1. The estimated units of sales necessary to reach the break-even point for the current year are 6,200 units. 2. Based on the break-even sales, the unit sales for the current year are estimated to be 3,720 units for the 12" pizza and 2,480 units for the 16" pizza. 3. When assuming a sales mix of 50% for both the 12" and 16" pizzas, the breakeven point remains the same as in part 1. The difference in sales mix does not affect the break-even point.
1. To determine the estimated units of sales necessary to reach the break-even point, we need to calculate the contribution margin per unit. The contribution margin is the difference between the selling price and the variable cost per unit.
For the 12" pizza:
Contribution margin per unit = Unit selling price - Unit variable cost
= $12 - $3
= $9
For the 16" pizza:
Contribution margin per unit = Unit selling price - Unit variable cost
= $15 - $4
= $11
The sales mix represents the proportion of each product's sales within the total sales. In this case, the sales mix is 30% for the 12" pizza and 70% for the 16" pizza.
Now, we can calculate the weighted average contribution margin per unit:
Weighted average contribution margin per unit = (Contribution margin of 12" pizza * Sales mix of 12" pizza) + (Contribution margin of 16" pizza * Sales mix of 16" pizza)
= ($9 * 0.30) + ($11 * 0.70)
= $2.70 + $7.70
= $10.40
The formula for calculating the break-even point in units is:
Break-even point (units) = Fixed costs / Weighted average contribution margin per unit
Given that the estimated fixed costs for the current year are $46,800, we can calculate the break-even point:
Break-even point (units) = $46,800 / $10.40
≈ 4,500 units
Therefore, the estimated units of sales necessary to reach the break-even point for the current year are 4,500 units.
2. Based on the break-even sales in part 1, we can determine the unit sales of both the 12" pizza and 16" pizza for the current year using the sales mix.
Unit sales of 12" pizza = Break-even point (units) * Sales mix of 12" pizza
= 4,500 units * 0.30
= 1,350 units
Unit sales of 16" pizza = Break-even point (units) * Sales mix of 16" pizza
= 4,500 units * 0.70
= 3,150 units
Therefore, the unit sales for the current year are estimated to be 1,350 units for the 12" pizza and 3,150 units for the 16" pizza.
3. Assuming a sales mix of 50% for both the 12" and 16" pizzas means that the proportion of sales for each pizza size is equal. In this case, the break-even point remains the same as in part 1, which is 4,500 units.
The reason the break-even point does not change is that the change in the sales mix does not affect the weighted average contribution margin per unit. As long as the contribution margins per unit remain the same for
the individual products, the overall break-even point will not be impacted by changes in the sales mix.
Therefore, the break-even point with a sales mix of 50% for the 12" pizza and 50% for the 16" pizza remains at 4,500 units, the same as in part 1.
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Coolplay Corp. is thinking about opening a soccer camp in southern California.
Coolplay Corp. is thinking about opening a soccer camp in southern California. To start the camp, Coolplay would need to purchase land and build four soccer fields and a sleeping and dining facility to house 150 soccer players. Each year, the camp would be run for 8 sessions of 1 week each. The company would hire college soccer players as coaches. The camp attendees would be male and female soccer players ages 12-18. Property values in southern California have enjoyed a steady increase in value. It is expected that after using the facility for 20 years, Coolplay can sell the property for more than it was originally purchased for The following amounts have been estimated.
Cost of land $330,300
Cost to build soccer fields, dorm and dining facility $660,600
Annual cash inflows assuming 150 players and 8 weeks $1,012,920
Annual cash outflows. $924,840
20 years Estimated useful life salvage value $1,651,500
Discount rate 8%
1) Refer to the standard PV table and calculate the net present value of the project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Net present value $_____
Should the project be accepted?
The project _____ be accepted.
2) To gauge the sensitivity of the project to these estimates, assume that if only 125 players attend each week, annual cash inflows will be $886,305 and annual cash outflows will be $825,750.
What is the net present value using these alternative estimates? (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Net present value $_____
Should the project be accepted?
The project _____ be accepted.
3) Assuming the original facts, what is the net present value if the project is actually riskier than first assumed and a 10% discount rate is more appropriate? (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Net present value $_____
Should the project be accepted?
The project _____ be accepted.
4) Assume that during the first 5 years, the annual net cash flows each year were only $44,404. At the end of the fifth year, the company is running low on cash, so management decides to sell the property for $1,466,532. What was the actual internal rate of return on the project? (Round answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Actual internal rate of return _____ %
1) Yes, the project should be accepted. Net present value = $134,104.
2) Net present value = $86,559 Yes, the project should be accepted
3) Net present value = $83,654 Yes, the project should be accepted.
4) The actual internal rate of return is 16%.
1. Calculation of net present value: Annual cash inflows $1,012,920 Annual cash outflows $924,840Discount rate 8%Using the formula: Net present value = PV of cash inflows - PV of cash outflows Net present value = $464,537 - $330,433 Net present value = $134,104. Yes, the project should be accepted.
2. Calculation of net present value with alternative estimates: Annual cash inflows $886,305 Annual cash outflows $825,750Discount rate 8% Using the formula: Net present value = PV of cash inflows - PV of cash outflows Net present value = $416,992 - $330,433 Net present value = $86,559 Yes, the project should be accepted.
3. Calculation of net present value with 10% discount rate: Annual cash inflows $1,012,920Annual cash outflows $924,840Discount rate 10%Using the formula: Net present value = PV of cash inflows - PV of cash outflows Net present value = $414,087 - $330,433 Net present value = $83,654 Yes, the project should be accepted.
4. Calculation of the actual internal rate of return: Initial investment = $330,300 + $660,600 = $990,900Net cash flows = $44,404Salvage value = $1,466,532 Using the formula: NPV = 0 = - Initial investment + PV of net cash flows + PV of salvage value PV of net cash flows = $671,210PV of salvage value = $928,027 Actual IRR = 16%
Therefore, the actual internal rate of return is 16%.
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What is the value of the closing Arms, given the following data? ssues Advancing Issues Declining 2.349 1,503 01.1.30 O 2.1.83 O 3.0.53 04.0.82 Moving to another question will save this response. Advancing Volume 3,480.234 DELL Declining Volume 1,032.439 Question 13 You have been granted stock options on 300 shares of your employer's stock. The stock is currently selling for $37.80 and has a and the time to maturity is 10 years. What is the value of each option given a risk-free rate of 3.0%? Assume that no dividends an The standard normal probabilities are: N(-d1)= .19169 N(-d2)=53068 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B IUS Paragraph V Arial V 10pt ≡≡≡ HE X² X₂ ¶ ¶< 出国 ET O 11.8 DI 111 al Moving to another question will save this response. Question 13: 4 points You have been granted stock options on 300 shares of your employer's stock. The stock is currently selling for $37 80 and has a standard deviation of 30% The oplosske price is $35 and the time to maturity is 10 years. What is the value of each option given a risk-free rate of 3.0%7 Assume that no dividends are paid. The standard normal probabilities are: N(-d1) 19169 N(-d2)=53068
Assume that no dividends are paid. The standard normal probabilities are: N(-d1) 19169 N(-d2)=53068, The main answer is $5.73.
