The modified internal rate of return (MIRR) for the proposed project is 20.22%.
The modified internal rate of return (MIRR) is a financial metric used to evaluate the profitability of an investment or project. It takes into account the cash flows generated by the project as well as the reinvestment rate of those cash flows. Unlike the traditional internal rate of return (IRR), which assumes that cash flows are reinvested at the project's IRR, the MIRR assumes that cash flows are reinvested at a different rate, typically the cost of capital.
To calculate the MIRR, the cash inflows and outflows of the project are discounted to their present values using the project's cost of capital as the discount rate. Then, the future value of the positive cash flows (inflows) is calculated by compounding them at the reinvestment rate, while the future value of the negative cash flows (outflows) is calculated by discounting them at the cost of capital. Finally, the MIRR is determined by finding the discount rate that equates the present value of the outflows to the future value of the inflows.
In this case, the proposed project has a cost of $59,321. To calculate the MIRR, we would need additional information such as the timing and magnitude of the project's cash flows, as well as the reinvestment rate. Without these details, it is not possible to accurately calculate the MIRR. Therefore, the given MIRR of 20.22% cannot be confirmed without the necessary information.
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By creating an international business or an international
business venture, you will utilize your subject knowledge expertise
in discovering and overcoming the challenges of expanding a
business to a
By creating an international business or an international business venture, you will utilize your subject knowledge expertise in discovering and overcoming the challenges of expanding a business to a foreign market.
Expanding a business internationally has a lot of challenges, such as language barriers, cultural differences, legal and regulatory requirements, and unfamiliar business practices. International business refers to any type of business activity that crosses national borders, including the movement of goods, services, technology, capital, and personnel. International business ventures are becoming more common in today's globalized economy as companies seek to expand their markets and take advantage of new opportunities in foreign markets.
If you are planning to expand your business to a foreign market, it is important to conduct thorough research on the target market's culture, language, customs, and regulations. You should also identify potential partners, customers, and suppliers in the target market. Additionally, you should consider the financial risks and benefits of the venture and develop a strategy for managing these risks. Furthermore, you need to understand that international business involves higher risks than domestic business due to the uncertainties surrounding foreign economies, political situations, and laws. Therefore, you should also develop a contingency plan to minimize the impact of unforeseen events that may affect your business.
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1. Which of the following is a correct APA
in-text citation?
(Gomez & Lin, 2019, p. 4)
(Gomez and Lin (2019) page 4)
(Gomez & Lin; 2019; pp. 4)
(Gomez and Lin, 2019, 4)
2. How should this au
(Gomez & Lin, 2019, p. 4) is a correct APA in-text citation.The given citation "(Gomez & Lin, 2019, p. 4)" follows this format correctly.
In APA (American Psychological Association) style, the correct format for an in-text citation includes the author's last name(s), the publication year, and the specific page number(s) being referenced. The given citation "(Gomez & Lin, 2019, p. 4)" follows this format correctly. It indicates that Gomez and Lin are the authors of the source, the publication year is 2019, and the information being cited can be found on page 4.
APA in-text citations and proper formatting guidelines in the APA Publication Manual, which provides detailed instructions for citing various types of sources, including books, journal articles, and webpages. Understanding and using correct in-text citations is crucial to avoid plagiarism and give proper credit to the original authors of the information you use in your research.
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True Value received an invoice dated April 21, 2020. The invoice had a $5,600 balance that included $400 freight. Terms were 2/10, 1/30, n/60. True Value pays the invoice on May 05. What amount does True Value pay?
Amount paid_____
To calculate the amount True Value pays, we need to consider the terms mentioned. The terms state 2/10, 1/30, n/60. True Value pays $5,376 to the supplier.
The first number, 2, represents the discount percentage if the payment is made within the specified time frame. In this case, it means a 2% discount if paid within 10 days. The second number, 10, represents the number of days within which the payment needs to be made to avail the discount.
So, if True Value pays within 10 days, they can deduct 2% from the invoice amount. In this case, the invoice is $5,600, and the discount is 2% of $5,600, which equals $112.
Now, the remaining balance after deducting the discount would be $5,600 - $112 = $5,488.
The next term, 1/30, means that if the payment is not made within the initial 10 days, True Value has an additional 20 days (30-10) to make the payment without any discount.
Finally, the term n/60 means that if True Value does not make the payment within the initial 30 days, they have a total of 60 days to make the payment without any discount.
Since True Value pays on May 05, which is 14 days after the invoice date, they fall within the 10-day discount period. Therefore, they can deduct the discount of $112 from the invoice amount.
Thus, the amount True Value pays is $5,600 - $112 = $5,488.
It's important to note that this calculation assumes that True Value does not take advantage of the additional payment terms mentioned (1/30 and n/60).
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Last year, Hassan’s Madhatter, Inc. had an ROA of 9.4 percent, a
profit margin of 18.40 percent, and sales of $20 million.
calculate Hassan’s Madhatter’s total assets. (Enter your
answer in doll
Hassan's Madhatter, Inc.'s total assets are approximately $39,148,936.17.
Hassan's Madhatter, Inc.'s total assets can be calculated using the formula:
Total Assets = Net Income / ROA
First, we need to calculate the net income. Net income can be found by multiplying the profit margin by sales:
Net Income = Profit Margin * Sales
Net Income = 0.1840 * $20,000,000 = $3,680,000
Next, we can calculate the total assets using the ROA:
Total Assets = Net Income / ROA
Total Assets = $3,680,000 / 0.094 = $39,148,936.17
Therefore, Hassan's Madhatter, Inc.'s total assets are approximately $39,148,936.17.
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Identify the prominent musical layer(s) of the timbre in this selection. Hint: Listen to Active Listening 6.1 "Devi Niye Tunai" (O Devi! With Fish-Shaped Eyes"). The song language and praises the goddess text is in the -(pg.308). The song form is the principal song form of South Indian classical music called (pg.307). The is in 3 sections. The raga is with a scale similar to the European harmonic scale. The tala (time cycle Is the most common of the South Indian time cycles. It has beats subdivided as First, there is the unchanging sound of a A single then unfolds. When the come in we can sense a strong beat. melody drone mythm (percussion all of the given answers
The prominent musical layers of the timbre in the selection "Devi Niye Tunai" include the melody, drone, and rhythm (percussion).
In the given selection, the melody is a significant musical layer. It is the main melodic line that carries the tune and is sung by the vocalist.
The melody follows the raga, which is a melodic framework or scale used in South Indian classical music. The raga in this selection is characterized by a scale similar to the European harmonic scale, infusing the melody with unique tonal characteristics.
