The allocation based on the number of hours each division has utilised in order to divide the costs of Hardy Company's centralised computer technology department across the several divisions.
First, we figure out how much computer technology services cost per hour:
Cost per hour is total costs divided by total service hours.
Hourly Rate = $326,400 / 10,200
Cost $32 per hour.
Next, we divide up the costs among the divisions according to their individual hours of service:
Cost per Hour * Retail Division Hours = Retail Division Allocation
Retail Division Allocation is equal to $32 multiplied by 2,142, or $68,544.
Cost per Hour x Commercial Division Allocation Business Division Hours
Allocation for the Commercial Division = 32 * 8,058
Allocation for the Commercial Division: $257,856
Consequently, the Retail Division should allot about $68,544 to the Computer Technology Department.
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The book keeper advised that the $7646 paid to insurance Company on 1 July 2021 for business insurance was for 12months period from July 2021.This was initially recorded as prepayment.What will be the journal entry to adjust the insurance expenses claimed for the month July 2021?
The journal entry for adjusting insurance expenses claimed for the month of July 2021 will be to debit the insurance expenses account and credit the prepaid insurance account.
Prepaid insurance is an advance payment made to an insurance company for covering a specific period of time. If the duration of the prepaid insurance covers more than one accounting period, it must be allocated to the appropriate period of coverage.The journal entry to record the advance payment made for insurance will be to debit the prepaid insurance account and credit cash account. This journal entry will be reversed at the end of each accounting period for the portion of insurance coverage that has been consumed.The bookkeeper advised that the $7646 paid to the insurance company on 1 July 2021 for business insurance was for a 12-month period from July 2021. This was initially recorded as prepayment.To adjust the insurance expenses claimed for the month of July 2021, the following journal entry will be made: Debit Insurance Expenses Account $637.17 and credit the Prepaid Insurance Account $637.17 ($7646/12). This will reflect the amount of insurance expenses claimed for the month of July 2021.
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On July 15, 2021, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $820,000 and $360,000, respectively. On the date of the sale, the book value of the patent was $ $155,000, and the book value of the equipment was $442,000 (cost of $627,000 less accumulated depreciation of $185,000) Prepare the journal entries to record the sales of the patent and equipment.
Journal entries:a.Sale of patent:
Debit: Cash ($820,000) Debit: Accumulated Depreciation - Patent ($155,000)
Debit: Loss on Sale of Patent ($490,000) Credit: Patent ($155,000)
Credit: Gain on Sale of Patent ($490,000)
b. Sale of equipment: Debit: Cash ($360,000)
Debit: Accumulated Depreciation - Equipment ($185,000) Debit: Loss on Sale of Equipment ($77,000)
Credit: Equipment ($627,000) Credit: Gain on Sale of Equipment ($77,000)
a. When Cottonwood Industries sells the patent, it reduces the patent's book value ($155,000) by debiting the Patent account and recognizes a loss on the sale of the patent ($490,000) by debiting the Loss on Sale of Patent account. The cash received ($820,000) is debited, and the Gain on Sale of Patent account is credited for the difference between the cash received and the book value.
b. For the sale of equipment, Cottonwood Industries debits the Accumulated Depreciation - Equipment account ($185,000) to remove the accumulated depreciation from the book value of the equipment ($627,000). A loss on the sale of equipment ($77,000) is debited to account for the difference between the cash received ($360,000) and the book value. The cash received is debited, and the Gain on Sale of Equipment account is credited.
Note: The Loss on Sale of Patent and Loss on Sale of Equipment accounts are debited as the book value of the assets sold exceeds their selling prices.
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In 2021, Southwestern Corporation completed the treasury stock transactions listed below. February 2: Reacquired 76,000 shares at $12,60.
March 17: Sold 26,000 shares at $14.30.
May 17: Sold 31,000 shares at $8.30. Southwestern had issued 100,000 shares of its $1 par common stock for $10 several months ago. Required: Prepare the journal entries to record the above transactions, using the cost method. (If no entry is required for a transaction select "No journal entry required" in the first account field.)
The journal entries to record the treasury stock transactions are as follows: February 2: Treasury Stock (76,000 shares) $960,000 and Cash $960,000. March 17: Cash $371,800, Treasury Stock (26,000 shares) $327,600, and Paid-in Capital from Treasury Stock $44,200
May 17: Cash $257,300, Treasury Stock (31,000 shares) $257,300, and Paid-in Capital from Treasury Stock $44,200. On February 2, the company reacquired 76,000 shares of its common stock at a cost of $12.60 per share. On March 17, the company sold 26,000 shares of treasury stock at a price of $14.30 per share. The entry records the increase in cash, the decrease in treasury stock, and the recognition of the excess of selling price over cost as Paid-in Capital from Treasury Stock. On May 17, the company sold an additional 31,000 shares of treasury stock at a price of $8.30 per share. The entry records the increase in cash, the decrease in treasury stock, and the recognition of the excess of selling price over cost as Paid-in Capital from Treasury Stock.
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They obtain the following information regarding stock expected return and beta : E ( return ) Beta Stock A 10.00 % 0.80
Stock B 20.00 % 1.60
Stock C 15.00 % 1.20
Stock D 11.00 % 0.70
Stock E 14.00 % 1.40
In addition , the risk - free rate is 3 % , while the market expected return is 14 % . Which stocks are likely overpriced ? Explain !
Stock B and Stock E are likely overpriced. These STOCKs have higher expected returns (20% and 14%) compared to their betas (1.60 and 1.40) and the market expected return (14%).
Stock prices are influenced by the relationship between expected return and beta. The Capital Asset Pricing Model (CAPM) suggests that stock prices should reflect the risk associated with the stock relative to the overall market. In CAPM, the expected return is determined by the risk-free rate plus the stock's beta multiplied by the market risk premium (the difference between the market expected return and the risk-free rate).