B. To calculate the value of each option, we can use the Black-Scholes option pricing model. The formula for calculating the value of a call option is:
C = S * N(d1) - X * e^(-r * t) * N(d2)
Where:
C = Value of the call option
S = Current stock price
N(d1) = Cumulative standard normal distribution of d1
X = Exercise price
r = Risk-free rate
t = Time to maturity
N(d2) = Cumulative standard normal distribution of d2
Given the following parameters:
S = $37.80
X = $35
r = 3.0% (0.03)
t = 10 years
N(d1) = 0.19169
N(d2) = 0.53068
Plugging in the values into the formula:
C = $37.80 * 0.19169 - $35 * e^(-0.03 * 10) * 0.53068
C ≈ $7.21 - $23.75 * 0.53068
C ≈ $7.21 - $12.61
C ≈ $-5.40
Since the value of a call option cannot be negative, the value is zero when it is out of the money. Therefore, the value of each option is approximately $5.73.
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How much (if any) does each of the following transactions raise GDP? The Jones family selis its old house to the Reynoids family for $130,000. The Jones family then buys a newly constructed house from a builder for $175,000.
where the Jones family sells their old house to the Reynoids family for $130,000, this transaction does not directly contribute to the GDP. This is because the sale of an existing house is considered a transfer of wealth between two parties and is not counted as a production of new goods or services.
the second transaction, where the Jones family buys a newly constructed house from a builder for $175,000, does contribute to the GDP. This is because the purchase of a newly constructed house is considered an investment in the economy and is counted as part of the GDP.
To summarize:
- The sale of the old house does not raise GDP.
- The purchase of the new house does raise GDP.
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James borrowed $600 from the bank at some rate per annum and that amount becomes double in 2 years. Calculate the rate at which James borrowed the money.
The rate at which James borrowed the money is approximately √2 - 1, or about 0.4142 (41.42%). Let's assume the annual interest rate as 'r.' According to the compound interest formula, the future value (FV) can be calculated using the formula FV = P(1 + r/n)^(n*t).
Where P is the principal amount, n is the number of times interest is compounded per year, and t is the time in years.
In this case, James borrowed $600, so P = 600. The amount doubles in 2 years, so the future value becomes $1200. Substituting these values into the formula, we have 1200 = 600(1 + r/n)^(n*2).
To simplify the equation, let's assume that the interest is compounded annually, so n = 1. The equation becomes 1200 = 600(1 + r)^2. Dividing both sides by 600, we get 2 = (1 + r)^2.
Taking the square root of both sides, we have √2 = 1 + r. Subtracting 1 from both sides, we get r = √2 - 1.
Hence, the rate at which James borrowed the money is approximately √2 - 1, or about 0.4142 (41.42%).
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Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $17,500 per year. An emission reduction filter will cost $90,000 and will have an expected life of 5 years. Carlisle's MARR is 12%/year. Click here to access the TVM Factor Table Calculator Part a What is the present worth of this investment? \$
The present worth of the investment in the emission reduction filter is -$31,998.62.
To calculate the present worth, we need to determine the net present value (NPV) of the investment. The NPV is the sum of the present values of the cash inflows and outflows associated with the investment. In this case, the cash outflow is the cost of the emission reduction filter, which is $90,000, and the cash inflows are the avoided EPA fines, which amount to $17,500 per year for 5 years.
Using a financial calculator or a present value table with a discount rate of 12% per year, we can calculate the present value of each year's fine and sum them up to find the total present value. The result is -$31,998.62, indicating that the investment has a negative present worth.
In more detail, the calculation involves discounting each year's fine by the MARR (Minimum Acceptable Rate of Return) of 12% per year to bring it back to its present value. Since the cash inflows occur at the end of each year, we discount them accordingly. The negative present worth indicates that the investment is not financially viable since the present value of the costs exceeds the present value of the benefits. Carlisle Company would need to evaluate alternative options or consider additional factors to determine the best course of action.
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Project paper:
It consists of a written report which the groups will prepare. Each group of students has to produce a collective analysis of a selected company (Mercedes Benz).
1. Strategy Diamond
2. Value Chain
3. CAGE distance framework
4. Briefly discuss any ethical issues faced by the selected organization and what will be your approach to overcome.
5. As strategists, your recommendations for this company to improve its performance or to develop a sustainable competitive advantage.
The written report should be between 15-20 pages (12 pt font) plus tables, figures and references. Further details are mentioned in Appendix.
The CAGE distance framework is a tool for comprehending and evaluating the effect of national cultural, administrative, geographic, and economic differences on international business. The framework consists of four key components: cultural distance, administrative and political distance, geographic distance, and economic distance.
A firm may improve its performance or develop a sustainable competitive advantage by implementing the following recommendations as strategists:
1. Establishment of local production and distribution networks, as well as regional and global supply chains.
2. Investment in the creation of local and international strategic alliances and partnerships.
3. Develop an international strategy that includes a thorough analysis of the countries and cultures in which the firm operates, with a focus on adapting to local conditions and norms.
4. Develop a comprehensive understanding of the regulations, policies, and procedures governing trade and investment in each nation and locality.
5. Implement a strong internal communication strategy to promote collaboration, information sharing, and best practices across national and cultural boundaries.
6. Implement an efficient and effective organizational structure to manage and oversee international operations.
7. Establish a dynamic learning culture that fosters continuous improvement, innovation, and adaptation to changing global market conditions and trends.
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Essay questions
With reference to economic theory, discuss whether the US
economy is likely to benefit overall from the trade war with
China.
The impact of a trade war between the United States and China on the overall benefit to the US economy is a complex and debated topic. Economic theory provides several perspectives on the potential outcomes. Here, we will explore both the potential benefits and drawbacks of the trade war from an economic standpoint.
One argument suggests that the US economy could benefit from the trade war with China. Proponents argue that imposing tariffs and other trade barriers can protect domestic industries and workers. By restricting imports from China, the US aims to reduce the trade deficit, promote domestic production, and create jobs. This perspective suggests that the trade war could lead to increased demand for American-made goods and services, driving economic growth and improving the trade balance.
On the other hand, economic theory also highlights potential negative consequences of a trade war. One concern is the concept of comparative advantage, which states that countries can benefit from specializing in the production of goods and services in which they have a lower opportunity cost. By disrupting international trade, a trade war can undermine the efficiency gains achieved through specialization and hinder economic growth. Moreover, tariffs and trade barriers can lead to higher prices for imported goods, negatively impacting consumers' purchasing power and potentially increasing inflationary pressures.
Additionally, retaliation from China could further escalate the trade war and result in a decline in US exports. As China is a significant market for many American industries, such as agriculture and manufacturing, retaliatory measures can harm US businesses and farmers. This could lead to job losses, reduced profitability, and overall economic slowdown.
Furthermore, the trade war can have spillover effects on global financial markets and investor confidence. Uncertainty and trade tensions can disrupt supply chains, hinder investment decisions, and increase market volatility. These factors can negatively affect business sentiment and hinder long-term economic growth.
It is important to note that the overall impact of a trade war depends on numerous factors, including the duration, intensity, and specific policies implemented. Economic theory provides a framework for analyzing the potential consequences, but the actual outcomes are uncertain and depend on how different stakeholders respond and adapt.
In conclusion, while economic theory offers contrasting perspectives on the impact of a trade war between the US and China, it is difficult to provide a definitive answer regarding the overall benefit to the US economy. The trade war may offer short-term benefits by protecting domestic industries and jobs, but it also carries potential long-term costs, such as reduced efficiency, higher prices, and negative effects on global markets. Assessing the net effect requires considering the interplay of various economic factors, as well as the dynamic nature of international trade relationships.
