Given, Freight-in P2,000; Selling Expenses P150,000; Purchase Returns P3,000; Ending Inventory P80,000. The cost of goods sold is equal to 800% of selling expenses.
The formula to calculate the cost of goods available for sale is: Beginning Inventory + Net PurchasesSo, Cost of goods sold = 800% of selling expenses = 8 × 150,000 = 1200000. Given, Freight-in P2,000; Selling Expenses P150,000; Purchase Returns P3,000; Ending Inventory P80,000. The cost of goods sold is equal to 800% of selling expe
Now, Cost of goods available for sale = Cost of goods sold + Ending Inventory= 1200000 + 80,000= 1,280,000 Thus, P1,280,000 should be reported as the cost of goods available for sale. The formula to calculate the cost of goods available for sale is:Beginning Inventory + Net Purchases So, Cost of goods sold = 800% of selling expenses = 8 × 150,000 = 1200000.
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Ethical behavior, which is defined by actions that are the "right thing to do, not simply what is required by law," are critical to the healthcare industry. The healthcare industry is fraught with difficult situations that involve ethical dilemmas and it is the responsibility of the human resources (HR) department to ensure employees are knowledgeable concerning legal, ethical, and safety concerns in healthcare. Devise a framework for ethics training that incorporates the theme(s) of a healthcare code of ethics for managed care. The framework must address the following components: discussion of competent medical care, upholding professional standards, respecting the law, respecting the rights of patients and colleagues, maintaining a commitment to medical education, supporting public health activities, regard for patient care as the primary goal, and support for medical care access for all individuals.
Ethical behavior, which is defined by actions that are the "right thing to do, not simply what is required by law," is critical to the healthcare industry.
A framework for ethics training that incorporates the theme(s) of a healthcare code of ethics for managed care can be developed through the following steps:
1. Introduction - The introduction will serve to provide an overview of the course and how it is structured. It should also include information on why ethics is important in healthcare and how it relates to managed care.
2. Competent medical care - This component will involve a discussion of the importance of providing high-quality care to patients. It will cover topics such as evidence-based practice, patient safety, and risk management.
3. Upholding professional standards - This component will involve a discussion of the ethical and professional standards that healthcare workers are expected to uphold. This will include topics such as confidentiality, informed consent, and professional boundaries.
4. Respecting the law - This component will involve a discussion of the legal and regulatory requirements that govern healthcare practice. It will cover topics such as HIPAA, the Americans with Disabilities Act, and the Affordable Care Act.
5. Respecting the rights of patients and colleagues - This component will involve a discussion of the ethical principles that guide interactions with patients and colleagues. It will cover topics such as respect for autonomy, non-maleficence, and beneficence.
6. Maintaining a commitment to medical education - This component will involve a discussion of the importance of ongoing education and training for healthcare professionals. It will cover topics such as continuing education requirements, professional development, and lifelong learning.
7. Supporting public health activities - This component will involve a discussion of the role of healthcare professionals in promoting public health. It will cover topics such as disease prevention, health promotion, and community engagement.
8. Regard for patient care as the primary goal - This component will involve a discussion of the ethical principles that guide patient care. It will cover topics such as patient-centered care, cultural competency, and communication.
9. Support for medical care access for all individuals - This component will involve a discussion of the ethical and social responsibilities of healthcare professionals. It will cover topics such as access to care, healthcare disparities, and advocacy.
10. The conclusion will serve to summarize the course and reinforce the importance of ethics in healthcare. It should also include information on additional resources and support available to employees who have questions or concerns about ethical issues.
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QUESTION 19 Ronaldo is about to move to San Francisco and has a huge garage sale in advance. The implied warranty of merchantability applies to every sale Ronaldo makes Thue False
An implied warranty is a promise by the seller that the goods offered for sale are of reasonable quality for the purpose intended. The answer to the given question is "False".
There are two kinds of implied warranties: merchantability and fitness for a particular purpose. The implied warranty of merchantability is a promise that the goods sold are suitable for the purpose for which they are intended. The goods must be of average quality and fit for use by an ordinary person. Ronaldo's garage sale is a simple sale and the rules governing a seller's implied warranty of merchantability apply. However, because the items are being sold at a garage sale, it is likely that the buyer will get the item "as is." As a result, Ronaldo will not be responsible for any deficiencies or concerns with the items after they have been sold. The statement "The implied warranty of merchantability applies to every sale Ronaldo makes" is False because this warranty only applies when the seller is in the business of selling goods and not in a garage sale.
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.A _____ is a voluntary deduction that can provide a variety of benefits to employees.
Answer:
A. cafeteria plan
B. retirement plan
C. medical plan
D. defined contribution plan
A. cafeteria plan
A cafeteria plan is a voluntary deduction that can provide a variety of benefits to employees.
It allows employees to choose from a menu of options and allocate their pre-tax salary toward the benefits they prefer. This can include options such as health insurance, dental insurance, vision coverage, flexible spending accounts (FSAs), and other qualified benefits. By offering a cafeteria plan, employers provide employees with the flexibility to customize their benefits package according to their individual needs and preferences. This can result in tax savings for employees and enhance overall employee satisfaction and well-being.
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Using the start year 2003 and the end year 2013 plot the US dollar to euro exchange rate 1.0785, the US dollar to Australian dollar exchange rate 0.5956, and the canadian to US dollar exchange rate 1.5121. Plot the vamue of the 3 currencies in terms of both US dollar to Foreign currency and foreign country to us dollar from january of the start year 2003 to December or end year 2013. on excel please
Here are the steps on how to plot the exchange rates of US dollar to euro, US dollar to Australian dollar, and Canadian dollar to US dollar from January 2003 to December 2013 in Excel:
Open Excel and create a new workbook.In the first sheet, create a table with the following columns:DateUS Dollar to EuroUS Dollar to Australian DollarCanadian Dollar to US DollarIn the "Date" column, enter the dates from January 1, 2003 to December 31, 2013.In the "US Dollar to Euro" column, enter the exchange rate of US dollar to euro on the corresponding date. You can get the exchange rate from a reliable source, such as the website of the European Central Bank.In the "US Dollar to Australian Dollar" column, enter the exchange rate of US dollar to Australian dollar on the corresponding date. You can get the exchange rate from a reliable source, such as the website of the Reserve Bank of Australia.In the "Canadian Dollar to US Dollar" column, enter the exchange rate of Canadian dollar to US dollar on the corresponding date. You can get the exchange rate from a reliable source, such as the website of the Bank of Canada.Select the data in the table.Click on the "Insert" tab and select the "Chart" option.In the "Insert Chart" dialog box, select the "Line" chart type and click on the "OK" button.The exchange rates will be plotted on a line chart.You can also plot the exchange rates in terms of foreign country to US dollar by reversing the values in the "US Dollar to Foreign Currency" columns. For example, to plot the exchange rate of euro to US dollar, you would enter the value of 1/1.0785 in the "US Dollar to Euro" column.