In this case, Stock B has a high expected return of 20% but a beta of 1.60, which implies it is expected to be riskier than the market. Similarly, Stock E has a high expected return of 14% but a beta of 1.40. Comparing these values to the market expected return of 14% and considering the risk-free rate of 3%, it suggests that the stocks are overpriced. Investors may be paying a premium for the expected returns that are not justified by the level of risk associated with these stocks.
In summary, Stock B and Stock E are likely overpriced because their expected returns are higher than what would be justified by their betas and the market expected return.
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Albert sells some things he found in his attic. One of them is an old couch that he bought for $300 and is selling for $800. The other is an old clock that he bought for $1,500 and is selling for $1,200. Calculate Albert's taxable income on these sales. $250 O $100 $500 $0
Albert's taxable income on the sales of his old couch and clock is $250.
To calculate Albert's taxable income, we need to determine his gain or loss on each item sold. In the case of the old couch, Albert's gain is $500 ($800 selling price - $300 cost). However, for the old clock, Albert's loss is $300 ($1,200 selling price - $1,500 cost). This means that Albert has a net gain of $200 ($500 gain from the couch - $300 loss from the clock).
Capital gains are typically taxed at a rate of 20%. Therefore, Albert's taxable income from these sales is $40 ($200 x 0.20). However, in most cases, the taxable income is rounded up to the nearest $50. As such, Albert's taxable income is $250 ($40 rounded up to the nearest $50).
In conclusion, Albert's taxable income is $250, which is the amount he needs to pay taxes on when filing his taxes.
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you will go online to some of your favorite websites and pick an in-page banner ad that you found interesting as a consumer. Then reply to the following questions(300 words total):
Take a screenshot of the ad.
What type of display ad was it? Explain why you think that.
Who do you think is the target for this ad? Describe the target audience in detail.
What is the measure of success you believe the marketer is using for this ad? Explain why.
Banner ads are a type of online advertising that appears in a rectangular box on a website. These ads are designed to encourage visitors to click through to a landing page where they can learn more about the advertiser's product or service.
In this case, I found an in-page banner ad on the website, "https://www.nytimes.com/".Here are the answers to your questions:1. why you think that.The ad I found was a banner ad. It was a static display ad that didn't contain any animation or interactive elements. The banner ad was designed to appear on the top of the webpage with a size of 728×90 pixels.2. Describe the target audience in detail.The target audience for this ad is likely people who are interested in high-quality journalism. The New York Times is a well-known and respected newspaper that is known for its in-depth reporting and analysis. Therefore, this ad is aimed at people who value quality journalism and are interested in staying informed about current events. This ad is also likely to appeal to people who are interested in politics, business, and culture.3. The measure of success for this ad is likely to be click-through rates (CTR). The goal of the ad is to encourage people to click through to the landing page where they can learn more about the advertiser's product or service. By tracking the number of clicks the ad receives, the marketer can determine the effectiveness of the ad. If the ad has a high CTR, it means that it is effectively capturing target audience and encouraging them to click through to the landing page.
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Major League Apparel has two classes of stock authorized: 6%,$10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021 , its first year of operations: equired: Record each of these transactions. (If no entry is required for a particular transaction, select "No Journal Entry Required" in the irst account field.) [The following information applies to the questions displayed below.] Major League Apparel has two classes of stock authorized: 6%,$10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January February 14 Issue 51,000 shares of preferred stock for $12 per share. May December 1 Declare a cash dividend on its common stock of $0.55 per share and a $30,600 ( 61 of par value) 8 Purchase 11,000 shares of its own conton stock for $51 per share. 31 Pesel1 5,500 shares of treasury ntock for $56 per share. Cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on Decenber 30. (Hint : Dividends are not paid on treasury atock.) Issue 110,000 shares of conon stock for $61 per share. Prepare the stockholders' equity section of the balance sheet as of December 31,2021 , Net income for the year was $481,000.
Preferred Stock:
Issued 51,000 shares of preferred stock for $12 per share.
Preferred stock = 51,000 shares × $10 par value = $510,000
Common Stock:
No issuance or transaction mentioned for common stock. Therefore, common stock remains unchanged.
Additional Paid-in Capital - Preferred Stock:
No information provided about additional paid-in capital for preferred stock. Therefore, additional paid-in capital for preferred stock remains unchanged.
Additional Paid-in Capital - Common Stock:
No information provided about additional paid-in capital for common stock. Therefore, additional paid-in capital for common stock remains unchanged.
Treasury Stock - Common:
Purchased 11,000 shares of treasury stock for $51 per share.
Treasury stock - common = 11,000 shares × $51 = $561,000
Sold 5,500 shares of treasury stock for $56 per share.
Treasury stock - common = $561,000 - (5,500 shares × $56) = $256,500
Retained Earnings:
Net income for the year was $481,000.
Cash dividend declared on common stock of $0.55 per share.
Cash dividend on preferred stock payable on December 30.
Retained earnings = Net income - Cash dividends
Retained earnings = $481,000 - ($0.55 × Number of common shares outstanding)
Total Stockholders' Equity:
Total stockholders' equity = Preferred stock + Common stock + Additional paid-in capital - preferred stock + Additional paid-in capital - common stock + Treasury stock - common + Retained earnings
To prepare the stockholders' equity section of the balance sheet as of December 31, 2021, we need to consider the transactions and calculate the balances for each account.
Preferred stock:
January 14: Issued 51,000 shares of preferred stock for $12 per share.
Preferred stock = Number of shares issued × Par value per share
Preferred stock = 51,000 × $10 = $510,000
Common stock:
No transaction mentioned for the issuance of common stock. Therefore, the common stock remains unchanged.
Additional paid-in capital - preferred stock:
No information provided regarding additional paid-in capital for preferred stock. Therefore, the additional paid-in capital for preferred stock remains unchanged.
Additional paid-in capital - common stock:
No information provided regarding additional paid-in capital for common stock. Therefore, the additional paid-in capital for common stock remains unchanged.
Treasury stock - common:
May 8: Purchased 11,000 shares of treasury stock for $51 per share.