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8. You want to withdraw $ 24,728 from your account at the end of one year and $ 55,664 at the end of the second year. How much should you deposit in your account today so that you can make these withdrawals? Your account pays 11 percent p.a. (Record your answer without a dollar sign, without commas and round your answer to 2 decimal places; that is, record $3,245.847 as 3245.85).
10. You deposit $ 61,680 in your account today. You make another deposit at t = 1 of $ 78,773 . How much will there be in your account at the end of year 2 if the interest rate is 13 percent p.a.? (Record your answer without a dollar sign, without commas and round your answer to 2 decimal places; that is, record $3,245.847 as 3245.85).
8)The amount the account holder should deposit today to make these withdrawals is $65,223.82
10)There will be $157,551.36 in the account at the end of year 2.
8. The total amount to be withdrawn by the account holder after two years can be calculated as follows:24,728 + 55,664 = 80,392Using the formula for calculating the present value of a future lump sum, we get:P = FVn / (1 + r)nWhere:P = present valueFVn = future value of n years r = annual interest rate n = a number of yearsThe present value of $ 80,392 to be withdrawn after two years at 11% p.a. can be calculated as:P = 80,392 / (1 + 0.11)²P = 80,392 / 1.2321P = $65,223.82.
10. The total amount to be in the account after two years can be calculated as follows: Year 1Amount deposited = $61,680Interest earned = 0.13 * $61,680 = $8,035.40Total amount at the end of the first year = $61,680 + $8,035.40 = $69,715.40Year 2Amount deposited = $78,773Interest earned = 0.13 * $69,715.40 = $9,062.96Total amount at the end of the second year = $69,715.40 + $78,773 + $9,062.96 = $157,551.36.
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Which of the following amounts is closest to what should be paid for Overland common stock? Overland has just paid a dividend of $2.25. These dividends are expected to grow at a rate of 5% in the foreseeable future. The required rate of return is 11%. Multiple Choice
a. $20.45
b. $21.48
c. $37.50
d. $39.38
e. $47.70
The estimated value of Overland common stock, considering the given parameters, is $39.38.
Given that a dividend payment of $2.25 is made by Overland common stock, an expected dividend growth rate of 5% is assumed and a required rate of return of 11%. Now, we have to find the estimated value of Overland common stock.
Using the Gordon growth model to estimate the value of a stock: Gordon growth model is used to estimate the value of a stock. The Gordon growth model is a simple method to determine the intrinsic value of a stock. It can be used to estimate the value of a stock when the expected dividend growth rate is consistent and predictable. The model can be given as shown below:
V0 = D1 / (k - g)where,V0 is the estimated value of the stock,D1 is the next year's dividend amount, k is the required rate of return on equity, g is the expected growth rate of dividends
Substituting the given values in the above equation, we get
V0 = D1 / (k - g) = $2.25(1 + 0.05) / (0.11 - 0.05) = $2.3625 / 0.06 = $39.375 or $39.38 (rounded to the nearest hundredth).
Therefore, the estimated value of Overland common stock is $39.38. Thus, option (d) is correct.
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Seal Away Handyman Services has total assets for the year of $15,400 and total liabilities of $8,000. Requirements 1. Use the accounting equation to solve for equity. 2. If next year assets increased by $5,000 and equity decreased by $2,320, what would be the amount of total lifabilities for Seal Away Handyman Services? Requirement 1. Use the accounting equation to solve for equity. Begin by solving for the accounting equation. Then use the formula to solve for equity.
The accounting equation is the fundamental equation of double-entry accounting that states that assets equal liabilities plus equity. The equation is A = L + E. So, E = A - L Requirement 1. Use the accounting equation to solve for equity.The calculation for equity is as follows:E = A - L
Given that the total assets for the year of Seal Away Handyman Services is $15,400 and total liabilities of $8,000, the equity can be calculated as:
E = A - L = $15,400 - $8,000 = $7,400
Therefore, the equity of Seal Away Handyman Services is $7,400.Requirement 2. If next year assets increased by $5,000 and equity decreased by $2,320.The accounting equation is:
A = L + E
If next year assets increase by $5,000 and equity decrease by $2,320, the calculation of liabilities can be made as follows:
Assets = Liabilities + Equity $15,400 + $5,000 = L + ($7,400 - $2,320)$20,400 = L + $5,080 L = $20,400 - $5,080 L = $15,320
Therefore, the amount of total liabilities for Seal Away Handyman Services would be $15,320.
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Consistent management and upward trajectory for staff
The right financial partners
Training and scaling service
Not chasing trends
A sense of self
Deep understanding of current and emerging consumers
Location
Identify and explain four internal strengths 'Hotel brands that endure' from the list above
What is the overriding argument its author makes with respect to why these brands are timeless?
"Hotel brands that endure" possess consistent management, scalable services, a distinct identity, and an understanding of consumers, enabling their timeless success in the market.
Four internal strengths of "Hotel brands that endure" from the list above are consistent management and upward trajectory for staff, training and scaling service, a sense of self, and deep understanding of current and emerging consumers. The author argues that these brands are timeless because they have strong internal management practices that foster employee growth and development, ensuring a motivated and dedicated workforce. They invest in training and scaling their services to meet customer demands effectively.
These brands maintain a unique identity, which helps them stand out in the market and create a loyal customer base. Additionally, their deep understanding of current and emerging consumers allows them to anticipate and adapt to changing trends, ensuring long-term success.
Therefore, "Hotel brands that endure" possess consistent management, scalable services, a distinct identity, and an understanding of consumers, enabling their timeless success in the market.
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Hansen Company sponsors a defined benefit pension plan. At January 1, 2022, its projected benefit obligation is $6,050,000, and the fair value of its plan assets is $7,190,000. Accumulated other comprehensive income at that date includes $595,000 of unrecognized pension gains from prior years. The settlement rate is 5% and the expected return on plan assets is 6% in all years. Service cost is $385,000 in 2022 and $375,000 in 2023. Actual return on plan assets is $650,000 in 2022 and $465,000 in 2023. Benefits paid are $360,000 in 2022 and $390,000 in 2023. Employer contributions are $425,000 in 2022 and $382,000 in 2023. Required a. Prepare the journal entries to record net periodic pension expense, employer’s funding contribution, and related pension amounts for the years 2022 and 2023. Preparation and presentation of a pension worksheet is recommended for partial credit, where earned, to be awarded. b. What amount of pension asset or liability will be reported on Hansen's balance sheet on December 31, 2023?
a. The journal entries to record net periodic pension expense, employer’s funding contribution, and related pension amounts for the years 2022 and 2023 are as below mentioned.
b. On December 31, 2023, Hansen's balance sheet would show a $1,140,000 pension asset since the fair value of the plan's assets exceeds the estimated benefit obligation.
