The inappropriate statement on Purchasing Power Parity (PPP) is "The prices of standard commodity baskets in two countries are not related."
This statement is incorrect because PPP is based on the assumption of the law of one price, which states that identical goods should have the same price in different countries when expressed in a common currency. The other options listed are valid statements related to PPP.
Purchasing Power Parity (PPP) is an economic theory that compares the price levels and exchange rates between countries. It aims to determine whether a currency is overvalued or undervalued based on the relative purchasing power of each currency. The correct statements about PPP are as follows:
PPP is based on the assumption of the law of one price: The law of one price assumes that identical goods should have the same price in different countries when converted to a common currency. This forms the foundation of PPP.
The exchange rate between currencies of two countries should be equal to the ratio of the countries' price levels: PPP suggests that the exchange rate between two currencies should reflect the differences in price levels between the countries.
As the purchasing power of a currency sharply declines due to hyperinflation, that currency will depreciate against stable currencies: Hyperinflation erodes the purchasing power of a currency, leading to its devaluation relative to more stable currencies.
Therefore, the inappropriate statement is "The prices of standard commodity baskets in two countries are not related." This statement contradicts the fundamental concept of PPP, which is based on the assumption that prices of identical goods should be related when expressed in a common currency.
To know more about Purchasing Power Parity :
brainly.com/question/28199500
#SPJ11
Sakala's year end is 30 September 2021. Sakala commenced the development stage of a project to produce a new pharmaceutical drug on 1 January 2021. Expenditure of £40.000 per month was incurred until the project was completed on 30 June 2021 when the drug went into
immediate production. The directors only became confident of the project's success on 1 March 2021. The drug has an estimated life span of five years; time apportionment is used for
amortisation by Sakala where applicable. What amount will Sakala charge to profit or loss for development costs, including any
amortisation, for the year ended 30 September 2021?
Sakala's development costs, including any amortization, for the year ended 30 September 2021 is £174,000.
From 1 January 2021 to 28 February 2021, the drug's viability was uncertain, and therefore development costs incurred in that timeframe should be expensed.40,000 * 2 months = £80,000
From 1 March 2021 to 30 June 2021, the drug's viability was confirmed, and as a result, costs incurred during that period should be capitalized.
The costs incurred during this period are:£40,000 * 4 months = £160,000
Total development expenses = £80,000 + £160,000 = £240,000
The development expense that needs to be capitalized is £160,000; the remaining £80,000 has already been expensed.
Amortization cost of development expense: The capitalized development expense should be amortized over the drug's estimated useful life span.
The drug has an expected life span of five years, which means that the amortization rate should be 1/5 = 0.20.
Amortization cost = Capitalized Development Cost * Amortization rate= £160,000 * 0.20 = £32,000
Therefore, Sakala's development costs, including any amortization, for the year ended 30 September 2021 is £160,000 + £32,000 = £174,000.
Learn more about amortization at
https://brainly.com/question/24232991
#SPJ11
Accepting Business at a Special Price
Forever Ready Company expects to operate at 82% of productive capacity during July. The total manufacturing costs for July for the production of 31,980 batteries are budgeted as follows:
Direct materials $506,700
Direct labor 186,300
Variable factory overhead 52,134
Fixed factory overhead 104,000
Total manufacturing costs $849,134
The company has an opportunity to submit a bid for 3,000 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses.
What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places.
$fill in the blank 1 per unit
To determine the unit cost below which Forever Ready Company should not go in bidding on the government contract, we need to calculate the incremental cost per unit for the additional 3,000 batteries.
The incremental cost includes only the direct materials, direct labor, and variable factory overhead, as the fixed factory overhead and other expenses are unaffected by the contract. By dividing the total incremental cost by the quantity of batteries, we can find the unit cost threshold for bidding on the contract.
To determine the incremental cost per unit for the additional 3,000 batteries, we only consider the direct materials, direct labor, and variable factory overhead. The respective costs for these items are $506,700, $186,300, and $52,134. Summing these costs, we get $745,134 for the additional 3,000 batteries.
Dividing the incremental cost by the quantity of batteries, the unit cost below which Forever Ready Company should not go in bidding on the government contract is $745,134 / 3,000 = $248.38 per battery, rounded to two decimal places. Therefore, the answer is $248.38 per unit.
Learn more about quantity here;
brainly.com/question/14581760
#SPJ11
Other things equal, the price of a stock put option is positively correlated with which of the following factors?
The time to expiration, stock volatility, and exercise price
The stock price
The stock volatility
The time to expiration
The exercise price
The price of a stock put option is positively correlated with the stock volatility and the time to expiration.
The stock volatility is a measure of the price fluctuations of the underlying stock. Higher volatility increases the potential for larger price swings, which increases the value of the put option as it provides the holder with the right to sell the stock at a predetermined price.
The time to expiration is also positively correlated with the price of a put option. With a longer time to expiration, there is a higher probability that the stock price may fall below the exercise price, increasing the value of the put option.
On the other hand, the stock price itself and the exercise price of the option have an inverse relationship with the price of a put option. As the stock price rises, the likelihood of the stock falling below the exercise price decreases, reducing the value of the put option. Similarly, a higher exercise price makes it less likely for the stock to drop below that price, decreasing the value of the put option.
Learn more about put option here:
https://brainly.com/question/32294526
#SPJ11
A taxpayer recently called our office and indicated she was interested in being a surrogate mother. Her idea was to carry the baby for a fee (not unusual). She would carry the fertilized egg for biological father and mother. I was very impressed by what a giving person she was. She thanked me, but indicated she was not that giving, since the fee was $50,000. She further indicated the $50,000 fee is tax free due to the pain and suffering she incurred delivering a baby. While I am a father of four, I cannot personally relate to the pain and suffering. Would the payments be tax free? When she is "out of work" could she collect unemployment? What about workers compensation?
The $50,000 fee received by the taxpayer for being a surrogate mother would likely not be considered tax-free.
While the taxpayer may have undergone pain and suffering during the delivery, the fee received for the surrogacy arrangement is generally considered compensation for services rendered, rather than damages for personal injury. As a result, it would be subject to taxation as ordinary income.
The tax treatment of payments received for being a surrogate mother is determined by the nature of the payments. In this case, the $50,000 fee is not likely to qualify as tax-free. Generally, payments received for providing services, such as being a surrogate mother, are considered taxable income. While the taxpayer may have experienced pain and suffering during the delivery process, the fee is seen as compensation for services rendered rather than damages for personal injury. Therefore, it would be subject to taxation as ordinary income.
Regarding unemployment benefits, eligibility is typically based on being available and actively seeking work. If the taxpayer is temporarily "out of work" after the surrogacy arrangement, she may be eligible to collect unemployment benefits if she meets the relevant requirements, such as actively searching for a new job.
However, workers' compensation benefits are generally not applicable in the case of self-inflicted injuries or situations where the individual willingly assumes risks. As being a surrogate mother is a voluntary arrangement, it is unlikely that the taxpayer would be eligible for workers' compensation benefits based solely on the surrogacy activities.
It is important to note that tax laws and regulations can vary by jurisdiction, and it is advisable for the taxpayer to consult with a qualified tax professional or seek specific guidance from the relevant tax authority to understand the tax implications and eligibility for benefits in their particular situation.
