The expected returns for the two stocks are as follows:Expected return of Stock A = 10.55%Expected return of Stock B = 2.07%. The standard deviation for the two stocks are as follows:Standard deviation of Stock A = 0.93%Standard deviation of Stock B = 20.70%
The calculation of the expected return for two stocks and their standard deviation is given below.State of Probability of Stock A Stock BRecession 0.18 0.07 ? 0.18Normal 0.55 0.10 0.11Boom 0.27 0.15 0.28Expected return:The expected return is calculated using the formula below:Expected Return = Sum of (Probability * Rate of return) for all outcomesTherefore,Expected return of Stock A = (0.18 * 0.07) + (0.55 * 0.10) + (0.27 * 0.15)Expected return of Stock A = 0.01 + 0.055 + 0.0405Expected return of Stock A = 0.1055 or 10.55%Expected return of Stock B = (0.18 * x) + (0.55 * 0.11) + (0.27 * 0.28)Expected return of Stock B = 0.18x + 0.0605 + 0.0756Expected return of Stock B = 0.18x + 0.1361To calculate x, use the fact that the sum of probabilities must be equal to 1.0.
Therefore,0.18 + 0.55 + 0.27 = 1.00So, the expected return of Stock B can be calculated as follows:Expected return of Stock B = 0.18x + 0.1361 = 0.1568x = 0.1568 - 0.1361x = 0.0207Expected return of Stock B = 0.0207 or 2.07%Therefore, the expected returns for the two stocks are as follows:Expected return of Stock A = 10.55%Expected return of Stock B = 2.07%.
Standard Deviation:Formula to calculate standard deviation is given as follows:Standard deviation = SQRT[ Σ ( xi - μ )2 / N ]where,μ = Expected returnTo calculate the standard deviation for Stock A, use the formula below:Standard deviation of Stock A = SQRT [ (0.18 * (0.07 - 0.1055)2) + (0.55 * (0.10 - 0.1055)2) + (0.27 * (0.15 - 0.1055)2) ]Standard deviation of Stock A = SQRT [ 0.0000280825 + 0.00000225025 + 0.00005632025 ]Standard deviation of Stock A = SQRT [ 0.000086652 ]Standard deviation of Stock A = 0.00931 or 0.93%To calculate the standard deviation for Stock B, use the formula below:
Standard deviation of Stock B = SQRT [ (0.18 * (0.0207 - 0.0207)2) + (0.55 * (0.11 - 0.0207)2) + (0.27 * (0.28 - 0.0207)2) ]Standard deviation of Stock B = SQRT [ 0.0000072285 + 0.00356720325 + 0.03932040145 ]Standard deviation of Stock B = SQRT [ 0.0428948322 ]Standard deviation of Stock B = 0.2070 or 20.70%Therefore, the standard deviation for the two stocks are as follows:Standard deviation of Stock A = 0.93%Standard deviation of Stock B = 20.70%
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The goal of the firm is to maximise profit."" Do you agree or disagree with this statement? Justify your answer.
I believe that the goal of the firm should be to maximize profit, but it should also focus on other important goals, such as customer satisfaction, employee satisfaction, and social responsibility.
In the past, it was assumed that firms should focus on maximizing profit. However, this view has changed in recent years. Today, it is recognized that there are other important goals for firms, such as customer satisfaction, employee satisfaction, and social responsibility.
Customer satisfaction is important because it leads to repeat business. When customers are satisfied with a firm's products or services, they are more likely to buy from the firm again in the future. This can lead to increased sales and profits for the firm.
Employee satisfaction is important because it leads to increased productivity and reduced turnover. When employees are satisfied with their jobs, they are more likely to be productive and stay with the firm. This can lead to increased profits for the firm.
Social responsibility is important because it can lead to increased trust and loyalty from customers, employees, and investors. When firms are seen as being socially responsible, they are more likely to be successful in the long run.
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If inflation continues to erode the purchasing power of the dollar, then households may cut back on spending at restaurants. This is a risk faced by Chipotle Mexican Grill, Inc. true or false
Climate change is not a risk that management of Chipotle Mexican Grill, Inc, considers to be material. true or false
The Board of Directors of Chipotle Mexican Grill, Inc. in the company’s proxy statement for the 2022 annual meeting of shareholders recommended that shareholders vote against shareholder proposal 6, which recommends "commissioning a racial equity audit analyzing Chipotle’s impacts on civil rights, equity, diversity and inclusion, and the impacts of those issues on Chipotle’s business." The reason the Board recommended that shareholders vote against this proposal is that they believe considerations of civil rights should not impact business decisions. true or false
The risks associated with inflation and climate change are relevant to Chipotle Mexican Grill, Inc. Inflation eroding the purchasing power of the dollar may lead to reduced spending at restaurants. Additionally, climate change can have significant implications for the company's operations and supply chain.
True: Inflation reduces the purchasing power of the dollar, and if households experience a decrease in their purchasing power, they may choose to cut back on discretionary spending, including dining out at restaurants like Chipotle Mexican Grill, Inc. This presents a risk to the company's revenue and profitability.
False: Climate change is considered a significant risk by many companies, including Chipotle Mexican Grill, Inc. The effects of climate change, such as extreme weather events and changes in agricultural production, can impact the availability and cost of ingredients, disrupt supply chains, and affect consumer behavior. Therefore, it is a material risk that management should consider.
False: The statement suggests that the Board of Directors recommended voting against a shareholder proposal for commissioning a racial equity audit. However, the reason provided, stating that considerations of civil rights should not impact business decisions, is an inaccurate representation. Many companies recognize the importance of diversity, equity, and inclusion in their operations and consider the social and ethical impacts of their business decisions.
The risks associated with inflation and climate change are relevant to Chipotle Mexican Grill, Inc. Inflation eroding the purchasing power of the dollar may lead to reduced spending at restaurants. Additionally, climate change can have significant implications for the company's operations and supply chain. The claim that the Board of Directors rejected a shareholder proposal based on the notion that civil rights considerations should not impact business decisions is false. In reality, many companies strive to incorporate diversity, equity, and inclusion principles into their decision-making processes.
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On January 1, Dallas Corp. leases a truck they have manufactured to Valley Corp. Dallas has calculated the lease payments to Valley to be $50,000 per year for 4 years, and the sales price of the truck is $170,000. It cost Dallas $130,000 to manufacture the truck. Dallas follows IFRS.
Instructions
Record the journal entries to set up the lease on January 1 on the books of the lessor, Dallas Corp.
Need Answer with a proper explanation?
To record the lease transaction on January 1, the lessor (Dallas Corp.) needs to make the following journal entries:
Record the initial recognition of the lease:
Lease Receivable (Asset) $170,000
Truck (Asset) $130,000
Lease Liability (Liability) $300,000
Sales Revenue (Revenue) $170,000
Explanation:
The lessor recognizes the lease receivable as an asset representing the future lease payments to be received. The truck, which is being leased, is also recognized as an asset. The lease liability is recorded for the present value of the lease payments. The sales revenue is recognized for the sales price of the truck.
Record the lease payment received at the end of the year:
Cash (Asset) $50,000
Lease Receivable (Asset) $50,000
Explanation:
The lessor receives the lease payment from the lessee (Valley Corp.) and records it as cash received. The lease receivable is reduced by the same amount.