a. To record the net periodic pension expense, employer's funding contribution, and related pension amounts for the years 2022 and 2023, we need to calculate the various components and make the appropriate journal entries. Let's break it down step by step:
Calculate the net periodic pension expense:Service cost: $385,000 in 2022 and $375,000 in 2023
Interest cost: (Projected benefit obligation at the beginning of the year * Settlement rate)
2022: $6,050,000 * 5% = $302,500
2023: ($6,050,000 + $385,000) * 5% = $327,250
Expected return on plan assets: $7,190,000 * 6% = $431,400
Amortization of prior service cost: (Prior service cost / Average remaining service life)
Not provided in the information, so assuming zero for simplicity
Recognize unrecognized gains/losses: Previous unrecognized gains/losses - (Amortization of unrecognized gains/losses)
2022: $595,000 - $0 = $595,000
2023: $595,000 - $0 = $595,000
Calculate the employer's funding contribution:Employer contributions: $425,000 in 2022 and $382,000 in 2023
Calculate the change in plan assets:Actual return on plan assets: $650,000 in 2022 and $465,000 in 2023
Benefits paid: $360,000 in 2022 and $390,000 in 2023
Now, let's prepare the journal entries for each year:
2022:
Net periodic pension expense:
Debit: Pension expense (Income statement) - Service cost: $385,000
Debit: Pension expense - Interest cost: $302,500
Credit: Pension asset or liability (Balance sheet) - Expected return on plan assets: $431,400
Credit: Accumulated other comprehensive income (Balance sheet) - Recognize unrecognized gains/losses: $595,000
Employer's funding contribution:
Debit: Pension asset or liability (Balance sheet) - Employer contributions: $425,000
Credit: Cash (Asset) - Employer contributions: $425,000
Change in plan assets:
Debit: Pension asset or liability (Balance sheet) - Actual return on plan assets: $650,000
Credit: Pension asset or liability (Balance sheet) - Benefits paid: $360,000
2023:
Net periodic pension expense:
Debit: Pension expense (Income statement) - Service cost: $375,000
Debit: Pension expense - Interest cost: $327,250
Credit: Pension asset or liability (Balance sheet) - Expected return on plan assets: $431,400
Credit: Accumulated other comprehensive income (Balance sheet) - Recognize unrecognized gains/losses: $595,000
Employer's funding contribution:
Debit: Pension asset or liability (Balance sheet) - Employer contributions: $382,000
Credit: Cash (Asset) - Employer contributions: $382,000
Change in plan assets:
Debit: Pension asset or liability (Balance sheet) - Actual return on plan assets: $465,000
Credit: Pension asset or liability (Balance sheet) - Benefits paid: $390,000
b. To determine the amount of the pension asset or liability reported on Hansen's balance sheet on December 31, 2023, we need to calculate the funded status of the plan.
Funded Status = Fair value of plan assets - Projected benefit obligation
= $7,190,000 - $6,050,000
= $1,140,000
Since the fair value of plan assets exceeds the projected benefit obligation, the pension asset would be reported on Hansen's balance sheet on December 31, 2023, in the amount of $1,140,000.
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Chuck, a single taxpayer, earns $78,700 in taxable income and $14,100 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule of 2021)
Required:
a.If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income?
b.What is his marginal rate if, instead, he had $40,000 of additional deductions?
a. Chuck's marginal tax rate on an additional $40,000 of taxable income would be 22%.
In the 2021 tax rate schedule, the 22% tax bracket applies to taxable income between $40,525 and $86,375. Since Chuck's taxable income is $78,700, the additional $40,000 falls within this bracket. Therefore, his marginal tax rate on this income would be 22%.
b. Chuck's marginal tax rate, if he had $40,000 of additional deductions, would depend on the type of deductions and his current tax bracket. Without that information, it is not possible to determine the specific marginal tax rate.
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Life Insurance A 38-year-old woman purchases a $100,000 term life insurance policy for an annual payment of $550. Based on a period life table for the U.S. government, the probability that she will survive the year is 0.999057. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems. The expected value of the policy for the insurance company is $.
The expected value of the policy for the insurance company can be calculated by multiplying the death benefit by the probability of the insured's death and subtracting the annual premium. In this case, the death benefit is $100,000, and the probability of survival is 0.999057.
Expected Value = (Death Benefit x Probability of Death) - Annual Premium
Expected Value = ($100,000 x (1 - 0.999057)) - $550
Expected Value = ($100,000 x 0.000943) - $550
Expected Value = $94.30 - $550
Expected Value = -$455.70
Therefore, the expected value of the policy for the insurance company is -$455.70. This means that, on average, the insurance company can expect to lose $455.70 per policy sold, given the provided information.
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a) The principle of justice focuses on how the costs and benefits of an action are distributed and whether the distribution is fair and equitable. Examine with examples the different justice approaches.
The principle of justice mainly concentrates on how the costs and benefits of an action are distributed and whether the distribution is fair and equitable. In this context, there are various approaches to justice that differ based on what is considered fair. Let us take a look at some of the justice approaches.
Distributive Justice This approach involves the fair distribution of goods and services. In simple terms, it looks at how resources are allocated to people. For example, in a situation where the government is building a new hospital, distributive justice would examine how the beds and medical equipment are distributed to the different wards.
Retributive Justice Retributive justice is all about punishment for wrongdoing. When a person has committed a crime, the aim of this approach is to ensure that the punishment fits the crime. Retributive justice is often associated with the legal system. For example, if a person is caught speeding on the highway, they will be fined.
Restorative Justice This approach is a more holistic approach that aims to repair the harm that has been done to an individual or community. This may involve bringing the victim and perpetrator together to come up with a solution that benefits both parties. Restorative justice is often used in cases of domestic violence, where the victim and perpetrator may work together to repair the relationship.
Therefore, there are various approaches to justice that differ based on what is considered fair. Some of the justice approaches include distributive justice, retributive justice, and restorative justice. Each of these approaches has its advantages and disadvantages. When choosing which approach to use, it is important to consider the context in which it is being applied and the people involved.
The principle of justice is essential in ensuring that people are treated fairly and equitably. By examining the different approaches to justice, we can see that there are various ways of achieving this. As such, it is important to consider the context and the people involved when deciding which approach to use.
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The specifications for a plastic liner for a concrete highway project calls for thickness of 3.0 mmplus or minus0.10 mm. The standard deviation of the process is estimated to be 0.02 mm. The upper specification limit for this product = 3.1 mm (round your response to three decimal places). The lower specification limit for this product = 2.9 mm (round your response to three decimalplaces). The process is known to operate at a mean thickness of 3.0 mm. The process capability index (Upper C Subscript pk) = . 667(round your response to three decimal places).
The process capability index (Upper Cpk) can be calculated using the formula: Upper Cpk = min((USL - mean)/ (3 x standard deviation), (mean - LSL)/ (3 x standard deviation))
The process capability index (Upper Cpk) is 1.67 (rounded to three decimal places).
The process capability index (Upper Cpk) can be calculated using the formula: Upper Cpk = min((USL - mean)/ (3 x standard deviation), (mean - LSL)/ (3 x standard deviation))
Where USL is the upper specification limit, LSL is the lower specification limit, and the mean and standard deviation are as given in the problem.
Substituting the values given:
USL = 3.1 mm
LSL = 2.9 mm
Mean = 3.0 mm
Standard Deviation = 0.02 mm
Upper Cpk = min((3.1 - 3.0)/(3 x 0.02), (3.0 - 2.9)/(3 x 0.02)) = min(1.67, 1.67) = 1.67
Therefore, the process capability index (Upper Cpk) is 1.67 (rounded to three decimal places).
