1. Total product costs to make 20,250 units: $410,325.
2. Total period costs to sell 20,250 units: $209,025.
3. Total product costs to make 24,500 units: $496,750.
4. Total period costs to sell 16,000 units: $164,800.
1. For financial accounting purposes, the total amount of product costs incurred to make 20,250 units is calculated as follows:
Total Product Costs = Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed Manufacturing Overhead
= $7.70 + $4.70 + $2.20 + $5.70= $20.30 per unitProduct costs for 20,250 units = $20.30 × 20,250= $410,325
Therefore, the total amount of product costs incurred to make 20,250 units is $410,325.
2. For financial accounting purposes, the total amount of period costs incurred to sell 20,250 units is calculated as follows:Total Period Costs = Fixed Selling Expense + Fixed Administrative Expense + Sales Commissions + Variable Administrative Expense= $4.20 + $3.20 + $1.70 + $1.20= $10.30 per unit
Period costs for 20,250 units = $10.30 × 20,250= $209,025Therefore, the total amount of period costs incurred to sell 20,250 units is $209,025.
3. For financial accounting purposes, the total amount of product costs incurred to make 24,500 units is calculated as follows:Total Product Costs = Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed Manufacturing Overhead= $7.70 + $4.70 + $2.20 + $5.70= $20.30 per unit
Product costs for 24,500 units = $20.30 × 24,500= $496,750 Therefore, the total amount of product costs incurred to make 24,500 units is $496,750.
4. For financial accounting purposes, the total amount of period costs incurred to sell 16,000 units is calculated as follows:Total Period Costs = Fixed Selling Expense + Fixed Administrative Expense + Sales Commissions + Variable Administrative Expense= $4.20 + $3.20 + $1.70 + $1.20= $10.30 per unit
Period costs for 16,000 units = $10.30 × 16,000= $164,800 Therefore, the total amount of period costs incurred to sell 16,000 units is $164,800.
In conclusion, the total amount of product costs incurred to make 20,250 units is $410,325 and the total amount of period costs incurred to sell 20,250 units is $209,025. The total amount of product costs incurred to make 24,500 units is $496,750 and the total amount of period costs incurred to sell 16,000 units is $164,800.
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Trade between two people Select one: a. usually helps the richer of the two and hurts the poorer of the two. b. always benefits both parties. c. Usually hurts one of them, although we cannot be sure which one. d. usually benefits one person at the expense of another. e. sometimes benefits both parties. Which of the following is most likely to encourage private land owners to plant more trees? Select one: a. A law requiring that consumers buy more paper products made from recycled paper. b. Increased use of artificial Christmas trees. c. Decreased use of lumber in construction and furniture products and increased reliance on synthetic materials such as plastic and fiberboard. d. Laws requiring that people turn in all of their recyclable paper products for recycling. e. An increase in the use of paper bags. paper towels and other products made from freshly-cut trees.
1.Trade between two people: sometimes benefits both parties. The correct option is (e).
In many situations, trade can be mutually beneficial, leading to gains for both parties involved. Through trade, individuals can specialize in the production of goods or services they have a comparative advantage in, resulting in increased efficiency and overall welfare. Therefore, trade can sometimes benefit both parties involved.
2. Encouraging private land owners to plant more trees: Decreased use of lumber in construction and furniture products and increased reliance on synthetic materials such as plastic and fiberboard. The correct option is (c).
To encourage private land owners to plant more trees, reducing the demand for lumber and promoting the use of alternative materials like plastic and fiberboard can be effective. By decreasing the use of lumber in construction and furniture products.
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The complete question might be:
(1) Trade between two people Select one: a. usually helps the richer of the two and hurts the poorer of the two. b. always benefits both parties. c. Usually hurts one of them, although we cannot be sure which one. d. usually benefits one person at the expense of another. e. sometimes benefits both parties.
(2) Which of the following is most likely to encourage private land owners to plant more trees? Select one: a. A law requiring that consumers buy more paper products made from recycled paper. b. Increased use of artificial Christmas trees. c. Decreased use of lumber in construction and furniture products and increased reliance on synthetic materials such as plastic and fiberboard. d. Laws requiring that people turn in all of their recyclable paper products for recycling. e. An increase in the use of paper bags. paper towels and other products made from freshly-cut trees.
what is an environmental scan for the finance investment industry? such as doing a SLEPT analysis. the company is Sterling Investment Limited
An environmental scan for the finance investment industry, such as doing a SLEPT analysis, involves assessing the external factors that can impact the industry and the specific company, in this case Sterling Investment Limited.
SLEPT analysis stands for Social, Legal, Economic, Political, and Technological factors. It is a framework used to analyze the macro environment and identify potential opportunities and threats.
In the context of the finance investment industry, a SLEPT analysis would involve examining social trends, such as changing consumer preferences or attitudes towards investing. It would also consider legal factors, such as regulations and compliance requirements.
Economic factors, such as interest rates, inflation, and economic growth, would be assessed to understand the potential impact on the finance investment industry. Political factors, such as government policies or stability, can also influence the industry.
Lastly, technological factors, such as advancements in financial technology (fintech), can disrupt traditional investment practices and create new opportunities.
By conducting an environmental scan using the SLEPT analysis, Sterling Investment Limited can gain insights into the external factors affecting the finance investment industry and adjust their strategies accordingly.
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Required Information The foilowing information applies to tho questions displayed below] Beigo Bays accounting system generated the following account balances on December 31 . The company's maneger :
Based on the information provided, it seems that there is missing information or a typo in your question.
However, I can still provide a general explanation about account balances.
Account balances refer to the amounts of money or value associated with specific accounts in a company's accounting system.
These balances are recorded on a specific date, in this case, December 31.
To answer your question more specifically, I would need the specific questions that are related to the account balances.
Additionally, please ensure that all necessary information is provided to help me better understand and assist you with your question.
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A stock price is currently at $50 and has a volatility of 30% p.a. The risk-free interest rate is 1% p.a. with continuous compounding. (a) Use a three-step binomial tree model with step size 3 months to compute the arbitrage free price of an American put option written on that stock with strike price K = $50 and maturity in 9 months. (b) At which nodes in the tree would it be optimal to early exercise the American put option before maturity T?
The arbitrage-free price of the American put option written on that stock is approximately $3.17.
Using a three-step binomial tree model, the arbitrage-free price of the American put option can be computed. With a stock price of $50, volatility of 30% per annum, risk-free interest rate of 1% per annum (continuous compounding), strike price of $50, and maturity of 9 months with a time step of 3 months, we proceed with the calculations.
The up factor (u) is approximately 1.132, and the down factor (d) is approximately 0.882. The risk-neutral probability of an up movement (p) is approximately 0.529. Constructing the binomial tree, we calculate the option values at each node by comparing the stock price with the strike price and taking the maximum of the difference or zero for a put option. Then, we perform backward induction to calculate the option values at each previous time step by discounting the expected future value using the risk-neutral probability and the risk-free interest rate.
After completing the calculations, the computed value at the initial node of the tree represents the arbitrage-free price of the American put option, which is approximately $3.17. This value indicates the maximum amount an option buyer should be willing to pay for the option at the current time.