To learn more about tax, click here:
brainly.com/question/30157668
#SPJ11
Defined as a system of values and beliefs in an organization that reinforces the idea that providing the customer with quality service is the principal concern of the business. Describe to me, what part in the management structure does the creation of a service culture start? How does it flow? Why is it important?
The creation of a service culture starts at the top of the management structure, typically with the organization's leaders and executives. They play a crucial role in setting the tone and establishing a customer-centric mindset throughout the entire organization.
The flow of a service culture then extends to all levels and departments, permeating the organization's values, behaviors, and processes. It is important because a service culture aligns the entire workforce towards a common goal of delivering quality service to customers, fostering customer loyalty, satisfaction, and long-term business success.
The creation of a service culture begins with the leaders and executives of an organization. They are responsible for developing a clear vision and mission that prioritize customer service as the principal concern of the business.
By articulating and demonstrating their commitment to a customer-centric approach, leaders set the foundation for creating a service-oriented culture.
Once the leadership establishes this vision, it needs to flow down to all levels and departments within the organization. This involves effective communication, training, and support mechanisms to ensure that every employee understands and embraces the importance of delivering quality service.
Managers and supervisors play a crucial role in reinforcing the service culture and leading by example.
A service culture is important because it drives customer satisfaction, loyalty, and retention. When employees are aligned with a common goal of providing excellent service, they are more motivated and empowered to meet customer needs and exceed expectations.
A service-oriented organization is better equipped to anticipate and respond to customer demands, resulting in enhanced customer experiences and positive word-of-mouth referrals.
Ultimately, a strong service culture contributes to long-term business success and a competitive advantage in the marketplace.
By instilling a service culture throughout the management structure, organizations can create an environment where every employee is dedicated to understanding and satisfying customer needs.
This customer-centric approach fosters strong relationships, customer loyalty, and business growth, making it a vital aspect of successful organizations in today's service-driven economy.
To learn more about, Management:-
brainly.com/question/28072798
#SPJ11
Larkspur Inc. has issued three types of debt on January 1,2020 , the start of the company's fiscal year. (a) \$10 million, 11-year, 14\% unsecured bonds, interest payable quarterly. Bonds were priced to yield 10%. (b) \$27 million par of 11-year, zero-coupon bonds at a price to yield 10% per year. (c) $20 million, 11-year, 9% mortgage bonds, interest payable annually to yield 10%.
(a) The unsecured bond have a face value of $10 million, a maturity of 11 years, a stated interest rate of 14%, and were priced to yield 10%. Interest is payable quarterly.
(b) The zero-coupon bonds have a par value of $27 million, a maturity of 11 years, and were priced to yield 10% per year.
(c) The mortgage bonds have a face value of $20 million, a maturity of 11 years, a stated interest rate of 9%, and were priced to yield 10%. Interest is payable annually.
(a) The unsecured bonds have a face value of $10 million, a maturity of 11 years, and a stated interest rate of 14%. However, they were priced to yield 10%, meaning investors will purchase them at a discount. The interest is payable quarterly.
(b) The zero-coupon bonds have a par value of $27 million and a maturity of 11 years. Since they are zero-coupon bonds, they do not pay periodic interest but are issued at a discount to yield 10% per year.
(c) The mortgage bonds have a face value of $20 million, a maturity of 11 years, and a stated interest rate of 9%. However, they were priced to yield 10%, which means investors will purchase them at a discount. The interest is payable annually.
These debt issuances represent different types of bonds with varying terms and structures, but they all have in common the fact that they were priced to yield 10% to attract investors. The interest payment frequency and rates differ based on the specific terms of each bond.
Learn more about bond here:
https://brainly.com/question/31994049
#SPJ11
4. Under IFRS, "other comprehensive income" does NOT include
a) unrealized holding gains and losses on certain securities.
b) gains and losses on disposal of property, plant, and equipment.
c) gains and losses related to certain types of hedges.
d) certain gains and losses related to foreign exchange transactions.
5. Under IFRS, biological assets should normally be measured at
a) cost.
b) cost less accumulated depreciation.
c) fair value.
d) fair value less costs to sell.
9.Enviro Corporation had the following items as inventory as at December 31, 2020:
Item No. Quantity Unit Cost NRV
A1 130 $8.00 $8.40
B4 190 5.00 4.90
C2 190 12.00 12.90
D3 200 11.00 10.00
Assume that Enviro uses a perpetual inventory system and that none of the inventory items can be grouped together for accounting purposes. The year-end adjusting entry, applying Lower of Cost and NRV by individual items, should include a charge to cost of goods sold of
a) $219.
b) $188.
c) $35.
d) $0.
4. Under IFRS, "other comprehensive income" does NOT include the gains and losses on disposal of property, plant, and equipment (Option b)
5. Under IFRS, biological assets should normally be measured at fair value (Option c).
9. Therefore, the total charge to the cost of goods sold is $219 (option a)
4. .Other comprehensive income (OCI) refers to a component of a company's net income that arises from sources other than traditional profit or loss, such as unrealized gains or losses from certain securities, currency translation adjustments, pension adjustments, and gains or losses from certain derivative financial instruments.
5. Biological assets are plants or animals that a business cultivates or breeds in order to sell as products, such as crops, timber, or livestock.
Biological assets are typically valued at their fair value at each reporting date, less any costs that would be incurred to sell the asset. Fair value reflects the current market price for the assets.
9. The year-end adjusting entry, applying Lower of Cost and NRV by individual items, should include a charge to the cost of goods sold of $219 (Option a).NRV stands for net realizable value. In the context of inventory, it refers to the estimated selling price of an item less any estimated costs of completion and disposal.
The lower-of-cost-or-net realizable value (LCNRV) method is a way of valuing inventory that is often used in financial accounting to prevent inventory from being valued at more than it is worth.
In this case, the charge to the cost of goods sold for Item A1 will be $8.00 because the NRV is less than the cost, so the inventory is written down to the lower NRV value. For Item B4, there will be no adjustment because the cost is less than the NRV.
For Item C2, the charge to the cost of goods sold will be $190 because the NRV is less than the cost. For Item D3, the charge to the cost of goods sold will be $31 because the NRV is less than the cost.
for such more questions on biological
https://brainly.com/question/13276200
#SPJ8
Soaring Pieces Inc. creates aluminum alloy parts for commercial aircraft. In a recent transaction Soaring leased a high precision lathe machine from Rapid Revolving Corp. on January 1, 2019.
The following information pertains to the leased asset and the lease agreement:
Cost of lathe to lessor
$140,000
Rapid's normal selling price for lathe (FMV)
$178,268
Useful life
7 years
Lease provisions -
Lease term
5 years
Payment amount
$40,000
Payment frequency
Annual
Payment timing
December 31
Estimated residual value at end of lease (unguaranteed)
$20,000
Interest rate implicit in the lease (readily determinable by lessee)
7%
Lessee's incremental borrowing rate
8%
The lathe machine will revert back to the lessor at end of lease term, title does not transfer to lessee at any time, and there is not a bargain purchase option.
Both parties report under IFRS.
Required:
Classify this lease from the perspective of the lessor, Rapid Revolving Corp. Demonstrate all four tests and conclude operating or finance.
Prepare the journal entries on January 1, 2019 and December 31, 2019 for the lessor.
Based on the given information, the lease should be classified as a finance lease for the lessor, Rapid Revolving Corp. This classification is determined by applying the four tests: transfer of ownership, bargain purchase option, lease term, and present value of lease payments.