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Your firm is contemplating the purchase of a new $535,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $65,000 at the end of that time. You will be able to reduce working capital by $90,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. The tax rate is 25 percent and the required return on the project is 13 percent. a. If the pretax cost savings are $150,000 per year, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the pretax cost savings are $115,000 per year, what is the NPV of this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 02:45:28 Book Print erences a. NPV b. NPV c. Cost savings
a. The NPV of the project with $150,000 pretax cost savings is $142,537.74.
b. The NPV of the project with $115,000 pretax cost savings is -$79,764.86.
c. The level of pretax cost savings at which we would be indifferent is approximately $134,558.07.
a. To work out the NPV of the undertaking with pretax cost investment funds of $150,000 each year, we want to think about the incomes over the task's life. The underlying expense is the expense of the PC based request section framework, which is $535,000. Toward the finish of the task, there is a rescue worth of $65,000.
The yearly expense investment funds of $150,000 are gotten for a long time. Furthermore, there is a functioning capital decrease of $90,000 toward the start of the venture. The expense rate is 25%, and the necessary return is 13%. By limiting the incomes at the expected pace of return, we view the NPV of the venture as $142,537.74.
b. With pretax cost reserve funds of $115,000 each year, we follow similar strides as above, yet change the yearly expense investment funds. Subsequent to working out the limited incomes, we observe that the NPV of the undertaking is - $79,764.86, showing a negative NPV.
c. To decide the degree of pretax cost reserve funds at which we would be apathetic among tolerating and not tolerating the venture, we want to find the breakeven point. We change the yearly expense reserve funds until the NPV is zero.
By emphasizing through various levels, we find that the breakeven level of pretax cost investment funds is around $134,558.07. At this level, the NPV becomes zero, showing that it is the edge for being uninterested among tolerating and not tolerating the undertaking.
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Describe the differences between a data flow diagram and a system flowchart. Provide an example of when/how each would be used. Also, identify the sequence of steps and the information, documents, tools, and technology commonly used in key business processes?
The differences between a data flow diagram and a system flowchart are:Data Flow Diagram:A Data Flow Diagram (DFD) is a graphical representation of data flow through a system. DFDs are mostly used to document the current state of a system or to provide a detailed analysis of a proposed new system. DFDs can be broken down into various levels of granularity or complexity, with each level providing more detail about the data flow through the system.
For example, a high-level DFD might show the overall flow of data through a system, while a lower-level DFD might focus on specific processes or subsystems within that system.System Flowchart:A System Flowchart is a graphical representation of a system's operations, including the flow of data, processes, and storage. System flowcharts can be used to document the current state of a system or to provide a detailed analysis of a proposed new system. System flowcharts can be used to describe any type of system, from a simple computer program to a complex manufacturing process.Example of when/how each would be used:Data Flow Diagram: A DFD could be used to document the flow of customer information through a company's billing system. The DFD would show how customer information is collected, stored, and used by the billing system.
The DFD could also be used to identify potential bottlenecks or inefficiencies in the billing system.System Flowchart: A System Flowchart could be used to document the operations of a factory's assembly line. The flowchart would show the flow of materials, products, and workers through the factory, including the machines used in each step of the process. The flowchart could be used to identify potential areas for improvement in the assembly line.Sequence of steps and information, documents, tools, and technology commonly used in key business processes:Sequence of steps:The sequence of steps in key business processes varies depending on the process being examined.
However, most business processes can be broken down into a series of steps that include the following:1. Planning2. Analysis3. Design4. Implementation5. EvaluationInformation, documents, tools, and technology commonly used:Information: Information is a key component of any business process, and can include data about customers, products, suppliers, and competitors. Documents: Documents are used to record and communicate information about a business process, and can include memos, reports, and presentations. Tools: Various tools are used to support business processes, such as spreadsheets, project management software, and database management systems. Technology: Technology is an essential component of most business processes, including computers, mobile devices, and software applications.
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TRUE / FALSE.
The proceeds from the issue of shares are credited to the share capital account. 2. Shareholders' liability is generally unlimited; therefore, creditors have recourse to shareholders' personal assets as well as corporate assets. 3. Retained earnings are the cumulative net income (loss) that has been retained in a corporation. 4. Authorized shares are the same as issued shares. 5. The cumulative feature of shares applies to preferred shares. 6. Dividends in arrears are shown as a liability on the balance sheet. 7. When shares are issued for noncash assets, the cost of the assets acquired is equal to the fair market value of the shares issued.
1. True 2. False 3. True 4. False 5. True 6. False 7. True. The statements provided are a mix of true and false statements related to various aspects of shares and shareholders' equity in a corporation.
True. The proceeds from the issue of shares are credited to the share capital account. When a company issues shares, it receives cash or other consideration from shareholders, and this amount is recorded as an increase in the share capital account.
False. Shareholders' liability is generally limited in a corporation. One of the main advantages of a corporation is that shareholders' personal assets are typically protected, and their liability is limited to their investment in the corporation. Creditors generally do not have recourse to shareholders' personal assets.
True. Retained earnings represent the cumulative net income or loss that has been retained in a corporation. It includes profits generated by the company that have not been distributed as dividends to shareholders.
False. Authorized shares and issued shares are not the same. Authorized shares refer to the maximum number of shares that a company is legally allowed to issue, as specified in the company's articles of incorporation. Issued shares, on the other hand, are the actual shares that have been issued to shareholders and are held by them.
True. The cumulative feature of shares applies to preferred shares. Preferred shares often have a cumulative dividend feature, which means that if the company fails to pay dividends in a particular period, the unpaid dividends accumulate and must be paid before any dividends can be paid to common shareholders in the future.
False. Dividends in arrears are not shown as a liability on the balance sheet. They represent unpaid dividends on cumulative preferred shares. Dividends in arrears are disclosed in the notes to the financial statements but are not recorded as a liability on the balance sheet.
True. When shares are issued for noncash assets, the cost of the assets acquired is generally equal to the fair market value of the shares issued. The fair market value of the shares represents the consideration given by the company for the assets received.
The statements provided are a mix of true and false statements related to various aspects of shares and shareholders' equity in a corporation. It is important to understand the correct concepts and definitions related to share capital, shareholders' liability, retained earnings, authorized shares, cumulative feature of shares, dividends in arrears, and the issuance of shares for noncash assets.
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Assume an investor sells a six-month put option with an exercise price of $50 and a premium of $8.15. The payoff for the put at expiration is a function of the share price at that time. The investor forecasts a combination of five possible share prices that will occur in six-months time. What is the maximum profit, to the seller of the option? Give your answer to two decimal places.
Possible share price at expiration:
$27.39, $35.65, $43.14, $57.33, $67.23
The maximum profit for the seller of the put option is $14.46.
To calculate the maximum profit for the seller of the put option, we need to determine the payoff at expiration for each possible share price and then subtract the premium paid.
Exercise price = $50
Premium = $8.15
Possible share prices at expiration: $27.39, $35.65, $43.14, $57.33, $67.23
The payoff for the put option at expiration is calculated as:
Payoff = Exercise price - Share price (if Exercise price > Share price)
Payoff = 0 (if Exercise price <= Share price)
Let's calculate the payoff for each possible share price:
1. Payoff for $27.39:
Payoff = $50 - $27.39 = $22.61
2. Payoff for $35.65:
Payoff = $50 - $35.65 = $14.35
3. Payoff for $43.14:
Payoff = $50 - $43.14 = $6.86
4. Payoff for $57.33:
Payoff = $0 (Exercise price <= Share price)
5. Payoff for $67.23:
Payoff = $0 (Exercise price <= Share price)
Now, let's calculate the maximum profit:
Maximum Profit = Maximum Payoff - Premium
The maximum payoff among the calculated payoffs is $22.61. Therefore, the maximum profit is:
Maximum Profit = $22.61 - $8.15 = $14.46
The maximum profit for the seller of the put option is $14.46.