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Suppose work conditions in a host nation are inferior to those in a multinational’s home nation. Which standards should apply? Home or host nation or something between? please give a real example
Multinational corporations should uphold a set of minimum standards consistent with international labor and human rights norms, regardless of whether work conditions in a host nation are inferior or superior to those in the home nation.
It is important for multinational corporations to prioritize ethical behavior and respect for human rights in all locations where they operate. Upholding minimum standards based on international norms ensures that workers are treated fairly and their basic rights are protected, regardless of the disparities between home and host nations. Applying consistent standards helps prevent exploitation, promotes social responsibility, and contributes to sustainable development. By taking a principled approach and adhering to international labor and human rights standards, multinational corporations can help drive positive change and contribute to a more equitable global business environment.
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Kingbird Company leases an automobile with a fair value of $10,297 from John Simon Motors, Inc., on the following terms:
1. Non-cancelable term of 50 months.
2. Rental of $210 per month (at the beginning of each month). (The present value at 0.5% per month is $9,317.)
3. Kingbird guarantees a residual value of $1,000 (the present value at 0.5% per month is $779). Delaney expects the probable residual value to be $1,000 at the end of the lease term.
4. Estimated economic life of the automobile is 60 months.
5. Kingbird’s incremental borrowing rate is 6% a year (0.5% a month). Simon’s implicit rate is unknown.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What is the nature of this lease to Kingbird?
The nature of this lease is a/an
operating
finance
lease.
What is the present value of the lease payments to determine the lease liability? (Round answer to 0 decimal places, e.g. 5,275.)
Present value of the lease payments
$
Based on the original fact pattern, record the lease on Kingbird’s books at the date of commencement. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Record the first month’s lease payment (at commencement of the lease). (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)
Account Titles and Explanation
Debit
Credit
Record the second month’s lease payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)
Account Titles and Explanation
Debit
Credit
Record the first month’s amortization on Kingbird’s books (assume straight-line). (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25.)
Account Titles and Explanation
Debit
Credit
Suppose that instead of $1,000, Kingbird expects the residual value to be only $500 (the guaranteed amount is still $1,000). How does the calculation of the present value of the lease payments change from part (b)? (Round answer to 0 decimal places, e.g. 5,275.)
PV of lease payments $
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The nature of this lease to Kingbird is a finance lease.
Present value of the lease payments = $9,317 + $779 = $10,096
Based on the original fact pattern, the lease is recorded on Kingbird's books at the date of commencement.
Account Titles and Explanation
Debit Credit
Leased Automobile $10,096
Lease Liability $10,096
At the commencement of the lease, the first month's lease payment is recorded as:
Account Titles and Explanation
Debit Credit
Lease Liability $210
Cash $210
In the second month, the lease payment is recorded as:
Account Titles and Explanation
Debit Credit
Lease Liability $210
Cash $210
The first month's amortization on Kingbird's books is recorded as:
Account Titles and Explanation
Debit Credit
Lease Expense $170
Accumulated Depreciation $170
If Kingbird expects the residual value to be only $500, the present value of the lease payments would change from part (b) as follows:
PV of lease payments = $9,317 + $500 = $9,817
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Janet Foster bought a computer and printer at Computerland. The printer had a $580 list price with a $100 trade discount and 2/10, n/30 terms. The computer had a $2,380 list price with a 25% trade discount but no cash discount. On the computer, Computerland offered Janet the choice of (1) paying \$85 per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying 7% interest for 18 months in equal payments. a. Assume Janet could borrow the money for the printer at 7% to take advantage of the cash discount. How much would Janet save? Note: Use 360 days a year. Round your answer to the nearest cent. b. On the computer, what is the difference in the final payment between choices 1 and 2 ? Note: Round your answer to the nearest cent.
Janet would save $3.36 by borrowing the money for the printer at 7% to take advantage of the cash discount.
To calculate how much Janet would save by borrowing the money for the printer at 7% to take advantage of the cash discount, we need to find the cash price of the printer. The cash price is the list price minus the trade discount.
List price of the printer = $580
Trade discount = $100
Cash price of the printer = $580 - $100 = $480
Now, let's calculate the amount saved by taking advantage of the cash discount. We can use the formula for simple interest to find the savings:
Savings = Cash price * Interest rate * Time
= $480 * 0.07 * (30/360) (Since the terms are 2/10, n/30)
= $3.36
So, Janet would save $3.36 by borrowing the money for the printer at 7% to take advantage of the cash discount.
For choice 1, Janet will pay $85 per month for 17 months, and then pay the remainder of the balance on the 18th month.
For choice 2, Janet will pay 7% interest for 18 months in equal payments.
To find the difference in the final payment between the two choices, we need to calculate the final payment for each choice.
For choice 1:
Final payment = Remainder of the balance
= Total cost of the computer - (17 * $85)
For choice 2:
Final payment = Total cost of the computer * (1 + 0.07) - 18 equal payments
Now, we can substitute the given values to calculate the final payment for each choice and find the difference.
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The quantity that results in the best profits(the largest profits or smallest losses) is?
The quantity that results in the best profits is known as the optimal quantity. This is the quantity at which a business maximizes its profits or minimizes its losses.
It is important for businesses to determine this optimal quantity in order to make informed decisions regarding production levels and pricing strategies. By analyzing factors such as production costs, demand, and market conditions, businesses can identify the quantity that will generate the highest profits.
To explain further, businesses need to consider both fixed costs (such as rent and salaries) and variable costs (such as raw materials and labor). By understanding these costs, businesses can calculate their total costs and determine the price they need to set in order to cover their expenses and generate profits.
However, it's important to note that the optimal quantity may change over time due to factors such as changes in demand, costs, and competition.
In summary, the optimal quantity is the quantity at which a business achieves the highest profits or the smallest losses. Businesses can determine this quantity by analyzing their costs and considering market conditions and demand. By doing so, they can make informed decisions to maximize their profitability.
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ACFshoes Suppose that ACF shoes expects to sell 56,000 pairs of shoes for the next 3 years at $112 a pair. It costs $52 a pair to produce. The initial investment in equipment is $930,000, and it will depreciate straight-line to zero over three years. From year 4 onwards, 35000 pairs of the shoes are expected to be sold at $75 a pair. The increased variable costs will be $57 a pair but no extra investment in equipment will be needed. This production can be carried out indefinitely. Find the free cash flows and find the value of the business when the cost of capital is 19% and the tax rate is 21%. [Hint: set up year 0 to year 3 as in chapter 6 to find the FCF (or the total asset cash flow) and find the FCF for year 4 but remember that there is no depreciation.] $4,025,328 $4,889,520 55,544,379 56,443,941
The value of the business is $4,025,328 when the cost of capital is 19% and the tax rate is 21%.
To calculate the free cash flows (FCF) and the value of the business, we need to consider the cash flows from each year and discount them to their present value using the cost of capital.
