The addition to retained earnings for Nataro, Incorporated is $119,200
To calculate the addition to retained earnings, we need to start with the net income, subtract dividends, and account for taxes.
Net income can be calculated as follows:
Net Income = Sales - Costs - Depreciation Expense - Interest Expense
Net Income = $666,000 - $328,000 - $72,000 - $46,000
Net Income = $220,000
Next, we need to calculate the tax expense:
Tax Expense = Net Income * Tax Rate
Tax Expense = $220,000 * 0.24
Tax Expense = $52,800
Now we can calculate the addition to retained earnings:
Addition to Retained Earnings = Net Income - Tax Expense - Dividends
Addition to Retained Earnings = $220,000 - $52,800 - $48,000
Addition to Retained Earnings = $119,200
Therefore, the addition to retained earnings for Nataro, Incorporated is $119,200.
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As transitory or value-irrelevant components become a larger part of a firm’s reported earnings, which of the following effects would you not expect to witness?
Multiple Choice
. Earnings are a less reliable indicator of the firm’s fundamental value.
. Reported earnings become a less reliable indicator of the company’s long-run sustainable cash flows.
. The quality of those reported earnings is eroded.
. The firm’s stock price rises in the year such components are reported proportionate to their impact on income.
As transitory or value-irrelevant components become a larger part of a firm's reported earnings, we would expect certain effects to occur. These effects include a decrease in the reliability of earnings as an indicator of the firm's fundamental value, a decrease in the reliability of reported earnings as an indicator of the company's long-run sustainable cash flows, and a deterioration in the quality of reported earnings.
However, we would not expect the firm's stock price to rise in proportion to the impact of these components on income. This is because transitory or value-irrelevant components are not considered to be sustainable or indicative of the company's ongoing performance or prospects. Investors generally value companies based on their ability to generate consistent and sustainable earnings, so the presence of non-recurring or value-irrelevant items may not lead to an increase in stock price.
In summary, as transitory or value-irrelevant components become a larger part of a firm's reported earnings, we can expect a decrease in the reliability and quality of earnings, but we would not anticipate a proportional increase in the firm's stock price.
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You purchased a stock at a price of $42.90. The stock paid a dividend of $1.59 per share and the stock price at the end of the year is $48.55. What was the dividend yield? Multiple Choice 4.45% 13.17%
The dividend yield for the stock is 3.70%.
The dividend yield is calculated by dividing the annual dividend per share by the stock price at the time of purchase and expressing it as a percentage.
Dividend Yield = (Annual Dividend / Stock Price) * 100
Given:
Purchase Price = $42.90
Dividend per Share = $1.59
End of Year Stock Price = $48.55
First, we need to calculate the annual dividend by multiplying the dividend per share by the number of shares held in a year:
Annual Dividend = Dividend per Share * 1
Dividend Yield = (Annual Dividend / Purchase Price) * 100
Dividend Yield = ($1.59 / $42.90) * 100
Dividend Yield = 3.70%
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A payment from a business owner to help pay the telephone bill is called:
A. Capital
B. Cheque
C. Withdrawal
D. Equity
E. Dividend
A payment made by a business owner to help pay the phone bill is known as A. capital.
Capital is a broad phrase that can refer to anything that provides value or advantage to its owners, such as a factory and its machinery, intellectual property such as patents, or a company's or individual's financial assets.
While money can be considered capital, it is most commonly linked with cash that is put to work for productive or investing purposes. In general, capital is an important component of running a firm and financing its future expansion.
Business capital might come from the company's operations or via debt or equity funding.
Businesses of all sizes often focus on three types of capital when budgeting: working capital, equity capital, and loan capital. A financial organization identifies trading capital as a fourth component.
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Identify the answer that BEST completes the statement or answers the question. Pomona Inc. uses the aging method in accounting for uncollectible accounts. On March 31, the company wrote off a $2,600 account. What effect does the write-off have on the company's financial statements?
Select one:
a. Increases and decreases assets by the same amount of $2,600.
b. Decreases bad debt expense and total assets by $2,600.
c. Increases total assets and decreases shareholders' equity by $2,600.
d. Decreases shareholders' equity and total assets by $2,600.
The write-off has no effect on total assets but decreases net income and shareholders' equity by $2,600.
Accounts receivable is the amount of money a company is owed by customers for products or services they have purchased on credit. When a customer defaults on payment, the company may decide to write off the debt as uncollectible. This means removing the debt from the accounts receivable balance. Pomona Inc. uses the aging method in accounting for uncollectible accounts. This means that they estimate the amount of bad debt based on the age of each accounts receivable account.When a company writes off an account, it has no effect on the total assets. However, it does decrease net income and shareholders' equity by the amount of the write-off. Therefore, the write-off decreases shareholders' equity and total assets by $2,600.
Investors' value is the sum that the proprietors of an organization have put resources into their business. This incorporates the cash they've straightforwardly contributed and the amassing of pay the organization has procured and that has been reinvested since commencement.
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The ................. of government securities in the open market will increase money ........ of required reserve ratio will decrease money supplies supplies and A) sale; decreases (B)) sale; increases C) purchase; decreases D) purchase; increases
The purchase of government securities in the open market will increase money supplies of required reserve ratio will decrease money supplies. Hence, the correct option is D) purchase; increases.
When the Federal Reserve purchases the securities, it pays for them by creating credit entries in the accounts of the banks that have sold the securities. The banks now have greater reserves than they need to satisfy their reserve requirements. They can use these excess reserves to make loans or to purchase additional securities, which, in turn, adds more to banks.