Record interest revenue on the lease:
Lease Receivable (Asset) $9,000
Interest Revenue (Revenue) $9,000
Explanation:
The lessor recognizes interest revenue based on the implicit interest rate implicit in the lease. This interest revenue is calculated as the lease liability (present value of lease payments) multiplied by the effective interest rate.
Record depreciation expense on the truck:
Depreciation Expense (Expense) $32,500
Accumulated Depreciation (Asset) $32,500
Explanation:
The lessor depreciates the truck over its useful life. The depreciation expense is calculated based on the cost of the truck ($130,000) divided by the lease term (4 years).
These journal entries reflect the initial recognition of the lease, the lease payment received, interest revenue, and depreciation expense related to the lease transaction on the books of the lessor (Dallas Corp.) following IFRS.
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A college estimate that its new student union building will require R800 for upkeep at the end of each year for the next 10 years and R1500 at the end of each year thereafter in definitely. If money its worth 4% p.a. how large endowment is necessary for the future upkeep of the building?
To calculate the necessary endowment for the future upkeep of the building, we need to find the present value of the annual maintenance payments using a discount rate of 4%. The necessary endowment for the future upkeep of the building is R43,759.25.
The first 10 years of payments form an annuity, so we can use the formula for the present value of an annuity:
PV = PMT x [1 - 1 / (1 + r)^n] / r
Where:
PV = Present value
PMT = Payment amount per period
r = Discount rate
n = Number of periods
Plugging in the values, we get:
PV1-10 = R800 x [1 - 1 / (1 + 0.04)^10] / 0.04
= R6,259.25
So the present value of the first 10 years of payments is R6,259.25.
The payments beyond the first 10 years are perpetuities, so we can use the formula for the present value of a perpetuity:
PV = PMT / r
Plugging in the values, we get:
PV11+ = R1500 / 0.04
= R37,500
So the present value of the payments beyond the first 10 years is R37,500.
The total necessary endowment is the sum of these present values:
Endowment = PV1-10 + PV11+
= R6,259.25 + R37,500
= R43,759.25
Therefore, the necessary endowment for the future upkeep of the building is R43,759.25.
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29 # 1 2 3 4 5 6 7 8 9 10 Factor Expectation A Higher Future Profit Expectation A Higher Future Income Advance Technology A
The factors listed are:
1. Higher future profit expectation
2. Higher future income
3. Advanced technology
The factors mentioned are potential considerations that can impact various aspects of a business or investment decision. Let's briefly discuss each factor:
1. Higher future profit expectation: This factor implies that if there is an expectation of increased profitability in the future, it can influence decision-making. Businesses and investors often consider the potential for higher profits as a favorable factor.
2. Higher future income: Similar to higher future profit expectation, the anticipation of increased income can be an important factor. Higher income can indicate growth potential and may attract businesses and investors.
3. Advanced technology: Advancements in technology can play a significant role in shaping business strategies and investment decisions. Utilizing advanced technology can enhance efficiency, productivity, and competitiveness, potentially leading to better outcomes.
These factors highlight important considerations for businesses and investors. While higher future profit expectation and higher future income signify positive prospects, advanced technology showcases the potential benefits of leveraging technological advancements. It's essential to assess these factors in conjunction with other relevant aspects to make informed decisions.
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McDonald’s Currently Pays An Annual Dividend Of $5.16 For Each Share Of Common Stock Owned By Investors. If The Price Of A Share Of McDonald’s Stock Were To Decrease As A Result Of A Decrease In Sales By Its International Restaurants, How Would This Affect The Value Of The Annual Dividend? Briefly Explain Your Answer.
McDonald’s currently pays an annual dividend of $5.16 for each share of common stock owned by investors. If the price of a share of McDonald’s stock were to decrease as a result of a decrease in sales by its international restaurants, how would this affect the value of the annual dividend? Briefly explain your answer.
While a decrease in the stock price would not directly affect the value of the annual dividend, it could have indirect implications for the company's future dividend payments and overall investor confidence.
If the price of a share of McDonald's stock were to decrease due to a decrease in sales by its international restaurants, it would not directly affect the value of the annual dividend.
The annual dividend is typically set by the company's board of directors and represents a fixed amount per share, regardless of the stock price.
The dividend is calculated based on the company's profits and its decision to distribute a portion of those profits to shareholders. It is usually expressed as a fixed dollar amount per share or as a percentage of the stock's price.
Therefore, the value of the annual dividend would remain the same as long as the company maintains its current dividend policy and profitability.
However, a decrease in sales and profitability may impact the company's ability to sustain or increase its dividend payments in the future. If the company's financial performance weakens significantly, it may be forced to reduce or even eliminate its dividend.
This could, in turn, affect investor sentiment and potentially lead to a further decline in the stock price.
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During Year 2, Franklin Manufacturing Company incurred $133,400,000 of research and development (R\&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R\&D cost was recognized as an expense in Year 2. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $72 per unit. Packaging. shipping, and sales commissions are expected to be $16 per unit. Franklin expects to sell 2,900,000 batteries before new research renders the battery design technologically obsolete. During Year 2, Franklin made 448,000 batteries and sold 405,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the Year 2 amount of cost of goods sold and the ending inventory bolance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Franklin desires to earn a profit margin that is equal to 20 percent of the fotal cost of developing. making, and distributing the batteries. d. Prepare a GAAP-based income statement for Year
The total cost of manufacturing (including R&D) for Franklin Manufacturing Company is $206,400,000 ($133,400,000 + (2,900,000 * ($72 + $16))).
Franklin Manufacturing Company incurred $133,400,000 in R&D costs during Year 2, which were recognized as an expense according to FASB standards. In addition to R&D, the company incurs manufacturing costs per unit. The manufacturing costs consist of direct materials, direct labor, and overhead, amounting to $72 per unit. Packaging, shipping, and sales commissions add an additional $16 per unit. Franklin expects to sell 2,900,000 batteries before new research renders the battery design obsolete. To calculate the total cost of manufacturing, we multiply the per unit cost ($72 + $16) by the number of batteries sold (2,900,000) and add the R&D cost, resulting in a total manufacturing cost of $206,400,000.
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My courses
Nutrition Finance & Accounting Section 2 / CHAPTER 7 - Flexible Budgeting and Variance Analysis / Chapter 7 Post-Class Homew
Take me to the text
Brianna budgeted that she would use 2,300 labour hours in her department at an hourly rate of $16 per hour. However, the accounting records show 2,600 hours at $21 per hour. What is the labour cost variance?
Do not enter dollar signs or commas in the input boxes.
Round your answer to the nearest whole number.
Labour Cost Variance $
17800
Unfavourable
Check
Note: The "check" button does not submit your attempt. To submit the attempt, go to the end of the quiz and click on the "submit all and finish" button.
The labor cost variance is $17,800. The $17,800 positive labour cost variance shows that the actual labour costs were higher than anticipated. This indicates that more hours were put in than originally planned, at a higher hourly rate.
To calculate the labor cost variance, we need to find the difference between the actual labor cost and the budgeted labor cost.
Budgeted labor cost = Budgeted labor hours * Budgeted hourly rate
= 2,300 hours * $16 per hour
= $36,800
Actual labor cost = Actual labor hours * Actual hourly rate
= 2,600 hours * $21 per hour
= $54,600
Labor cost variance = Actual labor cost - Budgeted labor cost
= $54,600 - $36,800
= $17,800
Therefore, the labor cost variance is $17,800.