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Identify two things that YOU personally consider to be non negotiable in your personal life.
These non-negotiable aspects can vary from person to person, as individuals have unique values and priorities in their personal lives. It is important for each person to identify and honor their own non-negotiables, as they serve as guiding principles for living a fulfilling and authentic life.
Two things that one may consider to be non-negotiable in their personal life could be:
1. Personal Values: Personal values are the principles and beliefs that guide an individual's behavior and decision-making. These values can include honesty, integrity, compassion, respect, or environmental sustainability, among others. For some individuals, these values are non-negotiable, meaning they are fundamental and non-negotiable aspects of their personal lives that they prioritize and uphold in all situations.
2. Health and Well-being: Personal health and well-being are essential for a fulfilling and balanced life. It can encompass physical, mental, and emotional well-being. Prioritizing self-care, maintaining a healthy lifestyle, setting boundaries, and engaging in activities that promote well-being can be non-negotiable aspects for many individuals. This may include regular exercise, adequate sleep, healthy eating, practicing mindfulness or meditation, and seeking support when needed.
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George is 60 and works full time for a salary of $100,000 plus super. He has $500,000 in his super account, made up of $350,000 taxable component and $150,000 of tax-free component.
If George was to salary sacrifice up to the $27,500 Concessional Contribution cap, calculate the following for him:
a) how much does George need to draw Transition to Retirement (TTR) pension to maintain the same take-home pay?
b) what is the change in net tax payable by george?
a) To maintain the same take-home pay, George needs to draw a Transition to Retirement (TTR) pension of $72,500 ($100,000 salary - $27,500 salary sacrificed).
b) The change in net tax payable by George depends on his personal circumstances, such as his tax bracket and applicable tax rates. However, by salary sacrificing up to the concessional contribution cap, George can potentially reduce his taxable income and lower his overall tax liability. The specific calculation would require detailed information on George's total income, deductions, and other factors influencing his tax liability.
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Define the following words: (a) Cap Rock (b) lithostatic pressure (c) API (d) Vitrinite 2. Explain how to determine the bottom hole temperature and draw the geothermal gradient curve. (By drawing a figure) (1.5 points) 3. Explain the important factors in the production of organic matter in source rock. (1.5 points) 4. Name the main types of crude oil, write two characteristics of each. 5. Name the types of kerogen, explain briefly. (1.5 points) 6- Explain two methods of measuring the degree of thermal maturity of organic matter of source rock. (1.5 points) 7. Define the drainage of the source rock, write what factors it depends on. (1.5 points) 8- What effect do the textural parameters of the rock have on the porosity and permeability of the carbonate reservoir rocks? (1.5 points) 9- Just name the types of hydrocarbon oil traps.
(a) Cap Rock:Cap rock refers to the impervious rock layer, usually situated directly above the reservoir rock, which prevents hydrocarbons from escaping to the surface of the Earth. Cap rocks might be composed of a variety of rock types, including shale, limestone, or sandstone.
Cap rock is necessary to ensure that hydrocarbons stay in the reservoir rock. They should also have an appropriate thickness and adequate mechanical strength, making sure that the hydrocarbons do not migrate to the surface of the Earth.(
b) Lithostatic pressure:In geology, lithostatic pressure refers to the stress exerted by the weight of layers of rocks that are located above the rock being measured. The pressure increases as the depth increases. It applies in all directions, and it is uniform.
(c) API:API gravity is a measure of the relative density of crude oil or petroleum liquids. It is based on the oil's specific gravity, and the higher the API gravity, the lighter the oil.
(d) Vitrinite:Vitrinite is a type of maceral that forms from the thermal alteration of woody plant debris. It is one of the most frequent macerals found in coals, and it is primarily composed of carbonized cell walls. Vitrinite is a useful fossil fuel exploration tool since its reflectance varies as the rank of the coal changes. The reflectance values may be used to track the temperature history of the coal.
2. The bottom-hole temperature (BHT) can be determined using one of the following methods:
a. Using the temperature log,
b. Using the density log and c. Using a specific heat diagram. The geothermal gradient curve can be plotted by using the following steps: a. By collecting the BHT information for each well and b. By plotting the well data on a graph to create the geothermal gradient curve.
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Consider a simple economy that produces two goods: apples and erasers. The following table shows the prices and quantities of the goods over a three-year period.
Apples Erasers
Year Price (dollars per apple) Quantity (number of apples) Price (dollars per eraser) Quantity (number of erasers)
2008 1 120 1 170
2009 2 170 4 230
2010 2 110 4 165
1) Use the information from the previous table to fill in the following table:
Year Nominal GDP (dollars) Real GDP (Base year 2008, dollars)
2008
2009
2010
2) Why is the real GDP a more accurate measure of an economy's production than the nominal GDP?
a) Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.
b) Real GDP is not influenced by price changes, but nominal GDP is.
c) Real GDP includes the value of exports, but nominal GDP does not.
1) Using the information from the previous table, we can calculate the Nominal GDP and Real GDP (base year 2008) as follows:
Year | Nominal GDP (dollars) | Real GDP (Base year 2008, dollars)
-------------------------------------------------------------
2008 | 1 * 120 + 1 * 170 | 1 * 120 + 1 * 170
2009 | 2 * 170 + 4 * 230 | 2 * 120 + 1 * 170
2010 | 2 * 110 + 4 * 165 | 2 * 120 + 1 * 170
2) Real GDP is a more accurate measure of an economy's production than nominal GDP because it adjusts for changes in prices over time. Nominal GDP measures the value of goods and services using current prices, which can be influenced by inflation or deflation. Real GDP, on the other hand, measures production in constant, or base year, prices. By removing the price changes, real GDP provides a clearer picture of the actual physical output of an economy, unaffected by changes in price levels. This allows for a better comparison of production across different time periods, providing a more accurate representation of economic growth or contraction.
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How HR's role in an organization can impact its involvement during the change management process.