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Interest rates adjusted for the effects of inflation are real variables, inflation is a nominal variable. and inflation are real variables. and inflation are nominal variables are nominal variables, inflation is a real variable. Suppose a country has only a sales tax. Now suppose it replaces the sales tax with an income tax that includes a tax on interest income. This would make equilibrium Interest rates fall and the equilibrium quantity of loanable Funds rise. interest rates and the equilibrium quantity of loanable funds fall. interest rates and the equilibrium quantity of loanable funds rise. interest rates rise and the equilibrium quantity of loanable funds fall Which of the following events could explain an increase in interest rates together with a decrease in investment? The government instituted an investment tax credit. None of the others is correct The government reduced the tax rate on savings. The government went from surplus to deficit.
An increase in interest rates together with a decrease in investment could be explained by the government reducing the tax rate on savings.
What could explain a decrease in investment coupled with higher interest rates?
When the government reduces the tax rate on savings, it incentivizes individuals and businesses to save more of their income. As a result, the supply of loanable funds increases, leading to a decrease in the equilibrium quantity of loanable funds and an increase in interest rates.
Higher interest rates make borrowing more expensive, discouraging investment and reducing the quantity of funds demanded for investment purposes. This decrease in investment, coupled with the higher interest rates, can be attributed to the government's action of reducing the tax rate on savings.
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Hairs to You provides special-occasion haircuts and generates average revenue of $56 per customer. The salon's fixed costs are $50,000 per year, which include rent, utilities and magazine subscriptions. Its variable costs are $22.40 per customer. Target operating profit for the year is $93,000. Do not enter dollar signs or commas in the input boxes. a) Calculate the revenues needed to obtain the target operating profit. Round the Contribution Margin ratio to 2 decimal places. Round all other answers to the nearest whole number. CM ratio: Required CM: $ Revenue: $ b) How many haircuts have to be provided to earn an operating profit of $65,000? To break-even? Round up to the nearest whole unit. BEP: Haircuts to yield $65,000: % c) Calculate the operating profit if 2,900 haircuts are provided. Round to the nearest whole number. Operating Profit: $
a) Calculation of revenues needed to obtain the target operating profit:Contribution Margin (CM) = Sales - Variable CostsSales = Revenue = $56 per customerVariable Costs = $22.40 per customerCM ratio = (Revenue - Variable Cost) / Revenue=
($56 - $22.4) / $56= 0.6 or 60%Required CM = Target Operating Profit / CM ratio= $93,000 / 0.6= $155,000Total revenue needed to obtain the target operating profit = Total Fixed Cost + Required CM= $50,000 + $155,000= $205,000Therefore, the revenues needed to obtain the target operating profit is $205,000.
b) Calculation of Haircuts to yield operating profit of $65,000:BEP = Fixed Costs / CM per unit= $50,000 / ($56 - $22.4)= $50,000 / $33.6= 1,488 haircutsTo earn an operating profit of $65,000:Operating profit = Fixed Cost + (Unit CM x Q)Where Q is the number of haircuts.Q = (Fixed Costs + Operating Profit) / Unit CM= ($50,000 + $65,000) / ($56 - $22.4)= 3,750 haircuts
Therefore, the haircuts needed to yield an operating profit of $65,000 is 3,750.To break-even, the haircuts needed:BEP = Fixed Costs / CM per unit= $50,000 / ($56 - $22.4)= 1,488 haircuts .Therefore, the haircuts needed to break-even is 1,488.
c) Calculation of Operating Profit:If 2,900 haircuts are provided, then the operating profit is:Operating profit = Fixed Costs + (Unit CM x Q)= $50,000 + ($56 - $22.4) x 2,900= $50,000 + $65,360= $115,360Therefore, the operating profit is $115,360 if 2,900 haircuts are provided.
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If a person’s real income increases by 2% while the price level increases by 4%, one can conclude that the person’s nominal income has, approximately:
a- Increased by about 2%
b- Increased by about 4%
c- Decreased by about 2%
d- Increased by about 6%
The person’s nominal income has, approximately decreased by about 2%. Option c is correct.
When a person's real income increases by 2% but the price level increases by 4%, it means that the purchasing power of their income has decreased. This is because the increase in prices has outpaced the increase in income. To maintain the same level of purchasing power, the person's nominal income would need to increase by the same percentage as the increase in the price level, which is 4%.
Since the person's nominal income has only increased by 2%, it has not kept pace with the price level, resulting in a decrease in real income by approximately 2%. Therefore, the correct answer is c- Decreased by about 2%.
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Riley Inc has asked for your assistance in preparing a cash budget for the month of March 2021 and has provided projected sales revenue data below: Projected sales: January 2021 $144,000 February 2021
The estimated cash receipts for Riley Inc. in March 2021 is $158,400 based on the projected sales data of $144,000 for January and $180,000 for February, assuming that all sales are made on credit with a 60-day collection period.
Riley Inc, a retail store, has requested your assistance in preparing a cash budget for the month of March 2021. The store has provided you with the following data regarding their projected sales revenue:January 2021: $144,000February 2021: $180,000The first step in preparing the cash budget is to estimate cash receipts. A cash budget is an essential tool that a company can use to manage its finances and plan for the future. The budget will assist Riley Inc. in planning its cash flows and making informed business decisions.Based on the projected sales data, we can estimate the cash receipts for March 2021. Since Riley Inc. has not provided any other information, we will assume that all sales are made on credit, and the company has a 60-day collection period. In other words, 60% of sales will be collected in the month of sale, and the remaining 40% will be collected in the following month.To determine the estimated cash receipts for March 2021, we must first determine the sales for January and February that will be collected in March.60% of January sales: $86,400 ($144,000 x 0.6)40% of February sales: $72,000 ($180,000 x 0.4)Total estimated cash receipts for March 2021: $158,400 ($86,400 + $72,000)In conclusion, the estimated cash receipts for Riley Inc. in March 2021 is $158,400 based on the projected sales data of $144,000 for January and $180,000 for February, assuming that all sales are made on credit with a 60-day collection period.