The positive labor cost variance of $17,800 indicates that the actual labor cost exceeded the budgeted labor cost. This means that more hours were worked at a higher hourly rate than originally budgeted.
The variance suggests that there may have been factors such as overtime, increased wages, or additional staffing needs that caused the labor cost to be higher than anticipated. It is important for Brianna to analyze the labor cost variance to understand the reasons behind the deviation from the budget.
This analysis can help identify areas where cost control measures can be implemented, such as managing overtime, negotiating wage rates, or improving workforce planning.
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8. According to the Boston Consulting Group's Portfolio Analysis matrix discussed in the Portfolio Analysis lecture, which of the following type of business unit is in an industry with tow industry growth but the firm's business unit has?
A. Dog
B. Cash Cow
C. Question Mark
D. Star
The answer to the given question is option (A) Dog. According to the Boston Consulting Group's Portfolio Analysis matrix discussed in the Portfolio Analysis lecture, the type of business unit that is in an industry with low industry growth, but the firm's business unit has is Dog.
What is the Boston Consulting Group (BCG) Portfolio Analysis Matrix?The Boston Consulting Group's Portfolio Analysis Matrix is a management tool for strategic analysis and planning, which is commonly used to assess the strengths and weaknesses of a business unit portfolio.
The Boston Consulting Group (BCG) matrix was developed in the 1960s by Bruce Henderson, the founder of Boston Consulting Group, as a tool for evaluating the firm's product line or business units based on their relative market shares and market growth rates.
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A demand loan of $4000.00 is repaid by payments of $1500.00 after two years, $1500.00 after four years, and final payment after eight years. Interest is 9% compounded quarterly for the first two years, 10% compounded monthly for the next two years, and 10% compounded quarterly thereafter. What is the size of the final payment?
The final payment is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
The size of the final payment is $1,622.28 A demand loan of $4000.00 is repaid by payments of $1500.00 after two years, $1500.00 after four years, and final payment after eight years.
We can find out the loan balance after two years as:[tex]$$4000(1+\frac{0.09}{4})^{4 \cdot 2} = 4000 \cdot 1.395996^{8} = 6287.23$$[/tex] The interest rate for the next two years is 10%, compounded monthly. Therefore, we can find out the loan balance after four years as: [tex]$$6287.23(1+\frac{0.10}{12})^{12 \cdot 2} = 6287.23 \cdot 1.106046^{24} = 9169.63$$[/tex] For the final two years, the interest rate is also 10% but the interest is compounded quarterly. Therefore, we can find out the loan balance after 6 years as: [tex]$$9169.63(1+\frac{0.10}{4})^{4 \cdot 2} = 9169.63 \cdot 1.477456^{8} = 18696.31$$[/tex] Therefore, the remaining balance after the first two payments are made is:[tex]$$18696.31 - 1500 - 1500 = 15696.31$$[/tex].
Now, we have to find the present value of this remaining balance using the interest rate of 10% compounded quarterly and the remaining time period of two years. Therefore, we can find out the present value as:[tex]$$PV = \frac{15696.31}{(1+\frac{0.10}{4})^{4 \cdot 2}} = 11178.94$$[/tex] Therefore, the size of the final payment is[tex]:$$11178.94 \cdot (1+\frac{0.10}{4})^{4 \cdot 2} = 11178.94 \cdot 1.227113^{8} = 1622.28$$[/tex]Therefore, the size of the final payment is $1,622.28
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A debt bears an annual effective interest rate of 10%. The debt will be repaid over 20 years with payments at the end of each year. The payment schemes made are:
a. The annual installment for the principal portion of the first 5 payments is 100
b. Each subsequent installment contains the principal portion which is increased by 100 from the principal of the previous 5 years (eg the 7th year principal installment is 200, i.e. 100 plus the 2nd year principal installment of 100); and
c. Interest is calculated based on the remaining outstanding debt. Determine the portion of interest on the 17th to 20th installment payments. Determine the interest portion on the 9th to 12th installment payments.
The interest portions for the 17th to 20th installment payments are as follows: $100, $90, $80, $70. For the 9th to 12th installment payments, the interest portions are: $60, $50, $30, $0.
To solve this problem, we can use the formula for the annuity payment of a loan:
[tex]\[P = \dfrac{r \cdot PV}{1 - (1 + r)^{-n}}\][/tex]
Where:
P = Paymentr = Interest rate per periodPV = Present value of the loan (initial debt)n = Number of periods (years in this case)We will calculate the outstanding debt at the end of each year and subtract it from the previous year's outstanding debt to find the principal portion of each installment. Then, we can calculate the interest portion by subtracting the principal portion from the total payment for each year.
Let's calculate the installment payments for the given scenarios:
Scenario a:
The annual installment for the principal portion of the first 5 payments is 100.
For the first 5 years:
Payment = Principal portion = 100
Remaining outstanding debt after each year:
Year 0:
Outstanding debt = Initial debt = Principal = 1000
Year 1:
Principal portion = Payment - Interest
Principal portion = 100 - (0.1 * 1000) = 100 - 100 = 0
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 1000 - 0 = 1000
Year 2:
Principal portion = Payment - Interest
Principal portion = 100 - (0.1 * 1000) = 100 - 100 = 0
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 1000 - 0 = 1000
Year 3:
Principal portion = Payment - Interest
Principal portion = 100 - (0.1 * 1000) = 100 - 100 = 0
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 1000 - 0 = 1000
Year 4:
Principal portion = Payment - Interest
Principal portion = 100 - (0.1 * 1000) = 100 - 100 = 0
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 1000 - 0 = 1000
Year 5:
Principal portion = Payment - Interest
Principal portion = 100 - (0.1 * 1000) = 100 - 100 = 0
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 1000 - 0 = 1000
Scenario b:
Each subsequent installment contains the principal portion, which is increased by 100 from the principal of the previous 5 years.
For the next 15 years (years 6 to 20):
The principal portion increases by 100 each year.
Year 6:
Principal portion = Principal portion of the 1st year + 100 = 0 + 100 = 100
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 1000 - 100 = 900
Year 7:
Principal portion = Principal portion of the 2nd year + 100 = 0 + 100 = 100
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 900 - 100 = 800
Year 8:
Principal portion = Principal portion of the 3rd year + 100 = 0 + 100 = 100
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 800 - 100 = 700
Year 9:
Principal portion = Principal portion of the 4th year + 100 = 0 + 100 = 100
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 700 - 100
= 600
Year 10:
Principal portion = Principal portion of the 5th year + 100 = 0 + 100 = 100
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 600 - 100 = 500
Year 11:
Principal portion = Principal portion of the 6th year + 100 = 100 + 100 = 200
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 500 - 200 = 300
Year 12:
Principal portion = Principal portion of the 7th year + 100 = 200 + 100 = 300
Outstanding debt = Previous outstanding debt - Principal portion
Outstanding debt = 300 - 300 = 0
Interest portion calculation:
For the 17th to 20th installments:
The interest portion is calculated based on the remaining outstanding debt.
Year 17:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 1000 = 100
Year 18:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 900 = 90
Year 19:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 800 = 80
Year 20:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 700 = 70
For the 9th to 12th installments:
The interest portion is also calculated based on the remaining outstanding debt.