Another prominent musical layer is the drone. A drone is a continuous, unchanging sound that serves as a backdrop for the melody. In this selection, the drone provides a constant harmonic foundation, creating a rich and resonant texture. It enhances the melodic phrases and contributes to the overall timbral quality of the music.
Additionally, the rhythm or percussion plays a significant role in the musical texture. It provides a rhythmic framework called tala, which structures the time cycle of the music.
The tala used in this selection is the most common of the South Indian time cycles. The percussion instruments, such as the mridangam or tabla, establish the rhythmic pulse and add intricate rhythmic patterns and variations to the performance.
Together, these musical layers—the melody, drone, and rhythm—contribute to the intricate and mesmerizing timbre of "Devi Niye Tunai." They work in harmony to create a rich and immersive sonic experience that showcases the beauty and complexity of South Indian classical music.
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In a social media campaign, which of the following should you NOT do before the campaign begins?
Analyze results and adjust
Establish goals for the campaign
Select your social media platforms
Develop the campaign assets and content calendar
In a social media campaign, which of the following should you NOT do before the campaign begins is Analyze results and adjust.
In a social media campaign, one should NOT analyze results and adjust before the campaign begins. Analysis and adjustment are typically done during or after the campaign to evaluate its performance and make necessary improvements.
The other options you mentioned—establishing goals for the campaign, selecting social media platforms, and developing campaign assets and content calendar—are essential steps that should be completed before the campaign begins.
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me-Mirror, Mirror on the wall, who’s the fairest of them all?
Mirror: “Kindly move aside. I can’t see anything.”
is this u? :7(
Answer:
what?
Explanation:
Assume that you are considering investing in a local daycare center. You have been provided with the center’s latest financial statements. What information about the operations and financial well-being of the center can you obtain from the financial statements? Would it make a difference if a reputable CPA had prepared the statements? The answer supplied by another "expert" is not the correct answer. Please help with more clarification.
Financial statements provide information about the operations and financial well-being of a business. When investing in a local daycare center, the following information can be obtained from the financial statements: Net income and expenses:
This information is useful in assessing the financial performance of the daycare center. A higher net income indicates that the center is making more money than it is spending, while a higher expense indicates the opposite. Cash flow statement: This statement shows the flow of cash in and out of the business over a particular period. It provides information on how much money is coming in and going out of the daycare center, which is useful in assessing the center's liquidity and solvency. Financial position: The balance sheet shows the assets and liabilities of the business at a particular point in time. It provides information on the financial position of the daycare center and can be useful in assessing its ability to meet its financial obligations and to invest in new equipment, staff training, and other areas that may require capital investment. If a reputable CPA had prepared the financial statements, the following benefits could be derived: Accuracy: A reputable CPA would ensure that the financial statements are accurate, complete, and free from errors, which would provide confidence in the center's financial performance. Timeliness: A CPA would prepare the financial statements in a timely manner, which would be useful for investors in making informed decisions about investing in the daycare center. Credibility: Financial statements prepared by a reputable CPA are credible and can be relied on by investors, banks, and other stakeholders.
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Activity Immediate Predecessor Activity Time(weeks) Number of workers reqd.
A - 4 2
B - 4 1
C - 3 3
D B,C 4 2
E A 4 1
F D 3 3
a. Draw a project network. If you draw on a paper, scan it and insert it to the document with answers. Images submitted separately will not be graded.
b. Develop resource requirement plan (similar to figure 6.5,6.7 ). See presentation slide 10 for an example.
c. Assume that each task can be performed independently of the other tasks. (No predecessor relationships). Now, do a resource leveling. How many workers are required? What is the project completion time? Show all work to earn credit.
d. Assume that each task can be performed independently of the other tasks. But now, you have only 3 workers available at any given time. Perform resource-limited scheduling. What is the new completion time for the project? Show all work to earn credit.
a. To draw the project network, we need to identify the activities and their immediate predecessors. Here is the project network for the given activities:
A -> E -> F
B -> D -> F
C -> D -> F
b. To develop the resource requirement plan, we need to consider the number of workers required for each activity. Here is the resource requirement plan:
Activity A: 2 workers
Activity B: 1 worker
Activity C: 3 workers
Activity D: 2 workers
Activity E: 1 worker
Activity F: 3 workers
c. Assuming no predecessor relationships, we can perform resource leveling to determine the number of workers required and the project completion time. By assigning the available workers to activities with the shortest durations first, we can level the resources. Let's calculate the resource leveling for each activity:
Activity A: 2 workers (duration 4 weeks)
Activity B: 1 worker (duration 4 weeks)
Activity C: 3 workers (duration 3 weeks)
Activity D: 2 workers (duration 4 weeks)
Activity E: 1 worker (duration 4 weeks)
Activity F: 3 workers (duration 3 weeks)
To calculate the project completion time, we sum up the durations of all activities: 4 + 4 + 3 + 4 + 4 + 3 = 22 weeks.
d. Considering only 3 workers available at any given time, we need to perform resource-limited scheduling. Let's adjust the resource requirement plan based on the availability of workers:
Activity A: 2 workers (duration 4 weeks)
Activity B: 1 worker (duration 4 weeks)
Activity C: 3 workers (duration 3 weeks)
Activity D: 2 workers (duration 4 weeks)
Activity E: 1 worker (duration 4 weeks)
Activity F: 3 workers (duration 3 weeks)
With only 3 workers available, we need to adjust the schedule. Let's distribute the workers to the activities:
Week 1: A (2 workers)
Week 2: A (1 worker), B (1 worker)
Week 3: C (3 workers)
Week 4: C (2 workers), D (1 worker)
Week 5: D (2 workers), E (1 worker)
Week 6: F (3 workers)
The new completion time for the project is 6 weeks.
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JK granted 1,000 share appreciation rights (SARS) to its 120 employees on 1 December 2007. To be eligible, employees must remain employed for 3 years from the grant date. The rights must be exercised in December 2010. In the year to 30 November 2008, 12 staff left and a further 15 were expected to leave over the following two years. In the year to 30 November 2009 8 staff left and a further 10 were expected to leave in the following year. The fair value of each SAR was $15 at 30 November 2008 and $17 at 30 November 2009
Required:
Prepare accounting entries to account for the above transactions.
The Accumulated SARs Liability account is debited, reducing the liability as the SARs are exercised by employees. The Share Capital (or Additional Paid-in Capital) account is credited, reflecting the issuance of shares to employees based on the exercise of the SARs.
These accounting entries capture the transactions related to the grant, vesting, changes in employee count, fair value adjustments, and exercise of SARs over the given period.
To account for the given transactions related to share appreciation rights (SARs) for JK, we need to consider the grant date, vesting period, exercise date, and changes in employee count. Here are the accounting entries required:
1. On December 1, 2007 (Grant Date):
No accounting entry is needed at this stage as the SARs are granted but not yet vested or exercised.