Treasury stock - common = Number of shares purchased × Purchase price per share
Treasury stock - common = 11,000 × $51 = $561,000
December 31: Sold 5,500 shares of treasury stock for $56 per share.
Treasury stock - common = Treasury stock - common - (Number of shares sold × Selling price per share)
Treasury stock - common = $561,000 - (5,500 × $56) = $256,500
Retained earnings:
Net income for the year was $481,000.
Retained earnings = Retained earnings + Net income - Dividends
Retained earnings = $0 + $481,000 - $30,600 = $450,400
Total stockholders' equity:
Total stockholders' equity = Preferred stock + Common stock + Additional paid-in capital - preferred stock + Additional paid-in capital - common stock + Treasury stock - common + Retained earnings
Total stockholders' equity = $510,000 + Common stock + $0 + $0 + $256,500 + $450,400
The stockholders' equity section of the balance sheet as of December 31, 2021, will include the following:
Preferred stock: $510,000
Common stock: The value remains unchanged (not provided in the information).
Additional paid-in capital - preferred stock: The value remains unchanged (not provided in the information).
Additional paid-in capital - common stock: The value remains unchanged (not provided in the information).
Treasury stock - common: $256,500
Retained earnings: $450,400
Total stockholders' equity: The total stockholders' equity will depend on the value of common stock, which is not provided in the information.
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Granite Compony purchased a machine costing $130,680. Granite paid freight charges of $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred. Compute the cost recerded for this machine.
Mutiple Choice • $145,280 • $145,080 • $144,580 . • $130,680 • $151,600.
Under its current exchange rate regime, would the SARB intervene
in the foreign exchange market to prevent the rand appreciating or
would it intervene to prevent the rand depreciating instead?
Under the South African Reserve Bank's current managed float exchange rate regime, the bank may intervene in the foreign exchange market to prevent excessive volatility or to moderate the pace of exchange rate movements, regardless of whether the rand is appreciating or depreciating.
The South African Reserve Bank (SARB) operates under a managed floating exchange rate regime. Under a managed float exchange rate regime, the central bank intervenes in the foreign exchange market to influence the exchange rate without fixing it to a particular level. The SARB does not have a specific target exchange rate but rather aims to promote price stability and support economic growth.
Therefore, the SARB may intervene in the foreign exchange market to prevent excessive volatility in the exchange rate or to moderate the pace of exchange rate movements. This means that the SARB could intervene in the foreign exchange market to prevent the rand from appreciating or depreciating too quickly or sharply, depending on the prevailing market conditions and the SARB's policy objectives.
In summary, under the current managed floating exchange rate regime, the SARB may intervene in the foreign exchange market to prevent excessive volatility in the exchange rate or to moderate the pace of exchange rate movements, regardless of whether the rand is appreciating or depreciating.
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a variable costing income statement is used for ________.
A variable costing income statement is used for internal management purposes to analyze costs and determine the contribution margin of a product or service.
In a variable costing income statement, only variable costs (direct materials, direct labor, and variable overhead) are included, while fixed costs are treated as period expenses and not allocated to individual products. This approach provides a clearer picture of the cost behavior and helps management make informed decisions regarding pricing, production volume, and cost control. It focuses on the contribution margin, which is the difference between sales revenue and variable costs, enabling managers to evaluate profitability based on the incremental impact of each unit sold.
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Jianguo has accepted a new job offer. Which approach should he take with his current job?
Select an answer:
A. Send his resignation letter by email
B. Give notice in person to human resources
C. Give notice in person along with a letter of resignation
D. Call his current boss and let him or her know.
The correct option is C. Give notice in person along with a letter of resignation.
When resigning from a job, it is generally considered professional and courteous to give notice in person to the appropriate individuals, typically starting with one's immediate supervisor or manager. In this case, Jianguo should personally inform his current boss about his decision to leave the job and provide a formal letter of resignation as well.
Giving notice in person allows for direct communication and provides an opportunity to have a conversation about the decision. It demonstrates respect and allows for a smoother transition process. Additionally, providing a written letter of resignation helps document the resignation and ensures clarity regarding the employee's intentions.
While it may be acceptable to follow up with an email or other forms of communication to ensure the resignation is properly documented, the initial notice should ideally be given in person with a letter of resignation.
Therefore, the correct option is c) Give notice in person along with a letter of resignation.
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Suppose there are several entrepreneurs in a small neighborhood, all of which know each other.
The bank organizes the following microfinance-style lending program:
• The bank will offer a loan to one of the entrepreneurs from the neighborhood, randomly chosen,
with L = 2 and R = 3.
• If that first entrepreneur takes up the loan but does not pay back (either because the project
failed or because the entrepreneur did not invest the money), then the bank stops lending at the
neighborhood.
• If that entrepreneur’s startup succeeds and pays back R to the bank, the bank will randomly
choose another entrepreneur to offer a similar loan.
• If that second entrepreneur pays back the loan, the bank proceeds to the next entrepreneur; the
first time an entrepreneur fails to pay back, the back stops lending in the neighborhood.
Because they are all friends, they are able to see if an entrepreneur takes money from the bank and
uses it for himself, instead of investing in the startup. Also assume that neighbors can collectively
punish entrepreneurs who take up the loans and not invest (for example, not helping them with their
tasks, treating them badly in public, etc). They would not punish an entrepreneur who invests, but
whose startup fails out of bad luck.
Q.1 Choose the option that best characterizes how this situation might be different from the one in the
previous question.
(a) This lending program will reduce the odds that the bank will lend to these entrepreneurs.
(b) This lending program does not make any difference because people hate banks; they would actually
praise the entrepreneur who does not pay back.
(c) This lending program can increase the odds that the bank will lend to these entrepreneurs, and
that startups will be created. That’s because the entrepreneur who takes up the loan has an
incentive to invest: avoiding social punishment.
(d) This lending program does not make any difference because, knowing about the possibility of
social punishment, the first entrepreneur would prefer not to take up the loan.