To classify the lease, we need to apply the four tests. Firstly, the lease term is 5 years, which represents a major part of the lathe's useful life of 7 years. This satisfies the lease term test. Secondly, there is no bargain purchase option in the lease agreement, indicating that the lessee has no option to purchase the asset at a price significantly lower than its fair value.
Next, we consider the present value of lease payments. To calculate this, we discount the annual payment of $40,000 at the implicit interest rate of 7% (readily determinable by the lessee). The present value of the lease payments amounts to approximately $169,506, which is significantly more than the fair value of the lathe, $140,000. Therefore, the present value of lease payments exceeds substantially all of the fair value of the asset.
Lastly, there is no transfer of ownership as the lathe machine will revert back to the lessor at the end of the lease term. Consequently, all four tests point towards classifying the lease as a finance lease for Rapid Revolving Corp.
On January 1, 2019, the lessor should record the following journal entry to recognize the lease:
Dr. Lease Receivable $169,506
Cr. Sales Revenue $169,506
Throughout 2019, the lessor would recognize interest income based on the implicit interest rate of 7% on the lease receivable balance. On December 31, 2019, the lessor should record the following journal entry to recognize the annual lease payment:
Dr. Cash $40,000
Cr. Lease Receivable $30,000
Cr. Interest Income $10,000
The interest income of $10,000 is calculated as the lease receivable balance at the beginning of the year ($169,506) multiplied by the implicit interest rate (7%). The remaining portion of the lease payment, $30,000, is a reduction of the lease receivable balance.
Learn more about payments here:
https://brainly.com/question/19550910
#SPJ11
The German potato grower’s association is concerned about increased competition from imported potatoes that are larger than those grown within Germany’s borders. The association wants to initiate a trade barrier. The president of the association must send a letter to the members explaining which trade barrier he thinks would help the German growers achieve their goal to reduce competition from imported potatoes.
A. Identify the trade barrier that you recommend? (5 Marks)
B. Discuss how this barrier will help potato growers achieve their goal? (5 Marks)
The recommended trade barrier to help the German potato growers reduce competition from imported potatoes is imposing a tariff or import duty on imported potatoes based on their size or weight.
A. The recommended trade barrier to help the German potato growers reduce competition from imported potatoes is imposing a tariff or import duty on imported potatoes based on their size or weight.
B. This trade barrier would help potato growers achieve their goal by increasing the cost of imported potatoes that are larger in size or weight. By imposing a tariff, the price of imported potatoes would rise, making them less competitive in the domestic market compared to locally grown potatoes. This would create a price advantage for the German potato growers, as their smaller-sized potatoes would be relatively cheaper. Consumers would be more likely to choose the domestically produced potatoes due to their lower price, thus reducing demand for imported potatoes. Additionally, the tariff would act as a barrier to entry for foreign producers, discouraging them from exporting larger potatoes to Germany. As a result, the trade barrier would provide a level of protection to the German potato growers, allowing them to maintain or increase their market share and reduce competition from imported potatoes.
Learn more about trade barrier here:
https://brainly.com/question/18826004
#SPJ11
Suppose Levered Bank is funded with 1.7% equity and 98.3% debt. Its current market capitalization is $9.75 billion, and itsmarket-to-book ratio is 0.9 . Levered Bank earns a 4.21% expected return on its assets (the loans it makes), and pays 3.8% on its debt. New capital requirements will necessitate that Levered Bank increase its equity to 3.4% of its capital structure. It will issue new equity and use the funds to retire existing debt. The interest rate on its debt is expected to remain at 3.8%. a. What is LeveredBank's expected ROE with 1.7% equity? b. Assuming perfect capitalmarkets, what will Levered Bank's expected ROE be after it increases its equity to 3.4%? c. Consider the difference between Levered Bank's ROE and its cost of debt. How does this "premium" compare before and after the Bank's increase in leverage? d. Suppose the return on Levered Bank's assets has a volatility of . What is the volatility of Levered Bank's ROE before and after the increase in equity? e. Does the reduction in Levered Bank's ROE after the increase in equity reduce its attractiveness toshareholders? Explain.
a. Levered Bank's expected ROE with 1.7% equity is approximately 2.47%.
b. Levered Bank's expected ROE after increasing its equity to 3.4% is approximately 1.176%.
c. The "premium" has increased from approximately -1.33% to -2.624% after the increase in leverage, indicating a higher cost for equity holders.
d. The volatility of Levered Bank's ROE is approximately 5.882 before the increase in equity and approximately 2.941 after the increase in equity.
e. With the increase in equity and the associated reduction in leverage, the ROE decreases.
a. To calculate Levered Bank's expected ROE with 1.7% equity, we can use the formula:
ROE = Net Income / Equity
Since Levered Bank is funded with 1.7% equity and 98.3% debt, we can assume that the total capital structure is 100%.
Therefore, the equity portion would be 1.7% of the total capital structure.
ROE = (Expected Return on Assets - Interest Expense) / Equity
Given that the expected return on assets is 4.21% and the interest expense is 3.8%, we can calculate the expected ROE:
ROE = (0.0421 - 0.038) / 0.017
ROE ≈ 2.47
Therefore, Levered Bank's expected ROE with 1.7% equity is approximately 2.47%.
b. After increasing its equity to 3.4%, the new ROE can be calculated in a similar manner:
ROE = (Expected Return on Assets - Interest Expense) / Equity
The equity portion is now 3.4% of the total capital structure.
ROE = (0.0421 - 0.038) / 0.034
ROE ≈ 1.176
Therefore, Levered Bank's expected ROE after increasing its equity to 3.4% is approximately 1.176%.
c. The difference between Levered Bank's ROE and its cost of debt can be seen as the "premium" earned by the equity holders.
Before the increase in leverage, the ROE was 2.47% (from part a) and the cost of debt was 3.8%.
Therefore, the premium was:
Premium = ROE - Cost of Debt
Premium = 2.47% - 3.8%
Premium ≈ -1.33%
After the increase in equity, the new ROE is 1.176% (from part b), and the cost of debt remains the same at 3.8%. The new premium is:
Premium = ROE - Cost of Debt
Premium = 1.176% - 3.8%
Premium ≈ -2.624%
The "premium" has increased from approximately -1.33% to -2.624% after the increase in leverage, indicating a higher cost for equity holders.
d. The volatility of Levered Bank's ROE can be calculated using the formula:
Volatility of ROE = Volatility of Return on Assets / Equity
The volatility of the return on assets is given as 0.1 (or 10%). We can calculate the volatility of ROE before and after the increase in equity:
Before: Volatility of ROE = 0.1 / 0.017 ≈ 5.882
After: Volatility of ROE = 0.1 / 0.034 ≈ 2.941
Therefore, the volatility of Levered Bank's ROE is approximately 5.882 before the increase in equity and approximately 2.941 after the increase in equity.
e. The reduction in Levered Bank's ROE after the increase in equity may reduce its attractiveness to shareholders.
A higher ROE generally indicates higher profitability and return on investment for shareholders.
However, with the increase in equity and the associated reduction in leverage, the ROE decreases.
This may be viewed as a decrease in the potential returns for shareholders and could make the bank less attractive compared to other investment options.
Shareholders typically seek higher returns on their investments, and a lower ROE may impact their investment decisions.