2. Year Ended November 30, 2008:
To account for the employees who left during the year:
[Date] Share Appreciation Rights Expense A/C $X
Accumulated SARs Liability A/C $X
(To record the expense and reduce the accumulated liability for SARs related to the employees who left.)
3. Year Ended November 30, 2009:
To account for the employees who left during the year:
[Date] Share Appreciation Rights Expense A/C $X
Accumulated SARs Liability A/C $X
(To record the expense and reduce the accumulated liability for SARs related to the employees who left.)
4. On November 30, 2008:
[Date] Share Appreciation Rights Expense A/C $X
Accumulated SARs Liability A/C $X
(To record the expense and increase the accumulated liability for SARs based on the fair value of $15 per SAR at that date.)
5. On November 30, 2009:
[Date] Share Appreciation Rights Expense A/C $X
Accumulated SARs Liability A/C $X
(To record the expense and increase the accumulated liability for SARs based on the fair value of $17 per SAR at that date.)
6. On December 31, 2010 (Exercise Date):
[Date] Accumulated SARs Liability A/C $X
Share Capital (or Additional Paid-in Capital) A/C $X
(To record the exercise of SARs, reducing the accumulated liability and increasing the share capital or additional paid-in capital based on the fair value.)
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Calculate the present value of an annual payment of $590.00 you would received for 11 years if the interest rate is 7.51%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2. Calculate the present value of an annual payment of $472.00 you would received for 20 years if the interest rate is 7.51%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-1. Calculate the present value of an annual payment of $590.00 you would received for 11 years if the interest rate is 14.40%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Calculate the present value of an annual payment of $472.00 you would received for 20 years if the interest rate is 14.40%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
The present value of an annual payment of $590.00 for 11 years at an interest rate of 7.51% is approximately $4635.78. a-2.
To calculate the present value of an annual payment, we need to use the present value formula. The formula for the present value of an ordinary annuity is:
PV = PMT * (1 - (1 + r)^-n) / r
where:
PV = present value
PMT = annual payment
r = interest rate per period
n = number of periods
a-1. To calculate the present value of an annual payment of $590.00 you would receive for 11 years with an interest rate of 7.51%, we can substitute the values into the formula:
PV = 590 * (1 - (1 + 0.0751)^-11) / 0.0751
By evaluating this expression, we find that the present value is approximately $4635.78.
a-2. To calculate the present value of an annual payment of $472.00 you would receive for 20 years with an interest rate of 7.51%, we can use the same formula:
PV = 472 * (1 - (1 + 0.0751)^-20) / 0.0751
By evaluating this expression, we find that the present value is approximately $5667.17.
b-1. To calculate the present value of an annual payment of $590.00 you would receive for 11 years with an interest rate of 14.40%, we can again use the formula:
PV = 590 * (1 - (1 + 0.1440)^-11) / 0.1440
By evaluating this expression, we find that the present value is approximately $3315.60.
b-2. Finally, to calculate the present value of an annual payment of $472.00 you would receive for 20 years with an interest rate of 14.40%, we can once again apply the formula:
PV = 472 * (1 - (1 + 0.1440)^-20) / 0.1440
By evaluating this expression, we find that the present value is approximately $3727.99.
In summary:
a-1. The present value of an annual payment of $590.00 for 11 years at an interest rate of 7.51% is approximately $4635.78.
a-2. The present value of an annual payment of $472.00 for 20 years at an interest rate of 7.51% is approximately $5667.17.
b-1. The present value of an annual payment of $590.00 for 11 years at an interest rate of 14.40% is approximately $3315.60.
b-2. The present value of an annual payment of $472.00 for 20 years at an interest rate of 14.40% is approximately $3727.99.
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when a pr practitioner talks about the importance of communicating across both mac and pc platforms, what is he or she talking about?
A PR practitioner would typically stress the importance of communicating across both Mac and PC platforms to ensure that the message is accessible to as many people as possible and that there are no issues with compatibility or formatting.
Communication is one of the most critical components of PR. When communication is impaired, the entire PR campaign may fail. As a result, a PR practitioner must ensure that the message is accessible to as many people as possible, regardless of the platform they are using.
In the PR industry, there are two primary platforms for desktop computers: Mac and PC. Both platforms are popular among consumers, with Macs being more common among design and creative professionals and PCs being more common among corporate and business users.
As a result, it is critical to ensure that any messages or communication from a PR campaign are compatible with both platforms.
Compatibility is critical when it comes to formatting, applications, and software. Incompatibility issues can cause errors, which can result in messages being lost or not reaching their intended audience.
To prevent this from happening, PR practitioners must ensure that their communication is compatible with both Mac and PC platforms.
In conclusion, the importance of communicating across both Mac and PC platforms cannot be overstated. PR practitioners must ensure that their communication is accessible and compatible with both platforms to reach as many people as possible and to avoid any compatibility issues.
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Leadership course.
tell us about a leader you admire and why you admire that
leader.
Nelson Mandela's leadership is a shining example of integrity, courage, and visionary thinking. His ability to bring about change through peaceful means, his commitment to reconciliation, and his unwavering dedication to justice make him a truly admirable leader.
One leader I greatly admire is Nelson Mandela. His unwavering commitment to justice, reconciliation, and equality made him an extraordinary figure in history. Mandela's leadership was marked by his remarkable ability to forgive and unite people, even after spending 27 years in prison for his anti-apartheid activism.
One of the qualities that I admire most about Mandela is his vision and long-term perspective. Despite facing immense adversity and injustice, he remained focused on his vision of a democratic and inclusive South Africa. He believed in the power of reconciliation and worked tirelessly to dismantle the apartheid system, leading the country towards a peaceful transition.
Mandela's leadership style was characterized by his humility and ability to inspire others. He demonstrated empathy and compassion, seeking to understand different perspectives and build bridges between diverse communities. His ability to bring people together, despite deep-seated divisions, was truly remarkable.
Furthermore, Mandela's commitment to justice and equality was unwavering. He fought for the rights of all South Africans, regardless of their race or background. Mandela's perseverance and resilience in the face of adversity continue to inspire generations.
Overall, Nelson Mandela's leadership is a shining example of integrity, courage, and visionary thinking. His ability to bring about change through peaceful means, his commitment to reconciliation, and his unwavering dedication to justice make him a truly admirable leader. Mandela's legacy serves as a reminder of the power of leadership to bring about positive transformation and create a more just and inclusive world.