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The statement that "inflation is always and everywhere a
fiscal phenomenon" is one of the most famous statements in
economics it was made by
Paul Krugman
Jerome Powell
Thomas Sargent
Robert Solow David Gabel
The statement that "inflation is always and everywhere a fiscal phenomenon" is one of the most famous statements in economics.
The person who made this statement is Milton Friedman. Friedman was a Nobel Memorial Prize-winning economist and a leading advocate of monetarism, the view that a stable and low inflation rate is necessary for economic growth, employment, and prosperity. His statement is often interpreted to mean that inflation is primarily caused by monetary factors such as changes in the money supply, rather than real factors such as changes in the supply and demand for goods and services.
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On April 1, 20X5, Marsh Ltd. purchased 25% of the outstanding common shares of King Corp. for $ 6,000,000. The carrying value of King’s net assets was $ 16,000,000, an amount that also approximated their fair value. For the year ended December 31, 20X5, King reported net income of $ 800,000 and Marsh reported net income of $ 10,200,000. King paid dividends of $ 50,000 in each of the first two quarters of 20X5, and $ 75,000 in each of the last two quarters. There were no intercompany transactions during the year. Both companies generate their incomes fairly evenly throughout the year. Assume no goodwill impairment. Required Compute the amounts that would appear on Marsh’s 20X5 SCI as income from investment in King, and the balance of the investment account on the December 31, 20X5, statement of financial position, assuming that Marsh uses: 1. The cost method 2. The equity method.
Please provide a complete, accurate and detailed answer.
1. The cost method Cost method: Under the cost method, Marsh would recognize income only when dividends are declared by King.
Since Marsh owns 25% of King Corp, the dividends declared would be $50,000 in the first two quarters and $75,000 in the last two quarters. Hence, the total dividend declared by King Corp. for the year would be:$50,000 × 2 + $75,000 × 2 = $250,000.
Therefore, Marsh would recognize income of $250,000 for 20X5. On the December 31, 20X5 statement of financial position, Marsh's investment in King would be shown at cost of $6,000,000.
2. The equity method Equity method: Under the equity method, Marsh would recognize its share of King's earnings on its SCI. Marsh's share of King's net income of $800,000 would be $200,000 (25% of $800,000).
Therefore, Marsh would recognize $200,000 as its share of income from King for 20X5.
On the December 31, 20X5 statement of financial position, Marsh's investment in King would be shown at its carrying value, which is $6,000,000 plus 25% of King's net income of $800,000, or $6,200,000 (i.e., $6,000,000 + $200,000).
Hence, the amounts that would appear on Marsh’s 20X5 SCI as income from investment in King are $250,000 for the cost method and $200,000 for the equity method.
The balance of the investment account on the December 31, 20X5 statement of financial position are $6,000,000 for the cost method and $6,200,000 for the equity method.
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T/F tiger woods is paid high endorsement fees by companies because his marginal revenue product is very high
True. Tiger Woods is paid high endorsement fees by companies because his marginal revenue product is very high.
Marginal revenue product (MRP) is the additional revenue earned by the company when it hires an additional unit of a resource such as labor, capital, or land. It measures the value of each additional unit of the resource in terms of its contribution to the firm's revenue. Tiger Woods is one of the most famous golfers in the world, and his success has led to many lucrative endorsement deals. The value of his endorsement contracts is so high because he is a popular and successful athlete. He has won numerous awards, including 82 PGA Tour events, 15 major championships, and two FedEx Cup championships. The companies that hire Tiger Woods for endorsements expect him to boost their revenue through increased brand recognition and sales. Therefore, his marginal revenue product is very high. He has endorsed brands such as Nike, Pepsi, Gillette, and Rolex, which have contributed significantly to his net worth and the overall revenue of the companies he works with.
In conclusion, Tiger Woods is paid high endorsement fees by companies because its marginal revenue product is very high.
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Using relevant examples from different industries, discuss the factors that complicate the job of international human resource managers.
International human resource management involves managing human resources in a global business environment.
The job of an international human resource manager is a complex one due to various factors. Below are some of the factors that complicate the job of international human resource managers.
Cultural differences: Different cultures have different ways of doing things, which could affect business operations. An international human resource manager needs to be knowledgeable of the local cultures to manage employees effectively. For example, American businesses may have different approaches to performance management compared to businesses in Japan. Legal and regulatory differences: Different countries have different employment laws and regulations. It's the responsibility of the international human resource manager to ensure the company complies with local employment laws and regulations. For example, the employment laws and regulations in China are different from those in Germany.
Language differences: Communication is critical in international business. An international human resource manager needs to be able to communicate effectively with employees, stakeholders, and customers who speak different languages. For example, if a German company is expanding its operations to Brazil, the human resource manager needs to be able to speak Portuguese to effectively communicate with the employees. Technology differences: Different countries have different technology infrastructures, which could affect the company's operations. For example, if a company operates in a developing country, there may be poor internet connectivity that could affect communication and operations.ConclusionIn summary, international human resource managers need to understand the cultural, legal, linguistic, and technological differences that could complicate their jobs. They must develop strategies to address these challenges to ensure business operations are not affected.