Provide an example of data/information that HR can collect and analyze/provide reports to assist in making organizational changes
HR's role in change management is vital for effective implementation. By focusing on communication, talent management, and assessing change readiness, HR can facilitate a smooth transition.
Additionally, collecting and analyzing employee feedback data can provide valuable insights to guide organizational changes.
HR plays a crucial role in change management within an organization as it is responsible for managing the people aspect of change. HR's involvement can impact the change management process in the following ways:
1. Communication and Employee Engagement: HR can facilitate effective communication channels and strategies to ensure that employees are well-informed about the changes, understand the reasons behind them, and feel engaged throughout the process. HR can develop communication plans, organize town hall meetings, conduct training sessions, and provide ongoing support to address employees' concerns and facilitate a smooth transition.
2. Talent Management and Skill Development: HR can assess the organization's current workforce and identify any gaps in skills or competencies required for the change. By conducting skills assessments, HR can determine the training and development needs of employees and design learning programs to enhance their capabilities. This ensures that employees have the necessary skills to adapt to new processes or technologies introduced during the change.
3. Change Readiness and Impact Assessment: HR can conduct change readiness assessments to gauge employees' readiness for change and identify potential resistance or areas of concern. Additionally, HR can analyze the potential impact of the change on different employee groups and provide insights to help mitigate any negative consequences. This allows for targeted interventions and customized support to address specific needs.
As for data/information that HR can collect and analyze to assist in making organizational changes, an example could be employee feedback surveys. HR can design and administer surveys to gather employees' opinions, concerns, and suggestions related to the proposed changes. This data can provide valuable insights into employees' perceptions, readiness, and potential barriers to change. HR can analyze the survey results and generate reports highlighting the key findings, trends, and recommendations. These reports can inform decision-making, shape the change management strategy, and help address any identified issues proactively.
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The Hawthorne studies were the first to show that workers________________________________________.
a. are more productive in specialized jobs
b. create group norms that influence how productive they are
c. train each other if management does not train them
Which of the following are research findings that led to the rise of the human relations movement? Check all that apply.
( ) Workers become more productive if there is better lighting in the workplace.
( ) Workers compete with each other to produce more and earn higher wages.
( ) Workers become more productive if they receive special attention and sympathetic supervision from managers.
( ) Workers create group norms that dictate acceptable workplace behavior, including acceptable levels of productivity.
Which term refers to the idea that people in an organization will be productive if they work under favorable conditions and are rewarded for reaching objectives?
a. Theory X
b. Organizational behavior
c. Theory Y
Which of the following are contributions of behavioral management researchers to today’s practice of management? Check all that apply.
( ) Challenging the idea that employees behave according to group norms they create themselves
( ) Challenging the idea that employees behave like cogs in a machine
( ) Focusing managers’ attention on the importance of group dynamics in organizations
( ) Focusing managers’ attention on the importance of organizational structures
The Hawthorne studies were the first to show that workers create group norms that influence how productive they are.
The following are research findings that led to the rise of the human relations movement: Workers become more productive if they receive special attention and sympathetic supervision from managers. Workers create group norms that dictate acceptable workplace behavior, including acceptable levels of productivity. The term that refers to the idea that people in an organization will be productive if they work under favorable conditions and are rewarded for reaching objectives is Theory Y.
The following are contributions of behavioral management researchers to today’s practice of management :Challenging the idea that employees behave like cogs in a machine. Focusing managers’ attention on the importance of group dynamics in organizations.
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Paolo is evaluating a project with the following cash flows: Year Cash Flow 0 -$4,500 1 2,030 2 2,190 3 1,718 What is the payback period for this project? Should he accept it if the required payback period is 2 years? Multiple Choice 1.16, Yes. 2.84, Yes. 2.16, No.
He should not accept it since the payback period is greater than the required payback period which is 2 years. Therefore, the correct answer is 2.16, No.
Paolo is evaluating a project with the following cash flows: YearCash Flow0-$4,50012,03022,19031,718To determine the payback period for the project, the formula below is used: Payback Period = Initial Investment / Annual Cash FlowsThus, the calculation of the payback period is shown below: YearCash FlowCumulative Cash Flow0-$4,500-$4,50012,030-$2,47022,190$28031,718$1,998 The second year is the year when the cumulative cash flow crosses zero.
So, we can find the payback period by interpolation as follows: Payback Period = Year Before Zero - (Absolute value of Year Before Zero / Cash Flow After Zero)Payback Period = 2 - ($2,470 / $2,190)Payback Period = 2.13 or 2.16 years. He should not accept it since the payback period is greater than the required payback period which is 2 years. Therefore, the correct answer is 2.16, No.
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Current Attempt in Progress Wildhorse Corporation had the following activities in 2020 1. 4 Collection of note receivable $96,000 2. Payment of accounts payable $833,000 Issuance of common stock $234,000 Payment of dividends $330,000 5. Issuance of bonds payable $548,000 Purchase of treasury stock $44.000 3 6. Compute the amount Wildhorse should report as net cash provided (used) by financing activities in its 2020 statement of cash flows. (Show amounts that decrease cash flow with either a-signes -15,000 or in parenthesis eg (15,000) Net cash by financing activities $
There are six activities listed in the problem and we have to compute the amount Wildhorse should report as net cash provided (used) by financing activities in its 2020 statement of cash flows:
Payment of accounts payable $833,000Issuance of common stock $234,000Payment of dividends $330,000Issuance of bonds payable $548,000Purchase of treasury stock $44.000Collection of note receivable $96,000Financing activities mainly involve debt and equity financing. Payment of dividends and purchase of treasury stock are considered as the reduction of equity.
Issuance of common stock and issuance of bonds payable are considered as the increase of equity and liabilities respectively. Net cash by financing activities = [Payment of accounts payable] + [Issuance of common stock] + [Payment of dividends] + [Issuance of bonds payable] + [Purchase of treasury stock](Net cash by financing activities) = (833,000) + 234,000 – 330,000 + 548,000 – 44,000(Net cash by financing activities) = $ 275,000
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Auditing is a risky business. Many problems may arise during an audit. For questions 1. and 2. below discuss the primary risks involved in each scenario. Please be specific.
1. Sam and Dave are audit partners, and have decided to undertake the audit of ABC Corp. During some preliminary analytical procedures they determined that the cash account was low relative to the amount of sales. Sam proceeds to double check the bank reconciliations, but they seem to be correct. Dave reviews the Chart of Organization to see the responsibility level of those that examine the cancelled checks for proper signatures. However, Sam and Dave are still worried.