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CP13-2 Computing Ratios LO13-4, 13-5,13-6, 13-7 Refer to the financial statements and footnotes of Express given in Appendix C at the end of this book. Compute the following ratios for fiscal 2017. return on equity, return on assets, net profit margin, inventory turnover, current ratio, and the debt-to-equity ratio
To compute the requested ratios for Express in fiscal year 2017, we need to refer to the financial statements and footnotes provided in Appendix C.
However, since the specific financial statements and footnotes are not available in this context, I am unable to provide the exact ratios for the company.Return on equity (ROE) is calculated by dividing net income by shareholders' equity. It measures the profitability of a company's equity investment. A higher ROE indicates better profitability.Return on assets (ROA) is calculated by dividing net income by total assets. It measures the profitability of a company's assets. A higher ROA indicates better asset utilization.Net profit margin is calculated by dividing net income by total revenue. It measures the percentage of revenue that translates into profit. A higher net profit margin indicates better profitability.Inventory turnover is calculated by dividing cost of goods sold by average inventory. It measures how quickly a company sells its inventory. A higher inventory turnover ratio indicates efficient inventory management.
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1.The SPIN sales strategy involves _______________ questions.
a.Social, Public, International, and Numerical.
b.Spatial, Personal, Integrative, and Interactive
c.Situation, Problem, Implication, and Need payoff.
d.Sales, Profit, Identification, and Need satisfaction.
2.First impressions are important for setting the tone of a sales presentation.
a.True
b.False
3.The salesperson gives up a degree of presentation control for a greater understanding of the customer’s concerns.
a.True
b.False
4.What formula is used in formula presentations?
a.FABS
b.CARB
c.SPIN
d.AIDA
1. The correct answer for question 1 is c. Situation, Problem, Implication, and Need Payoff.
The SPIN sales strategy involves asking these types of questions to understand the customer's situation, identify any problems or challenges they may have, explore the implications of these problems, and ultimately present a solution that satisfies their needs.
2. The correct answer for question 2 is a. True.
First impressions are crucial in setting the tone of a sales presentation. The initial interaction between the salesperson and the customer can greatly influence their perception and engagement throughout the presentation. A positive first impression can build trust and credibility, while a negative one may lead to disinterest or skepticism.
3. The correct answer for question 3 is a. True.
The salesperson gives up a degree of presentation control in order to better understand the customer's concerns. By actively listening and allowing the customer to express their needs, preferences, and objections, the salesperson can tailor their presentation to address those concerns effectively. This approach helps build rapport, shows empathy, and increases the chances of closing the sale.
4. The correct answer for question 4 is d. AIDA.
The formula presentations typically follow the AIDA (Attention, Interest, Desire, and Action) formula. This approach aims to capture the customer's attention, generate interest in the product or service, create a desire or need for it, and ultimately prompt the customer to take action, such as making a purchase or signing up for a subscription.
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Yogi Maharaj, Inc. is one of the leading retailers of specialty donuts with stores in most major US cities. They recently changed from a price of $3.38 per dozen donuts, at which they sold 19,000 dozen donuts per week to a new, higher price of $4.63 per dozen donuts. At this new price point, Yogi has sold 15,400 donuts. Variable costs per dozen donuts are estimated at $0.56.
What is the optimal (profit maximizing) price for a dozen of Yogi's donuts?
The optimal (profit-maximizing) price for a dozen of Yogi's donuts is $2.38.
To determine the optimal (profit-maximizing) price for a dozen of Yogi's donuts, we need to consider the demand and costs associated with the product.
First, let's calculate the initial demand at the original price of $3.38 per dozen. Given that Yogi sold 19,000 dozen donuts per week at this price, the weekly demand is 19,000 dozen.
Next, we can calculate the price elasticity of demand using the formula:
Elasticity = Percentage change in quantity demanded / Percentage change in price.
Using the given information, we can find the percentage change in quantity demanded: (19,000 - 15,400) / 19,000 = 0.19
The percentage change in price is: (4.63 - 3.38) / 4.63 = 0.25
Plugging these values into the elasticity formula, we find the elasticity to be 0.76.
Now, we need to calculate the marginal cost. The variable cost per dozen donuts is given as $0.56.
To maximize profit, Yogi should set the price where marginal cost equals marginal revenue. Since marginal revenue is equal to the price in a perfectly competitive market, the optimal price can be calculated as:
Price = Variable cost per dozen donuts / (1 - 1/elasticity)
Substituting the values, we get:
Price = 0.56 / (1 - 1/0.76) = $2.38 per dozen donuts.
Therefore, the optimal (profit-maximizing) price for a dozen of Yogi's donuts is $2.38.
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businessoperations managementoperations management questions and answersproblem s7.20 janelle heinke, the owner of ha’peppas!, is considering a new oven in which to bake the firm’s signature dish, vegetarian pizza. oven type a can handle 20 pizzas an hour. the fixed costs associated with oven a are $20,000 and the variable costs are $2.00 per pizza. oven b is larger and can handle 40 pizzas an hour. the fixed costs associated
Question: Problem S7.20 Janelle Heinke, The Owner Of Ha’Peppas!, Is Considering A New Oven In Which To Bake The Firm’s Signature Dish, Vegetarian Pizza. Oven Type A Can Handle 20 Pizzas An Hour. The Fixed Costs Associated With Oven A Are $20,000 And The Variable Costs Are $2.00 Per Pizza. Oven B Is Larger And Can Handle 40 Pizzas An Hour. The Fixed Costs Associated
Problem S7.20 Janelle Heinke, the owner of Ha’Peppas!, is considering a new oven in which to bake the firm’s signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the variable costs are $2.00 per pizza. Oven B is larger and can handle 40 pizzas an hour. The fixed costs associated with oven B are $30,000 and the variable costs are $1.25 per pizza. The pizzas sell for $14 each.
a) What is the break-even point for each oven?
b) If the owner expects to sell 9,000 pizzas, which oven should she purchase?
c) If the owner expects to sell 12,000 pizzas, which oven should she purchase?
d) At what volume should Janelle switch ovens?
When the expected number of pizzas to be sold exceeds the break-even point for oven B, Janelle should switch to oven B.
In this case, Janelle should switch ovens when the expected number of pizzas to be sold is greater than or equal to
2,352.94
pizzas.
a) The
break-even point
for each oven can be calculated by finding the quantity of pizzas that need to be sold in order to cover the
total costs (fixed costs + variable costs)
and result in zero profit.
For oven A:
Fixed costs = $20,000
Variable costs per pizza = $2.00
Selling price per pizza = $14.00
To find the break-even point, we need to divide the fixed costs by the contribution margin per pizza, where the
contribution margin is the selling price minus the variable cost
per pizza.