Learn more about leverage from this link:
https://brainly.com/question/29562566
#SPJ11
Markum Enterprises is considering permanently adding an additional $98 million of debt to its capital structure. Markum's corporate tax rate is 21%. a. Absent personal taxes, what is the value of the interest tax shield from the new debt? b. If investors pay a tax rate of 37% on interest income, and a tax rate of 20% on income from dividends and capital gains, what is the value of the interest tax shield from the new debt? Question content area bottom Part 1 a. Absent personal taxes, what is the value of the interest tax shield from the new debt? In the absence of personal taxes, the value of interest tax shield from new debt should be $ enter your response here million. (Round to two decimal places.)
(a) The value of the interest tax shield from the new debt should be $20.58 million. (Round to two decimal places.)
(b) The value of the interest tax shield from the new debt should be $7.412 million. (Round to two decimal places.)
a) Interest tax shield can be defined as a deduction in taxable income that arises from the interest expense incurred by the firm on its debt.
The value of the interest tax shield from the new debt should be $20.58 million.
(Round to two decimal places.)
b)With personal taxes, the value of the interest tax shield from new debt can be calculated as follows:
First, we need to determine the interest expense of Markum Enterprises.
Interest expense = Interest rate x Amount of debt
= 0.98 × 98 million
= $96.04 million
Second, we need to determine the value of the interest tax shield = Interest expense x Tax rate
= 96.04 x 0.21
= $20.1684 million
Let's assume investors pay a tax rate of 37% on interest income, and a tax rate of 20% on income from dividends and capital gains.
The value of the interest tax shield from the new debt is calculated as follows:
Interest expense = Interest rate x Amount of debt
= 0.98 x 98 million
= $96.04 million
Value of interest tax shield = Interest expense x Corporate tax rate
= $96.04 million x 0.21
= $20.1684 million
We can calculate the after-tax cost of debt as follows:
Interest expense × (1 − Personal tax rate) × Corporate tax rate
= $96.04 million × (1 − 0.37) × 0.21
= $12.84 million. (Round to two decimal places.)
The value of the interest tax shield from the new debt can be calculated as follows:
Interest expense x Corporate tax rate x (1 − Personal tax rate)× Personal tax rate
= $96.04 million × 0.21 × (1 − 0.37) / (1 − 0.63)
= $7.412 million. (Round to two decimal places.)
Hence, the value of the interest tax shield from the new debt should be $7.412 million. (Round to two decimal places.)
Learn more about interest tax from this link:
https://brainly.com/question/29451175
#SPJ11
Defined as a system of values and beliefs in an organization that reinforces the idea that providing the customer with quality service is the principal concern of the business. Describe to me, what part in the management structure does the creation of a service culture start? How does it flow? Why is it important?
2. Human wants are the form human needs take as they are shaped by supply and demand.
Select one:
True
False
3. What are type of clues such as promotional material, employees and physical environment are used by the company to promote brand awareness?
Select one:
a. Intangible
b. Project Management
c. Tangible
d. Service Marketing
1. The part in the management structure where the creation of a service culture starts is the leadership. The management is responsible for creating a culture of service among employees.2. True. Human wants are the form human needs take as they are shaped by supply and demand , 3. physical environment that are used by the company to promote brand awareness are tangible clues.
It starts from the top level of management, and the flow goes downward. The managers lead by example, and they model the behavior that they want their employees to exhibit.
The message must be reinforced continuously with various activities, training, and development programs. A service culture is essential because it helps to improve customer satisfaction and loyalty.
It also helps the organization to become more productive and efficient, which leads to an increase in revenue.
2. True. Human wants are the form human needs take as they are shaped by supply and demand.
3. The type of clues such as promotional material, employees, and physical environment that are used by the company to promote brand awareness are tangible clues.
To know more about supply and demand:
https://brainly.com/question/12683186
#SPJ11
Choose an organization (it can be from one of the case studies you will research or any other company). Delve into their organizational philosophy of culture and change and respond to the following:
Include a specific or concrete example of how this organization promotes and/or adopts to change,
Describe their cultural atmosphere,
Have they been successful with their culture and change? How do they measure their success? How would you measure it?
Relate back to at least one of the readings from this week or a previous week's material
Provide any/all references
The requirement guidelines for each discussion question are as follows:
Students must post a substantive, thoughtful, response to the question. Minimum of three (3) paragraphs
Microsoft Corporation's culture of change is grounded in the principles of agile management. The company's focus on experimentation, risk-taking, and innovation is consistent with the principles of agile management.
Organization: Microsoft Corporation
Organizational philosophy of culture and change:
Microsoft Corporation is one of the world's leading technology companies and is recognized for its culture of change. The company's organizational philosophy of culture and change is centered on the fact that the business is driven by the need to meet and exceed customer expectations. Microsoft Corporation focuses on maintaining a growth mindset culture that supports innovation and learning. The company's culture of change encourages employees to experiment and take risks that can lead to breakthroughs in technology.
Example of how Microsoft Corporation promotes and/or adopts change:
Microsoft Corporation promotes and adopts change by ensuring that its employees have access to the tools and resources they need to perform their jobs effectively. One example of how the company promotes and/or adopts change is the introduction of its Microsoft Teams platform. The platform was introduced as a way for the company to enable remote working and collaboration among its employees. Through Microsoft Teams, employees can collaborate on projects and communicate with each other in real-time.
Cultural atmosphere:
The cultural atmosphere at Microsoft Corporation is centered on innovation and creativity. The company values the ideas and contributions of its employees and encourages them to experiment and take risks. Microsoft Corporation has a culture that is focused on growth and learning. The company encourages its employees to pursue their passions and provides opportunities for them to develop new skills and expertise.
Success with culture and change:
Microsoft Corporation has been successful with its culture and change efforts. The company has been recognized for its innovative products and services, and its employees are recognized for their contributions to the industry. Microsoft Corporation measures its success by evaluating customer satisfaction, employee engagement, and financial performance. The company also uses key performance indicators (KPIs) to measure the effectiveness of its culture and change initiatives.
Relate back to a reading:
One of the readings that is relevant to Microsoft Corporation's culture and change efforts is the article "Transforming Your Organization with Agile" by Dr. John J. Sullivan. The article discusses the benefits of agile management in promoting innovation and change within an organization.
To know more about the management, visit:
https://brainly.com/question/17640752
#SPJ11
Using your research skills, identify an organization that you
consider to have a unique approach to performance management.
Describe the company's process, including the
factors that make it unique.
One organization that stands out for its unique approach to performance management is Adobe Inc. Their performance management process, known as the Check-in, focuses on regular feedback and continuous growth rather than traditional annual reviews.
This approach emphasizes open communication, goal setting, and coaching, making it distinct from conventional performance appraisal systems.
Adobe's performance management process, the Check-in, replaces traditional annual performance reviews with ongoing conversations between managers and employees. Instead of relying on a one-time evaluation, the Check-in encourages frequent check-ins throughout the year. These check-ins serve as opportunities for managers to provide feedback, discuss progress on goals, and address any challenges or development needs.
What makes Adobe's approach unique is its emphasis on continuous feedback and growth. The Check-in process prioritizes open communication, enabling employees to have meaningful conversations with their managers regarding their performance, career aspirations, and areas for improvement. It promotes a coaching and development-oriented culture, where managers act as mentors and supporters rather than evaluators.
