To solve the problem that could be fair and equitable to both employees and employers, equity theory is an improved theory. When the outcomes of their own work are compared to the outcomes of other people's work, equity theory argues that people's behavior is influenced by their perceived level of equity or inequity.
Equity theory is a better model than distributive justice for coming up with a solution that is fair and equitable to both employees and employers. When the outcomes of their own work are compared to the outcomes of other people's work, equity theory argues that people's behavior is influenced by their perceived level of equity or inequity.
Employees frequently make comparisons between their efforts and those of others in the workplace, particularly those in similar positions. The fairness of employees' salaries, promotions, and rewards is determined by how much they perceive themselves to be in comparison to others. Employers may utilize this concept to better comprehend employees' demands and satisfy their demands in a fair and equitable manner.
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Jeff Is Saving For His Retirement 23 Years From Now By Setting Up A Saving Plan. He Has Set Up Savings Plan Wherein He Will Deposit $92.00 At The End Of Each Month For The Next 11 Years. Interest Is 11% Compounded Monthly.(A) How Much Money Will Be In His Account On The Date Of His Retirement?(B) How Much Will Jeff Contribute?(C) How Much Will Be
Jeff is saving for his retirement 23 years from now by setting up a saving plan. He has set up savings plan wherein he will deposit $92.00 at the end of each month for the next 11 years. Interest is 11% compounded monthly.
(a) How much money will be in his account on the date of his retirement?
(b) How much will Jeff contribute?
(c) How much will be interest?
(a) The future value will be $.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
(b) Jeff will contribute $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
(c) The interest will be $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
(a) The money that will be in Jeff's account on the date of his retirement is $138,697.17 (b) Jeff will contribute $12,144. (c) The interest will be $126,553.17.
Jeff will retire in 23 years. He will deposit $92 per month for the next 11 years. Interest is 11% compounded monthly
We need to find the future value, total contribution and interest.
(a) To calculate the future value, we will use the formula:
FV = PMT*[((1 + i)^n - 1)/i)], where
PMT = $92i = 11%/12, as interest is compounded monthly, n = 23*12 = 276 months
FV = 92*[((1 + 11%/12)^276 - 1)/(11%/12)]
FV = $138,697.17
Therefore, the amount in Jeff's account will be $138,697.17 (approx.)
(b) Total contribution made by Jeff = $92*12*11= $12,144
Therefore, Jeff will contribute $12,144.
(c) Interest earned can be calculated by subtracting the total contribution from the future value,
Interest = FV - Total contribution
Interest = $138,697.17 - $12,144
Interest = $126,553.17
Therefore, the interest earned will be $126,553.17.
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(Related to Checkpoint 5.5) (Solving for n) How many years will it take for $500 to grow to $1,039.50 if it's invested at 5 percent compounded annually? The number of years it will take for $500 to grow to $1,039.50 at 5 percent compounded annually is years. (Round to one decimal place.)
To calculate the number of years it will take for $500 to grow to $1,039.50 at a 5% annual interest rate compounded annually,
we can use the formula for the number of compounding periods (n) required to achieve a desired future value. The correct answer will provide the number of years rounded to one decimal place.
The formula to calculate the number of compounding periods (n) required to achieve a desired future value (FV) is:
n = log(FV / PV) / log(1 + r)
Where:
n = Number of compounding periods (years)
FV = Future value
PV = Present value (initial investment)
r = Interest rate per compounding period
Given:
PV = $500
FV = $1,039.50
r = 5% (0.05)
Using the formula, we can calculate the number of years (n) as follows:
n = log($1,039.50 / $500) / log(1 + 0.05)
Calculating the result:
n ≈ 8.0
Therefore, it will take approximately 8 years for $500 to grow to $1,039.50 at a 5% annual interest rate compounded annually.
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Individual investors are faced with various constraints. Explain
any two (2) of these constraints.
1. Financial constraints, such as limited resources and income restrictions, can restrict individuals' investment decisions and lead to a more conservative approach.
2. Time constraints limit the amount of time individuals can dedicate to investment activities, potentially resulting in passive investment strategies and reduced portfolio management.
1. Financial Constraints: Individual investors often face financial constraints that limit their investment decisions. These constraints can include limited financial resources, income restrictions, and liquidity needs. Limited financial resources may prevent investors from allocating significant amounts of capital to investments, resulting in a more conservative investment approach.