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The company that manufactures Molson beer launched the Arctic brand in Ontario and the Tornade brand in Quebec, with the intention of gaining a share of the rapidly expanding alcoholic lemonade segment of the beverage industry. The separate launch strategies for the products are due to different market conditions in the two Canadian provinces. What strategy did Molson use to reach existing markets with its new product?
Molson used a differentiated marketing strategy to reach existing markets with its new product.
Differentiated marketing strategy refers to the process of designing specific product campaigns to attract different customer segments. Molson beer company launched two different brands, Arctic brand in Ontario and Tornade brand in Quebec, with the intention of gaining a share of the rapidly expanding alcoholic lemonade segment of the beverage industry. The separate launch strategies for the products are due to different market conditions in the two Canadian provinces.
The differentiated marketing strategy is effective because it focuses on developing and delivering products that meet the needs of specific groups of customers.The Molson beer company used the differentiated marketing strategy to reach existing markets with its new product. The Arctic brand was launched in Ontario while the Tornade brand was launched in Quebec. Both provinces had different market conditions, hence the different launch strategies.
The company used different promotional and advertising campaigns for each brand, which made it possible to reach different customers. As a result, Molson managed to gain a share of the rapidly expanding alcoholic lemonade segment of the beverage industry.
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what are the usual forms of limits to arbitrage 1. fundamental risk 2. noise trader risk 3. agency problem 4. implementation costs 5. model risk
Arbitrage is a financial term that refers to purchasing and selling stocks, currencies, or other assets at different marketplaces to take advantage of market inconsistencies. However, as profitable as arbitrage can be, it is not a risk-free strategy, as there are often limitations that prevent investors from exploiting market inconsistencies. The common types of limits to arbitrage include:
1. Fundamental risk: This is a kind of risk that arises due to the economic environment. For example, the uncertainty of market fluctuations or the global economic condition might impact an investor's decision to purchase or sell an asset.
2. Noise trader risk: This is a type of risk that arises due to the volatility of the market. Due to the presence of noise traders, the market can be quite erratic, making it challenging to exploit price inconsistencies.
3. Agency problem: This is a type of risk that arises due to the separation of management and ownership of an asset. The manager may act in their best interests rather than that of the investors.
4. Implementation costs: These are expenses incurred by an investor in the process of buying and selling an asset. These costs may include transaction fees, taxes, and other expenses that might make the arbitrage strategy less profitable.
5. Model risk: This is a type of risk that arises due to the inadequacy or wrong application of a specific model used in evaluating the market. An investor who relies on a flawed model might make the wrong investment decision, which may limit their chances of exploiting the market inconsistency.
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On December 31, Russell Company had 123,000 shares of $30 par value common stock issued and outstanding. On this date, they split the stock 5:1. Required: 1. How many shares of common stock will be outstanding after the stock split? 2. What is the new par value of each share of common stock after the stock split? Number of shares outstanding 0 Par value of each share
After the stock split, the number of shares of common stock outstanding will increase by a factor of 5. The new number of shares outstanding will be 615,000 shares.
Let's break down the details of the stock split and its impact on the number of shares outstanding and the par value of each share.
Number of shares outstanding after the stock split: Before the stock split, the Russell Company had 123,000 shares of common stock outstanding. In a 5:1 stock split, each existing share is split into five new shares. So, for every one share owned before the split, shareholders will receive five new shares. To calculate the new number of shares outstanding, we multiply the initial number of shares by the split ratio: 123,000 shares x 5 = 615,000 shares.New par value of each share after the stock split: The par value per share is the nominal value assigned to each share of stock. In a stock split, the par value per share is typically adjusted proportionally. In this case, since it is a 5:1 stock split, the par value per share will also change. The initial par value of each share was $30. To calculate the new par value, we divide the initial par value by the split ratio: $30 / 5 = $6.After the stock split:
The number of shares of common stock outstanding increases from 123,000 to 615,000 shares.The par value of each share decreases from $30 to $6.It's important to note that a stock split does not change the total value of the company or the ownership percentage of shareholders. It is primarily done to increase liquidity, improve marketability, and potentially lower the share price to make it more accessible to investors.
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A stock had returns of 16.27 percent, -6.23 percent, and 23.48 percent for the past three years. What is the standard deviation of the returns? Multiple Choice 24.02% 15.50% 8.95% 2.40% 12.22%
A stock had returns of 16.27 percent, -6.23 percent, and 23.48 percent for the past three years and The standard deviation of the returns is approximately 10.85%, none of the given options match the calculated standard deviation.
To calculate the standard deviation of the returns, we need to follow these steps:
Calculate the average return.
Subtract the average return from each individual return and square the result.
Calculate the average of the squared differences.
Take the square root of the average squared difference.
Let's calculate the standard deviation using these steps:
Step 1: Calculate the average return:
(16.27% - 6.23% + 23.48%) / 3 = 11.84%
Step 2: Subtract the average return from each individual return and square the result:
(16.27% - 11.84%)^2 = 0.1969
(-6.23% - 11.84%)^2 = 217.4624
(23.48% - 11.84%)^2 = 135.2544
Step 3: Calculate the average of the squared differences:
(0.1969 + 217.4624 + 135.2544) / 3 = 117.6379
Step 4: Take the square root of the average squared difference:
√117.6379 ≈ 10.85
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If an individual moves money from a saving account to a checking account deposit, then the value of M1 _____, and the value of M2:
a) increases: increases
b)increases; does not change
c)decreace; does not change
d)decreases; decreases
The movement of money from saving account to a checking account deposit then value of money is given by option b) increases; does not change.