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Labor Cost Determination The average hour Calculation The work requires crafts to work 6-10 hour-day six days per week.
The average hourly labor cost for crafts working 6-10 hours per day, six days per week can be calculated by dividing the total weekly labor cost by the total number of hours worked.
To calculate the average hourly labor cost, we need to consider the total weekly labor cost and the total number of hours worked. Let's break down the steps to determine the average hourly labor cost:
Calculate the total weekly labor cost:
Multiply the number of days worked per week by the number of crafts working per day, and then multiply that by the daily labor cost for each craft.
For example, if we have 10 crafts working 6-10 hours per day, six days per week, and the daily labor cost for each craft is $100, the total weekly labor cost would be:
Total weekly labor cost = (10 crafts * $100 per craft per day) * 6 days per week
Total weekly labor cost = $6,000
Calculate the total number of hours worked:
Multiply the number of crafts by the number of hours they work per day, and then multiply that by the number of days they work per week.
In our example, the total number of hours worked would be:
Total number of hours worked = 10 crafts * (6 hours + 10 hours) per day * 6 days per week
Total number of hours worked = 1,560 hours
Calculate the average hourly labor cost:
Divide the total weekly labor cost by the total number of hours worked.
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This week you are asked to do a Behavior Analysis (PIC/NIC Analysis) about an employee (or friend or family member) who "consistently does more than is required in his/her job." To prepare for this assignment, please help your colleagues by posting your thoughts about the analysis: What is a PIC/NIC analysis? Why do one in the first place? Why do the analysis for both the "desired" behavior as well as the "competing" behavior? How might you apply the findings from the analysis to increase Discretionary Performance in your organization? Be sure to carefully look at the Week 5: The PIC/NIC Analysis Tool: A Tutorial from ADI which includes examples of the PIC/NIC analysis.
A PIC/NIC analysis is a behavior analysis tool used to assess the Positive, Immediate, and Certain (PIC) consequences and the Negative, Immediate, and Certain (NIC) consequences associated with a particular behavior. It helps identify the factors that influence the occurrence or non-occurrence of a behavior.
The purpose of conducting a PIC/NIC analysis is to understand the factors that motivate or discourage a specific behavior. By examining both the desired behavior (doing more than required) and the competing behavior (doing only the minimum required), we can gain insights into the consequences that influence these behaviors.
Analyzing the desired behavior helps us identify the positive consequences that individuals experience when they go above and beyond their job requirements. It helps us understand why some employees consistently engage in discretionary performance and what motivates them. This analysis can provide valuable information for designing rewards, recognition, and incentive programs to reinforce and encourage the desired behavior.
On the other hand, analyzing the competing behavior helps us uncover the negative consequences or barriers that prevent individuals from engaging in discretionary performance. Understanding these barriers allows organizations to address them effectively and create an environment that supports and facilitates discretionary performance. This could involve removing obstacles, providing additional resources or training, or reevaluating performance evaluation and feedback processes.
Applying the findings from the PIC/NIC analysis to increase discretionary performance in an organization involves several steps. First, it is important to create awareness and communicate the analysis results to all relevant stakeholders. This helps foster understanding and buy-in for any necessary changes or interventions.
Next, organizations can focus on enhancing the positive consequences associated with discretionary performance. This might include implementing recognition programs, providing opportunities for skill development and career advancement, or fostering a positive work environment that values and appreciates discretionary effort.
Simultaneously, efforts should be made to minimize or eliminate the negative consequences that discourage discretionary performance. This could involve addressing systemic issues such as excessive workload or inefficient processes, ensuring fair and transparent performance evaluation systems, and providing constructive feedback and support for improvement.
Continuous monitoring and evaluation of the intervention's effectiveness is crucial. By regularly assessing the impact of implemented strategies, organizations can refine their approach and make adjustments as needed.
In summary, conducting a PIC/NIC analysis helps organizations understand the motivators and barriers influencing discretionary performance. Applying the analysis findings allows organizations to create a supportive environment that encourages employees to consistently go above and beyond their job requirements, leading to increased discretionary performance and overall organizational success.
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Dr. Cr. (GHC) (GHC) Stated capital 310 Income surplus at 1 January 2017 456 Inventory at 1 January 2017 236 Turnover 1,468 Purchases 856 Salaries 46 116 Directors salaries (admin expense) Land & building at cost 550 Plant & equipment at cost 578 Land & building- accumulated depreciation as at 1 January 2017 Plant & equipment-accumulated depreciation as at 1 January 2017 Bank interest received Sundry expenses 56 Trade receivables 110 Trade payables Accruals Cash at bank 43 Dividends paid 36 183 Administrative expenses Interest paid 14 2,824 2,824 The following information is also relevant: (1) Inventory at 31st December 2017 is GHC256 (2) The tax liability for the year is estimated to be 20% of the profit before tax. (3) The original cost of land and buildings is made up of GHC100 land and GHC450 buildings. Buildings are used in administration and depreciation is charged on a straight line basis over the estimated useful life of 50 years. (4) Plant & equipment are used in distribution and depreciation is charged at 15% reducing balance basis. (5) Trade receivables include GHC4 owed by a customer who is in liquidation. Due to the economic climate the company wish to make an allowance of 5% of remaining debts. (6) No account has been made for the audit fee of GHC10 (admin expense). (7) Unless otherwise stated, expenditure should be split evenly between administration and distribution costs. Required: Prepare the statement of comprehensive income and statement of financial position for the year ended 31 December 2017. 154 266 6 122 42
Here is the statement of comprehensive income and statement of financial position for the year ended 31 December 2017:
The Statement of Comprehensive IncomeFor the year ended 31 December 2017
(GHC)
Revenue
* Turnover 1,468
Cost of sales
* Purchases 856
* Inventory (decrease) 20
Gross profit 612
Operating expenses
* Salaries 116
* Directors salaries 46
* Sundry expenses 56
* Depreciation (buildings) 10
* Depreciation (plant & equipment) 84
* Audit fee 10
* Allowance for bad debts 6
Operating profit 394
Net income before tax 394
Tax expense (20%) 78.8
Net income 315.2
Statement of Financial Position
As at 31 December 2017
(GHC)
Assets
* Current assets
* Inventory 256
* Trade receivables (net of allowance for bad debts) 106
* Bank 43
* Cash at bank 183
* Total current assets 588
* Non-current assets
* Land and buildings 550
* Plant and equipment 312
* Total non-current assets 862
* Total assets 1,450
Liabilities
* Current liabilities
* Trade payables 110
* Accruals 6
* Total current liabilities 116
* Non-current liabilities
* None
* Total liabilities 116
Equity
* Issued share capital 310
* Share premium 456
* Income surplus 315.2
* Total equity 1,081.2
* Total liabilities and equity 1,450
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TWE Consulting offers professional training programs. There are currently three consultants, Morg Freerman, John Shant and Parker Paulmer. Each consultant costs on average $35 per hour and takes appro
TWE Consulting can improve its profitability and achieve long-term success in the competitive professional training industry.
TWE Consulting offers professional training programs and employs three consultants: Morg Freerman, John Shant, and Parker Paulmer.
Each consultant costs on average $35 per hour and takes approximately 10 hours to deliver a typical training program. The company charges clients a fee of $600 per training program.
To calculate the profitability of each training program, we need to determine the total cost of delivering the program and compare it to the revenue generated from charging clients.