Contribution margin per pizza = $14.00 - $2.00 = $12.00
Break-even point for oven A = $20,000 / $12.00 = 1,666.67 pizzas
For oven B:
Fixed costs = $30,000
Variable costs per pizza = $1.25
Selling price per pizza = $14.00
Contribution margin per pizza = $14.00 - $1.25 = $12.75
Break-even point for oven B = $30,000 / $12.75 = 2,352.94 pizzas
b) If the owner expects to sell 9,000 pizzas, she should purchase oven A because the break-even point for oven A is lower than 9,000 pizzas.
c) If the owner expects to sell 12,000 pizzas, she should purchase oven B because the break-even point for oven B is lower than 12,000 pizzas.
d) To determine the volume at which Janelle should switch ovens, we need to compare the break-even points for both of the ovens
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In case study "THE STATUS OF STRATEGIC PLANNING IN SMALL AND MEDIUM ENTERPRISES: PRIORITY OR AFTERTHOUGHT?" The title, research question and primary objective of the case study article have a relationship with each other. Explain how the title, research question, and, primary objective are linked by a ‘golden thread’. Use extracts from the article to support your analysis.
The title, research question, and primary objective of the case study article "THE STATUS OF STRATEGIC PLANNING IN SMALL AND MEDIUM ENTERPRISES: PRIORITY OR AFTERTHOUGHT?" are linked by a 'golden thread' that highlights the importance of investigating the status and significance of strategic planning in small and medium enterprises (SMEs).
The title of the case study article, "THE STATUS OF STRATEGIC PLANNING IN SMALL AND MEDIUM ENTERPRISES: PRIORITY OR AFTERTHOUGHT?", sets the stage for the research question and primary objective of the study. The research question, which is implied in the title, seeks to explore the current state of strategic planning in SMEs and whether it is given priority or considered an afterthought.
The primary objective of the case study article is to investigate the status and importance of strategic planning in SMEs. This objective is aligned with the research question and directly addresses the concerns raised in the title. The article aims to provide insights into whether SMEs prioritize strategic planning as a vital aspect of their business operations or whether it is neglected and considered less significant.
Supporting this analysis, the article mentions in its abstract, "The objective of this paper is to identify the status and significance of strategic planning in small and medium enterprises," which clearly indicates that the primary objective of the study is to assess the current status of strategic planning in SMEs. The title, research question, and primary objective form a 'golden thread' that connects the central theme of the study, emphasizing the importance of understanding the role of strategic planning in SMEs and whether it is given due priority or treated as an afterthought.
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Cyberhost Corporation's sales were $2,000,000 last year. If
sales grow at 7% per year, how large will they be 10 years
later?
Answer:
Explanation:
Using the formula for exponential growth, we can calculate the sales 10 years later:
Sales in 10 years = $2,000,000 × (1 + 0.07)^10
Sales in 10 years = $2,000,000 × 1.967151
Sales in 10 years = $3,934,302
Therefore, the sales 10 years later will be $3,934,302.
Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: Original Cost Labor per year Maintenance per year Salvage value Machine A $12,000 $2,200 $4,300 $2,400 Machine B $28,000 $4,800 $800 $7,500 He is told to assume that: 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year. The NPV for Machine A = (round your response to the nearest whole number and include a minus sign if necessary). The NPV for Machine B =$ (round your response to the nearest whole number and include a minus sign if necessary). Using the net present value as the basis of comparing the machines, Tim should recommend
Tim should recommend Machine A as it has a higher NPV compared to Machine B.
1. Calculate the annual cash flows for each machine:
- Machine A:
- Year 1: Original Cost + Labor per year + Maintenance per year - Salvage value
= $12,000 + $2,200 + $4,300 - $2,400
- Year 2: Original Cost + Labor per year + Maintenance per year - Salvage value
= $12,000 + $2,200 + $4,300 - $2,400
- Year 3: Original Cost + Labor per year + Maintenance per year - Salvage value
= $12,000 + $2,200 + $4,300 - $2,400
- Machine B:
- Year 1: Original Cost + Labor per year + Maintenance per year - Salvage value
= $28,000 + $4,800 + $800 - $7,500
- Year 2: Original Cost + Labor per year + Maintenance per year - Salvage value
= $28,000 + $4,800 + $800 - $7,500
- Year 3: Original Cost + Labor per year + Maintenance per year - Salvage value
= $28,000 + $4,800 + $800 - $7,500
2. Calculate the present value factor for each year:
- Year 1: 1 / (1 + 14%)^1
- Year 2: 1 / (1 + 14%)^2
- Year 3: 1 / (1 + 14%)^3
3. Calculate the present value of cash flows for each machine:
- Machine A:
- PV Year 1 = Year 1 cash flow * Present value factor for Year 1
- PV Year 2 = Year 2 cash flow * Present value factor for Year 2
- PV Year 3 = Year 3 cash flow * Present value factor for Year 3
- Machine B:
- PV Year 1 = Year 1 cash flow * Present value factor for Year 1
- PV Year 2 = Year 2 cash flow * Present value factor for Year 2
- PV Year 3 = Year 3 cash flow * Present value factor for Year 3
4. Calculate the Net Present Value (NPV) for each machine:
- Machine A: NPV = Sum of present values of cash flows for Machine A
- Machine B: NPV = Sum of present values of cash flows for Machine B
5. Round the NPV for each machine to the nearest whole number and include a minus sign if necessary.
6. Compare the NPVs for Machine A and Machine B. Since the NPV for Machine A is higher, Tim should recommend Machine A as the better option based on net present value.
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Community Engagement Plan: Identify local, state, and national
organizations recommended to be joined or supported.
When developing a Community Engagement Plan, it is important to identify local, state, and national organizations that can be joined or supported. These organizations can provide valuable resources, expertise, and networks to enhance community engagement efforts.
1. Local organizations: Look for community-based groups that are active in your area. For example, a local neighborhood association or a nonprofit organization focused on a specific cause, such as environmental conservation or youth development. These organizations often have a deep understanding of the community's needs and can provide valuable insights and connections.
2. State organizations: Research state-level agencies or associations that align with your community engagement goals. For instance, a state department of education or a state-wide nonprofit organization focused on healthcare. These organizations can offer expertise, funding opportunities, and connections to other communities or initiatives within the state.
3. National organizations: Consider national organizations that have a broader reach and can offer resources and support on a larger scale. For example, a national nonprofit organization focused on poverty alleviation or a professional association related to your field of interest. These organizations can provide research, best practices, and networking opportunities with other communities across the country.
Remember, the key is to choose organizations that align with your community engagement goals and can provide meaningful support. Conduct thorough research, attend meetings or events, and establish relationships with these organizations to maximize the impact of your community engagement efforts.