Year 0 to Year 3:Number of pairs sold: 56,000 pairs per yearPrice per pair: $112
Variable cost per pair: $52Depreciation: $930,000 / 3 = $310,000 per year (straight-line depreciation)Tax rate: 21%
Calculate the cash flows for each year:Revenue: 56,000 pairs * $112 = $6,272,000Variable costs: 56,000 pairs * $52 = $2,912,000Depreciation: $310,000
Taxable income: Revenue - Variable costs - Depreciation = $6,272,000 - $2,912,000 - $310,000 = $3,050,000Taxes: Taxable income * Tax rate = $3,050,000 * 21% = $641,500Net income: Taxable income - Taxes = $3,050,000 - $641,500 = $2,408,500Depreciation: $310,000
Capital expenditures: $930,000 (initial investment)FCF: Net income + Depreciation - Capital expenditures = $2,408,500 + $310,000 - $930,000 = $1,788,500Year 4 onwards:
Number of pairs sold: 35,000 pairs per yearPrice per pair: $75Variable cost per pair: $52 + $57 = $109 (increased variable costs)Tax rate: 21%
Calculate the cash flows for Year 4:Revenue: 35,000 pairs * $75 = $2,625,000Variable costs: 35,000 pairs * $109 = $3,815,000
Taxable income: Revenue - Variable costs = $2,625,000 - $3,815,000 = -$1,190,000 (tax loss)Taxes: 0 (no taxes on tax loss)Net income: Taxable income - Taxes = -$1,190,000 - $0 = -$1,190,000FCF: Net income = -$1,190,000
To find the value of the business, we need to discount the FCFs to their present value using the cost of capital (19%).
FCF and sum them up.Year 0 to Year 3 present value (PV):
PV = FCF / (1 + Cost of capital)^YearPV = $1,788,500 / (1 + 19%)¹ + $1,788,500 / (1 + 19%)² + $1,788,500 / (1 + 19%)³ = $4,025,328Year 4 present value (PV):
PV = FCF / (1 + Cost of capital)^YearPV = -$1,190,000 / (1 + 19%)⁴ = -$1,190,000 / (1.19)⁴ = -$1,190,000 / 1.6454 = -$723,192
Value of the business = PV of Year 0 to Year 3 + PV of Year 4 = $4,025,328 + (-$723,192) = $4,025,328.
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How does the perfectly competitive model explain the fact that many products that are used far less than they were in previous decades are not necessarily cheaper than they were decades ago? At what point do products disappear from the market?
The perfectly competitive model can help to explain why some products that are used less than they were in previous decades are not necessarily cheaper than they were decades ago. In a perfectly competitive market, prices are determined by supply and demand, with firms being price takers.
Therefore, if demand for a product decreases and the supply remains the same, then the price should fall.
However, there are a few reasons why this might not always be the case. Firstly, production costs may have increased due to factors such as inflation or changes in the cost of raw materials. If this is the case, then the price of the product may not fall even if demand has decreased.
Secondly, firms may have pricing power if they have a strong brand or are the only supplier of a particular product. In this case, they may be able to charge higher prices even if demand has decreased.
Finally, it is worth noting that products do not necessarily disappear from the market when demand decreases. Instead, firms may choose to continue producing the product if it is still profitable to do so, albeit at a lower level. However, if demand falls to a point where it is no longer profitable to produce the product, then it may disappear from the market.
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Rodney received a total of $1000 cash as graduation gifts from various relatives. He wants to invest it in a guaranteed investment certificate (GIC) so that he will have a down payment on a car when he graduates from university in five years. His bank will pay 3 percent interest compounded annually for the five-year GIC. How much will Rodney have in five years to put down on his car? (FV) #3 Michelle is attending college and has a part-time job. Once she finishes college, Michelle would like to relocate to a metropolitan area. She wants to build her savings so that she will have a "nest egg" to start her off. Michelle works out her budget and decides that she can afford to set aside $50 per month for savings. Her bank will pay her 3 percent interest compounded annually on her savings account. What will Michelle's balance be in five years? (FV) $4 Farah will receive $1550 each year for 15 years from an ordinary annuity that she has recently purchased. If she earns interest at a rate of 6.6 percent compounded annually, what is the present value of the amount that she will receive? (PV)
Rodney will have $1,159.27 to put down on his car after five years of investing his $1,000 cash gift in a guaranteed investment certificate (GIC) with a 3 percent annual interest rate compounded annually.
To calculate the future value (FV) of Rodney's investment in the GIC, we can use the formula:
FV = P(1 + r/n)^(n*t)
Where:
P = Principal amount (initial investment) = $1,000
r = Annual interest rate = 3% (or 0.03)
n = Number of times the interest is compounded per year = 1 (compounded annually)
t = Number of years = 5
Plugging in these values into the formula, we get:
FV = 1000(1 + 0.03/1)^(1*5)
= 1000(1.03)^5
≈ $1,159.27
Therefore, Rodney will have approximately $1,159.27 to put down on his car after five years of investing his $1,000 cash gift in the GIC.
Michelle's case:
To calculate the future value (FV) of Michelle's savings account, we can use the same formula as before:
FV = P(1 + r/n)^(n*t)
Where:
P = Principal amount (monthly savings) = $50
r = Annual interest rate = 3% (or 0.03)
n = Number of times the interest is compounded per year = 1 (compounded annually)
t = Number of years = 5
Since Michelle saves $50 per month, we need to adjust the time period to years by multiplying it by 12:
t = Number of years = 5 years * 12 months/year = 60 months
Plugging in these values into the formula, we get:
FV = 50(1 + 0.03/1)^(1*60)
= 50(1.03)^60
≈ $3,975.57
Therefore, Michelle's balance after five years will be approximately $3,975.57 in her savings account, considering the monthly savings of $50 and the 3 percent annual interest rate compounded annually.
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What is the Federal Reserve FOMC and what do they do? What are the economic implications of this FOMC action in terms of the following: - How does this announcement affect inflation? - How does it affect bond yields? - How does it affect the stock market? Your responses should be approximately 250−500 words double-spaced.
The Federal Reserve FOMC, or Federal Open Market Committee, is the monetary policymaking body of the Federal Reserve System. It consists of 12 members, including the seven members of the Board of Governors and five Reserve Bank presidents.
The FOMC is responsible for setting the nation's monetary policy, which involves making decisions on interest rates and other policies aimed at promoting price stability and maximum employment.When the FOMC makes an announcement regarding its monetary policy, it can have several economic implications. Let's discuss the effects on inflation, bond yields, and the stock market:1. Inflation: The FOMC's actions can impact inflation expectations. If the FOMC announces a more accommodative monetary policy, such as lowering interest rates or implementing quantitative easing, it can stimulate borrowing and spending, thereby potentially increasing inflationary pressures.
2. Bond Yields: Bond yields, particularly those of long-term bonds, are influenced by the FOMC's actions. When the FOMC announces a more accommodative monetary policy, such as lowering interest rates, it can reduce the returns on newly issued bonds. 3. Stock Market: The FOMC's decisions can also impact the stock market. When the FOMC adopts a more accommodative monetary policy, such as lowering interest rates, it can make borrowing cheaper and increase the availability of credit.
