of 1.5, and (5) its realized rate of return has averaged 10.0% over the last 5 years.
To calculate the required rate of return for Hope Inc., we can use the Capital Asset Pricing Model (CAPM). The CAPM formula is:
Required Rate of Return = Real Risk-Free Rate + (Beta × Market Risk Premium)
Given:
Inflation Rate (expected) = 2.0%
Real Risk-Free Rate = 3.5%
Market Return on S&P 500 Index = 8.5%
Beta = 1.5
Realized Rate of Return (average over the last 5 years) = 10.0%
First, we need to calculate the Market Risk Premium:
Market Risk Premium = Market Return - Real Risk-Free Rate
Market Risk Premium = 8.5% - 3.5%
Next, we can calculate the Required Rate of Return using the CAPM formula:
Required Rate of Return = 3.5% + (1.5 × Market Risk Premium)
Substituting the values:
Required Rate of Return = 3.5% + (1.5 × (8.5% - 3.5%))
Calculate the Market Risk Premium:
Market Risk Premium = 8.5% - 3.5%
Now substitute the Market Risk Premium in the formula:
Required Rate of Return = 3.5% + (1.5 × (8.5% - 3.5%))
Calculate the Required Rate of Return using the formula:
Required Rate of Return = 3.5% + (1.5 × (8.5% - 3.5%))
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Inverse market demand function faced by two firms in the market is given by p = 100 - q. Marginal cost of both firms is $10. If the two firms form a cartel instead of engaging in Cournot competition they will make an extra profit of
a. 500
b.225
c.400
d.180
The extra profit from forming a cartel instead of engaging in Cournot competition is $225 - $405 = $225. Hence, the correct option is (b) $225.
In Cournot competition, each firm chooses its quantity independently to maximize its own profit. However, if the two firms form a cartel and act as a monopoly, they can collectively maximize their joint profit. To determine the extra profit from forming a cartel, we compare the profits in Cournot competition and monopoly.
In Cournot competition, each firm determines its quantity based on the market demand and its marginal cost. The market demand function is given by p = 100 - q, where p is the price and q is the total quantity produced by both firms. Since the marginal cost for both firms is $10, the equilibrium quantity for each firm can be found by setting marginal cost equal to marginal revenue, which is the derivative of the inverse demand function. Solving this equation, we get q = 45.
In Cournot competition, each firm's profit is calculated as (p - MC) * q, where MC is the marginal cost. So, each firm's profit is (100 - 45 - 10) * 45 = $202.50. Therefore, the total profit in Cournot competition is $202.50 * 2 = $405. In a cartel, the firms act as a single monopolistic entity and maximize their joint profit. The monopolistic quantity can be found by setting marginal cost equal to marginal revenue, which is the derivative of the market demand function. Solving this equation, we get q = 50. In a cartel, the profit is calculated as (p - MC) * q. Substituting the values, the profit in a cartel is (100 - 50 - 10) * 50 = $225.
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When the Federal Reserve raises interest rates during their
next meeting, then what will happen to government bond prices?
When the Federal Reserve raises interest rates during their next meeting, the price of government bonds is expected to fall.
Government bonds are debts that are issued by the government to finance its projects and operations. People who buy these bonds are lending money to the government in return for periodic interest payments.
Interest rates play a significant role in bond prices. Bonds are financial instruments that pay interest to bondholders at a set rate. The Federal Reserve, as the country's central bank, determines the interest rate on these bonds.
When the Federal Reserve raises interest rates, the cost of borrowing money increases, which reduces the demand for money. The drop in demand causes bond prices to fall because fewer people want to borrow money.
Conversely, when the Federal Reserve lowers interest rates, the cost of borrowing money falls, and the demand for money rises. The demand increase makes bond prices rise.
The economy is impacted when the interest rates are adjusted by the Federal Reserve. The primary purpose of the Federal Reserve is to stabilize prices and regulate the economy.
If the economy is struggling, the Federal Reserve may reduce interest rates to encourage people to borrow and spend money. This can result in increased business activity, more jobs, and more money in circulation.
If the economy is overheating, the Federal Reserve may raise interest rates to cool it down. This can reduce inflation by slowing down economic activity. The Federal Reserve's role is to adapt its accounting strategy to the current economic circumstances.
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"Mckenzie is saving $371 per month. If their account earns a
1.9% interest rate, how many years will it take before they can buy
a $40,000 car? Enter your answer to two decimal places"
It will take approximately 20.66 years for McKenzie to save enough to buy a $40,000 car.
To calculate the number of years it will take for McKenzie to save enough to buy a $40,000 car, we can use the formula for compound interest and solve for time.
The formula for compound interest is:
[tex]A = P(1 + r/n)^(nt)[/tex]
Where:
A = Final amount (target savings)
P = Monthly savings
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Time in years
In this case, we know:
A = $40,000
P = $371
r = 1.9% or 0.019 (converted to decimal form)
n = 12 (since the interest is compounded monthly)
Let's solve for t:
[tex]$40,000 = $371(1 + 0.019/12)^(12t)[/tex]
Divide both sides by $371 and simplify:
[tex]108.07 = (1.00158333333)^(12t)[/tex]
Take the natural logarithm of both sides to solve for t:
[tex]ln(108.07) = ln(1.00158333333)^(12t)\\\\t = ln(108.07) / (12 * ln(1.00158333333))[/tex]
Using a calculator, we can find:
t ≈ 20.66
Therefore, it will take approximately 20.66 years for McKenzie to save enough to buy a $40,000 car.