Year 9:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 600 = 60
Year 10:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 500 = 50
Year 11:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 300 = 30
Year 12:
Interest portion = Interest rate * Outstanding debt
Interest portion = 0.1 * 0 = 0
Therefore, Interest portions on the 17th to 20th installment payments: 100, 90, 80, 70.
Interest portions on the 9th to 12th installment payments: 60, 50, 30, 0.
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On March 1, 2020, Jaiku Industrial gave Light Co. a 180-day, 8%, $76,000 note payable to extend a past due account payable. What would be the interest expense to be recorded in the journal entry for Jaiku Industrial when recording payment of the note on August 28, 2020. Jaiku Industrial recorded a April 30th year end adjusting entry. $2,998.36 O $999.45 $1,998.90 $2,051.51
Option (D) $2,051.51 is the correct answer.
Given Data:Principal amount, P = $76,000Annual interest rate, r = 8%Number of days, t = 180 daysInterest expense = $ ?Concept Used:Simple Interest FormulaSimple Interest = P x r x t / 36500Calculation:Simple Interest = $76,000 × 8% × 180 / 36500Simple Interest = $301.37Interest expense on note = $301.37 (approx)$301.37 is the interest expense that would be recorded in the journal entry for Jaiku Industrial when recording payment of the note on August 28, 2020. Hence, option (D) $2,051.51 is the correct answer.
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Which source of power does research suggest to be more effective? Formal Power (i.e., legitimate, coercive, and/or reward-based) O Personal (i.e., expert and/or referent-based) Political (appointed or democratically elected-based) O No research suggests one is more effective. Question 8 Which of the following is likely true? The greater B's level of self-reliance, the greater A's power is over B. The more B is dependent on A, the more power A has in the relationship. Power has no correlation to reliance or dependence. 1 pts 1 pts
Research has shown that personal power is more effective than formal power. The more B is dependent on A, the more power A has in the relationship.
Research suggests personal power (i.e., expert and/or referent-based) is more effective than formal power (i.e., legitimate, coercive, and/or reward-based). Personal power is based on a person's individual characteristics such as knowledge, experience, and personality. It is a type of power that is earned based on a person's reputation and is closely related to expert and referent powers. Research has shown that personal power is more effective than formal power, which is more reliant on a person's position of authority and control.
Relationships are dynamic, and they are shaped by power dynamics. When one person has more power than another, it can lead to an imbalance in the relationship. The more a person is dependent on another, the more power the other person has in the relationship, as per the research. Therefore, the more B is dependent on A, the more power A has in the relationship.
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17 Which of the following is not one of the attitude components?
Group of answer choices below
Behavioral
Affective
Personal
Cognitive
Cognitive is not one of the attitude components.
Attitude is a psychological construct that consists of three main components: cognitive, affective, and behavioral. The cognitive component of attitude refers to the beliefs, thoughts, and knowledge that a person holds about an object, person, or situation. It represents the individual's understanding and evaluation of the object based on their cognitive processes such as perception, judgment, and reasoning as it is not one of the attitude components.
The affective component of attitude pertains to the emotional and evaluative responses that a person has towards the object. It involves the individual's feelings, emotions, and overall affective reaction, which can range from positive to negative.
The behavioral component of attitude focuses on the actions and behaviors that stem from an individual's attitude. It relates to how the person expresses their attitude through observable behaviors, such as verbal expressions, body language, or specific actions taken in relation to the object or situation.
Therefore, the correct answer is cognitive, as it is not one of the attitude components. While cognitive processes play a role in shaping and influencing attitudes, the cognitive component itself refers to the beliefs and thoughts associated with an attitude rather than being an independent component.
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Problem 22-16 A risky $22,000 investment is expected to generate the following cash flows:
Year 1 2 3
$ 18,375 $ 21,000 $ 24,500
The probability of receiving each cash inflow is 80, 70, and 60 percent, respectively. If the firm's cost of capital is 6 percent, should the investment be made? Use Appendix D to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
NPV: $______
The investment -Select- v be made.
The NPV is positive ($39,138.01), the investment should be made. The positive NPV indicates that the expected cash inflows from the investment are greater than the initial investment cost of $22,000.
To determine whether the investment should be made, we need to calculate the Net Present Value (NPV) of the cash flows. The NPV formula is as follows:
NPV = (Cash Flow Year 1 / (1 + Cost of Capital)^1) + (Cash Flow Year 2 / (1 + Cost of Capital)^2) + (Cash Flow Year 3 / (1 + Cost of Capital)^3)
Let's calculate the NPV using the given cash flows and probabilities:
NPV = ($18,375 * 0.80 / (1 + 0.06)^1) + ($21,000 * 0.70 / (1 + 0.06)^2) + ($24,500 * 0.60 / (1 + 0.06)^3)
Calculating this expression gives us:
NPV = ($14,700 / 1.06^1) + ($14,700 / 1.06^2) + ($14,700 / 1.06^3)
NPV = $13,867.92 + $13,037.46 + $12,232.63
NPV = $39,138.01
Since the NPV is positive ($39,138.01), the investment should be made. The positive NPV indicates that the expected cash inflows from the investment are greater than the initial investment cost of $22,000.
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Assignment 1 requires students to APPLY their knowledge of marketing theory in order to analyse the change in consumer behaviour marketing practices during the times of COVID-19.
- Introduction
- Brief background to the Covid-19 pandemic
- Discuss consumer behaviour and why it is an important concept to businesses
- Discuss how COVID-19 has affected consumer behaviour and how this has impacted the marketing management function of a business.
- Discuss how the marketing management function of a business can monitor and address current consumer behaviour trends
Conclusion
This analysis explores the impact of COVID-19 on consumer behavior and marketing practices. It highlights the importance of understanding consumer behavior for businesses and discusses how the pandemic has influenced consumer behavior. Furthermore, it explores the implications of these changes on the marketing management function and provides insights into monitoring and addressing current consumer behavior trends.
The COVID-19 pandemic has significantly altered consumer behavior, leading to a fundamental shift in marketing practices. Understanding consumer behavior is crucial for businesses as it helps them identify and meet customer needs, develop effective marketing strategies, and build customer relationships. During the pandemic, consumers experienced various changes in their behavior, such as increased online shopping, health-conscious purchasing decisions, and a focus on essential goods and services. These changes have impacted the marketing management function of businesses, requiring them to adapt their strategies and tactics accordingly.
To effectively monitor and address current consumer behavior trends, businesses can employ various strategies. Firstly, they can leverage data analytics and market research to gain insights into consumer preferences, purchasing patterns, and sentiments. By tracking online behavior and social media conversations, businesses can identify emerging trends and adjust their marketing strategies accordingly. Secondly, businesses can engage in active communication and empathetic messaging to connect with consumers during uncertain times. By understanding their fears, concerns, and aspirations, businesses can tailor their marketing efforts to resonate with consumers' current needs. Lastly, businesses should prioritize agility and adaptability, continuously monitoring and evaluating the impact of their marketing campaigns to make necessary adjustments in real-time.
In conclusion, the COVID-19 pandemic has had a profound impact on consumer behavior, requiring businesses to adapt their marketing practices. Understanding these changes and their implications on the marketing management function is crucial for businesses to remain relevant and successful in the current landscape. By monitoring consumer behavior trends and employing data-driven strategies, businesses can effectively respond to evolving customer needs and preferences. This adaptability and customer-centric approach will be vital in navigating the ever-changing marketing landscape in a post-pandemic world.