When an individual moves money from a savings account to a checking account deposit, the value of M1 increases.
M1 is a measure of money supply that includes currency in circulation, demand deposits checking account, and other liquid assets.
By transferring money from a savings account to a checking account deposit,
The funds become part of the demand deposits, which are included in M1.
The value of M2 does not change in this scenario.
M2 is a broader measure of money supply that includes M1 and certain types of savings accounts, time deposits, and money market funds.
Moving money from a savings account to a checking account deposit does not impact the components included in M2.
It involves a transfer within the same category of accounts from one type of deposit to another.
Therefore, the correct answer for moving money from saving account to a checking account deposit is that the value of M1 increases, and the value of M2 does not change.
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in the market for cigarettes, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. a tax of $3.50 per pack is imposed on cigarettes. the tax reduces the equilibrium quantity in the market by 5,000 packs. the deadweight loss from the tax is
To calculate the deadweight loss from the tax, we need to consider the changes in consumer surplus and producer surplus caused by the tax.
1. Determine the initial equilibrium:
Before the tax is imposed, we have an initial equilibrium quantity and price in the market.Let's denote the initial equilibrium quantity as Q0 and the initial equilibrium price as P0.2. Calculate the equilibrium quantity after the tax:
The tax reduces the equilibrium quantity in the market by 5,000 packs.The new equilibrium quantity is Q0 - 5,000.3. Calculate the new equilibrium price after the tax:
The supply curve is upward-sloping, so the tax shifts the supply curve upward by the amount of the tax.The new equilibrium price is the price at which the new quantity demanded (Q0 - 5,000) equals the new quantity supplied.Let's denote the new equilibrium price as P1.4. Calculate the change in consumer surplus:
Consumer surplus is the area above the demand curve and below the price line.The change in consumer surplus is the difference between the initial consumer surplus and the new consumer surplus after the tax.5. Calculate the change in producer surplus:
Producer surplus is the area below the supply curve and above the price line.The change in producer surplus is the difference between the initial producer surplus and the new producer surplus after the tax.6. Calculate the deadweight loss:
Deadweight loss is the loss of economic efficiency caused by the tax.It is the reduction in total surplus (consumer surplus + producer surplus) caused by the tax.The exact calculation of the deadweight loss requires more specific information about the demand and supply curves, as well as their equations and intercepts. Without this information, it is not possible to provide a precise numerical calculation of the deadweight loss.
About MarketA market is a market structure in which there are many sellers or companies that produce goods. Perfect competition market is also defined as a market that has many companies to provide services to buyers in the market.
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A man gets a job with a salary of $38,600 a year. He is promised a $2,770 raise each subsequent year. During a 6-year period his total earnings are $ ___________
The man's total earnings over a 6-year period would be $273,150, starting with a salary of $38,600 and receiving a $2,770 raise each subsequent year.
How much will be his earnings in 6 years?To calculate the man's total earnings over a 6-year period, we can use the formula for the sum of an arithmetic series:
Total Earnings = (Number of terms / 2) * (First term + Last term)
Given:
First term (initial salary) = $38,600
Common difference (raise each subsequent year) = $2,770
Number of terms (years) = 6
Using this information, we can find the last term (salary in the 6th year):
Last term = First term + (Number of terms - 1) * Common difference
Last term = $38,600 + (6 - 1) * $2,770
Last term = $38,600 + 5 * $2,770
Last term = $38,600 + $13,850
Last term = $52,450
Now we can substitute the values into the formula:
Total Earnings = (Number of terms / 2) * (First term + Last term)
Total Earnings = (6 / 2) * ($38,600 + $52,450)
Total Earnings = 3 * $91,050
Total Earnings = $273,150
Therefore, the man's total earnings over a 6-year period would be $273,150.
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Ken earns $40,000 and pays $8,000 in tax, while Alicia earns $60,000 and pays $18,000 in tax.
If Ken's income increases by $100, his tax increases by $41, but if Alicia's income increases by $100, her tax increases by $54.
What is the average tax rate and marginal tax rate that Ken pays and that Alicia pays?
Is this income tax fair?
Ken's average tax rate is____percent.
To calculate the average tax rate and marginal tax rate, we need to use the formula:
Average Tax Rate = Total Tax Paid / Total Income
Ken's average tax rate:
Total Tax Paid = $8,000
Total Income = $40,000
Average Tax Rate = $8,000 / $40,000 = 0.20 or 20%
To calculate the marginal tax rate, we need to compare the change in tax with the change in income.
Ken's marginal tax rate:
Change in Tax = $41
Change in Income = $100
Marginal Tax Rate = Change in Tax / Change in Income = $41 / $100 = 0.41 or 41%
Similarly, we can calculate Alicia's average and marginal tax rates.
Alicia's average tax rate:
Total Tax Paid = $18,000
Total Income = $60,000
Average Tax Rate = $18,000 / $60,000 = 0.30 or 30%
Alicia's marginal tax rate:
Change in Tax = $54
Change in Income = $100
Marginal Tax Rate = Change in Tax / Change in Income = $54 / $100 = 0.54 or 54%
Whether the income tax is fair or not is a subjective question and depends on individual perspectives and societal norms. The fairness of a tax system is often a topic of debate and can vary based on factors such as income distribution, social policies, and economic considerations.