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Suppose that an individual gains utility from two goods: (i) Cheese (C) and (ii) Milk (M). This utility is given by the following utility function. For the purposes of figures, assume that Cheese (C) is on the x-axis and Milk (M) is on the y-axis. U(C,M)=10C 1/4 M 3 /4 Note that I have not given you values for p c ,p M , or m in this question yet. For now, leave them in their general forms. m=p C C+p M M We are going to solve this using the Unconstrained Optimization method (\#2). 1. Use the general form of the Budget Constraint to convert the Utility Function into a function of only Cheese (C). [2 points] 2. What is Demand for Cheese as a function of p c ,p M , and m ? Show your work. [3 points] 3. What is Demand for Milk as a function of p c ,p M , and m ? Show your work. [1 point] Suppose that m=$100,p C =$5, and p M =$4 4. What is the Demand for Milk and Cheese using the above specific prices and income numbers? Show your work. [1 point] 5. Are Milk and Cheese gross substitutes, gross compliments, or neither according to these preferences? How do you know? [3 points] [Hint: To solve this fully, you would want to take the derivative of the Demand for one good with respect to the price or quantity of the other good, to see how they change together.]
1. To convert the utility function into a function of only Cheese (C), we substitute the budget constraint into the utility function:
m = pC* C + pM* M
Rearranging the equation to solve for M:
M = (m - pC* C) / pMSubstituting this into the utility function:
U(C) = 10C⁽¹⁴⁾ * [(m - pC* C) / pM⁽³⁴⁾
2.
Cheese (C), we need to maximize the utility function with respect to C. Taking the derivative of the utility function with respect to C and setting it equal to zero:
dU/dC = 10 * (1/4) * C⁽⁻³⁴⁾ * [(m - pC* C) / pM⁽³⁴⁾ - 3/4 * pC* [(m - pC* C) / pM⁽¹⁴⁾ = 0
Simplifying the equation:
10 * (1/4) * C⁽⁻³⁴⁾ * [(m - pC* C) / pM⁽³⁴⁾ = 3/4 * pC* [(m - pC* C) / pM⁽¹⁴⁾
Dividing both sides by 10 * (1/4) * C⁽⁻³⁴⁾ * [(m - pC* C) / pM⁽¹⁴⁾:
[(m - pC* C) / pM⁽²⁴⁾ = 3/4 * pC/ (10 * (1/4) * C⁽⁻³⁴⁾)
Simplifying further:
[(m - pC* C) / pM⁽¹²⁾ = (3/10) * pC/ C⁽³⁴⁾
Squaring both sides:
(m - pC* C) / pM= (9/100) * (pC2) / (C⁽³²⁾)
Solving for (m - pC* C):
m - pC* C = (9/100) * (pC2) * (pM/ C⁽³²⁾)
Simplifying:
m = pC* C + (9/100) * (pC2) * (pM/ C⁽³²⁾)
This equation represents the demand for Cheese (C) as a function of pC pM and m.
3. To find the demand for Milk (M), we substitute the demand for Cheese (C) obtained in step 2 into the budget constraint equation:
m = pC* C + pM* M
Substituting the demand for Cheese (C):
m = pC* C + pM* [(m - pC* C) / pM
Simplifying:
m = pC* C + m - pC* C
Canceling out the terms:
0 = 0
Since the equation simplifies to 0 = 0, we cannot determine the demand for Milk (M) based on the given utility function and budget constraint.
4. Given specific prices and income numbers:
m = $100pC= $5
pM= $4
Using the demand for Cheese equation from step 2:
m = pC* C + (9/100) * (pC2) * (pM/ C⁽³²⁾)
Substituting the values:
$100 = $5 * C + (9/100) * ($5²) * ($4 / C^(3/
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bank is willing to finance the remaining balance at 8.45% compounded quarterly. What is the size of your monthly payment if the loan is for 5.25 years. The monthly payment is 9 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
When the bank is willing to finance the remaining balance at 8.45% compounded quarterly and if the loan is for 5.25 years, the size of the monthly payment will be 0.11.
To solve the problem we use the compound interest formula as the interest is compounded quarterly, the formula for compound interest can be expressed as
A=P(1+r/n)^nt
where A=final amount, P= principal, r=rate of interest, n=number of times interest is compounded per year, t=number of years
We will also use the formula for the monthly payment of a loan, given as
P=r(A/1-(1+r)^(-n))
where P=monthly payment, r=rate of interest, A=loan amount, n=number of payments
So, Loan amount is $9 . The bank is willing to finance the remaining balance at 8.45% compounded quarterly. The rate of interest is 8.45% compounded quarterly
So the rate of interest per quarter is 8.45/4 = 2.1125%
The number of quarters in 5.25 years= 21 (since 5.25 x 4 = 21)
The compounded interest rate is (1 + 0.021125) ^ 21 = 1.588306963
We can find the final amount, A as A = P * 1.588306963
We know the loan amount is 9
Thus, 9 = P * 1.588306963, P = 5.662853585
We can use the monthly payment formula to find out the monthly payment.
P=r(A/1-(1+r)^(-n))=0.0845/12*5.662853585/(1-1/(1+0.0845/12)^12*5.25)= 0.113945838
This rounds off to 0.11, rounded to two decimal places the answer is 0.11.
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Home has 2400 units of labor available. It can produce two goods, oranges and pears. The unit labor requirement in orange production is 6, while in pear production it is 4. There is a another country ,foreign, with a labor force of 1600. Foreign unit labor requirement in orange production is 10, while in pear production it is 2.
Draw the production possibility frontier for each country.
While country has a comparative advantage in apples, which one in bananas?
Which country has an absolute advantage?
Indicate the range of the international prices within which there will be gains from trade for both countries.
To draw the production possibility frontier (PPF) for each country, we need to plot the combinations of oranges and pears that can be produced given the available labor.
For Home:
Units of labor available: 2400
Unit labor requirement in orange production: 6
Unit labor requirement in pear production: 4
To draw the PPF for Home, we can use the following data points:
Orange production: 0, 400, 800, 1200, 1600, 2000, 2400
So, Pear production: 600, 800, 1000, 1200, 1400, 1600, 1800
For Foreign:
Units of labor available: 1600
Unit labor requirement in orange production: 10
Unit labor requirement in pear production: 2
To draw the PPF for Foreign, we can use the following data points:
Orange production: 0, 160, 320, 480, 640, 800, 960
Pear production: 800, 1200, 1600, 2000, 2400, 2800, 3200
To determine which country has a comparative advantage in apples and bananas, we would need information about the labor requirements and production possibilities for those goods. If that information is not provided, we cannot determine which country has a comparative advantage in those specific goods.
Absolute advantage is determined by comparing the productivity or efficiency of a country in producing a particular good. The country that can produce more units of a good with the same amount of resources (in this case, labor) has an absolute advantage. Without specific information about the productivity of each country, we cannot determine which country has an absolute advantage.
The range of international costs inside which there will be gains from exchange for both nations depends on the relative fetched of generation in each nation and the terms of exchange. If the international price for a good is lower than the domestic opportunity fetched of creating that great, both nations can advantage of specializing within the production of the merchandise they have a comparative advantage in and trading with each other. The exact range of international costs cannot be decided without extra data on the relative costs and terms of exchange.