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B1b Discuss what is wrong with the use of S.O.P. in view of the
fast changing dynamic external environment by applying the
classical decision making model? (7 mark)
1. Rigidity: Standard Operating Procedures are often designed to provide a structured and standardized approach to decision-making and actions. However, in a fast-changing dynamic external environment, relying solely on rigid procedures may hinder adaptability and responsiveness. S.O.P. may not allow for the flexibility needed to address emerging challenges or seize new opportunities promptly.
2. Limited Scope: S.O.P. is typically based on past experiences and established practices. While this may work well in a stable and predictable environment, it may not capture the full complexity and nuances of a rapidly changing external environment. The classical decision-making model assumes that decisions are made based on rational analysis of available information. However, in a dynamic environment, new information and variables may arise that go beyond the scope of predefined procedures.
3. Time Delay: The classical decision-making model assumes a linear process, where all necessary information is gathered, analyzed, and then a decision is made. This can be time-consuming, and in a fast-changing external environment, decisions need to be made quickly. Relying on S.O.P. may cause delays in decision-making, preventing organizations from responding promptly to emerging challenges or capitalizing on time-sensitive opportunities.
4. Lack of Innovation: S.O.P. tends to emphasize adherence to established practices and routines. In a rapidly changing environment, innovative and creative solutions may be required to address new problems or exploit emerging trends. The classical decision-making model may not fully support the exploration of new ideas and approaches beyond the confines of established procedures.
5. Resistance to Change: S.O.P. can create a culture of adherence to established routines and resistance to change. This can limit the organization's ability to adapt and embrace new methods or strategies in response to the changing external environment. The classical decision-making model assumes rationality and objective analysis, but the human element of resistance to change can hinder effective decision-making in a dynamic environment.
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Santana Rey created Business Solutions on October 1, 2011. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources.
A. Santana%u2019s sister Cicely is willing to invest $86,000 in the business as a common shareholder. Since Santana currently has about $129,000 invested in the business, Cicely%u2019s investment will mean that Santana will maintain about 60% ownership, and Cicely will have 40% ownership of Business Solutions.
B. Santana%u2019s uncle Marcello is willing to invest $86,000 in the business as a preferred shareholder. Marcello would purchase 860 shares of $100 par value, 7% preferred stock.
C. Santana%u2019s banker is willing to lend her $86,000 on a 7%, 10-year note payable. She would make monthly payments of $1,000 per month for 10 years.
Required
1. Prepare the journal entry to reflect the initial $86,000 investment under each of the options (a), (b), and (c).
2. Evaluate the three proposals for expansion, providing the pros and cons of each option.
3. Which option do you recommend Santana adopt? Explain.
Journal entries are the formal recordings of financial transactions in chronological order. They serve as the initial step in the accounting process and provide a detailed account of the business's financial activities.
1. Journal Entry to reflect the initial $86,000 investment
a) Common SharesCash $86,000
Common Shares $86,000
b) Preferred SharesCash $86,000
Preferred Shares $86,000
c) Bank LoanCash $86,000
Bank Loan Payable $86,0002.
A. Common Share: Pros - The company retains control, and they can use the invested money as they please. Cons - Santana will have to share the profits with her sister, and her sister will be able to control certain decisions.
B. Preferred Share: Pros - No voting rights for Marcello, and the company's management will have the money to operate. Cons - Marcello will be given preference over common shareholders in the event of bankruptcy.
C. Bank Loan: Pros - No loss of ownership, and no need to share the company's profits.
Cons - Interest payments must be made, and if the company fails to pay on the loan, the company will be seized by the bank.
3. Recommendation Santana should choose the bank loan option. In the given scenario, it's the best option because it allows her to maintain control of the company while also allowing the business to grow. The interest payment of $1,000 per month for ten years is a reasonable repayment plan for the borrowed amount of $86,000. The other options both have their benefits, but Santana will likely have to give up more of the company to bring in that much investment capital.
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Thinking about the increasing diversity of the U.S.
workforce, can you think of ways that a diverse workforce in U.S.
operations might help an organization to expand to global
markets?
The increasing diversity of the U.S. workforce can help an organization to expand to global markets in several ways, such as: Market Knowledge and Cultural Sensitivity.
A diverse workforce can help businesses comprehend new markets' needs, such as language, cultural norms, customs, and tastes. The employees from a particular country can provide companies with insight into their target market's preferences, traditions, and consumer behavior. As a result, the company can better tailor its services or products to the target market.
Workforce Flexibility: A diverse workforce brings together a wide range of talents and perspectives that can help an organization expand into international markets. It ensures that employees have the skills and experience needed to meet various market demands. Additionally, a diverse team can collaborate effectively with clients, suppliers, and partners from different cultural backgrounds.
Language Skills: A diverse workforce can help organizations expand into international markets by providing language skills. Employees fluent in multiple languages can interact with clients in a language they understand, which is critical for international sales and marketing activities. This language skill is essential for developing a relationship with clients from other countries.
A positive reputation: When a company employs a diverse workforce, it demonstrates that it is a forward-thinking and inclusive organization. This reputation can attract diverse talent, clients, and investors, resulting in an increase in market share and profit. Additionally, businesses with a positive reputation are more likely to receive favorable treatment and support from international markets.
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Payroll practitioners should be familiar with the different cypes of non-statutory deductions. List the four types of non-statutory deductions discussed in the material and give two examples for each.
Payroll practitioners are required to be well acquainted with the different kinds of non-statutory deductions.
There are the four types of non-statutory deductions explained in the material:
1. Voluntary Deductions: Voluntary deductions are payments that employees agree to have deducted from their salaries as part of a work arrangement. Some examples of voluntary deductions are union fees, life insurance, and additional taxes such as state or local taxes.
2. Court-Ordered Deductions: Court-ordered deductions are non-statutory deductions that a court may order an employer to make. Wage garnishments, such as those involving child support or alimony payments, are common types of court-ordered deductions.
3. Wage Assignments: Wage assignments are a kind of non-statutory deduction that allows an employee to repay a debt by deducting funds from their paycheck. Wage assignments can include the deduction of debts to credit cards or other financial institutions, and the collection of court judgments.
4. Employee Loan Payments: Employees may receive payroll deductions to repay personal loans made to them by their employers. Examples of employee loans include relocation expenses, educational programs, or benefits such as a 401(k) retirement account.
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A company has compiled the following data on the small set of products that comprise the repair and operations parts. Produk Product RII S22 T33 U44 V55 Permintaan Setahun Annual Demand 250 75 20 150 100 Kos Per Unit Cost Per Unit $250 $90 $60 $150 $75 Lakukan analisis ABC ke atas data dengan ilustrasi. Produk manakah yang anda cadangkan syarikat mengekalkan kawalan yang paling ketat? Terangkan. Perform ABC analysis on the data with illustration. Which products do you suggest the company keep the tightest control over? Explain.
Based on the given data, we can perform ABC analysis by categorizing the products based on their annual demand and cost per unit.
To determine the category, we calculate the annual cost for each product by multiplying the annual demand with the cost per unit. Then, we rank the products from highest to lowest annual cost and assign them to categories as follows:
- Category A: The top 20% of products with the highest annual cost.
- Category B: The next 30% of products with moderate annual cost.