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Topman Metal Bucket
Topman ltd is a rubber fabricating company based at North
Industrial Area. The company produce metal buckets for the West
African market and plans to produce 1,000 units of buckets
The Topman Metal Bucket is a high-quality item that is both durable and affordable. It is a popular choice among West African consumers who require sturdy and dependable buckets for their daily tasks.
Topman Metal Bucket Topman Ltd. is a rubber manufacturing firm situated in the North Industrial Area. The firm manufactures metal buckets for the West African market and intends to produce 1,000 units of buckets. The Topman Metal Bucket is made of high-quality metal, making it ideal for storing and carrying heavy loads. The bucket has a comfortable handle and a wide mouth for easy loading and unloading. The bucket is designed to withstand tough weather and usage conditions. The buckets are coated with a protective layer that provides superior corrosion resistance, ensuring the bucket's longevity. It has been tested and approved by international standard authorities. The Topman Metal Bucket is simple to use and maintain, requiring only regular cleaning with a soft cloth and a mild detergent. The bucket may be used for a variety of purposes, including storing and transporting water, sand, and other materials. The Topman Metal Bucket is a high-quality item that is both durable and affordable. As a result, it is a popular choice among West African consumers who require sturdy and dependable buckets for their daily tasks.The probable question may be:
Topman Metal Bucket
Topman ltd is a rubber fabricating company based at North Industrial Area. The company produce metal buckets for the West African market and plans to produce 1,000 units of buckets in the month of January. The bucket requires a single operation and the standard cost for the operation is presented below:
Standard cost card (bucket) GH
Direct material (plastics): 10 kg at GH 0.50 per kg) 5
Direct labour (5hours GH 20 per hours) 100
Variable overheads (3 hours at GH 2 per direct labour) 6
Total standard variable cost 111
Standard contribution margin 29
Standard selling price 140
Budget statement for the month of January GH GH
Sales (1,000 units of buckets at GH 140 per unit) 140,000
Direct materials: (10,000 at GH 0.50) 5,000
Direct labour (4,000 hours GH 20per hour) 80,000
Variable overheads (4,000 hours GH 2 per direct hour) 8,000
93,000
Budget contribution 47,000
Fixed overheads 20,000
Budgeted profit 27,000
T he annual budgeted fixed overheads is GH 240,000 and are assume to be incurred evenly throughout the year.
Actual results for April are:
GH GH
Sales (800 units of buckets at GH 150 per unit) 120,000
Direct materials: (9,000kg at GH 0.60) 5,400
Direct labour (3,500 hours GH 18 per hour) 63,000
Variable overheads (3,500 hours GH 2.50 per direct hour) 8,750
77,150
Contribution 42,850
Fixed overheads 18,000
Profit 24,850
The production overheads are charged to production on the basis of direct labour hours. Actual production and sales are 800 units of buckets.
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According to the textbook Crime and Justice in the City as Seen through The Wire
Discuss how the characters of The Wire that are involved in "the game" reflect the criminological theories stemming from the Chicago School. How do the informal controls and institutions of the neighborhood contribute to their overall experiences?
The informal control and institutions of the neighborhood contribute to the characters' overall experiences by shaping their behavior and reactions to different situations.
The Chicago School is a criminological theory that explains the relationship between social disorganization and crime. This theory focuses on understanding the neighborhoods' effect on the behavior and actions of individuals within the community. According to the textbook "Crime and Justice in the City as Seen through The Wire," characters involved in "the game" reflect the criminological theories stemming from the Chicago School.
In The Wire, criminological theories based on the Chicago School are reflected in the characters involved in "the game." The characters' social environments and experiences in the communities shaped their behavior. Social disorganization is portrayed in the characters' surroundings that are characterized by poverty, low economic status, inadequate social and community controls, and high crime rates.
The characters' behavior reflects the theories that people behave according to their environment and that certain areas promote criminal activities. For example, Avon Barksdale and Marlo Stanfield operate in the low-income housing projects and areas that have limited social controls and formal institutions. They used their economic status to establish their power in the community and had a strong influence on people in the neighborhood.The informal controls and institutions of the neighborhood contribute to the characters' overall experiences.
For example, Avon Barksdale and Marlo Stanfield had access to guns, and they used violence to gain control and protect their territory. The code of the streets is another example of informal control that dictates people's behavior. The code of the streets is an unwritten set of rules that govern interactions between people in the community.
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When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained patter of loses, it is a) considering opportunity costs b) considering capital investments c) preparing to reach its shutdown point d) preparing to exit operations
When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is preparing to exit operations. Therefore, option (d) is the correct answer.
Businesses can run into losses for various reasons, including poor management, operational inefficiencies, increased competition, changing consumer preferences, etc. Therefore, businesses need to be agile and adaptive to such situations and should be ready to change their strategies to remain viable. If a business is continuously making losses, then it needs to take corrective actions to reduce the losses or prevent them from further deterioration.
The strategy of reducing and/or discontinuing production is a cost-cutting strategy that businesses adopt when they are unable to generate sufficient revenues to cover their costs. By reducing or discontinuing production, businesses can minimize their variable costs, such as raw material costs, labor costs, and other direct costs. However, this strategy can be effective only in the short term as it will lead to lower revenues and reduced market share in the long term.
Therefore, if a business is continuously making losses and is unable to recover, it is preparing to exit operations. This strategy involves winding up all operations, liquidating assets, and repaying creditors. It is the last resort for businesses and is usually taken when they are unable to sustain operations in the long term.
The correct option is d.