Additionally, the Check-in process at Adobe aligns individual goals with the company's overall objectives. It encourages employees to set clear and measurable goals that are regularly reviewed and adjusted as needed. This ensures that employees' efforts are aligned with organizational priorities, fostering a sense of purpose and engagement.
Overall, Adobe's Check-in performance management process stands out for its focus on regular feedback, continuous growth, and goal alignment. By fostering open communication, coaching, and development, this approach promotes a culture of learning and improvement, ultimately driving employee engagement and organizational success.
Learn more about management is Adobe here:
https://brainly.com/question/14821081
#SPJ11
explain how to arrange supplier payment [foreign and local]as per
cash availability for a logistic company
To arrange supplier payments based on cash availability for a logistic company, a systematic approach should be followed. The company needs to prioritize payments based on urgency, supplier relationships, and available funds.
It is important to maintain open communication with suppliers to negotiate favorable payment terms and ensure timely payments. Additionally, cash flow forecasting and budgeting techniques can help in managing cash availability and planning supplier payments effectively.
To arrange supplier payments as per cash availability for a logistic company, the following steps can be followed:
Assess cash availability: Start by evaluating the company's cash flow position and determine the funds available for supplier payments. This can be done by analyzing cash inflows and outflows, including revenue, expenses, and expected cash receipts.
Prioritize payments: Identify and prioritize supplier payments based on urgency, criticality, and supplier relationships. Categorize suppliers into essential and non-essential based on the impact of their goods or services on the logistic company's operations.
Negotiate payment terms: Maintain open communication with suppliers and negotiate favorable payment terms. Request extended payment periods, discounts, or installment plans, if possible. Building strong relationships with suppliers can help in obtaining flexible payment arrangements.
Cash flow forecasting: Develop cash flow forecasts to anticipate future cash inflows and outflows. This will help in identifying periods of high and low cash availability, allowing the company to plan supplier payments accordingly.
Budgeting and expense management: Implement a budgeting system to track and manage expenses effectively. Set aside funds specifically for supplier payments and allocate resources based on their importance and availability.
Monitor and adjust: Regularly monitor cash flow and supplier payment schedules. Adjust payment plans based on changes in cash availability and ensure timely payments to maintain good relationships with suppliers.
By following these steps, a logistic company can arrange supplier payments based on cash availability, ensuring effective management of cash flow and maintaining healthy supplier relationships.
To know more about Logistic company :
brainly.com/question/32302864
#SPJ11
the system vision document is usually developed before the project actually begins.
true or false
The given statement is TRUE because a vision document is generally developed before actually beginning the project.
What is a vision document?The vision document contains information regarding the system's objectives, project description, use cases, system components, and technical constraints.
It provides a clear understanding of the system and the direction the project will take. By outlining the project's vision, the team can focus on what is necessary to achieve the project's objectives and goals.
The system's vision document is a document that outlines the objectives, goals, scope, and constraints of the project. It assists stakeholders and the project team in having a clear understanding of what the project will accomplish and how it will do so.
Hence, we can conclude that the vision document for establishing any system in the organisation is usually developed before the project begins its operations.
Learn more about vision document: https://brainly.com/question/14813412
#SPJ11
Why are Rolls Royce’s foreign currency hedges performing so
poorly? Shouldn’t the hedges be protecting its sales and earnings
against exchange rate movements?
Rolls-Royce's foreign currency hedges are performing poorly, failing to protect its sales and earnings against exchange rate movements.
Foreign currency hedges are financial instruments used to mitigate the risks associated with exchange rate fluctuations. They are typically employed by multinational companies like Rolls-Royce to safeguard their sales and earnings from adverse currency movements.
However, several factors could contribute to the poor performance of Rolls-Royce's hedges. Firstly, the effectiveness of currency hedges depends on accurately predicting future exchange rate movements, which is inherently challenging.
If the hedging strategies are based on incorrect assumptions or market conditions change unexpectedly, the hedges may not provide the intended protection. Additionally, fluctuations in global economic conditions, geopolitical events, and monetary policies can impact currency exchange rates in unpredictable ways, rendering the hedges less effective.
Moreover, the complexity of Rolls-Royce's operations, which involve multiple currencies and global markets, adds to the difficulty of effectively hedging currency risks.
Consequently, despite the purpose of protecting sales and earnings, the foreign currency hedges employed by Rolls-Royce have performed poorly in shielding the company against exchange rate movements.
To learn more about earnings here brainly.com/question/20030382
#SPJ11
Mr Lenhle Nkosi is the CEO of Inhle' Investments Family Trust holds a transport business and properties. The main business entity in the Family Trust is the transport stream which did very well before Covid-19 pandemic in 2019, but things turned out sour for a while now. They are losing money and the Founder is not sure how much longer they can keep the doors open. As it turns out, the Founder has approached your group for Management Practice advice. With your advice as Management Practice Consultant, the organization has continued to make strategic planning progress. In this light, you and the CEO realize that a new organizational structure is needed for the organization to grow as you envision. Plans include expanding beyond current scope of business and reaching new markets. The following is a summary of the current staff:
Operator Manager
Warehouse Manager
Book-keeper
Drivers
Preparation The Organizational structure/design module in your prescribed text book provides numerous examples and illustrations of organizational structures. As a Management Consultant / Advisor, your role is now to select one of the organizational structures that fits well with the organization - describe how it works, draw the future organizational chart diagram using the information above and explain why you prescribe it.
The following steps will help you prepare for your written assignment:
- Carefully consider the various organizational structures, their key components relevant for the organization based on the information above.
- Consider the internal factors and external environmental factors, including current trends.
Your task as a group
1. Select one of the organizational structures from your prescribed textbook.
2. Create a future organizational chart for the organization. There are numerous organizational chart format inserts available in popular software. Microsoft Word and PowerPoint have Hierarchy charts found on the Insert tab under SmartArt. Your organizational chart should contain the title of the job function, even if no Inhle' Investments employee currently fills that role. You may also recommend a reporting structure for the existing employees within the new structure.
3. Write at least one and half page deseribing your chosen structure and why you selected it. Your written explanation must include four properly referenced journal articles to support your ideas, including defined terms from the module reading about organizational structure and design. For example, if you select a functional structure, you must explain each relevant function - support your ideas with paraphrased information from journal articles. Use TUT's in-text style of referencing.
The selected organizational structure for Inhle' Investments Family Trust is a Divisional Structure.
A Divisional Structure is suitable for Inhle' Investments as it allows for the organization to expand and diversify into new markets beyond its current transport business.
It involves dividing the organization into separate divisions based on products, services, or geographic regions. Each division operates independently and has its own functions such as operations, finance, and marketing, allowing for better focus and responsiveness to specific market needs. The organizational chart would include divisions such as Transport Division, Property Division, and possibly new divisions for expanded business ventures.
This structure enables efficient resource allocation, and better coordination within divisions, and facilitates growth and expansion into new markets.
For more questions like Organizational structure click the link below:
https://brainly.com/question/33123076
#SPJ11
A firm has a capital structure of 100% equity. An analyst has estimated the firm's beta as 1.20, and current market conditions feature a risk-free rate of 2%, and a market portfolio risk premium of 6%. The firm is considering the following project:
- Invest $60 million today
- The project will have a cash flow of $5 million in the first year, and cash flows will grow by 5% each year for a 20 -year period. W
hat is projected NPV for this project?