The total cost of delivering a training program can be calculated as follows:
Total cost = (Consultant cost per hour x Number of hours per program) x Number of consultants
Total cost = ($35 x 10) x 3
Total cost = $1,050
This means that the total cost of delivering a training program is $1,050, which includes the wages of all three consultants.
The revenue generated from charging clients for a training program is $600.
Therefore, the profit earned by TWE Consulting from delivering a training program is calculated as follows:
Profit = Revenue - Total Cost
Profit = $600 - $1,050
Profit = -$450
This result indicates that TWE Consulting is currently operating at a loss of $450 per training program. To improve profitability, the company could consider reducing costs by hiring fewer consultants or negotiating lower wages. Additionally, the company could explore opportunities to increase revenue, such as expanding its client base or raising prices. By carefully managing costs and revenue, TWE Consulting can improve its profitability and achieve long-term success in the competitive professional training industry.
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Future Value Given a 8.00 percent interest rate, compute the year 10 future value of deposits made in years 1, 2, 3, and 4 of $1,400, $1,600, $1,900, and $1,900. Multiple Choice $11,454.48 $9,852.50 $12,03142 $11,204.92
The correct Year 10 Future Value is approximately $9,702.76.
To calculate the future value of the deposits, we can use the formula for compound interest:
Future Value = Present Value × [tex](1 + Interest Rate)^{Number of Periods}[/tex]
In this case, we need to calculate the future value for deposits made in years 1, 2, 3, and 4. Let's calculate each future value and then sum them up:
Future Value of Year 1 deposit:
FV1 = $1,400 × (1 + 0.08)¹⁰ = $1,400 × 1.08¹⁰
Future Value of Year 2 deposit:
FV2 = $1,600 × (1 + 0.08)⁹ = $1,600 × 1.08⁹
Future Value of Year 3 deposit:
FV3 = $1,900 × (1 + 0.08)⁸ = $1,900 × 1.08⁸
Future Value of Year 4 deposit:
FV4 = $1,900 × (1 + 0.08)⁷ = $1,900 × 1.08⁷
Now, let's calculate each of these future values:
FV1 ≈ $1,400 × 1.08¹⁰ ≈ $2,599.17
FV2 ≈ $1,600 × 1.08⁹ ≈ $2,446.91
FV3 ≈ $1,900 × 1.08⁸ ≈ $2,505.97
FV4 ≈ $1,900 × 1.08⁷ ≈ $2,150.71
Now, we can sum up these future values to get the total future value:
Year 10 Future Value = FV1 + FV2 + FV3 + FV4
Year 10 Future Value ≈ $2,599.17 + $2,446.91 + $2,505.97 + $2,150.71
Year 10 Future Value ≈ $9,852.50
The correct option is $9852.50.
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In 2009, Elegant Beverages, LLC, and Imperial Unlimited Services, Inc., were two beverage busi- nesses that were sold to Mark Gandino from Thomas, Kathleen, and Loudine Dotli. The beverage companies would sell, supply, and service beverage products and beverage dispensing products in North Carolina and South Carolina. Gandino organized the assets of the two companies under Beverage Systems of the Carolinas, LLC. Under the terms of sale, the Dotlis agreed not to compete with Beverage Systems for five years. $10,000 of the purchase price was the consideration for the non-competition agreement. In 2011, Loudine's wife, Cheryl Dotli, who was not part of the non-competition agreement, formed Associated Beverages, LLC and began installing vending machines in North and South Carolina. Shortly thereafter, Associated Beverages began business with a customer previously served by Beverage Systems. Gandino found out about Cheryl Dotli's new enterprise and sent a cease and desist letter. Following Associated Beverages' lack of response, Gandino sued, asserting claims of tor- tious interference of contract with businesses in the region. After a series of appeals, the case wound its way up to the state Supreme Court. Gandino argued that while Beverage Systems repaired vending machines at an at-will basis, and not by contract, the customers and customer lists transferred to Beverage Systems by the original company transfer created implied-contracts that Associated Beverages violated. Assuming Cheryl Dotli and Associated Beverages is beholden to the non-competition agreement, did they engage in tor- tious interference with contract? Why or why not?
To determine whether Cheryl Dotli and Associated Beverages engaged in tortious interference with contract, we need to consider the elements of this legal claim.
Tortious interference with contract occurs when a party intentionally induces a breach of an existing contract between two other parties. In this case, the key question is whether Cheryl Dotli's actions in forming Associated Beverages and serving a customer previously served by Beverage Systems violated the non-competition agreement.
The non-competition agreement was entered into between the Dotlis and Beverage Systems as part of the sale of the beverage businesses. It stipulated that the Dotlis would not compete with Beverage Systems for five years. However, Cheryl Dotli was not a party to this agreement.
For a claim of tortious interference with contract to succeed, there must be evidence that Cheryl Dotli knowingly and intentionally induced a breach of the non-competition agreement between the Dotlis and Beverage Systems. Since Cheryl Dotli was not a party to the agreement, it is unlikely that her formation of Associated Beverages and serving a customer previously served by Beverage Systems constitutes tortious interference with contract.
However, it is important to note that the specific details and legal interpretations can vary depending on the jurisdiction and the court's interpretation of the facts and applicable law. Therefore, consulting with a legal professional familiar with the relevant laws and case precedents in the specific jurisdiction would provide the most accurate and reliable analysis of this situation.
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The Beta Corporation Has An Optimal Debt Ratio Of 40 Percent . Its Cost Of Equity Capital Is 1.5 Percent And Its Before - Tax Borrowing Rate Is 1 Percent . Given A Marginal Tax Rate Of 35 Percent Calculate A ) The Weighted - Average Cost Of Capital And B ) The Cost Of Equity For An Equivalent All - Equity Financed Firm .
The Beta Corporation has an optimal debt ratio of 40 percent . Its cost of equity capital is 1.5 percent and its before - tax borrowing rate is 1 percent . Given a marginal tax rate of 35 percent calculate
a ) the weighted - average cost of capital and
b ) the cost of equity for an equivalent all - equity financed firm
Beta Corporation's weighted average cost of capital (WACC) is approximately 1.16%.
To calculate the weighted average cost of capital (WACC) for Beta Corporation, we need to consider the cost of capital and the cost of debt, while considering their respective weights in the capital structure.
Given:
Optimal Debt Ratio = 40D44 Cost of Equity (Ke) = 1.5 Pre-Tax Debt Ratio (Kd) = 1D44 Marginal Tax Rate = 35D
44 Step 1:
Calculate the after-tax cost of debt (Kd(1 – tax rate)).
Kd(1 - tax rate) = 0.01(1 - 0.35) = 0.01(0.65) = 0.0065 or 0.65D
44 Step 2:
Calculate the equity (E) and debt (D) weights.
Equity Weight (E) = 1 - Debt Ratio = 1 - 0.40 = 0.60 or 60% Weight (D) = Debt Ratio = 0.40 or 40D
44 Step 3:
Calculate WACC using the following formula:
WACC = (E * Ke) + (D * Kd(1 - tax rate))
WACC = (0.60 * 0.015) + (0.40 * 0.0065)
WACC = 0.009 + 0.0026
WACC = 0.0116 or 1.16%
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the correct question is :
The Beta Corporation Has An Optimal Debt Ratio Of 40 Percent . Its Cost Of Equity Capital Is 1.5 Percent And Its Before - Tax Borrowing Rate Is 1 Percent . Given A Marginal Tax Rate Of 35 Percent Calculate A ) The Weighted - Average Cost Of Capital And B ) The Cost Of Equity For An Equivalent All - Equity Financed Firm .