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The Deputy Chief Executive (DCE) is faced with a decision situation that can be described as a situation of uncertainty. Which Decision-making model will be used in this decision situation?
In a situation of uncertainty, the decision-making model that will be used by the Deputy Chief Executive (DCE) is the bounded rationality decision-making model. This model is also known as the incremental model or the satisficing model.
In a situation of uncertainty, the decision-making model that will be used by the Deputy Chief Executive (DCE) is the bounded rationality decision-making model. This model is also known as the incremental model or the satisficing model. The reason why this model is suitable for this situation is that in a situation of uncertainty, it is usually difficult for decision-makers to find an optimal solution to the problem. This is because there is little or no information about the future or the consequences of the decision. Therefore, the decision-maker is forced to make a decision based on limited information and cognitive resources.
The bounded rationality model is used when the decision-maker cannot obtain all the information necessary to make a rational decision, so they use a simplified decision-making strategy to reduce the complexity of the problem. This model is based on the idea that decision-makers are not always able to make the best decision due to the limitations of their cognitive abilities, resources, and the time available to them. The decision-maker uses a set of heuristics, or mental shortcuts, to simplify the problem and make a satisfactory decision. In this case, the Deputy Chief Executive (DCE) will use this model to make a decision based on the information that is available to them at the time.
They will not be able to obtain all the information they need to make an optimal decision, so they will use heuristics to simplify the problem and make a satisfactory decision. This means that the decision they make may not be the best decision, but it will be a decision that they can live with based on the information that is available to them. The bounded rationality model is useful in situations of uncertainty because it allows decision-makers to make decisions quickly and efficiently, without being paralyzed by the complexity of the problem. It is also useful when the decision-maker is under time pressure and needs to make a decision quickly.
The bounded rationality model is the most appropriate decision-making model for the Deputy Chief Executive (DCE) to use in a situation of uncertainty. This model allows decision-makers to make a satisfactory decision based on limited information and cognitive resources. The bounded rationality model is based on the idea that decision-makers cannot always obtain all the information necessary to make a rational decision, so they use heuristics to simplify the problem and make a satisfactory decision. The Deputy Chief Executive (DCE) will use this model to make a decision based on the information that is available to them at the time, even though it may not be the best decision.
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i. The answer should be at least 6 lines. ii. Please do not share your answer to others. Sharing answers will be subject to penalizing. iii. The answers should be from your own thought. Use Word format iv. The did 1- Explain why economists focus on GDP, inflation, and unemployment when assessing the health of an entire economy. 2- Identify why saving and investment are key factors in promoting rising living standards. 3-Describe why economists believe that "shocks" and "sticky prices" are responsible for short-run fluctuations in output and employment.
Gross Domestic Product (GDP), inflation, and unemployment rates are all crucial economic indicators that economists use to assess the well-being of an economy. These economic indicators are measured in order to evaluate economic performance, track growth and development, and determine the effectiveness of economic policies aimed at promoting economic growth.
GDP measures the total amount of goods and services produced in a country over a given period of time. It is a measure of the size and health of an economy. Economists use GDP to assess the overall health of an economy and its growth rate. Inflation, on the other hand, is the rate at which the price of goods and services is increasing over time. High inflation rates indicate that prices are rising too quickly, which can lead to a decrease in purchasing power. As a result, the ability of people to buy goods and services is negatively impacted.
Finally, unemployment is an economic indicator that measures the number of people who are out of work and looking for a job. It is a measure of the health of the labor market and the level of employment in an economy. High levels of unemployment can have a significant impact on the overall health of an economy. Saving and investment are critical factors in promoting rising living standards. By saving money, individuals can accumulate wealth, which can be used to invest in education, training, or other economic opportunities that can lead to higher wages and better jobs. When people save, they are also helping to provide capital for businesses to invest in new technology, equipment, and other forms of infrastructure. This, in turn, can lead to higher levels of productivity and growth, which can help to promote rising living standards. Economists believe that shocks and sticky prices are responsible for short-run fluctuations in output and employment. Shocks refer to unexpected events that can impact an economy, such as natural disasters, wars, or financial crises. These shocks can cause short-run fluctuations in output and employment by disrupting the normal functioning of markets and reducing economic activity. Sticky prices, on the other hand, refer to prices that do not adjust quickly to changes in supply and demand. These sticky prices can lead to short-run fluctuations in output and employment by creating imbalances in the economy.
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On January 1, 20x1, Impressed Co. acquired 8%, 1,000,000 face amount, 4-year ‘term’ bonds for 936,603. The bonds are measured at amortized cost and have a yield rate of 10%. How much is the carrying amount of the investment on December 31, 20x2?
The carrying amount of the investment on December 31, 20x2, is $904,904.50.
What is the carrying amount of Impressed Co.'s investment on December 31, 20x2, if they acquired 8% term bonds with a face amount of $1,000,000 for $936,603, measured at amortized cost, and with a yield rate of 10%?To determine the carrying amount of the investment on December 31, 20x2, we need to consider the amortization of the bond discount or premium.
Face amount of the bonds: $1,000,000Cost of the bonds: $936,603Yield rate: 10%Time: 2 yearsTo calculate the carrying amount, we first need to calculate the annual amortization amount. Since the bonds have a yield rate of 10%, which is lower than the coupon rate, it implies that the bonds were purchased at a discount. The discount is the difference between the face amount and the cost.
Discount = Face amount - Cost = $1,000,000 - $936,603 = $63,397The annual amortization amount is calculated as the discount divided by the number of years until maturity. In this case, since there are 4 years until maturity and 2 years have passed, we need to amortize half of the total discount.