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On January 1, 2021, Fisher Corporation paid $2,680,000 for 33 percent of the outstanding voting stock of Steel, Inc., and approprlately applied the equity method for Its Investment. Any excess of cost over Steel's book value was attributed to goodwill. Durlng 2021 , Steel reports $803,000 in net income and a $1,017,000 other comprehensive Income loss. Steel also declares and pays $18,000 in dividends. a. What amount should Fisher report as its Investment in Steel on Its December 31,2021 , balance sheet? b. What amount should Fisher report as Equity in Earnings of Steel on its 2021 income statement?
a. Fisher Corporation should report $2,603,440 as its investment in Steel, Inc. on its December 31, 2021, balance sheet.
b. Fisher Corporation should report $264,990 as equity in earnings of Steel, Inc. on its 2021 income statement.
a. To determine the amount Fisher Corporation should report as its investment in Steel, Inc. on its December 31, 2021, balance sheet, we need to consider the equity method.
According to the equity method, the initial investment is adjusted annually by the investor's share of the investee's net income or loss and any other comprehensive income (OCI). Dividends received from the investee are also considered.
Given:
- Fisher Corporation purchased 33% of the outstanding voting stock of Steel, Inc. on January 1, 2021.
- Fisher Corporation paid $2,680,000 for the investment.
- Steel, Inc. reported $803,000 in net income and a $1,017,000 OCI loss in 2021.
- Steel, Inc. declared and paid $18,000 in dividends in 2021.
To calculate the investment in Steel, Inc. on Fisher Corporation's balance sheet, follow these steps:
1. Start with the initial investment cost: $2,680,000.
2. Add Fisher Corporation's share of Steel, Inc.'s net income: 33% * $803,000 = $264,990.
3. Subtract Fisher Corporation's share of Steel, Inc.'s OCI loss: 33% * $1,017,000 = $335,610.
4. Subtract Fisher Corporation's share of Steel, Inc.'s dividends: 33% * $18,000 = $5,940.
Investment in Steel, Inc. on Fisher Corporation's December 31, 2021, balance sheet:
$2,680,000 + $264,990 - $335,610 - $5,940 = $2,603,440.
Therefore, Fisher Corporation should report $2,603,440 as its investment in Steel, Inc. on its December 31, 2021, balance sheet.
b. To determine the amount Fisher Corporation should report as equity in earnings of Steel, Inc. on its 2021 income statement, use the share of Steel, Inc.'s net income.
Equity in earnings of Steel, Inc. on Fisher Corporation's 2021 income statement:
33% * $803,000 = $264,990.
Therefore, Fisher Corporation should report $264,990 as equity in earnings of Steel, Inc. on its 2021 income statement.
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Your firm recently reported sales of $1,200,000. Operating costs are 30% of sales, and depreciation expenses total $250,000. The firm has $100,000 of debt outstanding at a 7% interest rate. The firm is in the 30% tax bracket. What is the firm's net income? $360,000 $174,900 $658,100 None of the Above
The firm's net income is determined by subtracting operating costs, depreciation expenses, interest expense, and taxes from its sales. In this case, the firm's net income is $72,100.
The firm's net income can be calculated by subtracting operating costs, depreciation expenses, interest expense, and taxes from its sales.
1. First, calculate the operating costs by multiplying the sales by the operating cost percentage: $1,200,000 * 30% = $360,000.
2. Next, subtract the depreciation expenses from the operating costs: $360,000 - $250,000 = $110,000.
3. Then, calculate the interest expense by multiplying the debt outstanding by the interest rate: $100,000 * 7% = $7,000.
4. Now, calculate the taxable income by subtracting the interest expense from the operating costs: $110,000 - $7,000 = $103,000.
5. Calculate the taxes by multiplying the taxable income by the tax rate: $103,000 * 30% = $30,900.
6. Finally, calculate the net income by subtracting the taxes from the taxable income: $103,000 - $30,900 = $72,100.
The firm's net income is $72,100.
To find the net income, we subtract the operating costs, depreciation expenses, interest expense, and taxes from the sales. By following the steps above, we calculated the firm's net income to be $72,100.
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Friendly’s Quick Loans, Inc., offers you $8.00 today but you must repay $9.95 when you get your paycheck in one week (or else).
What is the effective annual return Friendly’s earns on this lending business?
If you were brave enough to ask, what APR would Friendly’s say you were paying?
Friendly's Quick Loans, Inc. earns an effective annual return of 573.93% and would state that you are paying an APR of 1267.5%. To calculate the effective annual return on Friendly's Quick Loans, Inc.'s lending business, we need to determine the interest rate earned over the course of one year.
The formula to calculate the effective annual return is:
Effective Annual Return = (1 + Periodic Interest Rate)^n - 1
In this case, the amount borrowed is $8.00, and the amount to be repaid is $9.95. Therefore, the interest earned is $9.95 - $8.00 = $1.95.
The periodic interest rate can be calculated by dividing the interest earned by the principal amount:
Periodic Interest Rate = Interest / Principal = $1.95 / $8.00= 0.24375
To convert the periodic interest rate to an annual rate, we need to consider the compounding period. Since the loan term is one week, which is equivalent to 52 weeks in a year, we can calculate the effective annual return as follows:
Effective Annual Return = (1 + Periodic Interest Rate)^n - 1 = (1 + $1.95 / $8.00)^52 - 1= 5.7393 or 573.93% (rounded to two decimal places)
To calculate the APR (Annual Percentage Rate), we multiply the periodic interest rate by the number of compounding periods in a year:
APR = Periodic Interest Rate × Number of Compounding Periods = ($1.95 / $8.00) × 52
APR = ($1.95 / $8.00) × 52 = 12.675 or 1267.5% (rounded to two decimal places)
Therefore, Friendly's Quick Loans, Inc. earns an effective annual return of 573.93% and would state that you are paying an APR of 1267.5%.
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Describe the difference between adjusting entries and closing
entries. Why are these types of entries important in accounting,
give an example.
The main difference between adjusting entries and closing entries is that adjusting entries are made to ensure that revenues and expenses are properly recognized in the accounting period,
while closing entries are made to transfer temporary account balances to permanent accounts at the end of the accounting period.
Adjusting entries are important in accounting because they ensure the accuracy of the financial statements by reflecting the appropriate revenues and expenses for the period. They are made to record transactions or events that have occurred but have not yet been recorded, such as accrued expenses or unearned revenues. Adjusting entries bring the accounts up to date and adhere to the matching principle, which states that expenses should be matched with the revenues they help generate.
Closing entries, on the other hand, are important in accounting because they reset the temporary accounts (revenue, expense, and dividend accounts) to zero at the end of the accounting period. By transferring the balances of these accounts to the retained earnings account, closing entries prepare the accounts for the next accounting period. Closing entries help separate one period's activity from another, allowing for accurate tracking of revenues, expenses, and dividends on a period-by-period basis.
An example of an adjusting entry would be recording accrued interest expense on a loan. If interest is incurred but not yet paid, an adjusting entry is made to recognize the expense in the current period. This ensures that the financial statements reflect the true amount of interest expense for the period.
An example of a closing entry would be transferring the balance of the revenue account to the retained earnings account. This is done to close out the revenue account at the end of the period and start with a zero balance in the next period, enabling accurate tracking of revenues and expenses for each period.
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Suppose you are trying to answer the following research question: "What is the effect of studying economics rather than social work on the salaries of university graduates?". a. What is the dependent variable and the independent variable in the question above? b. What plausible causal channel(s) runs directly from the treatment to the outcome? (i.e., what is the economic rationale for the two variables to be related, is there a reason one would cause the other) c. What are possible sources of selection bias in the raw comparison of outcomes by treatment status? Which way would you expect the bias to go and why?
a. This is because the salaries of graduates are being measured and compared. b. Economics is often associated with higher-paying job opportunities. c. The bias may go in the direction of favoring economics graduates.
a. In the research question "What is the effect of studying economics rather than social work on the salaries of university graduates?", the dependent variable is the salaries of university graduates. This is because the salaries of graduates are being measured and compared.