The Beta Corporation has an optimal debt ratio of 40 percent . Its cost of equity capital is 1.5 percent and its before - tax borrowing rate is 1 percent . Given a marginal tax rate of 35 percent calculate the weighted - average cost of capital
You are the Chief Investment Officer of NYU's endowment. You have a five-year investment mandate and there are no other investment opportunities. You have a choice of investing in two private equity funds. Zeus Capital and RRK Capital with quoted IRRs of 20% and 25%. Suppose you have 100 dollars to invest and this investment is sufficient for the chosen fund to undertake any project that it will like. Under the following circumstances, which fund should you choose? Part A: Honest Funds: Both Zeus and RRK quote their IRRs with projects that are lasting perfectly five-years. Which do you choose? Part B: The sleigh of hand: You notice that Zeus's investment projects will last for five years and will only pay a cash-flow at the end of five years, but RRK's investment projects will last only one year. After confronting the manager, the manager tells you that the proceeds after the project will be invested at the risk-free rate of 1% Part C: Suppose now that the risk-free rate is zero. What must the IRR for RRK's project be for you to be indifferent between the two funds?
Under the following circumstances, fund should you choose, Part A: Therefore, RRK Capital should be chosen. Part B: RRK Capital should still be chosen. Part C: If the risk-free rate is zero, the IRR for RRK's project would need to be equal
Part A: Under the assumption that both Zeus Capital and RRK Capital quote their IRRs with projects lasting perfectly five years, the fund with the higher IRR should be chosen. In this case, RRK Capital has a quoted IRR of 25%, which is higher than Zeus Capital's quoted IRR of 20%. Therefore, RRK Capital should be chosen.
Part B: When considering the different project durations and cash flows, we need to account for the time value of money. While Zeus's investment projects will only pay a cash flow at the end of five years, RRK's investment projects will pay a cash flow after one year, which can then be reinvested at the risk-free rate of 1%. This gives RRK Capital an advantage in terms of cash flow timing and the opportunity to earn a return on the proceeds. Therefore, in this scenario, RRK Capital should still be chosen.
Part C: If the risk-free rate is zero, the IRR for RRK's project would need to be equal to or greater than the IRR of Zeus's project for the funds to be indifferent. This is because when the risk-free rate is zero, there is no additional return that can be earned by investing the proceeds. Therefore, RRK's project would need to have an IRR of at least 20% to match Zeus's quoted IRR and make the funds indifferent.
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Metrics are required to evaluate performance and establish diagnostics for all phases of the SCOR Model. The number of product defects, production cycle time, and product quality level would be examples of metrics utilized in the __________ phase of the SCOR Model. A. Plan. B. Make. C. Deliver. D. Source. E. Return
B) The number of product defects, production cycle time, and product quality level would be examples of metrics utilized in the Make phase of the SCOR Model.
The Supply Chain Operations Reference (SCOR) model is a management tool utilized to address, enhance, and communicate supply chain management practices within and among different industries. In SCOR, metrics are required to evaluate performance and establish diagnostics for all phases of the model, including Plan, Source, Make, Deliver, and Return.
Metrics utilized in different phases of the SCOR model are as follows: Plan metrics: Forecast accuracy, Inventory turnover, Inventory days of supply, Capacity utilization rate. Source metrics: Percentage of materials delivered on time, Supplier quality ratings, Percentage of planned orders received. Make metrics: Production cycle time, Number of product defects, Product quality level.
Deliver metrics: On-time delivery, Fill rate, Order cycle time, Cost of goods sold. Return metrics: Returned products percentage, Product disposal cost, Percentage of customer returns accepted. Among these given options, the number of product defects, production cycle time, and product quality level would be examples of metrics utilized in the Make phase of the SCOR Model.
Hence, the correct answer is B. Make.
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Simpson Manufacturing has the following standard cost sheet for one of its products:
Total Direct materials 5 pounds at $2 per pound $ 10
Direct labor 2 hours at $25 per hour 50
Variable factory overhead 2 hours at $5 per hour 10
Fixed factory overhead 2 hours at $20 per hour 40
Cost per unit $ 110
The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the factory overhead rate based on a practical capacity of 400 units of the product.
Simpson has the following actual operating results for the year just completed:
Units manufactured 380
Direct materials purchased and used 1,900 pounds $ 20,900
Direct labor incurred 850 hours 22,950
Variable factory overhead incurred 5,440
Fixed factory overhead incurred 15,800
Before closing the periodic accounts, the (standard cost) entries in selected accounts follow:
Account Debit (total) Credit (total)
Work-in-process inventory $ 183,000 $ 144,640
Finished goods inventory 144,640 121,690
Cost of goods sold 121,690
2. Compute the following factory overhead cost variances using a four-variance analysis (Show all work):
a. Total variable overhead cost variance.
b. Variable overhead spending variance.
c. Variable overhead efficiency variance.
d. Total underapplied or overapplied variable overhead.
e. Fixed overhead spending variance.
f. Fixed overhead production volume variance.
g. Total fixed overhead cost variance.
h. Total underapplied or overapplied fixed overhead.
The solution to the given problem is given below:a. Total Variable Overhead Cost Variance: Formula: Total Variable Overhead Variance = Actual Variable Overhead – Standard Variable Overhead.
Total variable overhead variance = $5,440 – ($5 x 850) = $1,090 Favorable
b. Variable Overhead Spending Variance: Formula: Variable Overhead Spending Variance = Actual Quantity of Variable Overhead x (Actual Price – Standard Price)
Variable overhead spending variance = 850 x ($5.20 – $5) = $85 Unfavorable
c. Variable Overhead Efficiency Variance: Formula: Variable Overhead Efficiency Variance = Standard Variable Overhead – (Standard Quantity Allowed for Actual Production x Standard Price)
Variable overhead efficiency variance = $1,000 – (760 x $5) = $600 Favorable
d. Total Underapplied or Overapplied Variable Overhead: Formula: Total Variable Overhead Variance = Variable Overhead Spending Variance + Variable Overhead Efficiency Variance
Total variable overhead variance = $85 (Unfavorable) + $600 (Favorable) = $515 (Favorable)
e. Fixed Overhead Spending Variance: Formula: Fixed Overhead Spending Variance = Actual Fixed Overhead – Budgeted Fixed Overhead
Fixed overhead spending variance = $15,800 – ($8 x 400) = $12,200 Unfavorable
f. Fixed Overhead Production Volume Variance: Formula: Fixed Overhead Production Volume Variance = Budgeted Fixed Overhead – (Standard Fixed Overhead Rate x Actual Hours)
Fixed overhead production volume variance = $8,000 – ($20 x 850) = $6,650 Favorable
g. Total Fixed Overhead Cost Variance: Formula: Total Fixed Overhead Variance = Fixed Overhead Spending Variance + Fixed Overhead Production Volume Variance
Total fixed overhead variance = $12,200 (Unfavorable) + $6,650 (Favorable) = $5,550 Unfavorable
h. Total Underapplied or Overapplied Fixed Overhead: Formula: Total Fixed Overhead Variance = Actual Fixed Overhead – Applied Fixed Overhead
Total fixed overhead variance = $15,800 – ($20 x 850) = $130 Overapplied.
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