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Hoopla Ltd. is a Canada Business Corporation and has 15,780 Class A voting (common) shares and 5,600 Class B non voting (preferred shares). Class A shares are non cumulative and Class B shares are cumulative. The Class B shares have a fixed return of $2/share and the dividends to Class A are unlimited. In Year 1 Hoopla paid no dividends. In Year 2, it paid 80 cents a share to Class A and the stated rated to Class B.
Required 1: What is the amount of dividends paid out to Class A shareholders in year 2? $
Required 2: What is the amount of dividends paid out to Class B shareholders in year 2? $
Required 3: What is the total amount of dividends paid out to shareholders in year 2? $
Required 4: What is the amount of dividends paid out to Class A shareholders in year 1? $
Required 5: What is the amount of dividends paid out to Class B shareholders in year 1? $
Required 1: The amount of dividends paid out to Class A shareholders in year 2 is $12,624.Required 2: The amount of dividends paid out to Class B shareholders in year 2 is $11,200.Required 3: The total amount of dividends paid out to shareholders in year 2 is $23,824.
Required 4: The amount of dividends paid out to Class A shareholders in year 1 is $0. Required 5: The amount of dividends paid out to Class B shareholders in year 1 is $0.To calculate the dividends paid out to each class of shareholders, we need to consider the number of shares and the dividend rates for each class. In Year 2, the dividends paid to Class A shareholders are 80 cents per share. Therefore, the total dividends paid to Class A shareholders in Year 2 can be calculated as: 80 cents/share x 15,780 shares = $12,624. For Class B shareholders, the fixed return is $2 per share. Since the Class B shares are cumulative, they receive the fixed return even if no dividends were paid in Year 1. The total dividends paid to Class B shareholders in Year 2 can be calculated as: $2/share x 5,600 shares = $11,200. To determine the total dividends paid out to all shareholders in Year 2, we sum up the dividends paid to Class A and Class B shareholders: $12,624 + $11,200 = $23,824.
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Shadee Corp. expects to sell 540 sun visors in May and 400 in June. Each visor sells for $20. Shadee's beginning and ending finished goods Inventories for May are 80 and 45 units, respectively. Ending finished goods inventory for June will be 60 units. Each visor requires a total of $5.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each. Shadee wants to have 32 closures on hand on May 1, 20 closures on May 31, and 20 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,100 per month, and variable manufacturing overhead is $2.50 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $8 per hour. Additional information: • Selling costs are expected to be 11 percent of sales. Fixed administrative expenses per month total $1,200. Required: Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places).
Step 1: Calculate direct materials cost per visor.Direct materials cost per visor is $5.50. Shadee expects to sell 540 sun visors in May and 400 in June.Direct materials cost for May sales = $5.50 × 540 = $2,970Direct materials cost for June sales = $5.50 × 400 = $2,200
Step 2: Calculate the cost of adjustable closures purchased.Cost of adjustable closures purchased for May 1 inventory is 32 × $1.50 = $48.Cost of adjustable closures purchased for May 31 inventory is 20 × $1.50 = $30.Cost of adjustable closures purchased for June 30 inventory is 20 × $1.50 = $30.Total cost of adjustable closures purchased = $48 + $30 + $30 = $108.
Step 3: Calculate the direct labor cost per visor and total direct labor cost.Direct labor cost per visor is 0.3 × $8 = $2.40.Total direct labor cost for May sales = 540 × $2.40 = $1,296Total direct labor cost for June sales = 400 × $2.40 = $960
Step 4: Calculate variable manufacturing overhead.Variable manufacturing overhead is $2.50 per unit produced. Shadee expects to sell 540 sun visors in May and 400 in June.Variable manufacturing overhead for May sales = 540 × $2.50 = $1,350Variable manufacturing overhead for June sales = 400 × $2.50 = $1,000
Step 5: Calculate total manufacturing overhead.Total manufacturing overhead is the sum of variable and fixed manufacturing overhead.Total manufacturing overhead for May sales = $1,350 + $1,100 = $2,450Total manufacturing overhead for June sales = $1,000 + $1,100 = $2,100
Step 6: Calculate total cost of sales.The total cost of sales is the sum of direct materials, direct labor, variable manufacturing overhead, and total manufacturing overhead.Total cost of sales for May sales = $2,970 + $1,296 + $1,350 + $2,450 = $8,066Total cost of sales for June sales = $2,200 + $960 + $1,000 + $2,100 = $6,260
Step 7: Calculate total expenses.Total expenses are the sum of cost of goods sold, selling expenses, and administrative expenses.Total expenses for May sales = $8,066 × 1.11 + $1,200 = $10,494.26Total expenses for June sales = $6,260 × 1.11 + $1,200 = $8,986.60
Step 8: Calculate budgeted selling and administrative expenses.Budgeted selling and administrative expenses are calculated by subtracting cost of goods sold from total expenses.Budgeted selling and administrative expenses for May sales = $10,494.26 - $8,066 = $2,428.26Budgeted selling and administrative expenses for June sales = $8,986.60 - $6,260 = $2,726.60Therefore, Shadee's budgeted selling and administrative expenses for May and June are $2,428.26 and $2,726.60, respectively (rounded to 2 decimal places).
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