The independent variable in this question is the field of study, specifically studying economics or social work. This variable is being manipulated to understand its impact on the dependent variable.
b. The plausible causal channel that runs directly from the treatment (studying economics) to the outcome (salaries of university graduates) could be the acquisition of specialized skills and knowledge in economics. Economics is often associated with higher-paying job opportunities, as graduates may have better understanding of market dynamics and are often sought after by employers in various sectors.
c. Possible sources of selection bias in the raw comparison of outcomes by treatment status could include factors such as prior academic ability, personal motivation, or socioeconomic background. These factors may influence both the choice of field of study and the eventual salary outcome. If students with higher academic ability tend to choose economics, for example, this may result in higher salaries for economics graduates compared to social work graduates. The bias may go in the direction of favoring economics graduates due to these unobserved characteristics.
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Question 1: we are going to be working with our usual production function: Y=f(K,L)=ĀK^(1/3)L(2/3).
Part A:
Suppose that in country X,
Ā=10
K=64
L=27
What is output?
Part B:
If K doubles to 128 and L remains the same at 27, what is output now?
Part C:
Comparing your answers from parts A and B, you see that this production function exhibits ______________ for capital.
Group of answer choices
Diminishing Returns
Increasing Returns
Constant Returns
Part D:
Now suppose that K had remained the same at 64, but Labor had doubled from 27 to 54. What is output now?
Part E: Comparing your answers from parts A and D, you see that this production function exhibits ______________ for Labor.
Group of answer choices
Diminishing Returns
Constant Returns
Increasing Returns
Part F:
Now suppose that capital and labor both have doubled from their original quantities (i.e. now L is 54 and K is 128). What is output now?
Part G:
Comparing your answers from parts A and F, you see that the production function exhibits overall ___________.
Group of answer choices
Constant Returns to Scale
Increasing Returns to Scale
Decreasing Returns to Scale
Part H:
Let's introduce a second country here.
A reminder for country X:
Ā= 10
K= 64
L= 27
Now suppose for country Z:
Ā: 20
K=128
L=27 (same as X)
Ā in country Z being twice what it is in country X, that is productivity being twice as high, will have what effect on country Z's GDP per-capita (Y/L) relative to country X's? (ignoring the effect of the differences in K)
Group of answer choices
It will make it twice as high as country X's
It will make it less than twice as high as country X's
It will make it more than twice as high as country X's
Part I:
How much richer should country Z be then country X on account of having twice the capital per worker? (ignoring the effect of differences in Ā)
Group of answer choices
26%
100%
0%
700%
Given that; [tex]f(K,L) = ĀK^(1/3)L^(2/3) where Ā = 10, K = 64, L = 27[/tex]
Part A: The output is given by: Y = f(K,L) =[tex]ĀK^(1/3)L^(2/3)= 10*64^(1/3)*27^(2/3)= 10*4*9= 360[/tex]
Part B: When K doubles to 128 and L remains at 27, then the output is given by:[tex]Y = f(K,L) = ĀK^(1/3)L^(2/3)= 10*128^(1/3)*27^(2/3)= 10*8*9= 720[/tex]
Part C: The production function exhibits diminishing returns for capital.
Part D: When K = 64 and L doubles from 27 to 54, then the output is given by:[tex]Y = f(K,L) = ĀK^(1/3)L^(2/3)= 10*64^(1/3)*54^(2/3)= 10*4*36= 1440[/tex]
Part E: The production function exhibits increasing returns for labor.
Part F: When K doubles to 128 and L doubles from 27 to 54, then the output is given by: Y = f(K,L) = ĀK^(1/3)L^(2/3)= 10*128^(1/3)*54^(2/3)= 10*8*72= 5760
Part G: The production function exhibits increasing returns to scale.
Part H: The output in country X is given by: Y = f(K,L) = ĀK^(1/3)L^(2/3)= 10*64^(1/3)*27^(2/3)= 10*4*9= 360
The output in country Z is given by: Y = f(K,L) = ĀK^(1/3)L^(2/3)= 20*128^(1/3)*27^(2/3)= 20*8*9= 1440
The ratio of the output per capita in country Z to country X is given by:
Y/L in Z/Y/L in X = 1440/27 / 360/27= 16/3 < 2, which means the output per capita in country Z is less than twice the output per capita in country X.
Part I: If the capital per worker in country Z is twice that in country X, then the output per capita ratio is given by:(Y/L) in Z/(Y/L) in [tex]X = [Ā in Z*K in Z^(1/3)*L^(2/3)]/[Ā in X*K in X^(1/3)*L^(2/3)] = [20*2^(1/3)*1]/[10*1^(1/3)*1]= 2^(2/3)[/tex]
The increase in output due to the increase in capital per worker is given by: [(2^(2/3) - 1)/(1)]*100%≈ 26%
Therefore, country Z should be 26% richer than country X on account of having twice the capital per worker.
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#SPJ11[tex][(2^(2/3) - 1)/(1)]*100%≈ 26%[/tex]
What European countries were hit the hardest following the 2008
housing crisis, and what are three pieces of evidence that prove
their economic fall?
The European countries hit hardest by the 2008 housing crisis, the three pieces of evidence that prove their economic fall are Spain's unemployment rate skyrocketed, greece unable to pay back its loans, and ireland country's banks were left holding a lot of debt.
Spain's housing market was one of the world's largest, and it collapsed in 2008. The country was particularly vulnerable because of its reliance on the construction sector, which accounted for roughly 20% of its gross domestic product. In the years after the crisis, Spain's unemployment rate skyrocketed, and it became one of the European Union's poorest countries. Ireland's economy was also heavily reliant on the construction sector, which had grown rapidly in the years leading up to the crisis.
As a result, when the market collapsed, the country's banks were left holding a lot of debt, and many of them were forced to shut down. Greece was one of the European Union's poorest countries prior to the crisis, and it was heavily indebted. As a result, when the housing market collapsed, the country was unable to pay back its loans. Greece had to implement severe austerity measures to cut back on spending, which led to significant social unrest and economic stagnation. So therefore the three pieces of evidence that prove their economic fall are Spain's unemployment rate skyrocketed, greece unable to pay back its loans, and ireland country's banks were left holding a lot of debt.
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Company C has sold a call option on 100,000 euros for speculative purposes. Assume that Company C would purchase the euros in the spot market just as the option was exercised. Each option was sold for a premium of $0.03 per unit, with an exercise price of $1.20. Assume that the option can only be exercised on the expiration date.
a) If the spot exchange rate of euro on the expiration date is $1.30, calculate the total dollar amount of Company C’s net profit.
b) If the spot exchange rate of euro on the expiration date is $1.21, calculate the total dollar amount of Company C’s net profit.
c) If the spot exchange rate of euro on the expiration date is $1.10, calculate the total dollar amount of Company C’s net profit.
d) Find the break-even point.