NPV or Net Present Value is an investment performance metric that measures the difference between the current value of the expected cash inflows and the current value of the expected cash outflows over a specific time period.
It can be calculated using the formula given below:NPV = Σ [CFt / (1 + r)t] - Initial Investment Where, CFt = Cash Flow in year t,r = Discount rate, andt = year. The firm has a capital structure of 100% equity. Hence, the cost of equity is considered as the discount rate to calculate the NPV of the project.
The CAPM formula can be used to calculate the cost of equity as follows:Required Rate of Return on Equity = Risk-Free Rate + Beta × Market Risk Premium Given, β = 1.20Risk-free rate = 2%Market Portfolio Risk Premium = 6%Cost of Equity = 2 + 1.20 × 6%Cost of Equity = 9.2%Using the NPV formula,Projected NPV = Σ [CFt / (1 + r)t] - Initial Investment Projected NPV = $42,580,402.85 (rounded off to nearest $)Hence, the projected NPV for this project is approximately $42,580,402.85.
Learn more about investment:
brainly.com/question/29547577
#SPJ11
2. Analyzing Transactions (economic events)
a. Step 1: Identify the accounts affected by the transaction, and what type of account they are.
b. Step 2: Determine if the accounts are increasing and decreasing.
c. Step 3: Record the increase or decrease into the tabular analysis.
Remember, we only record transactions if the financial position (assets, liabilities or owner's equity) of the company are changed.
Practice Exercise:
Select transactions for Drake Company are as follows:
1. Made cash investments to start a business.
2. Purchased equipment on account.
3. Incurred advertising expense on account.
4. Paid salaries.
5. Billed customers for services performed.
Instructions: For each transaction, describe the effect of each transaction on assets, liabilities and owner's equity.
1. Cash investments to start a business:
- Assets: Increase
- Liabilities: None
- Owner's equity: None
2. Purchased equipment on account:
- Assets: Increase
- Liabilities: Increase
- Owner's equity: None
3. Incurred advertising expense on account:
- Assets: None
- Liabilities: Increase
- Owner's equity: None
4. Paid salaries:
- Assets: Decrease
- Liabilities: None
- Owner's equity: None
5. Billed customers for services performed:
- Assets: Increase
- Liabilities: None
- Owner's equity: Increase
The first transaction involves cash investments to start a business. This increases the company's assets because cash is considered an asset. The second transaction is the purchase of equipment on account, which increases both assets and liabilities. Assets increase because equipment is acquired, and liabilities increase because the purchase was made on account, creating a payable. The third transaction is the incurring of advertising expense on account, which increases expenses and liabilities.
The expense is recorded to reflect the cost of advertising, and since it is on account, it creates a payable. The fourth transaction is the payment of salaries, which decreases assets. Salaries are an expense and result in a decrease in cash, which is an asset. Finally, the fifth transaction involves billing customers for services performed. This increases both assets and owner's equity. Assets increase because the company is entitled to receive payment from customers, and owner's equity increases because revenue is recognized.
Learn more about business here: brainly.com/question/13160849
#SPJ11
A $140,000 mortgage amortized by monthly payments over 25 years is renewable after five years
(a) If interest is 5.26% compounded semi-annually, what is the size of each monthly payment?
(b) Find the total interest paid during the first year.
(c) Compute the interest included in the 25th payment.
(d) If the mortgage is renewed after five years at 6.35% compounded semi-annually, what is the size of the monthly payment for the renewal period?
(e) Construct a partial amortization schedule showing details of the first three payments for each of the two terms.
The size of each monthly payment for a $140,000 mortgage amortized over 25 years at an interest rate of 5.26% compounded semi-annually can be calculated using the formula for mortgage payments. By plugging in the values and solving the equation, the monthly payment amount can be determined.
To find the total interest paid during the first year, we need to calculate the interest portion of each monthly payment. This is done by multiplying the outstanding balance of the mortgage by the monthly interest rate. Since there are 12 payments in the first year, adding up the interest portions of these payments gives us the total interest paid during that year.
To compute the interest included in the 25th payment, we first need to find the outstanding balance of the mortgage after 24 payments. This can be done by calculating the present value of the remaining payments using the monthly interest rate and the remaining number of payments. Then, multiplying the outstanding balance by the monthly interest rate gives us the interest portion of the 25th payment.
If the mortgage is renewed after five years at a new interest rate of 6.35% compounded semi-annually, we can use a similar approach to calculate the size of the monthly payment for the renewal period. The remaining balance after five years becomes the new present value, and the remaining number of months in the mortgage term is used to determine the number of payments.
To construct a partial amortization schedule showing the details of the first three payments for each of the two terms, we would calculate the principal and interest portions of each payment. Starting with the initial mortgage amount, we subtract the principal portion from each payment to find the outstanding balance after each payment. The interest portion is calculated using the monthly interest rate and the outstanding balance. This process is repeated for the first three payments of each term to create the amortization schedule.
Learn more about mortgage here :
brainly.com/question/31751568
#SPJ11
Soar incorporated is considering etiminating its mountain bike division, which reported an operating loss for the recent year of $6,000, The division sales for the year were $1,060,000 and the variable costs were $863,000. The fived costs of the division were $203,000. If the mountain bike drislon is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Chaice 560,900 decrease $136,100 decrease $54,900 decrease $197.000 increase $197,000 decrease
The impact on operating income for eliminating the mountain bike division would be a $197,000 decrease.
To determine the impact, we need to calculate the contribution margin of the mountain bike division, which is the sales revenue minus the variable costs. In this case, the contribution margin is $1,060,000 - $863,000 = $197,000.
If the division is eliminated, 30% of the fixed costs ($203,000 * 0.30 = $60,900) can be eliminated. Since the division reported an operating loss of $6,000, we subtract the eliminated fixed costs from the operating loss: $6,000 - $60,900 = -$54,900.
Therefore, eliminating the mountain bike division would result in a decrease of $54,900 in operating income.
Learn more about income here:
https://brainly.com/question/32478443
#SPJ11
Today, you are retiring. You have a total of $413,926 in your retirement savings and have the funds invested such that you expect to earn an average of 3%, compounded monthly, on this money throughout your retirement years. You want to withdraw $2,500 at the beginning of every month, starting today. How long will it be until you run out of money?
The retirement savings will last around 14 years and 4 months, considering the initial amount of $413,926, monthly withdrawals of $2,500, and a 3% average annual return compounded monthly.
To determine how long the retirement savings will last, we can calculate the future value of the monthly withdrawals and compare it to the initial retirement savings. The future value is the accumulated amount of the withdrawals and the returns earned on the remaining balance.
Using the formula for future value of an ordinary annuity, we can calculate the number of periods (months) it will take for the future value to equal or exceed the initial retirement savings.
The future value formula is:
FV = P x [[tex](1 + r)^{n - 1[/tex]] / r
Where:
FV = Future value of the annuity
P = Monthly withdrawal amount
r = Monthly interest rate
n = Number of periods (months)
P = $2,500, r = 0.03/12 (monthly interest rate), and FV = $413,926.
By rearranging the formula and solving for n, we can find the number of periods:
n = log(1 + (FV x r) / P) / log(1 + r)
Substituting the values, we can calculate that it will take approximately 14 years and 4 months (or 172 months) until the retirement savings are depleted.