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3) (6 points) Suppose there are two types of persons: high and low ability. A training that costs $13,000 for a high ability person costs $15,000 for a low ability person. Firms wish to use training as a screening device. If the firms intend to pay $30,000 for a person without the training completion document, and $K for a person with the document, find the range K must be in for the training to be used as a screening device.
The range of values for K in which the training can be used as a screening device is 43,000 ≤ K < 45,000.
To determine the range of values for K in which the training can be used as a screening device, we need to consider the costs involved.
Let's assume the firms intend to pay $30,000 for a person without the training completion document. Now, for a high-ability person, the training costs $13,000, and for a low-ability person, it costs $15,000.
If the firms are willing to pay $K for a person with the training completion document, we can set up the following inequalities:
For a high-ability person:
K - 13,000 ≥ 30,000
For a low-ability person:
K - 15,000 < 30,000
Simplifying these inequalities, we find:
K ≥ 43,000 for a high-ability person
K < 45,000 for a low-ability person
Thus, the range of values for K in which the training can be used as a screening device is 43,000 ≤ K < 45,000.
In other words, if the firms are willing to pay a person with the training completion document between $43,000 and $45,000, the training can be used as a screening device.
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What activities or functions do all managers perform regularly? How do these functions apply to the four levels of management found in most organizations?
Managers perform various activities and functions regularly to ensure the efficient and effective operation of an organization. These functions are applicable to the four levels of management found in most organizations, including top-level, middle-level, first-line, and team managers.
1. Planning: Managers engage in planning activities, which involve setting goals, determining the best course of action, and developing strategies to achieve those goals. This function applies to all levels of management. For example, top-level managers develop strategic plans for the entire organization, while first-line managers develop operational plans for specific departments or teams.
2. Organizing: Managers are responsible for organizing resources, such as human resources, materials, and equipment, to achieve organizational objectives. This function involves assigning tasks, establishing relationships, and creating a structure that promotes efficiency and coordination. All levels of managers are involved in organizing. For instance, top-level managers may establish the organizational structure, while middle-level managers allocate resources to different departments.
3. Leading: Managers play a crucial role in leading and motivating employees to achieve organizational goals. They provide guidance, direction, and support to their subordinates, fostering a positive work environment. This function applies to all levels of management. For example, top-level managers may inspire employees through their vision and strategic decisions, while first-line managers directly supervise and motivate their team members.
4. Controlling: Managers are responsible for monitoring and evaluating performance to ensure that goals are being achieved. This function involves establishing performance standards, measuring actual performance, and taking corrective actions when necessary. All levels of managers engage in controlling. For instance, top-level managers may use financial reports to assess the overall performance of the organization, while first-line managers may monitor employee productivity on a daily basis.
These functions apply differently to the four levels of management:
- Top-level managers primarily focus on planning and organizing, as they are responsible for setting the overall direction and structure of the organization.
- Middle-level managers are involved in all four functions, as they translate the strategic plans into specific actions, coordinate different departments, and communicate with both top-level and first-line managers.
- First-line managers primarily engage in organizing and leading functions, as they directly supervise and motivate employees to achieve operational goals.
- Team managers, who are responsible for managing a specific team or project, may focus more on leading and controlling functions, as they work closely with their team members and monitor their progress.
In summary, managers perform activities such as planning, organizing, leading, and controlling regularly. These functions are applicable to the different levels of management and contribute to the overall success of an organization.
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Callie, Inc., a retailer, accepts payment through credit cards. During August, credit card sales amounted to $130,000. The processor charges a 2% fee. What is the correct journal entry or entries for credit card sales using the gross method?
The correct journal entry for credit card sales using the gross method would involve recording both the sales revenue and the credit card fee expense. Here's the journal entry:
1. Record the sales revenue:
Accounts Receivable/Revenue - $130,000
Sales - $130,000
2. Record the credit card fee expense:
Credit Card Fee Expense - $2,600
Accounts Receivable/Revenue - $2,600
When a retailer, like Callie, Inc., accepts payment through credit cards, it incurs a fee charged by the processor. In this case, the processor charges a 2% fee on the credit card sales of $130,000.
To record the credit card sales, you would debit the Accounts Receivable/Revenue account by $130,000, as the company has earned this revenue. Then, credit the Sales account for the same amount, recognizing the increase in sales.
Next, to account for the credit card fee expense, you would debit the Credit Card Fee Expense account for $2,600, which is 2% of $130,000. Finally, credit the Accounts Receivable/Revenue account by $2,600, reducing the amount of revenue earned due to the fee charged by the processor.
The net effect of these journal entries is that the company records the full credit card sales amount as revenue but also recognizes the expense incurred from the credit card fee.
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Suppose the face value of a bond is $5,000 and the current interest rate is 7%. What is the price of the bond if it is a zerocoupon bond? $4.367.19 $4,672.90 $4.996.50 $5,350.00
We can use the formula: Price = Face Value / (1 + Interest Rate)^Number of Periods. The price of the zero-coupon bond would be approximately $4,672.90.
To calculate the price of a zero-coupon bond, we can use the formula:
Price = Face Value / (1 + Interest Rate)^Number of Periods
In this case, the face value of the bond is $5,000 and the current interest rate is 7%. Since it is a zero-coupon bond, we assume there are no coupon payments and the bond is held until maturity.
Let's assume the bond has a maturity of 1 year, so the number of periods is 1.
Plugging the values into the formula:
Price = $5,000 / (1 + 0.07)^1
Price = $5,000 / 1.07
Price ≈ $4,672.90
Therefore, the price of the zero-coupon bond would be approximately $4,672.90.
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As the manager of a fast paced, team-driven division you depend on teams to get things done. You need to fill a position on one of your teams. To get the best team members you should NOT focus on which of the following considerations?
a KSAs
b Leadership skills
c Conflict resolution skills
d Location
a. the necessary knowledge, skills, and abilities required for the position and who can contribute to the team's goals and objectives. b. the ability to motivate others, and effective communication skills. c. a team of talented individuals who can contribute to the success of your division, regardless of their physical location.
To get the best team members, you should NOT focus on d) Location.
When it comes to building effective teams, the location of team members should not be a primary consideration. While physical proximity can have some advantages, such as easier communication and coordination, it should not be the main factor in selecting team members.
Instead, focusing on the following considerations would be more beneficial:
a) KSAs (Knowledge, Skills, and Abilities): The most important factor in selecting team members is their KSAs. Look for individuals who possess the necessary knowledge, skills, and abilities required for the position and who can contribute to the team's goals and objectives.
b) Leadership skills: Leadership skills are crucial for team members, even if they are not in formal leadership positions. Look for individuals who demonstrate qualities such as initiative, problem-solving abilities, the ability to motivate others, and effective communication skills.
c) Conflict resolution skills: Conflict can arise within teams, and having team members with strong conflict resolution skills is important. Look for individuals who can effectively manage conflicts, foster collaboration, and promote a positive team environment.