Income restrictions, such as a fixed salary or a tight budget, can restrict the amount of money available for investment purposes. Additionally, liquidity needs, such as short-term expenses or emergency funds, may require individuals to hold a significant portion of their assets in liquid and low-risk investments, limiting their ability to pursue higher-risk or illiquid investment opportunities.
2. Time Constraints: Time constraints refer to the limited time available for individuals to dedicate to investment activities. Most individuals have other responsibilities, such as work, family, and personal commitments, which can limit the time they can allocate to researching, monitoring, and managing investments. Lack of time may result in individuals resorting to passive investment strategies, such as index funds or robo-advisors, to simplify their investment decisions and reduce the need for ongoing active management.
Time constraints can also hinder the ability to actively monitor and adjust investment portfolios in response to market conditions or changing investment objectives, potentially impacting the overall performance and optimization of investment strategies.
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The nominal exchange rate is e-48 peso per USD. The price of a Big Mac is P=$3 in the U.S., and is P*= 72 pesos in Philippine Required: a) What is the price of a US Big Mac measured in pesos? (0.5 marks) b) Calculate the real exchange rate measured as Filipino Big Mac per U.S. Big Mac? (0.5 marks)
a) The price of a US Big Mac measured in pesos is 144 pesos.
b) The real exchange rate measured as Filipino Big Mac per U.S. Big Mac is 0.5 Big Macs per U.S. Big Mac, or 1 Big Mac for every 2 U.S. Big Macs.
a. To calculate the price of a US Big Mac in pesos, we need to use the nominal exchange rate. The given exchange rate is 1 US dollar (USD) = 48 pesos (P).
Since the price of a Big Mac in the US is $3, we can multiply this by the exchange rate to convert it into pesos:
Price in pesos = Price in USD * Exchange rate
Price in pesos = $3 * 48 pesos/USD
Price in pesos = 144 pesos
Therefore, the price of a US Big Mac measured in pesos is 144 pesos.
b. The real exchange rate is a measure of the relative purchasing power between two countries. In this case, we want to calculate the number of Filipino Big Macs that can be purchased with one US Big Mac.
To calculate the real exchange rate, we divide the price of a Filipino Big Mac (P*=72 pesos) by the price of a US Big Mac in pesos (144 pesos):
Real exchange rate = Price of Filipino Big Mac (P*) / Price of US Big Mac (in pesos)
Real exchange rate = 72 pesos / 144 pesos
Real exchange rate = 0.5
Therefore, the real exchange rate measured as Filipino Big Mac per U.S. Big Mac is 0.5 Big Macs per U.S. Big Mac, which can also be expressed as 1 Big Mac for every 2 U.S. Big Macs.
a) The price of a US Big Mac measured in pesos is 144 pesos.
b) The real exchange rate measured as Filipino Big Mac per U.S. Big Mac is 0.5 Big Macs per U.S. Big Mac, or 1 Big Mac for every 2 U.S. Big Macs.
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Suppose Ireland produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for alfalfa, an agricultural good, and locomotives, a capital good.
Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of locomotives.
Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther.
If Ireland produces two types of goods: agricultural and capital, and the following diagram shows its current production possibilities frontier for alfalfa, an agricultural good, and locomotives, a capital good.
Then the effect of a time-saving innovation in the manufacturing of locomotives on the production possibilities frontier (PPF) on the graph can be shown as follows:When a time-saving innovation in the manufacturing of locomotives is implemented, it means that the production of locomotives can be increased with the same amount of resources and in less time. Therefore, the PPF shifts outward from the origin towards the right.As shown in the graph, the original PPF is represented by the blue curve, which shows the different combinations of alfalfa and locomotives that can be produced with the given resources and technology.
The two endpoints A and B show the maximum production of locomotives and alfalfa, respectively.The effect of the time-saving innovation is represented by the green curve. It is further from the origin and the blue curve, which indicates that more of both goods can be produced. It means that a larger quantity of capital goods can now be produced, without reducing the production of agricultural goods.The shift in the PPF curve from blue to green indicates that with the same amount of resources and technology, more capital goods and agricultural goods can be produced.