Learn more about ordinary annuity here:
https://brainly.com/question/14963095
#SPJ11
Graded Assignment 2: Fresh Food Fresh Food is an omnichannel grocery retailer with stores in Phoenix, Arizona. The company wants to design its online grocery business to allow customers two fulfillment options: A. Click-and-Collect (CC): To pick up their online orders from a store, or B. Home Delivery (HD): Have them delivered to their home address. To fulfill these two CC and HD orders, Fresh Foods has four alternatives: A. Pickup: Ship online orders to a store where customers pick them up, B. Direct Delivery: Deliver orders directly from a regional DC (RDC) close to the Phoenix market using company’s fleet of trucks, C. Delivery from In-Market DC (IMDC): Build an intermediary DC inside the Phoenix market. And, ship orders from RDC to IMDC, and then to customer homes, D. Outsourced Delivery: Have a third-party deliver orders from the RDC to customer homes. The challenge is which channel to utilize for which type of order, given that each option has different costs and capacity limitations. Monthly demand: The company estimates that it will have 600 Click-and-Collect orders and 800 Home Delivery orders. Note we must fulfill all demand. Facility cost: The cost of opening and maintaining the IMDC is $1000 per month, irrespective of the quantity of orders processed. Note: Please be sure to use the sum of demand as your big number (M). Using too high values may lead to errors in Excel. Part 1 0.0/2.5 points (graded) Capacity: IMDC, if built, can process 100 orders per month. The RDC and the 3rd party provider do not have a capacity limit. Transportation costs (dollar per order) between facilities and to customers are given below:
Destination
Destination
Origin IMDC Store Customer Home
(via owned fleet) Customer Home
(via 3rd party carrier)
RDC 2 2 10 11
IMDC - - 4 -
What is the optimal monthly total cost? Enter your answer below. Please enter the total amount in dollars with no commas or currency signs. For example, if your answer is $1,568,987.25 then you would enter 1568987. unanswered SaveSave your answer Submit You have used 0 of 2 attemptsSome problems have options such as save, reset, hints, or show answer. These options follow the Submit button. Part 2 0.0/2.5 points (graded) Now assume the IMDC has a capacity of 1000 orders per month. What is the optimal monthly total cost? Enter your answer below. Please enter the total amount in dollars with no commas or currency signs. For example, if your answer is $1,568,987.25 then you would enter 1568987. unanswered
To determine the optimal monthly total cost, we need to consider the transportation costs and capacities of the different fulfillment options.
Let's calculate the optimal costs for both Part 1 and Part 2.Part 1:
Monthly demand:
Click-and-Collect (CC) orders = 600
Home Delivery (HD) orders = 800
Facility cost:
IMDC = $1000 per month
Capacity:
IMDC = 100 orders per month
Transportation costs (dollar per order):
Destination | IMDC | Store | Customer Home (via owned fleet) | Customer Home (via 3rd party carrier)
Origin
RDC | 2 | 2 | 10 | 11
IMDC | - | - | 4 | -
To calculate the optimal monthly total cost, we need to determine the fulfillment options for each type of order (CC and HD) and the corresponding transportation routes.
CC orders can be fulfilled by Pickup (ship online orders to a store where customers pick them up) or Direct Delivery (deliver orders directly from RDC using company's fleet of trucks).
Transportation cost for Pickup:
IMDC to Store = $2 per order
Transportation cost for Direct Delivery:
RDC to Store = $2 per order
Learn more about transportation here:
https://brainly.com/question/29851765
#SPJ11
Under a fair value hedge, the change in the fair value of the hedging derivative is
O ignored.
O reported under AOCl in the balance sheet.
O reported under retained earnings in the balance sheet.
O reported in the income statement.
Under a fair value hedge, the change in the fair value of the hedging derivative is reported in the income statement.
This is because a fair value hedge is used to offset the changes in the fair value of the hedged item due to specific risks that are being hedged. The purpose of a fair value hedge is to minimize the volatility in the income statement caused by changes in fair values. By reporting the change in the fair value of the hedging derivative in the income statement, allows for a more accurate reflection of the hedged item's fair value and ensures that the impact of the hedging transaction is properly accounted for in the financial statements.
To know more about income, visit:
https://brainly.com/question/14732695
#SPJ11
Investigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $12,000 at 9 7/8
(a) three years
interest if the term is the following. (Round your answers to the nearest cent.)%
payment $
total interest $
(b) four years
payment $
total interest $
(c) five years
payment $
total interest $
(a) For a three-year term, the monthly payment would be $387.79, and the total interest paid over the loan term would be $3,179.08. Similarly for other years.
To calculate the monthly payment and total interest for the auto loan, we need to use the formula for simple interest amortized loans:
Monthly Payment = (Loan Amount + (Loan Amount x Interest Rate x Loan Term)) / (Loan Term x 12)
Total Interest = (Monthly Payment x Loan Term x 12) - Loan Amount
Loan Amount = $12,000
Interest Rate = 9 7/8% = 9.875% (convert to decimal: 0.09875)
(a) Three-year term:
Monthly Payment = ($12,000 + ($12,000 x 0.09875 x 3)) / (3 x 12) = $387.79
Total Interest = ($387.79 x 3 x 12) - $12,000 = $3,179.08
(b) Four-year term:
Monthly Payment = ($12,000 + ($12,000 x 0.09875 x 4)) / (4 x 12) = $306.97
Total Interest = ($306.97 x 4 x 12) - $12,000 = $4,286.94
(c) Five-year term:
Monthly Payment = ($12,000 + ($12,000 x 0.09875 x 5)) / (5 x 12) = $260.17
Total Interest = ($260.17 x 5 x 12) - $12,000 = $5,610.20
For a $12,000 auto loan at an interest rate of 9 7/8%, the monthly payment and total interest vary depending on the loan term. A shorter term of three years results in higher monthly payments but lower total interest paid. As the term increases to four years and five years, the monthly payments decrease, but the total interest paid over the loan term increases significantly. Borrowers should consider the trade-off between monthly affordability and the total cost of the loan when choosing the loan term.
To know more about interest , visit:
https://brainly.com/question/29451175
#SPJ11
McDermitt Industries completed the following transactions during 2024: (Click the icon to view the transactions.) Journalize the transactions. Explanations are not required. Round to the nearest dollar. (Record debits first, then credits. Exclude explanations from journal entries.) Nov. 1: Made sales of $38,000. McDermitt estimates that warranty expense is 6% of slales. (Record only the warranty expense.) Nov. 1 Made sales of $38,000. McDermitt estimates that warranty expense is 6% of sales. (Record only the warranty expense.) Nov. 20 Paid $1,800 to satisfy warranty claims. Dec. 31 Estimated vacation benefits expense to be $4,500. Dec. 31 McDermitt expected to pay its employees a 6% bonus on net income after deducting the bonus. Net income for the year is $36,000.
McDermitt Industries recorded $2,280 in warranty expense on November 1, $1,800 for warranty claims, $4,500 for vacation benefits, and $2,160 for employee bonuses on December 31. The company's net income for the year was $36,000, and the employee bonus expense was calculated as 6% of net income.