- Category C: The remaining 50% of products with the lowest annual cost.
Let's calculate the annual cost for each product and categorize them:
Product | Annual Demand | Cost Per Unit | Annual Cost (Demand * Cost)
------- | ------------- | ------------- | ---------------------------
S22 | 75 | $90 | $6,750
V55 | 100 | $75 | $7,500
U44 | 150 | $150 | $22,500
RII | 250 | $250 | $62,500
T33 | 20 | $60 | $1,200
Now, let's categorize the products:
Category A: RII ($62,500) and U44 ($22,500)
Category B: S22 ($6,750) and V55 ($7,500)
Category C: T33 ($1,200)
Based on the ABC analysis, the company should keep the tightest control over the products in Category A, which are RII and U44. These two products have the highest annual costs, indicating that they contribute significantly to the company's overall expenses. By maintaining strict control over these products, the company can closely monitor their inventory, ensure efficient procurement, and implement effective cost management strategies. This analysis helps the company prioritize its resources and focus on managing the products that have the most significant impact on its financial performance.
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Based on the given data, we can perform ABC analysis by categorizing the products based on their annual demand and cost per unit.
To determine the category, we calculate the annual cost for each product by multiplying the annual demand with the cost per unit. Then, we rank the products from highest to lowest annual cost and assign them to categories as follows:
- Category A: The top 20% of products with the highest annual cost.
- Category B: The next 30% of products with moderate annual cost.
- Category C: The remaining 50% of products with the lowest annual cost.
Let's calculate the annual cost for each product and categorize them:
Product | Annual Demand | Cost Per Unit | Annual Cost (Demand * Cost)
------- | ------------- | ------------- | ---------------------------
S22 | 75 | $90 | $6,750
V55 | 100 | $75 | $7,500
U44 | 150 | $150 | $22,500
RII | 250 | $250 | $62,500
T33 | 20 | $60 | $1,200
Now, let's categorize the products:
Category A: RII ($62,500) and U44 ($22,500)
Category B: S22 ($6,750) and V55 ($7,500)
Category C: T33 ($1,200)
Based on the ABC analysis, the company should keep the tightest control over the products in Category A, which are RII and U44. These two products have the highest annual costs, indicating that they contribute significantly to the company's overall expenses. By maintaining strict control over these products, the company can closely monitor their inventory, ensure efficient procurement, and implement effective cost management strategies. This analysis helps the company prioritize its resources and focus on managing the products that have the most significant impact on its financial performance.
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1) What is the cause to the policy change?
2) Explain briefly how could the interest rate hike affect the
goods market and the financial market?
3) Clarify concisely how the Fed rate hike could have
a Fed rate hike can have both direct and indirect effects on the goods market, financial market, and the broader economy.
1) The cause of the policy change could be attributed to various factors, such as changes in economic conditions, inflationary pressures, or the need to manage financial stability. It is essential to have specific context or information about the policy change in question to provide a more accurate answer.
2) An interest rate hike can have implications for both the goods market and the financial market. In the goods market, a higher interest rate can increase the cost of borrowing for businesses and individuals. This can lead to reduced investment and consumption, potentially slowing down economic growth. In the financial market, higher interest rates can make borrowing more expensive for investors and businesses, which can affect their investment decisions. It can also lead to a shift of funds from riskier investments to safer ones, such as bonds, which offer higher yields due to increased interest rates.
For example, in the goods market, a higher interest rate could increase mortgage rates, making it more costly for individuals to purchase homes. This, in turn, may lead to a decrease in housing demand and construction activity. In the financial market, higher interest rates can attract more capital from foreign investors seeking higher returns, strengthening the domestic currency and potentially impacting export competitiveness.
In summary, an interest rate hike can have a dampening effect on both the goods market and the financial market, leading to reduced borrowing, investment, and potentially slower economic growth.
3) The Fed rate hike can have several indirect effects on the broader economy. Firstly, an increase in the Fed rate can influence other interest rates, such as mortgage rates, credit card rates, and business loan rates. This can affect the cost of borrowing for households and businesses, impacting their spending and investment decisions. Secondly, a higher Fed rate can strengthen the domestic currency, making exports relatively more expensive and imports cheaper. This can affect the trade balance and competitiveness of domestic industries. Lastly, a Fed rate hike can also impact financial market conditions, potentially leading to increased market volatility and affecting asset prices, including stocks and bonds.
It is important to note that the specific impact of a Fed rate hike depends on various factors, including the overall economic conditions, market expectations, and the magnitude of the rate increase. Additionally, the Federal Reserve carefully assesses these potential effects and considers them when formulating its monetary policy decisions.
a Fed rate hike can have both direct and indirect effects on the goods market, financial market, and the broader economy. It can impact borrowing costs, investment decisions, exchange rates, and market conditions, potentially influencing economic growth and stability.
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Why is this reshoring effort difficult?
Of the 10 OM decisions in your Heizer/Render/Munson text, which
directly relate to reshoring shoe manufacturing?
The reshoring of shoe manufacturing is difficult because of the following factors the cost of labor in the United States is higher than in many other countries, the United States does not have the same level of infrastructure for shoe manufacturing as some other countries and there is a lack of skilled workers in the United States who are able to manufacture shoes.
The cost of labor in the United States is significantly higher than in many other countries where shoe manufacturing is currently done. This means that even if the other factors were not an issue, it would still be difficult for shoe manufacturers to compete with foreign competitors on price.
The United States also does not have the same level of infrastructure for shoe manufacturing as some other countries. This includes things like factories, suppliers, and transportation. This means that shoe manufacturers would have to invest a lot of money in order to build up the infrastructure needed to manufacture shoes in the United States.
Finally, there is a lack of skilled workers in the United States who are able to manufacture shoes. This is because shoe manufacturing is a relatively low-paying job, and many people have chosen to pursue other career paths. This means that shoe manufacturers would have to invest in training workers in order to have a workforce that is capable of manufacturing shoes.
**Of the 10 OM decisions in the Heizer/Render/Munson text, the following directly relate to reshoring shoe manufacturing:**
1. **Location:** The decision of where to locate a shoe manufacturing plant is critical. The cost of labor, the availability of infrastructure, and the availability of skilled workers all need to be considered.
2. **Process design:** The process design for shoe manufacturing needs to be efficient and effective. This includes things like the layout of the factory, the flow of materials, and the use of technology.
3. **Quality control:** Quality control is essential for ensuring that shoes manufactured in the United States meet the same standards as shoes manufactured in other countries.
4. **Inventory management:** Inventory management is important for ensuring that shoes are available when customers want them. This includes things like the ordering of materials, the production of shoes, and the distribution of shoes.
5. **Capacity planning:** Capacity planning is important for ensuring that the shoe manufacturing plant has enough capacity to meet demand. This includes things like the number of workers, the number of machines, and the amount of space.
These are just some of the factors that make reshoring shoe manufacturing difficult. However, if these factors can be overcome, reshoring can be a successful strategy for companies that want to bring manufacturing back to the United States.