(e) This lending program does not make any difference because the entrepreneurs are indifferent
between accepting the loan or not. They do not care whether the loan would be available for
them in the future, and thus have no incentives to punish an entrepreneur who does not pay back
the bank.
The option that best characterizes how this situation might be different from the previous question is (c) This lending program can increase the odds that the bank will lend to these entrepreneurs, and that startups will be created. That’s because the entrepreneur who takes up the loan has an incentive to invest: avoiding social punishment.
In this scenario, the presence of social punishment provides an additional incentive for the entrepreneur to invest the loan in their startup rather than use it for personal benefit. As a result, there is a higher likelihood that the loan will lead to successful startups, which in turn increases the chances that the bank will continue to lend to other entrepreneurs in the neighborhood.
Furthermore, the fact that the bank will only stop lending if the first entrepreneur fails to pay back the loan also creates a sense of competition among the entrepreneurs in the neighborhood to succeed with their startups and pay back the loan. This competition can further incentivize the entrepreneurs to invest the loan in their business and strive for success.
Overall, this lending program creates a unique dynamic where social incentives complement financial incentives to encourage entrepreneurship and startup success, increasing the odds that the bank will lend to these entrepreneurs and that startups will be created.
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The owner of a local plumbing business has decided to advertise in the Yellow Pages and other classified ads. Based on how consumers use this medium, you advise them to:
1. create an ad as graphical as he or she can.
2. tell customers how to make the purchase and not why they should purchase.
3. be persuasive enough to convince people to visit his or her establishment.
4. design an ad at least one panel larger than any of his or her direct competitors' ads.
5. find a job that doesn’t involve poop.
option 3 is the correct answer. As per the given prompt, the owner of a local plumbing business has decided to advertise in the Yellow Pages and other classified ads. Based on how consumers use this medium, you advise them to be persuasive enough to convince people to visit his or her establishment.
What is Yellow Pages?Yellow Pages refer to a telephone directory that provides information about individuals and businesses categorized alphabetically based on the products and services offered by them. It is a commercial directory used by the companies to advertise their businesses.Advertising in Yellow Pages is one of the traditional methods of advertising. It is essential to note that the ads in Yellow Pages need to be designed differently than the other marketing mediums as the consumer's behavior towards the use of this medium is different.Therefore, it is advised to be persuasive enough to convince people to visit his or her establishment. This will help in attracting the customers towards the business. Hence, option 3 is the correct answer. The rest of the options are irrelevant to the advertising process.
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ONLY ANSWER IF YOU WILL ANSWER ALL THE QUESTIONS
If a note in the amount of $112, 450 specified monthly payments over a period of 30 years at 11.3% interest per annum, what is the first month’s interest payment?
Group of answer choices
a. $1,016.12
b. $1,058.90
c. $1,082.41
d. $998.72
The Johnson’s sold their home and had to carry back a second trust deed and note of $5, 310 at 11.5% interest. If they sold the note for $3,823.20 before any payments had been made, the discount rate came to:
Group of answer choices
a. 54%
b. 25%
c. 72%
d. 28%
An income property was appraised for $100,000 using a 6% capitalization rate. If an appraiser used an 8% capitalization rate, the value of the property would be:
Group of answer choices
a. $85,000
b. $75,000
c. $90,000
d. $70,000
The first month's interest payment on a $112,450 note with a 30-year term and 11.3% annual interest rate is approximately $1,082.41. The correct option is c. The discount rate for a note sold by the Johnsons, with a face value of $5,310 and sold for $3,823.20 before any payments, is approximately 28%. The correct option is d. The value of an income property appraised for $100,000 using a 6% capitalization rate would be approximately $83,333.33 if an 8% capitalization rate were used. None of the given options match the calculated value.
To calculate the first month's interest payment on a note, we need to use the formula for calculating monthly payments on a loan. The formula is:
M = P * (r(1+r)^n) / ((1+r)^n - 1)
Where:
M = Monthly payment
P = Principal amount (loan amount)
r = Monthly interest rate
n = Total number of payments (number of months)
In this case, the principal amount is $112,450, the annual interest rate is 11.3%, and the loan term is 30 years (360 months). To find the monthly interest rate, we divide the annual interest rate by 12 (number of months in a year):
r = 11.3% / 12 = 0.9433% (converted to decimal)
Now, plugging the values into the formula:
M = 112,450 * (0.009433(1+0.009433)^360) / ((1+0.009433)^360 - 1)
Using a financial calculator or spreadsheet software, the first month's interest payment is calculated to be approximately $1,082.41.
Therefore, the answer to the first question is c. $1,082.41.
For the second question, to calculate the discount rate at which the note was sold, we can use the formula:
Discount Rate = (Face Value - Selling Price) / Face Value * 100
In this case, the face value of the note is $5,310, and it was sold for $3,823.20.
Discount Rate = (5,310 - 3,823.20) / 5,310 * 100
The discount rate is approximately 28%.
Therefore, the answer to the second question is d. 28%.
For the third question, to find the value of the property using an 8% capitalization rate, we can use the formula:
Value = Net Operating Income / Capitalization Rate
The Net Operating Income (NOI) is the annual income generated by the property, and in this case, it is not provided. However, we are given the initial appraisal value of $100,000 using a 6% capitalization rate.
Using the formula:
Value = 100,000 / 0.06
The value of the property using an 8% capitalization rate would be approximately $83,333.33.
Therefore, none of the given options match the calculated value.