The answers are:
a. Company C's net profit would be $10,000.
b. The Company C's net profit would be $1,000.
c. In this case, the net profit would be zero since there is no profit to be made.
d. The break-even point is a spot exchange rate of $1.20.
a) To calculate Company C's net profit when the spot exchange rate of the euro on the expiration date is $1.30, we need to determine if the option is in the money.
The exercise price of the option is $1.20, and the spot exchange rate is $1.30. Since $1.30 is higher than $1.20, the option is in the money.
To calculate the net profit, we subtract the exercise price from the spot exchange rate and multiply it by the number of euros:
Net profit = (Spot exchange rate - Exercise price) * Number of euros
Net profit = ($1.30 - $1.20) * 100,000 euros
Net profit = $0.10 * 100,000 euros
Net profit = $10,000
Therefore, Company C's net profit would be $10,000.
b) When the spot exchange rate of the euro on the expiration date is $1.21, the option is also in the money because $1.21 is higher than $1.20.
Using the same formula:
Net profit = (Spot exchange rate - Exercise price) * Number of euros
Net profit = ($1.21 - $1.20) * 100,000 euros
Net profit = $0.01 * 100,000 euros
Net profit = $1,000
c) When the spot exchange rate of the euro on the expiration date is $1.10, the option is out of the money because $1.10 is lower than $1.20.
d) The break-even point is the spot exchange rate at which the net profit becomes zero.
To calculate the break-even point, we set the net profit equation to zero and solve for the spot exchange rate:
0 = (Spot exchange rate - Exercise price) * Number of euros
0 = (Spot exchange rate - $1.20) * 100,000 euros
Solving for the spot exchange rate:
Spot exchange rate - $1.20 = 0
Spot exchange rate = $1.20
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For the production of part R-193, two operations are being considered. The capital investment associated with each operation is identical. Operation 1 produces 1,100 parts per hour. After each hour, the tooling must be adjusted by the machine operator. This adjustment takes 15 minutes. The machine operator for Operation 1 is paid $16 per hour (this includes fringe benefits). Operation 2 produces 1,350 parts per hour, but the tooling needs to be adjusted by the operator only once every two hours. This adjustment takes 45 minutes. The machine operator for Operation 2 is paid $14 per hour (this includes fringe benefits). Assume an 8-hour workday. Further assume that all parts produced can be sold for $0.50 each. a. Should Operation 1 or Operation 2 be recommended? b. What is the basic tradeoff in this problem?
a. We can determine which operation to recommend by calculating the production cost per part. The production cost per part includes the operator’s wages and the time it takes to produce a part and adjust the tooling.
For Operation 1, the machine produces 1,100 parts per hour, and the tooling must be adjusted by the operator every hour, which takes 15 minutes. Hence, the operator's total time for producing 1,100 parts and adjusting the tooling is 1 hour 15 minutes. Therefore, the production cost per part for Operation 1 is: $16 x (1.25) / 1100 = $0.0182.
For Operation 2, the machine produces 1,350 parts per hour, and the tooling must be adjusted by the operator once every two hours, which takes 45 minutes. Therefore, the operator's total time for producing 2,700 parts and adjusting the tooling is 2 hours 45 minutes. Hence, the production cost per part for Operation 2 is: $14 x (2.75) / 2700 = $0.0142. Since the production cost per part is lower for Operation 2 ($0.0142 < $0.0182), it should be recommended.
b. The basic tradeoff is between the operator’s wage and the number of parts produced.
Operation 1 has a higher production cost per part than Operation 2 because it requires a longer time for the operator to adjust the tooling, which is why the operator's wage has a greater impact on the production cost per part.
Operation 2, on the other hand, produces more parts per hour, so the operator's wage has a smaller effect on the production cost per part. As a result, there is a tradeoff between the operator's wage and the number of parts produced in determining which operation is best.
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Consider the following information. Initial cost of the project is $658,000. Life of project is 4 years. The project gives the annual cash inflows of throughout the life of the project. $2,48,600. Cost of capital is 10%. Suggest whether the project can be accepted using IRR. Answer choices: a. The projected can be accepted since the IRR is 16.24%. b. The projected can be accepted since the IRR is 8.68%. c. The project can be accepted since the IRR is 10%. d. The project can be accepted since the IRR is 18.84%.
The project can be accepted since the IRR is 16.24%. The answer is Option A.
The internal rate of return (IRR) is a capital budgeting metric that determines the cost of a project. It's the interest rate that would make the net present value (NPV) of all future cash inflows equal to the project's initial cost. The IRR of a project must be compared to the cost of capital to see if it is acceptable.
In order for the project to be accepted, the IRR must be greater than the cost of capital. The project's initial cost is $658,000, and its lifespan is four years. The annual cash inflow is $2,48,600. The cost of capital is 10%.The IRR for the project can be calculated using the formula below:
NPV = [tex](Cash flow / (1+r)^t) + (Cash flow / (1+r)^t)² + ... + (Cash flow / (1+r)^t)^n[/tex]
Where t is the period of the cash flow and n is the total number of periods.For the given project, the IRR is calculated to be 16.24 percent.Therefore, the answer is Option A. The projected can be accepted since the IRR is 16.24%.
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Supervisor is another name for which of the following? A) team leader B) middle manager C) first-line manager D) top manager
The term "supervisor" is another name for a "first-line manager." A first-line manager is someone who directly oversees and manages a group of employees or a team.
They are responsible for providing guidance, direction, and support to the employees in their team. They play a crucial role in ensuring that the day-to-day operations are running smoothly and that the team is meeting its goals and objectives.
Supervisors typically have authority over a specific group or department within an organization. They are responsible for ensuring that their team members are performing their tasks effectively, following company policies and procedures, and addressing any issues or concerns that may arise.
In summary, a supervisor is a first-line manager who is responsible for overseeing a team or group of employees and ensuring that they are performing their duties efficiently.
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In setting the business direction of the company, three essential questions of focus are: 1) what business are we in? 2) what are our goals and objectives and 3) what is our market share? True False
These three questions are indeed essential in setting the business direction as they help clarify the company's industry focus, establish clear goals and objectives, and assess its market position and competitiveness. The statement is true
In setting the business direction of a company, these three essential questions provide important guidance and clarity.
The first question, "What business are we in?" helps the company define its industry or sector and identify its core products or services. This question prompts the company to assess its unique value proposition and competitive advantage within a specific market.
The second question, "What are our goals and objectives?" helps the company establish clear targets and outcomes that it aims to achieve. By defining specific goals and objectives, the company can align its strategies, resources, and actions towards achieving desired outcomes, such as revenue growth, market expansion, or product innovation.
The third question, "What is our market share?" focuses on assessing the company's position relative to its competitors. Understanding market share provides insights into the company's market penetration, customer reach, and competitiveness. It helps the company gauge its performance and market position, and informs decision-making regarding market expansion, market targeting, or market differentiation strategies.
Overall, these three questions play a vital role in shaping the business direction of a company by guiding its industry focus, defining objectives, and evaluating market position. By addressing these questions, companies can better align their strategies and resources to achieve sustainable growth and success in their respective markets.