2. KPMX is a very large auditing firm. The Chairman of the Board of Endrun Corp., Tom Smith, wants to hire KPMX for its annual audit. However, Jane Green, the audit partner at KPMX knows that the turnover in the Accounting Department at Endrun Corp. is very high, and she also heard that the Endrun Corp. is poorly managed. Moreover, Endrun Corp’s. business is innovative and unique, and none of the auditors at KPMX have ever audited a company in that industry.
The primary risk in this scenario is the possibility of fraudulent activity related to the cash account.
The discrepancy between the low cash balance and high sales could indicate potential misappropriation of funds or unrecorded transactions. Even though the bank reconciliations appear to be correct, there could still be fraudulent activities occurring within the organization that are not captured in the reconciliations. Sam and Dave's concern is justified as they need to investigate further to identify the cause of the cash discrepancy and assess the risk of fraud. The primary risks in this scenario are related to the unique nature of Endrun Corp.'s business and the turnover in its Accounting Department.
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In Credit Risk Plus O With uncertainty about default, default correlation arises because all companies have the same default rate A typical assumption is that the expected number of defaults has a lognormal distribution A typical assumption is that the expected number of defaults has a gamma distribution Without uncertainty about default, there is no default correlation
The statement "Without uncertainty about default, there is no default correlation" is correct. Default correlation refers to the degree to which the defaults of different companies or entities are related or dependent on each other.
In a scenario where there is no uncertainty about default, meaning that the default events are certain and known, there would be no default correlation because the default outcomes are predetermined and not subject to random variation. Default correlation arises when there is uncertainty about default because the default events are not certain, and the probability of default can vary across different entities. In credit risk analysis, default correlation is an important consideration as it measures the extent to which defaults tend to occur simultaneously or in a correlated manner among different borrowers or issuers.
It is worth noting that the assumptions about the distribution of expected number of defaults, such as lognormal or gamma distribution, are related to modeling approaches used to analyze and quantify credit risk. These assumptions help in capturing the uncertainty and variability in default outcomes and allow for the estimation of default probabilities, default correlations, and other risk measures.
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The course is Managing Teams.
Starways Technology is a small start-up company that has become known for attracting talented programmers to create web applications ("apps") for the iPhone. You’re working there as a summer intern in "apps dev" (application development), and the company decides to spend time brainstorming and coming up with five new ideas for apps that it can develop and launch in the coming six months. You walk into the room and quietly take a seat at the back. When the meeting starts, the CEO and VP of Product Development both give a short presentation together about the goal of the meeting, at which point people start anxiously asking questions: • "How long do we have?" • "How many downloads are we shooting for?" • "What’s our budget?" • "This is going to take a lot of time; what will be done about our overtime issue?" You sense that this meeting is rapidly deteriorating into a town hall–style complaint-fest. Luckily, the CEO brings order by saying, "I know you all have questions and concerns. Right now, my primary interest is in identifying the best ideas in the room. So . . . please call them out. We will capture your thoughts and evaluate them later. Tell us, what are your ideas for apps that we can develop in the next six months?" There is silence for a few seconds before the first idea is shouted across the room. Immediately, someone disagrees with the idea, and two new ideas are offered. Before long, it is hard to distinguish between ideas and critiques, and people begin judging the ideas using very different criteria. One group talks louder and more insistently while another starts to withdraw. Several people pull out their technology and start tapping on the screens, and it is clear to you that this has officially become an unproductive brainstorming session.
• If this were your meeting, what would you do as the leader to improve (a) the quantity of viable of ideas, (b) the quality of those ideas, (c) the ability to capture those ideas in detail, and (d) the process to differentiate good ideas from bad?
As a leader, there are several things that can be done to improve the productivity of brainstorming sessions and create an environment that fosters creativity, and a few of these will be highlighted below in the context of Starways Technology's situation:Quantity of viable ideasTo improve the number of viable ideas that can come out of the brainstorming session, it would be best to encourage everyone in the room to participate and contribute their ideas.
Additionally, it would help to create an environment where ideas can be built upon, and constructive criticism is welcomed. This will make everyone feel valued and encouraged to participate. Quality of the ideasTo improve the quality of the ideas, there must be guidelines on what constitutes a good idea. To do this, the CEO should give an overview of the company's goals, and the VP of product development should provide an overview of the market and what the customers are looking for in the product. The participants should be informed of what the company is looking for, and encouraged to keep that in mind while suggesting ideas. It is essential to remind everyone that the goal is to create something innovative and unique, and it's not just a matter of coming up with any idea that comes to mind. Ability to capture ideas in detailTo capture the ideas discussed during the brainstorming session, it would be helpful to have someone take minutes or notes of the session. This will allow the company to evaluate the ideas later, and it will be easy to refer to them when they are needed. Additionally, it is crucial to ensure that everyone's ideas are captured accurately. Process to differentiate good ideas from badIt is also essential to differentiate good ideas from bad ones. One way to do this is by analyzing each idea and determining which ones align with the company's goals and which ones don't. After identifying the good ideas, the company can evaluate them further and determine if they are feasible and profitable. If the company cannot implement an idea, it is vital to provide feedback on why it wasn't selected and how it can be improved on.
This encourages participants to continue to contribute in the future.In conclusion, to improve the productivity of brainstorming sessions, it is essential to create an environment where everyone feels valued, constructive criticism is encouraged, and there are guidelines for what makes a good idea. Additionally, it would help to take notes during the session and differentiate between good and bad ideas using company goals as a guide.
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Which of the following is true about the Monetary Control Act of 1980? 30 Mutiple Choice unions, mutual savings banks, and nonmember banks under regulatory institutlions other than the Fed It reduced the dissinction between different types of depository institutions t further restricted the Federal Reservescontral of e kine tdereguilated the banking
The correct answer is, "It reduced the distinction between different types of depository institutions."The Monetary Control Act of 1980 is an important banking legislation that was enacted by the US Congress in 1980.
It was passed to enhance the transparency of monetary policy, specifically by reducing the distinctions between various depository institutions and expanding the authority of the Federal Reserve over monetary policies.Among its notable provisions, the act reduced the distinction between different types of depository institutions. It mandated that all depository institutions, including mutual savings banks, nonmember banks, and credit unions, be subject to regulatory institutions other than the Federal Reserve. This provision ensured that all depository institutions received equal regulatory treatment and facilitated the implementation of monetary policy across all depository institutions.The Monetary Control Act of 1980 also provided for the further restriction of the Federal Reserve's control of the money supply and deregulation of banking. It expanded the Federal Reserve's authority over monetary policies, allowing it to manage the money supply more effectively. The act also deregulated the banking industry, thereby increasing competition and making it easier for banks to merge with one another.