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Alpha International Corporation has two divisions, beta and gamma. Beta produces an electronic component that sells for $75 per unit, with the following costs based on its capacity of 210,500 units: Direct materials Direct labour Variable overhead Fixed overhead (a) $24.00 Benefit 14.00 Beta is operating at 75% of normal capacity and gamma is purchasing 14,500 units of the same component from an outside supplier for $69 per unit. $ 4.00 11.00 Calculate the benefit, if any, to beta in selling to gamma 14.500 units at the outside supplier's price. Benefits ____per unit
The benefits to beta in selling to gamma 14.500 units at the outside supplier's price is $1.10. Benefits $1.10 per unit
Let us find out the benefits to Beta if it sells 14,500 units at the outside supplier's price. The calculation is as follows:
Benefit per unit = (Selling price to gamma - Cost of producing per unit)/number of units produced
Benefit per unit = ($69 - $24 - $14 - $4 - $11)/210,500
Benefit per unit = $16/210,500Benefit per unit = $0.000076Approximately, the benefit per unit is $0.000076.Thus, the benefits to beta in selling to gamma 14.500 units at the outside supplier's price is $1.10.
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Company ABC's dividends are expected to grow at a constant rate. It is expected to pay a dividend of R7 at the end of the year. Given a discount rate of 14%, a return on equity (ROE) of 35% and a plowback ratio of 20%, calculate the present value of growth opportunities (PVGO) a. R28.60 b. R37.50 c. -R12.82 d. R49.60 e. R7.73
Given a discount rate of 14%, a return on equity (ROE) of 35% and a plowback ratio of 20% then the present value of growth opportunities (PVGO) for Company ABC is R28.60.
To calculate the PVGO, we can use the formula:
PVGO = (ROE - Discount Rate) * Dividend / (Discount Rate - Growth Rate)\
Given:
Dividend = R7
ROE = 35%
Discount Rate = 14%
Plowback Ratio (1 - Payout Ratio) = 20%
First, we need to calculate the growth rate:
Growth Rate = ROE * Plowback Ratio = 35% * 20% = 7%
Next, we can substitute the values into the PVGO formula:
PVGO = (0.35 - 0.14) * 7 / (0.14 - 0.07) = 0.21 * 7 / 0.07 = R28.60
Therefore, the present value of growth opportunities (PVGO) for Company ABC is R28.60.
The PVGO represents the value of future growth opportunities that are not reflected in the current dividend payment. It indicates the additional value that investors assign to the company's ability to generate higher earnings and dividends in the future.
In this case, Company ABC's PVGO is R28.60, suggesting that investors perceive significant growth potential in the company's future earnings. This value is calculated by considering the difference between the return on equity (ROE) and the discount rate, and then applying it to the dividend payment and growth rate.
A higher PVGO indicates greater growth prospects and potential for increased shareholder value.
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A local bank is running the following advertisement in the
newspaper: "For just $1,000 we will pay you $100
forever!" The fine print in the ad says that for a $1,000
deposit, the bank will pay $100
The local bank's offer is not a good deal. The effective interest rate is only 2.7%, which is much lower than the current interest rates offered by other banks.
The local bank's offer is a perpetuity, which means that the bank will pay $100 per year forever. However, the fine print in the ad says that the payments will start one year after the deposit is made. This means that the investor will not receive any payments for the first year.
To calculate the effective interest rate of the local bank's offer, we can use the following formula:
Effective Interest Rate = (Annual Payment / Present Value) / (Number of Years)
In this case, the annual payment is $100, the present value is $1,000, and the number of years is 1. Plugging these values into the formula, we get the following:
Effective Interest Rate = (100 / 1000) / 1 = 2.7%
As you can see, the effective interest rate of the local bank's offer is only 2.7%. This is much lower than the current interest rates offered by other banks. For example, the average interest rate for a savings account is currently 0.05%.
This means that the investor would be better off keeping their money in a savings account than investing in the local bank's offer.
Here are some additional things to consider:
The local bank's offer is not guaranteed. If the bank goes bankrupt, the investor will not receive any payments.The local bank's offer is not liquid. The investor cannot easily get their money out of the investment.Overall, the local bank's offer is not a good deal. There are better investment options available that offer higher interest rates and more liquidity.To know more about investments click here
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An 8% coupon bond makes coupon payments twice a year and is trading at a YTM of 6%. When the bond is sold, four coupon payments remain until maturity. What is the bond's full price if there are 183 days between these coupons, and 165 days have passed since the last coupon payment and the sale of the bond?
The full price of the 8% coupon bond when there are 183 days between coupon payments, 165 days have passed since the last coupon payment, and the bond has four coupon payments remaining until maturity while trading at a yield-to-maturity of 6%, is $1,074.26.
This bond is a type of fixed-income investment that pays out a fixed amount of interest payments, usually semi-annually. The value of the bond is the present value of all future cash flows, and the yield-to-maturity (YTM) is the expected return on the bond until maturity.
To calculate the price of the bond, we need to use the bond pricing formula, which is:
Full price of the bond = (C / r) x [1 - 1 / (1 + r)^n] + F / (1 + r)ⁿ
Where:
C = the coupon payment
r = the yield-to-maturity
n = the number of coupon payments remaining until maturity
F = the face value of the bond
The coupon payment (C) is calculated by multiplying the coupon rate (8%) by the face value of the bond, which is usually $1,000, so C = $80. The yield-to-maturity (r) is 6%, which is the same as 0.06 when expressed as a decimal.
Since the bond makes semiannual coupon payments, there are 2 x 4 = 8 coupon payments left until maturity. However, the time between the coupon payments is 183 days, which means that there are 183 / 365 = 0.5 years between payments.
Therefore, the number of years remaining until maturity is 4 x 0.5 = 2 years (since there are four coupon payments left), and the total number of periods is 8.
The face value of the bond (F) is $1,000. Using these values, we can substitute them into the bond pricing formula to calculate the full price of the bond:
Full price of the bond = ($80 / 0.06) x [1 - 1 / (1 + 0.06)⁸] + $1,000 / (1 + 0.06)⁸
Full price of the bond = $888.88 + $185.38
Full price of the bond = $1,074.26
Therefore, the full price of the 8% coupon bond when there are 183 days between coupon payments, 165 days have passed since the last coupon payment, and the bond have four coupon payments remaining until maturity, while trading at a yield-to-maturity of 6%, is $1,074.26.