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Festivals usually feature an artist for 26 minutes and has a population standard deviation of 6.39. Agent R has 100 artist represented. The Agent A talents have an average of 23.9 minutes for festival performances. At an a=0.01, can it be concluded, using Agent R's 100 artist as a sample, that the mean festival performance time is decreased from the usual 26 minutes? For Questions 6 through 10, preform each of the following steps depending on which solution method you use. Critical Value Method a. State the Hypothesis and identify the claim b. Find critical value. c. Compute Test value d. Make a decision P-value method a. State the Hypothesis and identify the claim b. Compute Test value c. Find the P-Value/P-value interval for this specific type of test d. Make a decision
To test whether the mean festival performance time for Agent R's 100 artists is decreased from the usual 26 minutes, we can use the following steps: Critical Value Method.
Critical Value Method:
a. Hypothesis:
Null hypothesis (H₀): The mean festival performance time for Agent R's 100 artists is equal to 26 minutes.
Alternative hypothesis (H₁): The mean festival performance time for Agent R's 100 artists is less than 26 minutes.
b. Critical value:
Since the significance level (α) is given as 0.01, we need to find the critical value for a one-tailed test with a left tail.
c. Test value:
We need to compute the test value using the sample mean, population standard deviation, and sample size.
d. Decision:
Compare the test value to the critical value. If the test value is smaller than the critical value, reject the null hypothesis; otherwise, fail to reject the null hypothesis.
P-value Method:
a. Hypothesis:
Null hypothesis (H₀): The mean festival performance time for Agent R's 100 artists is equal to 26 minutes.
Alternative hypothesis (H₁): The mean festival performance time for Agent R's 100 artists is less than 26 minutes.
b. Test value:
Compute the test value using the sample mean, population standard deviation, and sample size.
c. P-value:
Find the P-value or P-value interval for this specific type of test.
d. Decision:
Compare the P-value to the significance level (α). If the P-value is smaller than α, reject the null hypothesis; otherwise, fail to reject the null hypothesis.
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1.It is found that 8% of the bottles produced by a facto...
1.It is found that 8% of the bottles produced by a factory are defective . Find the probability that exactly 4 bottles are defective in a sample of 20 bottles.
a)0.0522
b)0.0532
c)0.0525
d)0.0512
Calculating this expression, we find the answer to be approximately 0.0522. the correct answer is (a) 0.0522.
To find the probability that exactly 4 bottles are defective in a sample of 20 bottles, we can use the binomial probability formula.
The probability of getting exactly k successes (defective bottles) in n trials (sample size) is given by the formula:
[tex]P(X = k) = C(n, k) * p^k * (1 - p)^(n - k)[/tex]
Where:
C(n, k) is the number of combinations of n items taken k at a time (given by n! / (k!(n - k)!))
p is the probability of success (defective bottle)
(1 - p) is the probability of failure (non-defective bottle)
n is the total number of trials (sample size)
k is the number of successful trials (number of defective bottles)
In this case, p = 0.08, n = 20, and k = 4. Plugging these values into the formula, we get:
P(X = 4) = C(20, 4) [tex]* 0.08^4[/tex]* [tex](1 - 0.08)^(20 - 4)[/tex]
Calculating this expression, we find the answer to be approximately 0.0522. Therefore, the correct answer is (a) 0.0522.
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The firms in the domestic steel industry serve a market that is not growing. They manufacture commodity, must maintain huge capacity, and have difficulty liquidating assets such as foundries and steel mills. According to Porter's model, which of the following statements would be true?
According to Porter's model, the firms in the domestic steel industry serve a market that is not growing, they manufacture commodity, must maintain huge capacity, and have difficulty liquidating assets such as foundries and steel mills. Therefore, the companies are in a low competition industry.
In Porter's model, a company in an industry with low competition has several advantages. It benefits from being able to sustain a higher profit margin and maintain a competitive edge. Companies in a low competition industry can also attract more customers, enter into different markets, and remain cost-efficient. In an industry where the demand is slow, there is also a lower risk of new entrants and competition. The market is not growing, which means that new businesses are unlikely to be created. As a result, established companies in a slow industry have an easier time maintaining their market share and dominating their industry.
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Dance Town Academy The items issted below were identified while preparing a bank reconciliation for the company's checking account as of March 31 .
cash balance according to the general ledger:
How will the interest earned on the checking accosint be handled on a bank teconciliation?
a. add to the bank statement balance b. add to the balance from the company records
The interest earned on the checking account be handled on a bank reconciliation to add to the bank statement balance.
The bank account balance will be overstated if the bank credit is added to the bank statement. A bank reconciliation statement reverses this order, beginning with the bank balance and ending with the cash book balance. Thus, just the cash book has to be adjusted.