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At the end of Year 1, the income statement for the Poor Boy Restaurant showed sales of $1,000,000. At the end of Year 2, the income statement showed $1,300,000 in sales. A horizontal analysis of the income statements would show the absolute difference between the two years as:
The food sales for the XYZ Restaurant were $100,000 for June. The cost of food consumed totaled $38,000. The costs of employee meals and promotional meals were $400 and $100 respectively. The food cost percentage for June was ( )%
At the Casual Fare Restaurant, the average price per meal sold is $10 with an average variable cost of $4. Fixed costs for July are expected to be $15,000. If the restaurant manager expects to sell 8,000 meals in July, the net income (or loss) for the month would be: $ ( ) ( )(net income or net loss).
The absolute difference in sales between Year 1 and Year 2 for Poor Boy Restaurant is $300,000.
To find the absolute difference in sales between Year 1 and Year 2, we subtract the sales of Year 1 from the sales of Year 2: $1,300,000 - $1,000,000 = $300,000. The food cost percentage is calculated by dividing the cost of food consumed by food sales and multiplying by 100. In this case, the calculation is: ($38,000 / $100,000) * 100 = 38%. To determine the net income (or loss) for Casual Fare Restaurant in July, we need to calculate the total revenue and subtract the total costs. Total revenue is calculated by multiplying the average price per meal by the number of meals sold: $10 * 8,000 = $80,000. Total costs consist of fixed costs and variable costs per meal multiplied by the number of meals sold: $15,000 + ($4 * 8,000) = $47,000. Net income is calculated by subtracting total costs from total revenue: $80,000 - $47,000 = $32,000.
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Your investment advisor has given you the following two investment alternatives. As a risk-averse investor, which one would you prefer? Show your work and explain. Stock (UPT) Stock (DML) return probability return probability 6% 0.6 8% 0.8 2% 0.4 0.2 2. A risk-free zero-coupon bill (discount bill) has a face value of £1,000 and is newly issued maturing in 6 months. Compute the price of this bill if the current market interest rate is 5% per year? 3. You purchased a 2-year 7% coupon bond at $930, one year after its issuance. You are very much determined to hold this bond with $1,000 face value until maturity. Calculate your annual holding period return?
As a risk-averse investor, I would prefer the first investment alternative, which is a 6% return probability for Stock (UPT) and 8% return probability for Stock (DML).
The expected return for each stock is calculated by multiplying the return probability by the payoff, which is the difference between the current price and the face value of the stock.
Expected return for Stock (UPT) = 6% * £1,000 = £60
Expected return for Stock (DML) = 8% * £1,000 = £80
The difference between the expected returns for Stock (UPT) and Stock (DML) is £20, which represents the additional risk taken by choosing Stock (DML).
As a risk-averse investor, I would prefer to invest in Stock (UPT), which has a lower expected return but also a lower level of risk.
For the second question, the price of the 6-month zero-coupon bill can be calculated using the formula:
Price = Face value * (1 + (Market interest rate - Discount rate))^(-n)
where n is the number of periods until maturity and the discount rate is the interest rate on the bill.
In this case, the market interest rate is 5% per year and the bill has a face value of £1,000, so the discount rate is 5%.
n = 6/12 * 365 = 18.75
Price = £1,000 * (1 + (5% - 5%)^(-18.75)) = £945.63
For the third question, the annual holding period return can be calculated using the formula:
Annual holding period return = [(Purchase price - Face value) / Face value] - 1
where Purchase price is the price at which the bond was purchased and Face value is the face value of the bond.
In this case, the purchase price is £930 and the face value is £1,000, so the annual holding period return is:
Annual holding period return = [(£930 - £1,000) / £1,000] - 1 = -£70
This means that the investor is losing £70 per year for holding the bond for one year.
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The units of production depreciation method is used when the asset is used for production and represents a big initial investment (like drilling equipment) O True False
True. The units of production depreciation method is commonly used when the asset is primarily used for production purposes and involves a significant initial investment.
This method allows for the depreciation expense to be allocated based on the actual usage or production output of the asset. It is particularly suitable for assets where the wear and tear or obsolescence is directly related to the level of production or usage.
This method ensures that the depreciation expense reflects the asset's actual contribution to revenue generation and provides a more accurate representation of its value over time. Therefore, for assets like drilling equipment that are used extensively for production activities, the units of production depreciation method is often considered appropriate.
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explain the basic idea behind ARRSES model. for what type of data is the model appropriate? what advantages does the model have over competing smoothing models or time series model for the forecasters
The ARRSES model uses Average Ratio Relative Seasonality Exponential Smoothing to forecast values for time series data with seasonality, offering simplicity, flexibility, and simultaneous capture of trend and seasonality.
The ARRSES model combines exponential smoothing with seasonal adjustments to generate forecasts. It calculates an average ratio of historical data and adjusts it based on the relative seasonality index to account for seasonal variations. This allows for accurate forecasting of future values, especially for data with recurring patterns over time.
Compared to competing smoothing models or traditional time series models, the ARRSES model offers several advantages. Firstly, it is relatively simple to implement and understand, making it accessible for forecasters with varying levels of expertise. Secondly, the model is flexible and can handle different types of seasonality, including multiplicative or additive effects. This flexibility enables accurate forecasting even in the presence of complex seasonal patterns. Lastly, the ARRSES model captures both trend and seasonality simultaneously, providing a comprehensive forecast that considers long-term trends and short-term seasonal variations. This makes it a valuable tool for forecasters looking to generate reliable predictions for time series data with seasonal components
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You are the manager of the company and you need to select from the following projects: (Assume MARR=6%) A B Initial Investment. 1900 2000 Revenue 580 700 Expenses 90 60 Salvage value 500 500 N 5 Show your calculations and explain your decision. Submit your solution.
The reason why we selected project B is that it has a higher NPV and IRR, which means it has a better chance of generating higher profits for the company.
MARR = 6%
A = Initial Investment
B = Revenue
C = Expenses
D = Net
E = Salvage Value
F = Number of years
To determine which project to select, we need to compare the net present value (NPV) and the internal rate of return (IRR) of both projects.