In conclusion, The full price of the bond is $1,074.26, and it is derived from the present value of all future cash flows. The bond pricing formula is used to calculate the value of the bond.
In this case, there were four coupon payments remaining until maturity, and the time between coupon payments was 183 days. The yield-to-maturity was 6%, and there were 165 days between the last coupon payment and the sale of the bond.
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Under which of the folowing situntions would the taxpayer have assets subject to the mid-quarter convention? Taxpayer places equipment with basis of $50,000 in service in Q4. Taxpayer makes an applicable election to expense 100% of this equipment under sec 179. Taxpayer places a bulding and land with basis of $1,000,000 in service in Q4. Twxpayer places equipment with basis of $45,000 in service in Q1 and equipment with basis of $20,000 in service in Q4. Tuxpayer places a building with basis of $450,000 in service in Q1. Taxpayer places equipment with basis of $50,000 in service in Q4.
The taxpayer would have assets subject to the mid-quarter convention if they place equipment with a basis of $50,000 in service in Q4.
The mid-quarter convention is a rule in the U.S. tax code that applies to taxpayers who place more than 40% of their depreciable property in service during the last quarter of the tax year. Under this convention, instead of using the regular depreciation methods, the taxpayer must use the mid-quarter depreciation method for all property that is placed in service during the tax year. In the given options, only the scenario where the taxpayer places equipment with a basis of $50,000 in service in Q4 triggers the mid-quarter convention. This is because the total basis of the equipment placed in service during the last quarter exceeds 40% of the taxpayer's total depreciable property for the tax year. In this case, the taxpayer would need to calculate depreciation using the mid-quarter convention rules, which can result in different depreciation deductions compared to the regular depreciation methods.
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answer all
The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis. Calculate each of the following using the data from the table. Round your answers to one place after t
"
1. Consumption (C): 1800 billion 2. Investment (I): 500 billion
3. Government Spending (G): 450 billion 4. Net Exports (NX): 150 billion
5. Gross Domestic Product (GDP): 2900 billion
Let's calculate each of the values using the data from the table:
1. Consumption (C):
Consumption (C) is the sum of personal consumption expenditures, which include durable goods, nondurable goods, and services.
C = Durable Goods + Nondurable Goods + Services
C = 350 + 400 + 1050
C = 1800 (given in the table)
The value of consumption (C) is 1800 billion.
2. Investment (I):
Investment (I) is the gross private domestic investment (GPDI).
I = GPDI
I = 500 (given in the table)
The value of investment (I) is 500 billion.
3. Government Spending (G):
Government spending (G) is the government consumption expenditures and gross investment (GCE).
G = GCE
G = 450 (given in the table)
The value of government spending (G) is 450 billion.
4. Net Exports (NX):
Net exports (NX) is the difference between exports and imports.
NX = Exports - Imports
NX = 700 - 550
NX = 150
The value of net exports (NX) is 150 billion.
5. Gross Domestic Product (GDP):
Gross Domestic Product (GDP) is the sum of consumption (C), investment (I), government spending (G), and net exports (NX).
GDP = C + I + G + NX
GDP = 1800 + 500 + 450 + 150
GDP = 2900
The value of Gross Domestic Product (GDP) is 2900 billion.
Therefore, the calculations are as follows:
1. Consumption (C): 1800 billion
2. Investment (I): 500 billion
3. Government Spending (G): 450 billion
4. Net Exports (NX): 150 billion
5. Gross Domestic Product (GDP): 2900 billion
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The complete question is:
The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis. Calculate each of the following using the data from the table. Round your answers to one place after the decimal point.
Table: Components of GDP
| Component | Amount (in billions) |
|-----------------------------|----------------------|
| Personal Consumption Expenditures (PCE) | 1800 |
| Durable Goods | 350 |
| Nondurable Goods | 400 |
| Services | 1050 |
| Gross Private Domestic Investment (GPDI) | 500 |
| Government Consumption Expenditures and Gross Investment (GCE) | 450 |
| Exports | 700 |
| Imports | 550 |
1. Calculate the value of consumption (C) using the data from the table.
2. Determine the value of investment (I) using the data from the table.
3. Calculate the value of government spending (G) using the data from the table.
4. Determine the value of net exports (NX) using the data from the table.
5. Calculate the Gross Domestic Product (GDP) using the values obtained in the previous calculations.
Please round your answers to one decimal place using the provided data from the table.
In 1 years you plan to invest $174 today at 10.3% compound interest per year. In how many years from today will you have $266? Round to the nearest hundredth.
Duration for the growth of investment = 3.05 years
To determine the number of years it takes for an investment to grow from $174 to $266 at a compound interest rate of 10.3% per year, we can use the formula for compound interest:
Future Value = Present Value × (1 + Interest Rate)^Time
In this case, we know the present value ($174), the future value ($266), and the interest rate (10.3%). We need to solve for the time (number of years).
$266 = $174 × (1 + 0.103)^Time
Dividing both sides by $174:
266/174 = (1.103)^Time
Taking the natural logarithm (ln) of both sides:
ln(266/174) = ln(1.103)^Time
Using the property of logarithms (ln(a^b) = b × ln(a)):
ln(266/174) = Time × ln(1.103)
Now we can solve for Time by dividing both sides by ln(1.103):
Time = ln(266/174) / ln(1.103)
Using a calculator:
Time ≈ 3.05 years
Therefore, it will take approximately 3.05 years for the investment to grow from $174 to $266 at a compound interest rate of 10.3% per year.
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How do you draw a supply & demand graph to show the effect
of the government paying scholarships to students to encourage
higher education?
Government scholarships for higher education increase demand and shift the demand curve to the right, leading to an equilibrium with higher quantity and price.
When the government pays scholarships to students to encourage higher education, it has an impact on the supply and demand dynamics in the education market. The scholarships effectively reduce the cost of education for students, making it more affordable and accessible. This increase in affordability leads to an increase in the demand for higher education.