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Gill Corporation had the following account balances at 12/1/17:
Receivables
$ 96,000
Inventory
240,000
Land
720,000
Building
600,000
Liabilities
480,000
Common Stock
120,000
Additional Paid-In Capital
120,000
Retained Earnings, 12/1/16
840,000
Revenues
360,000
Expenses
264,000
Several of Gill's accounts have fair values that differ from book value. The fair values are: Land — $500,000; Building — $700,000; Inventory — $330,000; and Liabilities — $400,000. Graves Inc. acquired all of the outstanding common shares of Gill by issuing 20,000 shares of common stock having a $6 par value, but a $65 fair value. Stock issuance costs amounted to $12,000. Direct combination costs amounted to $15,000. Graves also agreed to pay $30,000 to the former owners of Gill contingent on meeting certain revenue goals during the following year. Graves estimated the present value of its probability adjustment expected payment for the contingency at $18,000.
Required:
B. Assume dissolution of the subsidiary has occurred. Record the journal entries to merge the subsidiary records with the parent company.
C.What would be the amount of goodwill and the acquisition entries if the purchase method is used to record the merger? Show your work.
B. Journal entries: Debit Land $500,000, Debit Building $700,000, Debit Inventory $330,000, Debit Liabilities $400,000; Credit Receivables $96,000, Credit Inventory $240,000, Credit Land $720,000, Credit Building $600,000, Credit Liabilities $480,000; Debit Common Stock $120,000, Debit Additional Paid-In Capital $120,000, Debit Stock Issuance Costs $12,000; Credit Common Stock (par value) $120,000, Credit Stock Issuance Costs $12,000; Debit Contingent Payment Expense $18,000, Credit Contingent Payment Liability $18,000.
C. Goodwill: $0; Acquisition entries: Same as above.
B. Since the dissolution of the subsidiary has occurred, the journal entries to merge the subsidiary records with the parent company would be as follows:
To eliminate subsidiary's assets and liabilities:
Debit Land (fair value) for $500,000
Debit Building (fair value) for $700,000
Debit Inventory (fair value) for $330,000
Debit Liabilities (fair value) for $400,000
Credit Receivables for $96,000
Credit Inventory for $240,000
Credit Land for $720,000
Credit Building for $600,000
Credit Liabilities for $480,000
To record the issuance of common stock and related costs:
Debit Common Stock for $120,000
Debit Additional Paid-In Capital for $120,000
Debit Stock Issuance Costs for $12,000
Credit Common Stock (par value) for $120,000
Credit Stock Issuance Costs for $12,000
To record the contingent payment:
Debit Contingent Payment Expense for $18,000
Credit Contingent Payment Liability for $18,000
C. If the purchase method is used to record the merger, there would be no goodwill recognized. Instead, the acquisition entries would be as follows:
To record the fair value of net assets acquired:
Debit Land for $500,000
Debit Building for $700,000
Debit Inventory for $330,000
Debit Liabilities for $400,000
Credit Receivables for $96,000
Credit Inventory for $240,000
Credit Land for $720,000
Credit Building for $600,000
Credit Liabilities for $480,000
To record the issuance of common stock and related costs:
Debit Common Stock for $120,000
Debit Additional Paid-In Capital for $120,000
Debit Stock Issuance Costs for $12,000
Credit Common Stock (par value) for $120,000
Credit Stock Issuance Costs for $12,000
To record the contingent payment:
Debit Contingent Payment Expense for $18,000
Credit Contingent Payment Liability for $18,000
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If you own 15,000 shares of stock of Nike and it pays a dividend of $0.21 per share, then what is the total dividend you will receive? The total dividend that you will receive is $ (Round to the nearest dollar.)
The total dividend that you will receive is $3,150. So, the correct answer is $3,150.
If you own 15,000 shares of Nike stock and the company pays a dividend of $0.21 per share, you can calculate the total dividend you will receive by multiplying the number of shares you own by the dividend per share. In this case, the calculation would be:
Total Dividend = Number of shares * Dividend per share
Total Dividend = 15,000 * $0.21
Total Dividend = $3,150
Therefore, you will receive a total dividend of $3,150.
Dividends are a way for companies to distribute a portion of their profits to shareholders. The amount of the dividend per share is determined by the company's board of directors and can vary based on various factors, such as earnings, financial performance, and dividend policy.
It's important to note that dividends are usually paid on a per-share basis, meaning the total dividend amount is divided among the outstanding shares of the company. As a shareholder, the more shares you own, the higher your total dividend payout will be.
Receiving dividends can provide a regular income stream for investors and is one of the ways to generate a return on investment in stocks. It's essential to consider dividends as part of the overall investment strategy and assess the company's dividend history, financial stability, and growth prospects before making investment decisions.
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If the demand for traded goods is price-inclastic, the price-specie-flow mechanism will result in: a) Gold movements between countries that remove trade deficits and surpluses. b) Gold movements between countries that worsen trade deficits and surpluses. c) Negligible movements of gold between countries and hence little or no adjustment. d) Trade deficits and surphluses. e) A removal of the basis for trade between countries. 2. Which of the following factors influence comparative advantage in the monetised Ricardian model? I. Wages II. Exchange rates III. Productivity IV. Supply differences V. Demand differences a) Alt the above b) I), [I, 1II) and IV ) only. c) T), II), III) and V) only. d) I), II) and III) only. e) D) and II only. 3. In the Edgeworth box diagram in production with two goods and two factors of production: a) A moventent from any point off the "production efficiency locus" to any point on the locus must involve greater production of one good and less production of the other good. b) A movement from any point on the "production efficiency locus" to any point off the locus must involve less production of both goods. c) A point that is off the "production efficiency locus" must be associated with unemployment of at least one of the factors of production. d) A movement from any point on the "production efficiency locus" to another point on the locus must involve greater production of one good and less production of the other good. e) A movement from any point on the "production efficiency locus" to another point on the locus leads to an inefficient level of production in both goods.
In 1, If the demand for traded goods is price-inelastic, the price-specie-flow mechanism will result in negligible movements of gold between countries and hence little or no adjustment. Hence, the correct option is C. In 2, the correct option is D) I), II) and III) only. In 3, The correct option is D.
1. If the demand for traded goods is price-inelastic, the price-specie-flow mechanism will result in negligible movements of gold between countries and hence little or no adjustment. Hence, the correct option is C. The price-specie-flow mechanism is an economic theory that explains how trade imbalances between countries are corrected through the movement of gold. If the demand for traded goods is price-inelastic, the price-specie-flow mechanism will have little to no effect because changes in price will not result in a significant change in the quantity demanded or supplied.
2. In the monetized Ricardian model, the factors that influence comparative advantage are wages, productivity, and exchange rates. Supply differences and demand differences are not included in the monetized Ricardian model. Hence, the correct option is D) I), II) and III) only.
3. In the Edgeworth box diagram in production with two goods and two factors of production, a movement from any point on the "production efficiency locus" to another point on the locus must involve greater production of one good and less production of the other good. Hence, the correct option is D. An Edgeworth box is a graphical representation of the exchange economy. The production efficiency locus shows all the feasible combinations of goods that can be produced using the available factors of production. Any point outside the production efficiency locus is unattainable given the resources available. Any point inside the production efficiency locus is attainable but inefficient. A movement from any point on the production efficiency locus to another point on the locus involves a change in the quantities produced of both goods. The correct option is D.
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