NPV = FV / (1 + r)^n
Where:
FV = Future Value
r = Discount Rate
n = Number of years
IRR = Σ (D / FV) / n
Where:
D = Cash inflow
FV = Future Value
First, we need to calculate the NPV and IRR of project A:
NPV(A) = 580 / (1 + 0.06)^5 = 1,106.96=0.143
1,106.96IRR(A)=0.143
Next, we need to calculate the NPV and IRR of project B:
NPV(B) = 700 / (1 + 0.06)^5
1,230.17=0.152
1,230.17IRR(B)=0.152
Based on the calculations, we can see that project B has a higher NPV and IRR than project A. Therefore, we should select project B.
The reason why we selected project B is that it has a higher NPV and IRR, which means it has a better chance of generating higher profits for the company. Additionally, the IRR of project B is slightly higher than the discount rate of 6%, indicating that it has a higher potential for growth. Finally, the initial investment of project B (2,000)is higher than project A(1,900), which means that there is a higher potential for revenue generation.
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Show and explain the implications of the following on the balance of payments curve: a. Domestic prices are falling. b. The exchange rate is rising.
The implication of a rising exchange rate on the balance of payments curve is usually a deterioration in the current account balance. The increase in imports due to cheaper foreign goods and the decrease in exports due to more expensive domestic goods can contribute to a larger current account deficit.
a. Domestic prices are falling:
When domestic prices are falling, it generally indicates deflation or a decrease in the overall price level of goods and services within the domestic economy. This can have implications for the balance of payments curve as follows:
1. Effect on Exports: Falling domestic prices can make domestic goods and services relatively cheaper compared to foreign goods and services. This can increase the competitiveness of domestic exports in international markets, leading to an increase in export volume. As a result, the balance of payments curve may shift outward or experience an improvement in the current account balance.
2. Effect on Imports: Falling domestic prices can make imported goods and services relatively more expensive. This can reduce the demand for imports as consumers and businesses may find domestic products more attractive due to their lower prices. As a result, the balance of payments curve may shift inward or experience a reduction in the current account deficit.
Overall, the implication of falling domestic prices on the balance of payments curve depends on the relative impact on exports and imports. If the increase in export volume outweighs the decrease in import volume, the balance of payments curve may improve. Conversely, if the decrease in import volume outweighs the increase in export volume, the balance of payments curve may worsen.
b. The exchange rate is rising:
When the exchange rate of a country's currency rises, it means that the currency has appreciated or become stronger relative to other currencies. This can have implications for the balance of payments curve as follows:
1. Effect on Exports: A rising exchange rate can make domestic goods and services relatively more expensive for foreign buyers. This can lead to a decrease in export volume as foreign consumers may find it less attractive to purchase relatively more expensive domestic products. As a result, the balance of payments curve may shift inward or experience a deterioration in the current account balance.
2. Effect on Imports: A rising exchange rate can make imported goods and services relatively cheaper for domestic consumers. This can increase the demand for imports as domestic consumers may find it more affordable to purchase imported products. As a result, the balance of payments curve may shift outward or experience an increase in the current account deficit.
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REVISED JUDICATURE ACT OF 1961
Act 236 of 1961, Section 600.5714
For this Michigan statute
-Give the correct citation for the statute (Michigan Compiled Laws Annotated)
The correct citation for the Revised Judicature Act of 1961, Act 236 of 1961, Section 600.5714 in the Michigan Compiled Laws Annotated (MCLA) would be:
MCLA § 600.5714
The MCLA is a compilation of the laws of the state of Michigan that have been enacted by the legislature. It provides an organized and accessible reference to the statutes in force at any given time. The citation includes the abbreviation "MCLA" followed by the section number of the statute.
In this case, the specific statute being referenced is Section 600.5714 of the Revised Judicature Act of 1961, which is part of the larger body of laws governing the judiciary and court procedures in the state of Michigan.
By providing the correct citation, legal professionals, researchers, and individuals seeking to understand or reference this particular statute can easily locate and consult the relevant section within the Michigan Compiled Laws Annotated.
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A market researcher is proposing a survey for the Quarry Hill Country Club, a private country club that is contemplating several changes in its layout to make the golf course of championship caliber. The researcher is considering three different sample designs as a way to draw a representative sample of the club’s golfers. The three alternative designs include the following:
a. Station an interviewer at the first hole tee on one day chosen at random, with instructions to ask every 10th golfer to fill out a self-administered questionnaire.
b. Put a stack of questionnaires on the counter where golfers check in and pay for their golf carts with a sign above the questionnaires offering an incentive of a "free dinner in the clubhouse" for three players who fill out the questionnaire and whose names are selected by a lottery.
c. Using the city telephone directory to conduct a plus-one dialing procedure. With this procedure, a random page in the directory would be selected, and a name on that page would be selected, both using a table of random numbers. The plus-one system would be applied to that name and every name listed after it until 1,000 golfers are identified and interviewed by telephone.
Assess representativeness and other issues associated with this sample problem. Be sure to identify the sample method being contemplated in each case (a, b, and c). Which sample method do you recommend using and why?
Using sample method a - stationing an interviewer at the first hole tee on one randomly chosen day and asking every 10th golfer to fill out a self-administered questionnaire.
This method ensures a representative sample and minimizes potential biases.
In sample method a, an interviewer is stationed at the first hole tee on a random day, ensuring that all golfers have an equal chance of being selected. By asking every 10th golfer to fill out a self-administered questionnaire, the sample is systematically chosen and representative of the overall population of golfers at the Quarry Hill Country Club.
Sample method b, where questionnaires are placed at the counter with an incentive, may introduce a selection bias as only those interested in the incentive are likely to participate, leading to a potentially unrepresentative sample. This method may not capture the opinions of all golfers, including those who may not be interested in the incentive.
Sample method c, using the city telephone directory, may suffer from a non-response bias as not all golfers may be listed or available for telephone interviews. This method may exclude certain segments of the golfing population, leading to a biased sample.
Therefore, sample method a is the most recommended as it provides a random and systematic approach, ensuring representativeness and minimizing biases that may arise from other methods.
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.On October 1, 2020, Eastern Timber Inc. has available for issue $925,000 bonds due in four years. Interest at the rate of 6.00% is to be paid quarterly. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
Issue Price
a. 7%
b. 6%
c. 5%
a. The issue price at a market interest rate of 7% is $762,980.
b. The issue price at a market interest rate of 6% is $780,249.
c. The issue price at a market interest rate of 5% is $824,072.