Annual amortization amount = Discount / Number of years until maturity = $63,397 / 4 = $15,849.25
To calculate the carrying amount on December 31, 20x2, we subtract the accumulated amortization from the cost of the investment:
Carrying amount = Cost of the investment - Accumulated amortization
Carrying amount = $936,603 - ($15,849.25 ˣ 2)Simplifying the equation, we find:
Carrying amount = $936,603 - $31,698.50 = $904,904.50Learn more about carrying amount
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Some of the main factors the courts look for in determining the Australian tax residence of a person include: a. the extent to which they are physically present in Australia in the year of income b. the frequency, regularity, and duration of their visits c. whether they maintain a permanent place of abode in Australia or overseas d. where they maintain their family and business ties e. all of the above are correct.
Residency is an essential factor that is considered by Australian taxpayers. However, there are some main factors that the court looks at in determining the tax residency of a person in Australia.
These factors include, but are not limited to, the frequency, duration, and regularity of their visits to Australia, the extent to which they are physically present in the country in the year of income, whether or not they maintain a permanent place of abode in Australia or overseas, and where they maintain their family and business ties.
There is a common notion that Australian residents are required to pay taxes on their worldwide income, but non-residents are only taxed on income derived from within Australia. However, this is not entirely true, as the tax rules that govern these factors are more complex than this.Residents of Australia are taxed on their worldwide income, while non-residents are taxed on income sourced from Australia only.
Determining your residency status, however, is not as simple as merely looking at the number of days spent in the country.In conclusion, all the factors stated above are correct, and these factors are the main criteria that the courts look at in determining the tax residency of a person in Australia.
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Using the financial ratios provided, analyse the performance of Company X in 2021 compared to the previous year.
On 1 Jan 2019, Don Company purchased a machine for $100,000. The machine was estimated to have a useful life of 5 years with no residual value.
On 1 Jan 2021, the company determined that, due to advances in machinery maintenance, the total useful life of machine would be 7 years.
On 1 Jan 2022, the company traded in the machine and paid $20,000 for a new machine. There was no gain or loss on the exchange of machine.
The company uses the straight-line method of depreciation and the company’s financial year ends 31 Dec.
Compute the depreciation expense. Accumulate depreciation and net book value of the machine for the years 2019, 2020 and 2021, Show workings.
Present journal entries to record the trade-in of the old machine for the new machine.
Explain the concept of depreciation and why it requires the use of judgement and estimates.
Depreciation is a technique of allocating the cost of a tangible asset over its useful life.
It is important to estimate the useful life and residual value of the asset in order to calculate the depreciation expense. Don Company purchased a machine for $100,000 on 1 Jan 2019 with an estimated useful life of 5 years. However, due to advances in machinery maintenance, the company revised the total useful life of the machine to 7 years on 1 Jan 2021. The company uses the straight-line method of depreciation. Therefore, the depreciation expense for 2019, 2020, and 2021 will be $20,000 per year. The accumulated depreciation and net book value for the years will be: 2019 - $20,000 and $80,000, 2020 - $40,000 and $60,000, and 2021 - $60,000 and $40,000. To record the trade-in of the old machine for the new machine, a journal entry will be made by debiting the new machine account and crediting the old machine account and cash account. The concept of depreciation requires the use of judgement and estimates because it involves estimating the useful life and residual value of the asset. These estimates can have a significant impact on the financial statements and hence require management's judgement.
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You are the portfolio manager at Financial Trust Ltd, an investment firm that is restructuring a variable income portfolio to meet the objectives of a client. The client plans to retire in 10 years and wants to diversify his portfolio to reduce his risk. You look at a group of securities on the JSE. Based on five years of monthly data, you derive the following information for four companies listed on the JSE which are given in the following table:
Firm Std deviation σi Correlation rim GK 12.10%, 0.72 LASCO 14.60%, 0.33 GLX 7.60%, 0.55 CARR 10.20 0.60 JSE Index 5.50 1.00 Required:
A. Determine the beta coefficient for each stock. (6 m arks)
B. Assuming a risk-free rate of 8 percent and an expected return for the market portfolio of 15 percent, compute the expected (required) return for all the stocks. (8 marks) Financial Analysts estimated returns for the next year are as follows: i. GK 20 percent ii. LASCO 15 percent iii. GLX 19 percent iv. CARR 10 percent
C. Advise the client as to which stocks to hold and which ones to sell.
The Beta coefficient for each stock is as follows:i. GK;βi=0.8038ii. LASCO;βi=0.4024iii. GLX;βi=0.5916iv. CARR;βi=0.7256
Calculation:Beta formula is given as follows;βi=σimσm2i. The expected (required) return for all stocks is as follows:i. GK= 19.2%ii. LASCO= 12.6%iii. GLX= 17.7%iv. CARR= 11.4%Calculation:Using the Capital Asset Pricing Model (CAPM) formula:CAPM = rf + β (rm − rf)i. GK= 8% + 0.8038 (15% − 8%)= 19.2%ii. LASCO= 8% + 0.4024 (15% − 8%)= 12.6%iii. GLX= 8% + 0.5916 (15% − 8%)= 17.7%iv. CARR= 8% + 0.7256 (15% − 8%)= 11.4%iii. The client should hold GLX and GK stock and sell LASCO and CARR stocks.Reason:GLX and GK stocks have a higher expected return compared to LASCO and CARR stocks. This is because the higher the expected return, the more attractive the stock is to the client.
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