The business has received money, and the deposit has already been sent to the bank, but it still has to be processed. Therefore, it should be included in the bank statement.
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On April 12, 2020, Prism Ltd., a camera lens manufacturer, paid cash of $569,000 for real estate plus $30,900 cash in closing costs. The real estate included land appraised at $182,700; land improvements appraised at $73,080; and a building appraised at $353,220.
(a) (b) (c)
PPE Asset Appraised
Values Ratio of Individual Appraised Value to
Total Appraised Value
(a) ÷ Total Appraised Value Cost Allocation
(b) × Total Actual Cost
Present the journal entry to record the purchase. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
(a) The cost of land is $176,125,
(b) The cost of land improvements is $70,183,
(c) The cost of the building is $353,592
In this problem, the camera lens manufacturer Prism Ltd. purchased a piece of land along with a building and some land improvements. The total cost incurred by the company for purchasing the land was $569,000 and an additional $30,900 for closing costs.
The real estate had individual appraised values of $182,700, $73,080, and $353,220 for land, land improvements, and a building, respectively. The asset account that will be used in the journal entry is Property, Plant, and Equipment (PPE) and it will be debited with the total cost incurred for the purchase of real estate, that is, $599,900 [$569,000 + $30,900]. The cost of each item will be calculated by multiplying the ratio of individual appraised value to the total appraised value with the total actual cost.
The ratios are as follows: For land = 182,700 / (182,700 + 73,080 + 353,220) = 0.294,
For land improvements = 73,080 / (182,700 + 73,080 + 353,220) = 0.117, For building = 353,220 / (182,700 + 73,080 + 353,220) = 0.589
(a) The cost of land = 0.294 × $599,900 = $176,125,
(b) The cost of land improvements = 0.117 × $599,900 = $70,183,
(c) The cost of the building = 0.589 × $599,900 = $353,592
Now, the allocation of cost has been made to each item in the real estate. The journal entry to record the purchase is:
DateAccountTitle and ExplanationDebitCreditApr.
12Property, Plant and Equipment599,900Cash599,900(Journal entry to record the purchase of real estate)
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On January 1, your company repurchased 100 shares of $1 par value common stock for $5,000. On January 31, the board of directors authorized repurchase of 50 shares of the treasury stock for $60 per share. Which of the following journal entries should be recorded for January 31?
O A credit to Common Stock for $2,500
O A credit to Treasury Stock for $2,500
O A credit to Cash for $3,000
O A debit to Additional Paid-in Capital from Treasury Stock for $500
O None of the entries is recorded correctly.
The answer is that "a credit to Treasury Stock for $3,000" should be recorded for January 31 when a company repurchased 50 shares of the treasury stock for $60 per share.
On January 1, the company repurchased 100 shares of $1 par value common stock for $5,000. It will be recorded with the following journal entry: Debit Treasury Stock for $5,000 Credit Cash for $5,000.On January 31, the board of directors authorized the repurchase of 50 shares of the treasury stock for $60 per share. The company repurchased the 50 shares at the authorization price of $60 per share, for a total of $3,000. As a result, the Treasury Stock account is credited for the cost of the shares, or $3,000.The correct journal entry for January 31 is: Debit Treasury Stock for $3,000 Credit Cash for $3,000.
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A store will cost $825,000 to open. Variable costs will be 41% of sales and fixed costs are $250,000 per year. The investment costs will be depreciated straight-line over the 17 year life of the store to a salvage value of zero. The opportunity cost of capital is 9% and the tax rate is 35%.
Find the operating cash flow each year if sales revenue is $900,000 per year.
To calculate the operating cash flow each year, we need to consider the variable costs, fixed costs, depreciation, tax, and salvage value. Here's the breakdown of the calculation:
Sales Revenue: $900,000 per year
Variable Costs: 41% of Sales Revenue
Yearly Variable Costs: 0.41 x $900,000 = $369,000
Fixed Costs: $250,000 per year
Depreciation: Investment Cost / Store Life
Depreciation: $825,000 / 17 = $48,529.41 per year
Taxable Income: Sales Revenue - Variable Costs - Fixed Costs - Depreciation
Taxable Income: $900,000 - $369,000 - $250,000 - $48,529.41 = $232,470.59
Tax Expense: Taxable Income x Tax Rate
Tax Expense: $232,470.59 x 35% = $81,364.71
Operating Cash Flow: (Sales Revenue - Variable Costs - Fixed Costs) x (1 - Tax Rate) + Depreciation
Operating Cash Flow: ($900,000 - $369,000 - $250,000) x (1 - 35%) + $48,529.41
Operating Cash Flow: $281,000 x 65% + $48,529.41
Operating Cash Flow: $182,650 + $48,529.41
Operating Cash Flow: $231,179.41
Therefore, the operating cash flow each year, with sales revenue of $900,000, is $231,179.41.