To calculate the issue price of the bonds, we can use the present value formula for a bond:
Issue Price = (Coupon Payment x PVIFA) + (Face Value x PVIF)
Where:
Coupon Payment = (Face Value x Coupon Rate) / Number of Coupon Payments per Year
PVIFA = Present Value Interest Factor of an Annuity
PVIF = Present Value Interest Factor
Given:
Face Value = $925,000
Coupon Rate = 6% (0.06)
Number of Coupon Payments per Year = 4
a. Market Interest Rate = 7%
Coupon Payment = ($925,000 x 0.06) / 4 = $13,875
PVIFA = (1 - (1 + 0.07/4)^(-4*4)) / (0.07/4) = 3.4641
PVIF = 1 / (1 + 0.07/4)^(4*4) = 0.7350
Issue Price = ($13,875 x 3.4641) + ($925,000 x 0.7350) = $83,855 + $679,125 = $762,980
b. Market Interest Rate = 6%
Coupon Payment = ($925,000 x 0.06) / 4 = $13,875
PVIFA = (1 - (1 + 0.06/4)^(-4*4)) / (0.06/4) = 3.5293
PVIF = 1 / (1 + 0.06/4)^(4*4) = 0.7921
Issue Price = ($13,875 x 3.5293) + ($925,000 x 0.7921) = $48,997 + $731,252 = $780,249
c. Market Interest Rate = 5%
Coupon Payment = ($925,000 x 0.06) / 4 = $13,875
PVIFA = (1 - (1 + 0.05/4)^(-4*4)) / (0.05/4) = 3.5850
PVIF = 1 / (1 + 0.05/4)^(4*4) = 0.8385
Issue Price = ($13,875 x 3.5850) + ($925,000 x 0.8385) = $49,734 + $774,338 = $824,072
Therefore:
a. The issue price at a market interest rate of 7% is $762,980.
b. The issue price at a market interest rate of 6% is $780,249.
c. The issue price at a market interest rate of 5% is $824,072.
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.Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow.
V-1 V-2
Units produced 10,000 1,000
Direct materials cost per unit $ 2 $ 4
Machine hours per unit 1 2
Production runs per month 80 40
Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow.
Machine depreciation $ 54,000
Setup labor 25,200
Material handling 15,840
Total $ 95,040
Required:
a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round your answer to 2 decimal places.)
b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver.
Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow.
V-1 V-2
Units produced 10,000 1,000
Direct materials cost per unit $ 2 $ 4
Machine hours per unit 1 2
Production runs per month 80 40
Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow.
Machine depreciation $ 54,000
Setup labor 25,200
Material handling 15,840
Total $ 95,040
Required:
a. Compute the unit costs for the two products V-1 and V-2 using the current costing system at Upriver (using machine hours as the allocation basis). (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver.
a. The unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver are approximately $16,806.82 and $8,413.64, respectively.
To calculate the predetermined overhead rate for the month using the current costing system at Upriver (based on machine hours), we need to divide the total manufacturing overhead by the total machine hours for both products.
Total machine hours = (Machine hours per unit V-1 * Units produced V-1) + (Machine hours per unit V-2 * Units produced V-2)
Total machine hours = (1 * 10,000) + (2 * 1,000) = 10,000 + 2,000 = 12,000
Predetermined overhead rate = Total manufacturing overhead / Total machine hours
Predetermined overhead rate = $95,040 / 12,000
Predetermined overhead rate ≈ $7.92 per machine hour
Therefore, the predetermined overhead rate for the month using the current costing system at Upriver is approximately $7.92 per machine hour.
b. To compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver, we need to allocate the overhead costs based on the chosen cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling.
Step 1: Calculate the cost driver rates:
Cost driver rate = Total cost driver cost / Total units of the cost driver
Cost driver rate for machine depreciation = Machine depreciation / Total machine hours
Cost driver rate for machine depreciation = $54,000 / 12,000 = $4.50 per machine hour
Cost driver rate for setup labor = Setup labor / Total production runs
Cost driver rate for setup labor = $25,200 / (80 + 40) = $210 per production run
Cost driver rate for material handling = Material handling / Total direct materials cost
Cost driver rate for material handling = $15,840 / (10,000 * $2 + 1,000 * $4) = $0.16 per dollar of direct materials cost
Step 2: Calculate the overhead costs for each product:
Overhead cost for V-1 = (Machine hours per unit V-1 * Cost driver rate for machine depreciation) +
(Production runs per month V-1 * Cost driver rate for setup labor) +
(Direct materials cost per unit V-1 * Cost driver rate for material handling)
Overhead cost for V-2 = (Machine hours per unit V-2 * Cost driver rate for machine depreciation) +
(Production runs per month V-2 * Cost driver rate for setup labor) +
(Direct materials cost per unit V-2 * Cost driver rate for material handling)
Overhead cost for V-1 = (1 * $4.50) + (80 * $210) + ($2 * $0.16) = $4.50 + $16,800 + $0.32 = $16,804.82
Overhead cost for V-2 = (2 * $4.50) + (40 * $210) + ($4 * $0.16) = $9 + $8,400 + $0.64 = $8,409.64
Step 3: Calculate the unit costs for each product:
Unit cost for V-1 = Direct materials cost per unit V-1 + Overhead cost for V-1
Unit cost for V-2 = Direct materials cost per unit V-2 + Overhead cost for V-2
Unit cost for V-1 = $2 + $16,804.82 = $16,806.82
Unit cost for V-2 = $4 + $8,409.64 = $8,413.64
Therefore, the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver are approximately $16,806.82 and $8,413.64, respectively.
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In accounting for disposal of assets, accumulated depreciation refers to Answers: A Fair value of assets Total depreciation since acquisition of the asset Book value less total depreciation Depreciation expenses in the year of sale
In accounting for the disposal of assets, the term "accumulated depreciation" refers to the book value less the total depreciation.What is the accumulated depreciation The accumulated depreciation is the total amount of depreciation expense that has been charged to the asset since the date of its acquisition.
It represents the carrying amount of the asset that has been allocated to expense over its useful life.How is the accumulated depreciation calculated? The accumulated depreciation is calculated as the total amount of depreciation expense that has been charged to the asset since the date of its acquisition. This is done by subtracting the asset's salvage value from its cost and dividing the resulting amount by its estimated useful life. The result is the amount of depreciation that is charged to the asset each year.