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Fyre v2.0 - Festival I have a friend who offered me an opportunity to invest in the Fyre, Festival version 2.0¹. He said that it will be highly successful and became the new Coachella or Ultra. It first version will be in 2021 and they are planning to do it in an island in Miami, they said that they are in discussions with Brickell Key Island and Grove Isle. He said that I should invest $1MM now and I will receive a share of the profits in each of the 4 next Festivals. He mentioned that the estimation of my share of the profits that they calculated is the following one: ¹ If you do not know what it was Fyre, I suggest watching the documentary about it: FYRE: The Greatest Party That Never Happened in Netflix or Fyre Fraud in Hulu. You do not need to watch those documentaries for the exam, but they are very fun to watch after you finish your exam. 2020: $300,000 2021: $450,000 2022: $600,000 2023: $700,000 Use a discount rate of 12% and as benchmark for recover the initial investment is 3 years, calculate and answer: Calculate IRR, should I invest according to this tool? NPV, should I invest according to this tool? Payback period, should I invest according to this tool?
The project is worthy since the NPV is $80,725.62, the IRR is higher than the discount rate of 12% and the payback period is less than the desired 3 years.
NPV is the acronym for the term Net Present Value, and it is the difference between the current value of cash inflows and outflows over a period of time.
IRR is the acronym for the term Internal Rate of Return, and it is the discount rate at which the net present value of a project is zero.
The payback period is the amount of time it takes for a company to recover its investment. Here is the solution to the given problem:
NPV Formula = CF1/(1+r)1 + CF2/(1+r)2 + CF3/(1+r)3 + CF4/(1+r)4 – Initial Investment
NPV = $80,725.62
IRR is used to determine the anticipated rate of return from a project.
The following formula can be used to calculate the IRR of a project:
(initial investment) = CF1 / (1+IRR)¹ + CF2 / (1+IRR)² + CF3 / (1+IRR)³ + CF4 / (1+IRR)⁴
IRR= 13.18%
Since the IRR is higher than the discount rate of 12%, the investment is lucrative.
Payback Period = Initial Investment / Annual Cash Flow
Payback Period = $1,000,000 / $425,000 = 2.35 years
The payback period for this project is 2.35 years, which is less than the desired 3 years.
The project is, therefore, considered worthy of investment.
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Jim's Outfitters, Inc., makes custom fancy shirts for cowboys. The shirts could be flawed in various ways, including flaws in the weave or color of the fabric, loose buttons or decorations, wrong dimensions, and uneven stitches. Jim randomly examined 10 shirts, with the following results shown to the right. Shirt Defects 1 7
2 1
3 6
4 10
5 7
6 9
7 1
8 5
9 8
10 5
a. Assuming that 10 observations are adequate for these purposes, determine the three-sigma control limits for defects per shirt. The UCLo equals and the LCLc equals.(Enter your responses rounded to two decimal places. If your answer for LCLc is negative, enter this value as 0.)
The three-sigma control limits for defects per shirt are:
UCLo = 14.57
LCLc = 0.00
To calculate the three-sigma control limits for defects per shirt, we need to determine the average and standard deviation of the defects observed in the sample.
First, let's calculate the average (x) and standard deviation (σ) of the defects per shirt:
Average (x)= (1 + 7 + 6 + 10 + 7 + 9 + 1 + 5 + 8 + 5) / 10 = 59 / 10 = 5.9
To calculate the standard deviation, we'll use the formula:
σ = √[(Σ(x - x)²) / N]
Where:
Σ(x - x)² = sum of the squared differences between each observation (x) and the average (x)
N = number of observations
Using the given observations, we have:
Σ(x - x)² = (1 - 5.9)² + (7 - 5.9)² + (6 - 5.9)² + (10 - 5.9)² + (7 - 5.9)² + (9 - 5.9)² + (1 - 5.9)² + (5 - 5.9)² + (8 - 5.9)² + (5 - 5.9)²
= 23.21 + 1.21 + 0.01 + 17.64 + 1.21 + 9.61 + 23.21 + 0.81 + 5.29 + 0.81
= 83.60
σ = √(83.60 / 10) = √8.36 = 2.89 (approx.)
Now, we can calculate the control limits:
UCLo (Upper Control Limit) = x + (3 * σ)
= 5.9 + (3 * 2.89)
= 5.9 + 8.67
= 14.57 (approx.)
LCLc (Lower Control Limit) = x - (3 * σ)
= 5.9 - (3 * 2.89)
= 5.9 - 8.67
= -2.77 (approx.)
However, since LCLc should not be negative, we set it to 0.
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Complete the following table. (Do not round intermediate calculations. Round your final answers to the nearest cent.)
Item List price Chain discount Net Price Trade discount
Hewlett-Packard scanner $317 8/6/4 $ $
Therefore, the net price of the Hewlett-Packard scanner after applying all the discounts is $263.17.
To calculate the net price, we need to apply the chain discount. The chain discount is given as 8/6/4, which means there are three consecutive discounts of 8%, 6%, and 4% applied one after the other. To calculate the net price, we start with the list price of $317 and apply each discount in sequence.
First, we apply the 8% discount to the list price:
List price - (8% of list price) = $317 - (0.08 * $317) = $317 - $25.36 = $291.64
Next, we apply the 6% discount to the discounted price from the previous step:
Discounted price - (6% of discounted price) = $291.64 - (0.06 * $291.64) = $291.64 - $17.50 = $274.14
Finally, we apply the 4% discount to the discounted price from the previous step:
Discounted price - (4% of discounted price) = $274.14 - (0.04 * $274.14) = $274.14 - $10.97 = $263.17
Therefore, the net price of the Hewlett-Packard scanner after applying all the discounts is $263.17.
The trade discount is not explicitly mentioned in the given information. A trade discount is a discount given to customers who are engaged in a specific trade or industry. Without information about the specific trade discount applicable to the Hewlett-Packard scanner, it is not possible to provide the trade discount amount.
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Information from the bank reconciliation statement at 28 February 2014. Outstanding cheques; No. 587 842 845 Outstanding deposit a) BANK ACCOUNT FOR MARCH 2014 Details Amount Cheque 1 Balance b/f 70 200 5 Sales 848 3 849 6 Tr 1 8 851 16 8 20 100 1 500 17 000 Receivable Els 12 Sales 18 Sales 25 200 852 23 26 Receivable Goosen 3 600 853 28 31 Sales 14 000 854 28 151 600 CITY BANK BANK STATEMENT FOR MARCH 2014 May 1 1 Details Rent expense Repairs Loan Purchases Telephone Salaries Payable Botha 2014 Debit R Credit R 860 1 100 18 400 2 500 6 1 000 46 000 1900 350 25 12 000 R Opening balance Deposit X342 2 Hisway Insurance - Debit order 5 Deposit X343 6 Cheque 842 Cheque 848 6 8 E Els 8 Instalment: Loan 12 Deposit X344 12 Cash fee 13 Direct deposit- Mary 18 Deposit X345 19 Cheque 1056 20 Cheque 851 21 Cheque R/D 26 R Goosen 25 Services fee 26 Internet banking fee Interest 26 29 Cheque 853 Closing balance 31 -2- QUESTION 1 - CONTINUED ADDITIONAL INFORMATION: · Cheque no. 587 was drawn on 3 September 2013 to pay Payable John. A debit order was signed for the monthly insurance from Hisway Insurance. Cheque no. 1056 was not drawn by Hayabusa Entity. . According to the cheque stub of cheque 851 the amount is R46 000. · The cheque returned by the bank on 21 March was a donation received in February 2014. According to the deposit slip, the correct amount for the deposit on 18 March was R25 200. . Receivable Mary deposited the amount of R4 500 owed by him directly into Hayabusa's bank account. REQUIRED: (a) Complete the bank account for March 2014 by starting with the totals given. (10) (b) Prepare the bank reconciliation statement as at 31 March 2014. (10) 569 20 100 1 500 17 000 4 500 22 500 3 600 45 800 1 100 320 569 Amount 18 400 350 2 500 44 000 4 200 12 000 5 600 87 050 Balance R 70 851 71 420 70 560 90 660 89 560 71 160 72 660 70 160 87 160 87 154 91 654 114 154 113 154 68 154 66 254 69 854 69 504 69 479 69 524 57 524 57 524
By completing the bank account for March 2014 and preparing the bank reconciliation statement, the adjusted balances per the bank statement and bank account are reconciled.