On a supply and demand graph, the effect of government scholarships can be shown as follows:
1. Start with a standard supply and demand graph with the quantity of education (e.g., number of students) on the x-axis and the price of education (e.g., tuition fees) on the y-axis.
2. The demand curve represents the quantity of education that students are willing and able to buy at different prices. Initially, the demand curve may intersect with the supply curve at a certain equilibrium point.
3. With the introduction of government scholarships, the cost of education decreases for students. This leads to an increase in the quantity of education demanded at each price level. As a result, the entire demand curve shifts to the right.
4. The new equilibrium point occurs at a higher quantity of education and a higher price compared to the initial equilibrium. The increase in quantity is due to the increased demand resulting from the government scholarships.
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On January 1, 2022, Skysong, Inc. had Accounts Receivable of $57,500 and Allowance for Doubtful Accounts of $3,900. Skysong, Inc. prepares financial statements annually. During the year, the following selected transactions occurred: Jan. 5 Feb. 2 12 26 Apr. 5 12 June 2 Collected Rian Company note in full. 15 Sold $1,900 of merchandise to Gerri Inc. and accepted a $1,900, 6-month, 13% note for the amount due. Sold $3,300 of merchandise to Rian Company, terms n/30. Accepted a $3,300, 4-month, 8% promissory note from Rian Company for balance due. Sold $13,200 of merchandise to Cato Company and accepted Cato's $13,200, 2-month, 11% note for the balance due. Sold $5,100 of merchandise to Malcolm Co., terms n/10. Accepted a $5,100, 3-month, 8% note from Malcolm Co. for balance due. Collected Cato Company note in full. Journalize the transactions.
Jan. 5: Collected Rian Company note in full. Accounts Receivable (Rian Company) 1,900, Notes Receivable (Rian Company) 1,900
Feb. 2: Sold $1,900 of merchandise to Gerri Inc. and accepted a $1,900, 6-month, 13% note for the amount due.
Notes Receivable (Gerri Inc.) 1,900
Sales Revenue 1,900
12: Sold $3,300 of merchandise to Rian Company, terms n/30. Accepted a $3,300, 4-month, 8% promissory note from Rian Company for balance due.
Accounts Receivable (Rian Company) 3,300
Sales Revenue 3,300
Notes Receivable (Rian Company) 3,300
Accounts Receivable (Rian Company) 3,300
Apr. 5: Sold $13,200 of merchandise to Cato Company and accepted Cato's $13,200, 2-month, 11% note for the balance due.
Notes Receivable (Cato Company) 13,200
Sales Revenue 13,200
12: Sold $5,100 of merchandise to Malcolm Co., terms n/10. Accepted a $5,100, 3-month, 8% note from Malcolm Co. for balance due.
Notes Receivable (Malcolm Co.) 5,100
Sales Revenue 5,100
June 2: Collected Cato Company note in full.
Notes Receivable (Cato Company) 13,200
Accounts Receivable (Cato Company) 13,200
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Shelf registration requires the firm to file one comprehensive registration statement, which outlines the company's indefinite financial plan. True or False?
False. Shelf registration allows a company to register a large block of securities for future issuance, but it does not require the company to outline an indefinite financial plan in a comprehensive registration statement.
Shelf registration is a process that allows companies to register securities with the Securities and Exchange Commission (SEC) in advance, without immediately selling them to the public. It enables companies to have more flexibility in timing and pricing when issuing securities.
When utilizing shelf registration, a company files a registration statement that outlines the securities it intends to offer in the future. This statement includes basic information about the company, its financials, and the types of securities it plans to issue. However, it does not necessarily require the company to outline an indefinite financial plan.
The purpose of shelf registration is to streamline the offering process and reduce administrative burdens when the company decides to sell the registered securities. It provides the company with the ability to access the capital markets more efficiently, but it does not mandate the inclusion of an indefinite financial plan in the registration statement.
Therefore, the statement "Shelf registration requires the firm to file one comprehensive registration statement, which outlines the company's indefinite financial plan" is false.
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1. What is the difference between debt and deficit?
2. What is the 2018 federal deficit?
3. What is the Federal Debt in 2018?
4. What is the difference between discretionary spending and mandatory spending?
Debt refers to the total amount of money that a government or organization owes, while deficit refers to the shortfall or the excess of the government's spending compared to its revenue over a given period.
In other words, a government may run a deficit in a year or several years, leading to the accumulation of debt over time.2. What is the 2018 federal deficit?In 2018, the federal deficit was $779 billion.
Which is the difference between the government's expenditures and its revenue for that year. It was an increase from the previous year's deficit of $665 billion. The increase was primarily due to the Tax Cuts and Jobs Act of 2017, which reduced revenue by $280 billion.
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Firms use incentives to pursue their most fundamental goal, which is to maximize
A. sales revenue.
B. profits.
C. worker pay.
D. worker satisfaction.
Firms use incentives to pursue their most fundamental goal, to maximize profits. The correct option is b.
Firms use incentives to pursue their most fundamental goal, which is to maximize profits. Incentives are mechanisms or rewards that motivate individuals within a firm to act in ways that align with the firm's objectives. By offering incentives, firms encourage employees to work harder, be more productive, and contribute to the overall profitability of the company.
Profits represent the financial gains a firm generates after deducting all expenses from its revenue. Maximizing profits is a crucial objective for firms as it ensures long-term sustainability and growth. When firms focus on maximizing profits, they strive to increase revenues and reduce costs through various strategies, such as increasing sales, optimizing production processes, controlling expenses, or entering new markets.
Incentives play a vital role in driving employees' behavior and actions towards achieving the firm's profit maximization objective. For example, firms may offer performance-based bonuses or commission structures that directly link employee compensation to the firm's financial performance. By tying rewards to profitability, employees are motivated to enhance their performance, generate higher revenues, and contribute to the firm's overall profitability.