What is the book value?The book value is the value of an asset as shown on the balance sheet of a company. It is calculated as the original cost of the asset minus its accumulated depreciation.What is the significance of accumulated depreciation in accounting?Accumulated depreciation is important in accounting because it allows for the recognition of the decrease in an asset's value over time. It also helps in calculating the amount of depreciation expense that should be recognized in the financial statements of the company.
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Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $4.72 per share. Alth
The free cash flow valuation model is a widely used valuation technique that calculates the present value of the future free cash flows (FCFs) expected to be generated by a business. An initial public offering (IPO) is a type of investment that allows private companies to sell shares of their stock to the public for the first time, raising capital for the company in the process. To price an IPO using the free cash flow valuation model, the following steps must be taken:
Step 1: Estimate Free Cash Flows The first step is to estimate the free cash flows that will be generated by the business over a forecast period. This is typically done by projecting revenue, expenses, capital expenditures, and working capital requirements for a specified period, such as five years. The free cash flow is then calculated as operating cash flow minus capital expenditures and changes in working capital.
Step 2: Determine the Terminal Value The next step is to determine the terminal value of the business. The terminal value represents the present value of the free cash flows beyond the forecast period. It is typically calculated using a multiple of the last year’s free cash flow or using the Gordon Growth Model.
Step 3: Discount Free Cash Flows and Terminal Value The next step is to discount the forecasted free cash flows and the terminal value back to their present values using the appropriate discount rate. The discount rate is typically the weighted average cost of capital (WACC) or the cost of equity.
Step 4: Calculate the Intrinsic Value Finally, the intrinsic value of the business is calculated by summing the present value of the forecasted free cash flows and the terminal value. The intrinsic value per share is then calculated by dividing the intrinsic value by the number of shares outstanding.
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A company is considering purchasing equipment costing $160,000 to expand their business. The equipment is expected to have a useful life of 4 years with no disposal value. The estimated savings in cash operating costs are as follows. Year Amount 1 80,000 2 70,000 3 50,000 4 30,000 The company requires a rate of return of 10% in its capital budgeting decisions. Ignore the impact of income taxes and assume all cash flows occur at the end of the year except for the initial investment. Compute net present value (using the present value table in the textbook), payback period (rounded to two decimal places, discounted payback period (rounded to two decimal places), and accrual accounting rate of return based on the net initial investment (rounded to two decimal places as a percentage). Assume the straight-line depreciation method is applied and use the average annual savings in cash operating costs when computing the numerator for the accrual accounting rate of return.
The calculations for the equipment purchase include a net present value (NPV) of $29,853.71, a payback period of 2.07 years, a discounted payback period of 3.86 years, and an accrual accounting rate of return of 35.94%.
To calculate the net present value (NPV), we need to discount the cash flows at the company's required rate of return of 10%. The present value factors can be obtained from the present value table.
Calculate the present value of cash flows:
Year 1: $80,000 / (1 + 0.10)¹ = $72,727.27
Year 2: $70,000 / (1 + 0.10)² = $57,851.24
Year 3: $50,000 / (1 + 0.10)³ = $37,190.08
Year 4: $30,000 / (1 + 0.10)⁴ = $22,085.12
Calculate the net present value:
NPV = Present value of cash inflows - Initial investment
NPV = $72,727.27 + $57,851.24 + $37,190.08 + $22,085.12 - $160,000
NPV = $29,853.71
To determine the payback period, we add up the cash flows until the cumulative amount exceeds the initial investment:
Payback period = Year before cumulative cash flow exceeds the initial investment + (Remaining amount / Cash flow in the following year)
Payback period = 2 + ($32,085.12 / $30,000)
Payback period ≈ 2.07 years
The discounted payback period is calculated similarly, but we use the discounted cash flows:
Discounted payback period = Year before cumulative discounted cash flow exceeds the initial investment + (Remaining amount / Discounted cash flow in the following year)
Discounted payback period = 3 + ($32,085.12 / $37,190.08)
Discounted payback period ≈ 3.86 years
The accrual accounting rate of return is calculated by dividing the average annual savings in cash operating costs by the net initial investment and expressing it as a percentage:
Average annual savings = ($80,000 + $70,000 + $50,000 + $30,000) / 4 = $57,500
Accrual accounting rate of return = (Average annual savings / Net initial investment) × 100
Accrual accounting rate of return = ($57,500 / $160,000) × 100
Accrual accounting rate of return ≈ 35.94%
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Managerial accounting Under the variable-cost approach,the cost base includes all of the following except
O a.variable selling and administrative costs
O b.variable manufacturing costs
O c.total fixed costs.
O d.All of these answers are included
In the variable-cost approach, the cost base refers to the costs that are considered when calculating the cost per unit or the cost of goods sold. It includes all the costs that vary with the level of production or sales.
The main idea behind this approach is to distinguish between fixed costs and variable costs to better understand the cost behavior and make informed managerial decisions.
Under the variable-cost approach, both variable manufacturing costs and variable selling and administrative costs are included in the cost base.
Variable manufacturing costs are the costs that change proportionately with the level of production, such as direct materials and direct labor. Variable selling and administrative costs are the costs that fluctuate with the volume of sales, such as sales commissions and shipping expenses.
However, total fixed costs are not included in the cost base under the variable-cost approach.
Fixed costs are expenses that do not vary with changes in production or sales levels, such as rent and salaries. These costs are considered separately from the variable costs and are treated as a lump sum that is incurred regardless of the level of activity.
Therefore, the correct answer is (C) Total fixed costs, as they are not included in the cost base under the variable-cost approach
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In the variable-cost approach, the cost base refers to the costs that are considered when calculating the cost per unit or the cost of goods sold. It includes all the costs that vary with the level of production or sales.
The main idea behind this approach is to distinguish between fixed costs and variable costs to better understand the cost behavior and make informed managerial decisions.
Under the variable-cost approach, both variable manufacturing costs and variable selling and administrative costs are included in the cost base.
Variable manufacturing costs are the costs that change proportionately with the level of production, such as direct materials and direct labor. Variable selling and administrative costs are the costs that fluctuate with the volume of sales, such as sales commissions and shipping expenses.
However, total fixed costs are not included in the cost base under the variable-cost approach.
Fixed costs are expenses that do not vary with changes in production or sales levels, such as rent and salaries. These costs are considered separately from the variable costs and are treated as a lump sum that is incurred regardless of the level of activity.
Therefore, the correct answer is (C) Total fixed costs, as they are not included in the cost base under the variable-cost approach
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