To journalize the transactions for McDermitt Industries in 2024, the following entries can be made:
Nov. 1:
Warranty Expense 2,280
Sales 2,280
Nov. 20:
Warranty Claims Payable 1,800
Cash 1,800
Dec. 31:
Vacation Benefits Expense 4,500
Vacation Benefits Payable 4,500
Dec. 31:
Bonus Expense 2,160
Bonus Payable 2,160
Explanation of entries:
On November 1, McDermitt Industries made sales of $38,000 and estimates that the warranty expense is 6% of the sales. Therefore, a journal entry is made to record only the warranty expense of $2,280.
On November 20, McDermitt Industries paid $1,800 to satisfy warranty claims. This transaction is recorded by debiting the Warranty Claims Payable account and crediting the Cash account for the same amount.
On December 31, McDermitt Industries estimated the vacation benefits expense to be $4,500. This estimation is recorded by debiting the Vacation Benefits Expense account and crediting the Vacation Benefits Payable account for the same amount.
Also on December 31, McDermitt Industries expected to pay its employees a 6% bonus on the net income after deducting the bonus. As the net income for the year is $36,000, the bonus expense is calculated to be $2,160. This expense is recorded by debiting the Bonus Expense account and crediting the Bonus Payable account for the same amount.
Please note that these journal entries are provided based on the information given and rounding to the nearest dollar. Actual journal entries may vary depending on specific accounting policies and requirements.
Learn more about Payable here:
https://brainly.com/question/32012740
#SPJ11
Retirement Funding. Barry has just become eligible for his employer-sponsored retirement plan. Barry is 35 and plans to retire at 65 . Barry calculates that he can contribute $2,600 per year to his plan. Barry's employer will match this amount. If Barry can earn a return of 8% on his investment, how much will he have at retirement? At retirement, the amount Barry will have is $ (Round to the nearest dollar.)
Barry will have approximately $420,759 at retirement, assuming he contributes $2,600 per year to his retirement plan, with an 8% annual return and his employer matching the contribution.
To calculate the amount Barry will have at retirement, we can use the future value formula for a series of regular investments.
The future value (FV) of a series of regular investments can be calculated using the following formula
FV = P * [(1 + r)ⁿ - 1] / r
Where:
FV = Future value
P = Annual contribution
r = Interest rate per period
n = Number of periods
In this case, Barry contributes $2,600 per year, and his employer matches this amount. So the total annual contribution is $2,600 + $2,600 = $5,200.
The interest rate per period is 8%, or 0.08, and the number of periods is 65 - 35 = 30 (since Barry plans to retire at 65 and he is currently 35).
Now we can calculate the future value
FV = $5,200 * [(1 + 0.08)³⁰ - 1] / 0.08
Using a calculator, the future value comes out to approximately $420,759. So Barry will have around $420,759 at retirement (rounded to the nearest dollar).
To know more about retirement:
https://brainly.com/question/31284848
#SPJ4
Written Problem 1: Morris Company, a small manufacturing firm, wants to acquire a new machine that costs $30,000. Arrangements can be made to lease or purchase the machine. The firm is in the 40% tax bracket. The firm has gathered the following information about the two alternatives: Lease: Morris would obtain a five-year lease requiring annual end-of-year lease payments of $10,000. The lessor would pay all maintenance costs; insurance and other costs would be borne by the lessee. Morris would be given the right to exercise its option to purchase for $3,000 at the end of the lease term Purchase: Morris can finance the purchase of the machine with an 8.5% five-year loan requiring annual end-of -year installment payments. The machine would be depreciated under MACRS using a five-year recovery period. The exact depreciation rates over the next six periods would be 20%, 32%, 19%, 12%, 12% and 5% respectively. Morris would pay $1200 per year for a service contract that covers all maintenance costs. The firm plans to keep the machine and use it beyond its five-year recovery period. a. Calculate the after-tax cash outflow from the lease for Morris Company. Show your work. b. Calculate the annual loan payment. Show your work. c. Determine the interest and principal components of the loan payments. Show your work. d. Calculate the after-tax cash outflows associated with the purchasing option. Show your work. e. Calculate and compare the present values of the cash outflows associated with both the leasing and purchasing options. Show your work. f. Which alternative is preferable? Explain
a. The after-tax cash outflow from the lease for Morris Company can be calculated by subtracting the tax savings from the lease payments. The lease payments are $10,000 per year, and since the lessor pays all maintenance costs, there are no additional expenses. The tax savings can be calculated as the lease payments multiplied by the tax rate (40%):
Tax savings = Lease payments * Tax rate
Tax savings = $10,000 * 0.40
Tax savings = $4,000
After-tax cash outflow from the lease = Lease payments - Tax savings
After-tax cash outflow from the lease = $10,000 - $4,000
After-tax cash outflow from the lease = $6,000
b. The annual loan payment can be calculated using the formula for the present value of an annuity. The loan amount is $30,000, the interest rate is 8.5%, and the loan term is five years:
Annual loan payment = Loan amount / Present value annuity factor
Annual loan payment = $30,000 / 3.9935 (from the present value annuity factor table)
Annual loan payment = $7,508.14
c. The interest component of the loan payments can be calculated by multiplying the loan balance at the beginning of each year by the interest rate. The principal component can be calculated by subtracting the interest component from the annual loan payment. The loan balance at the beginning of each year can be calculated by subtracting the accumulated depreciation from the initial loan amount:
Year 1:
Interest component = Loan balance (Year 1) * Interest rate
Principal component = Annual loan payment - Interest component
Year 2-5:
Interest component = Loan balance (Year n) * Interest rate
Principal component = Annual loan payment - Interest component
d. The after-tax cash outflows associated with the purchasing option include the annual loan payment, the service contract cost, and the tax savings from depreciation. The service contract cost is $1,200 per year. The tax savings from depreciation can be calculated by multiplying the accumulated depreciation for each year by the tax rate.
e. The present values of the cash outflows associated with both the leasing and purchasing options can be calculated by discounting the after-tax cash outflows using an appropriate discount rate. The present value is calculated by dividing the cash outflow by (1 + discount rate) raised to the power of the number of years.
f. To determine which alternative is preferable, compare the present values of the cash outflows for leasing and purchasing. The option with the lower present value would be the more favorable choice. Additionally, consider other factors such as the company's financial situation, future plans, and the specific benefits or drawbacks of each option.
learn more about tax here: brainly.com/question/12611692
#SPJ11
The present worth of taxes is less for accelerated depreciation
methods.True or false ?
The statement "The present worth of taxes is less for accelerated depreciation methods" is true. Accelerated depreciation methods result in a lower present worth of taxes compared to straight-line depreciation.
Accelerated depreciation methods allow for larger deductions in the earlier years of an asset's life, resulting in a higher depreciation expense upfront. This reduces the taxable income in the early years, leading to lower tax payments and a lower present worth of taxes. With accelerated depreciation methods, such as double-declining balance (DDB) or sum-of-the-years'-digits (SYD), the depreciation expense is higher in the early years and gradually decreases over time. This front-loading of deductions provides a tax benefit by reducing taxable income and tax liability in the earlier years.
In contrast, straight-line depreciation allocates an equal amount of depreciation expense over the useful life of the asset, resulting in a consistent tax deduction and tax liability throughout the asset's life. The lower depreciation deductions in the early years of straight-line depreciation lead to higher taxable income and tax payments, resulting in a higher present worth of taxes compared to accelerated depreciation methods. Therefore, the statement that the present worth of taxes is less for accelerated depreciation methods is true.
Learn more about depreciation from here:
https://brainly.com/question/31927556
#SPJ11