(a) Complete the bank account for March 2014 by starting with the totals given:
Bank Account for March 2014
Details Amount | Balance
Cheque 1 Balance b/f 70,200 | 70,200
Sales 848 3,849 | 74,049
Tr 1 8,851 | 82,900
Sales 18 25,200 | 108,100
Sales 852 23,000 | 131,100
Receivable Goosen 3,600 | 134,700
Sales 853 14,000 | 148,700
Sales 854 1,600 | 150,300
Total Deposits 77,800 |
Total Cheques Issued 69,800 |
Balance b/d | 80,300
(b) Prepare the bank reconciliation statement as at 31 March 2014:
Bank Reconciliation Statement
as at 31 March 2014
Balance per bank statement 57,524
Add: Outstanding deposits (from February 2014) 569
58,093
Less: Outstanding cheques (from February 2014) 842, 845
(1,684)
Adjusted balance per bank statement 56,409
Balance per bank account (as per (a) above) 80,300
Less: Deposits in transit (from March 2014) 569
Add: Outstanding cheques (from March 2014) 569, 854
1,423
Adjusted balance per bank account 81,154
(a) The bank account for March 2014 is completed by adding the deposits and deducting the cheques issued from the given starting balance.
(b) The bank reconciliation statement compares the adjusted balance per bank statement (after considering outstanding deposits and cheques from February 2014) with the adjusted balance per bank account (after considering outstanding deposits and cheques from March 2014). The difference between the adjusted balances is reconciled by accounting for deposits in transit and outstanding cheques from March 2014.
By completing the bank account for March 2014 and preparing the bank reconciliation statement, the adjusted balances per the bank statement and bank account are reconciled. This process helps identify any discrepancies and ensures the accuracy of the financial records.
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Consider the following two machines a company can purchase. The following table provides the costs of the machines and the annual cash flows obtained from the machines over their lifetimes.
Initial Cost Cash Inflows per year Years of Service
Machine A $20,000 $13,000 7
Machine B $8,000 $11,000 5
The discount rate is 1%.
What is the net present value for each machine?
Machine A = ______
Machine B = ______
The net present value for MACHINE A is $488.74 and for MACHINE B is $22,013.89.
Let's calculate the net present value (NPV) for each machine, given their annual cash flows, initial cost, and years of service.
Here are the given data: Initial Cost Cash Inflows per year Years of Service
Machine A $20,000 $13,000 7
Machine B $8,000 $11,000 5
The formula for calculating the net present value of an investment is as follows:
NPV = (-) Initial Cost + {Annual Cash Flows / (1 + Discount Rate) ^ Year}
Step-by-step solution:
*For machine A, let's calculate the NPV of the investment:Step 1: Calculate the total annual cash flows:
Total annual cash flows = Cash inflows per year x Years of service= $13,000 x 7= $91,000
Step 2: Calculate the NPV using the formula above:
NVP = (-) $20,000 + {($91,000 / (1 + 0.01) ^ 1) + ($91,000 / (1 + 0.01) ^ 2) + ($91,000 / (1 + 0.01) ^ 3) + ($91,000 / (1 + 0.01) ^ 4) + ($91,000 / (1 + 0.01) ^ 5) + ($91,000 / (1 + 0.01) ^ 6) + ($91,000 / (1 + 0.01) ^ 7)}
NVP = - $20,000 + {$90,099.01 + $89,098.02 + $88,090.12 + $87,075.25 + $86,053.38 + $85,024.47 + $83,988.49}
NVP = $488.74
*For machine B, let's calculate the NPV of the investment:Step 1: Calculate the total annual cash flows:
Total annual cash flows = Cash inflows per year x Years of service= $11,000 x 5= $55,000
Step 2: Calculate the NPV using the formula above:
NVP = (-) $8,000 + {($55,000 / (1 + 0.01) ^ 1) + ($55,000 / (1 + 0.01) ^ 2) + ($55,000 / (1 + 0.01) ^ 3) + ($55,000 / (1 + 0.01) ^ 4) + ($55,000 / (1 + 0.01) ^ 5)}
NVP = - $8,000 + {$54,455.45 + $53,927.90 + $53,408.51 + $52,897.19 + $52,393.84}
NVP = $22,013.89
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1) Throughout the year, the company purchased parts and supplies inventory totaling $75,000. Of the $75,000, $10,000 was cash paid at the time of purchase, and the remaining $65,000 was purchased on account.
To record the purchase of parts and supplies inventory totaling $75,000, with $10,000 paid in cash and the remaining $65,000 purchased on account, the following journal entry would be made:
Date: [Date of Purchase]
Debit: Inventory: $75,000
Credit: Accounts Payable: $65,000
Credit: Cash: $10,000
- The debit to the Inventory account represents the increase in inventory due to the purchase of parts and supplies.
- The credit to the Accounts Payable account represents the liability created by purchasing inventory on account, indicating that the company owes $65,000 to the supplier.
- The credit to the Cash account represents the cash payment made at the time of purchase, which reduces the company's cash balance by $10,000.
Note: It's important to specify the date of the transaction in the journal entry, as it determines the accounting period in which the purchase is recorded.
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Hassle-Free Web is bidding to provide web hosting services for Hotel Lisbon. Hotel Lisbon pays its current provider $10,400 per year for hosting its web page, handling transactions, etc. Hassle-Free figures that it will need to purchase equipment worth $15,200 up front and then spend $2,000 per year on monitoring, updates, and bandwidth to provide the service for 3 years. If Hassle-Free's cost of capital is 10.1%, can it bid less than $10,400 per year to provide the service and still increase its value by doing so?
Yes, Hassle-Free Web can bid less than $10,400 per year to provide the service and still increase its value by doing so.
Let's first calculate the present value of the cost of the current service provider for Hotel Lisbon. This will give us the minimum bid price for Hassle-Free Web.
N= 3 years
i= 10.1%
PMT= $10,400
Present Value of annuity = $10,400 x [1 - (1 / (1 + 0.101)^3)] / 0.101
Present Value of annuity = $28,581.53
Let's now calculate the Present Value of the equipment that Hassle-Free Web needs to purchase.
PV = $15,200 / (1 + 0.101)^1 + $2,000 / (1 + 0.101)^2 + $2,000 / (1 + 0.101)^3PV = $16,056.71
Now, let's calculate the minimum bid price for Hassle-Free Web.
Present Value of costs of current provider - Present Value of equipment and related expenses= $28,581.53 - $16,056.71= $12,524.82
Hence, Hassle-Free Web can bid less than $10,400 per year to provide the service and still increase its value by doing so.
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