While location can sometimes be a practical consideration, it should not be the main focus when selecting team members. In today's interconnected world, remote work and virtual collaboration are increasingly common, allowing teams to work effectively across different locations. By prioritizing KSAs, leadership skills, and conflict resolution skills, you can assemble a team of talented individuals who can contribute to the success of your division, regardless of their physical location.
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Come-Clean Corporation produces a variety of cleaning compounds and solutions for both industrial and household use. While most of its products are processed independently, a few are related, such as the company's Grit 337 and its Sparkle silver polish.
Grit 337 is a coarse cleaning powder with many industrial uses. It costs $1.60 a pound to make, and it has a selling price of $2.00 a pound. A small portion of the annual production of Grit 337 is retained in the factory for further processing. It is combined with several other ingredients to form a paste that is marketed as Sparkle silver polish. The silver polish sells for $4.00 per jar.
This further processing requires one-fourth pound of Grit 337 per jar of silver polish. The additional direct variable costs involved in the processing of a jar of silver polish are:
Other ingredients $ 0.65
Direct labor $1.40
Total direct cost $ 2.05
Overhead costs associated with processing the silver polish are:
Variable manufacturing overhead cost 25% of direct labor cost
Fixed manufacturing overhead cost (per month)
-Production supervisor $3,000
-Depreciation of mixing equipment $ 1,400
The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is special-purpose equipment acquired specifically to produce the silver polish. It can produce up to 15,000 jars of polish per month. Its resale value is negligible and it does not wear out through use.
Advertising costs for the silver polish total $4,000 per month. Variable selling costs associated with the silver polish are 7.5% of sales. Due to a recent decline in the demand for silver polish, the company is wondering whether its continued production is advisable. The sales manager feels that it would be more profitable to sell all of the Grit 337 as a cleaning powder.
Use the information above to answer the following questions:
1. How much incremental revenue does the company earn per jar of polish by further processing Grit 337 rather than selling it as a cleaning powder?
2. How much incremental contribution margin does the company earn per jar of polish by further processing Grit 337 rather than selling it as a cleaning powder? # How many jars of silver polish must be sold each month to exactly offset the avoidable fixed costs incurred to produce and sell the polish? Explain.
3. If the company sells 9,000 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling is as a cleaning powder?
4. If the company sells 11,500 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling is as a cleaning powder?
1. By further processing Grit 337 instead of selling it as a cleaning powder, the company earns an incremental revenue of $3.50 per jar of polish and an incremental contribution margin of $0.35 per jar.
2. To offset the avoidable fixed costs, they need to sell at least 12,572 jars of polish each month.
3.When selling 9,000 jars, there is a financial advantage of $4,500, and
4. When selling 11,500 jars, the advantage increases to $5,750.
1. The incremental revenue earned per jar of polish by further processing Grit 337 rather than selling it as a cleaning powder can be calculated as follows:
Selling price of silver polish = $4.00 per jar
Selling price of Grit 337 as cleaning powder = $2.00 per pound
To find the incremental revenue, we need to subtract the revenue from selling Grit 337 as a cleaning powder from the revenue generated by selling the silver polish.
Weight of Grit 337 required per jar of polish = 1/4 pound
Revenue from selling Grit 337 as cleaning powder = Selling price of Grit 337 * Weight of Grit 337 required per jar of polish
= $2.00 * 1/4
= $0.50
Incremental revenue per jar of polish = Selling price of silver polish - Revenue from selling Grit 337 as cleaning powder
= $4.00 - $0.50
= $3.50
Therefore, the company earns an incremental revenue of $3.50 per jar of polish by further processing Grit 337 instead of selling it as a cleaning powder.
2. The incremental contribution margin earned per jar of polish by further processing Grit 337 rather than selling it as a cleaning powder can be calculated as follows:
The contribution margin is the difference between the selling price and the total direct costs of producing the silver polish.
Total direct costs of producing the silver polish = Cost of Grit 337 + Other ingredients + Direct labor
= $1.60 + $0.65 + $1.40
= $3.65
Incremental contribution margin per jar of polish = Selling price of silver polish - Total direct costs of producing the silver polish
= $4.00 - $3.65
= $0.35
Therefore, the company earns an incremental contribution margin of $0.35 per jar of polish by further processing Grit 337 instead of selling it as a cleaning powder.
3. The number of jars of silver polish that must be sold each month to offset the avoidable fixed costs incurred to produce and sell the polish can be calculated as follows:
Fixed manufacturing overhead costs per month = Production supervisor cost + Depreciation of mixing equipment
= $3,000 + $1,400
= $4,400
The avoidable fixed costs are the fixed manufacturing overhead costs associated with producing and selling the silver polish.
To calculate the number of jars, we need to divide the avoidable fixed costs by the incremental contribution margin per jar.
Number of jars = Avoidable fixed costs / Incremental contribution margin per jar
= $4,400 / $0.35
= 12,571.43 jars (rounded up to the nearest whole number)
Therefore, the company must sell at least 12,572 jars of silver polish each month to exactly offset the avoidable fixed costs incurred to produce and sell the polish.
4. To calculate the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling it as a cleaning powder when selling 9,000 jars of polish, we need to compare the revenues and costs.
Revenue from selling 9,000 jars of polish = Selling price of silver polish * Number of jars sold
= $4.00 * 9,000
= $36,000
Incremental revenue from further processing Grit 337 = Incremental revenue per jar of polish * Number of jars sold
= $3.50 * 9,000
= $31,500
Financial advantage (disadvantage) = Revenue from selling 9,000 jars of polish - Incremental revenue from further processing Grit 337
= $36,000 - $31,500
= $4,500
Therefore, if the company sells 9,000 jars of polish, there is a financial advantage of $4,500 in choosing to further process Grit 337 rather than selling it as a cleaning powder.
To calculate the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling it as a cleaning powder when selling 11,500 jars of polish, we can follow the same steps.
Revenue from selling 11,500 jars of polish = Selling price of silver polish * Number of jars sold
= $4.00 * 11,500
= $46,000
Incremental revenue from further processing Grit 337 = Incremental revenue per jar of polish * Number of jars sold
= $3.50 * 11,500
= $40,250
Financial advantage (disadvantage) = Revenue from selling 11,500 jars of polish - Incremental revenue from further processing Grit 337
= $46,000 - $40,250
= $5,750
Therefore, if the company sells 11,500 jars of polish, there is a financial advantage of $5,750 in choosing to further process Grit 337 rather than selling it as a cleaning powder.