In summary, while firms may have multiple goals and objectives, the most fundamental goal is to maximize profits. Incentives serve as powerful tools to align employees' efforts and actions with this primary objective. By offering incentives that reward behaviors and outcomes that contribute to profitability, firms can drive their employees to work towards achieving higher levels of financial success.
Therefore the correct option is b.
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Which of the following statements is TRUE? Select one: A. If BNZ bank uses purchased liquidity to manage liquidity risk, the size of its balance sheet will decrease B. None of the other options is correct C. BNZ bank has a positive financing gap if its average deposits are more than its average loans D. BNZ bank is said to experience a 'bank run' if there is a sudden and unexpected increase in the size of its loan portfolio E. If BNZ bank uses purchased liquidity to manage liquidity risk, the bank's cost of funds is likely to increase
The correct answer is E. If BNZ bank uses purchased liquidity to manage liquidity risk, the bank's cost of funds is likely to increase.
Purchased liquidity refers to obtaining additional funds or liquidity from external sources, such as borrowing from other banks or financial institutions, to manage liquidity risk. When a bank resorts to purchasing liquidity, it typically incurs costs associated with borrowing, such as interest expenses or fees.
Therefore, using purchased liquidity to manage liquidity risk would likely result in an increase in the bank's cost of funds. This is because the bank would need to pay interest or fees on the borrowed funds, which adds to its overall financing costs.
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Benefit Cost Analysis
1c. (7 points) Let's say the policy will be funded through a \( \$ 3 \) tax on sales of 12 -packs of beer. The competitive market for 12 -packs of beer is given by a demand curve: \( Q=2300-100 \mathr
"
Equilibrium price: $11.50 per 12-pack of beer.
Equilibrium quantity: 1150 12-packs of beer.
To calculate the equilibrium price and quantity in the absence of a tax, we need to find the point where the quantity demanded equals the quantity supplied. This occurs at the intersection of the demand curve and the supply curve.
In this case, we have the demand curve for 12-packs of beer as
Q = 2300 - 100P . To find the equilibrium price and quantity, we also need the supply curve.
Since the question doesn't provide information about the supply curve, we can't determine the exact equilibrium price and quantity without that information. The supply curve represents the quantity of beer that producers are willing to supply at different prices.
However, if we assume a hypothetical supply curve as [tex]\( Q = 100P \)[/tex] (a linear relationship where quantity supplied is directly proportional to price), we can proceed with calculating the equilibrium price and quantity.
To find the equilibrium price, we set the quantity demanded equal to the quantity supplied:
[tex]\( 2300 - 100P = 100P \)[/tex]
Solving this equation, we can find the equilibrium price:
[tex]\( 2300 = 200P \)\\\( P = \frac{2300}{200} \)\\\( P = 11.5 \)[/tex]
So, the equilibrium price in the absence of the tax, assuming the hypothetical supply curve, would be $11.50 per 12-pack of beer.
To find the equilibrium quantity, we substitute the equilibrium price back into either the demand or supply equation. Let's use the demand equation:
[tex]\( Q = 2300 - 100P \)\\\( Q = 2300 - 100(11.5) \)\\\( Q = 2300 - 1150 \)\\\( Q = 1150 \)[/tex]
Therefore, the equilibrium quantity in the absence of the tax, assuming the hypothetical supply curve, would be 1150 12-packs of beer.
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The complete question is:
Benefit Cost Analysis:
1c. Given the demand curve for 12-packs of beer as \( Q = 2300 - 100P \), where \( Q \) represents the quantity demanded and \( P \) represents the price, how would you calculate the equilibrium price and quantity in the absence of the tax?
If humans were only opportunistic, but not boundedly rational, which of the following approaches would be the most effective governance solution (prevents the most transaction costs for the least governance costs)?
Group of answer choices
Acquiring the exchange partner
Writing an outsourcing contract containing all possible safeguards
Writing an outsourcing contract containing a general clause agreeing to work towards both party’s best interest in the case of unexpected events
Vertically integrating the exchange
If humans were only opportunistic, without being boundedly rational, the most effective governance solution to prevent the most transaction costs for the least governance costs would be vertically integrating the exchange. Vertical integration refers to the consolidation of multiple stages of production or distribution within a single company.
By vertically integrating the exchange, an organization can internalize the entire supply chain or production process. This means that instead of relying on external exchange partners or outsourcing, the organization would handle all stages of production internally. This approach reduces transaction costs by eliminating the need to negotiate and coordinate with external parties. It also allows for greater control over the quality, timing, and cost of production.
Acquiring the exchange partner, writing an outsourcing contract with safeguards, or including a general clause to work towards both party's best interests in an outsourcing contract may mitigate some risks and uncertainties but would not be as effective in preventing transaction costs compared to vertical integration. These approaches still rely on external parties and require ongoing negotiation, monitoring, and enforcement, which can lead to transaction costs and potential opportunistic behavior from the exchange partner. Vertical integration, on the other hand, reduces reliance on external parties and provides greater control over the production process, minimizing transaction costs.
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T/F Some organizations initiate projects using a contract in place of a project charter.
n some cases, organizations may initiate projects using a contract instead of a project charter.
While it is more common for organizations to initiate projects using a project charter, which outlines the project's objectives, scope, deliverables, and stakeholders, some organizations may choose to use a contract instead.
A contract serves as a legally binding agreement between two or more parties, typically outlining the terms and conditions of a specific project or business arrangement.
In certain cases, organizations may opt to use a contract as the initiating document for a project, especially when there is a clear client-contractor relationship involved.
Using a contract in place of a project charter can be more common in situations where the project is outsourced to an external vendor or contractor.
The contract would establish the project's scope, deliverables, timeline, and any other relevant terms and conditions. While the contract may not provide the same level of comprehensive project details as a project charter, it can still serve as a guiding document for the project's execution and management.
However, it is worth noting that the use of a contract alone may not provide the same level of project clarity, alignment, and stakeholder understanding as a project charter.
Project charters are generally more comprehensive and include additional elements such as project objectives, strategic alignment, high-level risks, and success criteria.
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