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a certain investor wants an 11% return on investment from any real estate investment. a property priced at $360,000 has gross income of $60,000 and expenses of $22,000. approximately how much too high or too low is the price of this property for the investor to obtain her desired return exactly?
The property is priced about 4.20% too high for the investor to obtain her desired return exactly.
An investor wants an 11% return on investment from any real estate investment.The property is priced at $360,000.Gross Income of the property is $60,000Expenses of the property are $22,000We have to determine approximately how much too high or too low is the price of this property for the investor to obtain her desired return exactly.
Net Operating Income = Gross Income - Expenses= $60,000 - $22,000= $38,000Now, using the formula,Expected Rate of Return = (Net Operating Income / Property Value) * 10011 = (38,000 / Property Value) * 100Property Value = (38,000 / 11) * 100= $345,455.45This is the property value for an 11% return on investment.
As per the question, the property is priced at $360,000.Using the formula,Too High or Too Low = [(Actual Price - Expected Price) / Expected Price] * 100= [(360,000 - 345,455.45) / 345,455.45] * 100= 4.20%The property is priced about 4.20% too high for the investor to obtain her desired return exactly.
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a. Complete an amortization schedule for a \( \$ 36,000 \) loan to be repaid in equal instaliments at the end of each of the next three years. The Interest rate is \( 10 \% \) compounded annually. Rou
Calculation of Amortization Schedule:
Loan Amount = $36,000 Number of years = 3 Interest Rate = 10%
Calculate annual payment A = Payment × PVIFA(10%,3) Using the formula of Present Value Interest Factor Annuity PVIFA(10%,3) = 2.4869A = Payment × PVIFA(10%,3) Annual Payment, A = $36,000/2.4869Annual Payment, A = $14,470.52Step 2: Calculation of interest and principal amount and remaining balance The table for amortization schedule is shown below Hence, the loan payment of $36,000 with an interest rate of 10% and a period of 3 years, the annual payment required is $14,470.52.
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Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs Standard Quantity
or Hours per Unit of Output Standard Price or Rate
Direct materials 8.30 litres $7.90 per litre
Direct labour 0.40 hours $30.70per hour
Variable manufacturing .40 hours $ 6.80 per hour
overhead
The company has reported the following actual results for the product for September:
Actual output 10,500 units
Raw materials purchased 89,900 litres
The actual cost of raw materials purchased $729,500
Raw materials used in production 87,180 litres
Actual direct labour-hours 3,760 hours
Actual direct labour of cost $119,302
Actual variable overhead of cost $20,514
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead spending variance for September.
f. Compute the variable overhead efficiency variance for September.
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
a. Materials price variance
b. Materials quantity variance
c. Labor rate variance
d. Labor efficiency variance
e. variable overhead spending variance
f. Variable overhead efficiency variance
a. Materials price variance = ($7.90 - Actual price per litre) * 87,180 litres
b. Materials quantity variance = (8.30 litres per unit - Actual quantity used) * $7.90 per litre
c. Labor rate variance = ($30.70 - Actual rate per hour) * 3,760 hours
d. Labor efficiency variance = (0.40 hours per unit - Actual hours worked) * $30.70 per hour
e. Variable overhead spending variance = $20,514 - ($6.80 per hour * 3,760 hours)
f. Variable overhead efficiency variance = (0.40 hours per unit - Actual hours worked) * $6.80 per hour
a. Materials price variance:
To compute the materials price variance, we need to compare the actual cost of raw materials purchased with the standard cost of raw materials for the actual quantity used.
Actual quantity used: 87,180 litres
Standard price per litre: $7.90
Materials price variance = (Standard price per litre - Actual price per litre) * Actual quantity used
In this case, the actual cost of raw materials purchased is $729,500, and the actual quantity used is 87,180 litres. Therefore,
Materials price variance = ($7.90 - Actual price per litre) * 87,180 litres
b. Materials quantity variance:
The materials quantity variance measures the difference between the actual quantity used and the standard quantity allowed for the actual output.
Standard quantity allowed: 8.30 litres per unit
Actual output: 10,500 units
Materials quantity variance = (Standard quantity allowed - Actual quantity used) * Standard price per litre
In this case, the standard quantity allowed is 8.30 litres per unit, and the actual quantity used is 87,180 litres. Therefore,
Materials quantity variance = (8.30 litres per unit - Actual quantity used) * $7.90 per litre
c. Labor rate variance:
The labor rate variance compares the actual rate paid per hour for direct labor with the standard rate per hour.
Actual direct labor-hours: 3,760 hours
Standard rate per hour: $30.70
Labor rate variance = (Standard rate per hour - Actual rate per hour) * Actual direct labor-hours
In this case, the actual rate paid per hour for direct labor is $119,302, and the actual direct labor-hours is 3,760 hours. Therefore,
Labor rate variance = ($30.70 - Actual rate per hour) * 3,760 hours
d. Labor efficiency variance:
The labor efficiency variance measures the difference between the actual hours worked and the standard hours allowed for the actual output.
Standard hours allowed: 0.40 hours per unit
Actual output: 10,500 units
Labor efficiency variance = (Standard hours allowed - Actual hours worked) * Standard rate per hour
In this case, the standard hours allowed is 0.40 hours per unit, and the actual hours worked is 3,760 hours. Therefore,
Labor efficiency variance = (0.40 hours per unit - Actual hours worked) * $30.70 per hour
e. Variable overhead spending variance:
The variable overhead spending variance compares the actual variable overhead cost incurred with the standard variable overhead cost allowed for the actual output.
Actual output: 10,500 units
Standard variable overhead rate: $6.80 per hour
Actual variable overhead cost: $20,514
Variable overhead spending variance = Actual variable overhead cost - (Standard variable overhead rate * Actual hours worked)
In this case, the actual variable overhead cost is $20,514, and the actual hours worked is 3,760 hours. Therefore,
Variable overhead spending variance = $20,514 - ($6.80 per hour * 3,760 hours)
f. Variable overhead efficiency variance:
The variable overhead efficiency variance measures the difference between the actual hours worked and the standard hours allowed for the actual output, multiplied by the standard variable overhead rate.
Standard hours allowed: 0.40 hours per unit
Actual output: 10,500 units
Standard variable overhead rate: $6.80 per hour
Variable overhead efficiency variance = (Standard hours allowed - Actual hours worked) * Standard variable overhead rate
In this case, the standard hours allowed is 0.40 hours per unit, and the actual hours worked is 3,760 hours. Therefore,
Variable overhead efficiency variance = (0.40 hours per unit - Actual hours worked) * $6.80 per hour
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