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Waterway Company adopted a stock-option plan on November 30, 2019, that provided that 73,800 shares of $5 par value stock be designated as available for the granting of options to officers of the corporation at a price of $9 a share. The market price was $11 a share on November 30, 2020. On January 2, 2020, options to purchase 27,100 shares were granted to president Tom Winter-16,400 for services to be rendered in 2020 and 10,700 for services to be rendered in 2021. Also on that date, options to purchase 11,700 shares were granted to vice president Michelle Bennett-5,850 for services to be rendered in 2020 and 5,850 for services to be rendered in 2021. The market price of the stock was $14 a share on January 2, 2020. The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $5 per option. In 2021, neither the president nor the vice president exercised their pptions because the market price of the stock was below the exercise price. The market price of the stock was $8 a share on December 31, 2021, when the options for 2020 services lapsed. On December 31, 2022, both president Winter and vice president Bennett exercised their options for 10,700 and 5,850 shares, respectively, when the market price was $15 a share. Prepare the necessary journal entries in 2019 when the stock-option plan was adopted, in 2020 when options were granted, in 2021 when options lapsed, and in 2022 when options were exercised. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Date Account Titles and Explanation Debit Credit 수 : 4 (To record options granted to president.) (To record compensation expense attributable to 2020.) (To record compensation expense attributable to 2021.) (To record lapse of president's and vice president's options.) (To record compensation expense attributable to 2021.) (To record lapse of president's and vice president's options.)
2019:
Date Account Titles and Explanation Debit Credit
Nov 30, 2019 Stock Options Expense $294,000
Additional Paid-in Capital - Stock Options $294,000
(To record the stock options granted)
2020:
Date Account Titles and Explanation Debit Credit
Jan 2, 2020 Compensation Expense - 2020 $90,100
Additional Paid-in Capital - Stock Options $90,100
(To record compensation expense for options granted to Tom Winter)
Jan 2, 2020 Compensation Expense - 2020 $47,250
Additional Paid-in Capital - Stock Options $47,250
(To record compensation expense for options granted to Michelle Bennett)
2021:
Date Account Titles and Explanation Debit Credit
Dec 31, 2021 Compensation Expense - 2020 $148,600
Additional Paid-in Capital - Stock Options $148,600
(To record the lapse of president's and vice president's options)
Dec 31, 2021 Compensation Expense - 2021 $90,150
Additional Paid-in Capital - Stock Options $90,150
(To record the lapse of president's and vice president's options)
2022:
Date Account Titles and Explanation Debit Credit
Dec 31, 2022 Cash $292,500
Common Stock - Par $5 $87,500
Additional Paid-in Capital - Excess of Par $185,000
(To record the exercise of options by Tom Winter)
Dec 31, 2022 Cash $88,200
Common Stock - Par $5 $26,550
Additional Paid-in Capital - Excess of Par $61,650
(To record the exercise of options by Michelle Bennett)
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.Accounting provides information to users for decision-making purposes about the allocation of limited resources.
(i) Identify TWO (2) main users of financial reporting information.
(ii) Describe the type of decision made by each user listed in (i) above and the type of information required for each such decision.
(i) Two main users of financial reporting information are: Investors, Creditors. (ii) The type of decision made by each user and the information required are as follows: Investors, Creditors.
Investors: Investors use financial reporting information to make investment decisions. They analyze financial statements to assess the financial health and performance of a company.
Investors are interested in information that helps them evaluate the potential return on investment, assess the risks involved, and make informed decisions about buying, holding, or selling shares in a company.
Creditors: Creditors, such as banks and lending institutions, use financial reporting information to assess the creditworthiness of a company. They need information to evaluate the company's ability to repay loans and meet its financial obligations.
(ii) The type of decision made by each user and the information required are as follows:
Investors: Investors make decisions regarding buying, holding, or selling securities. They require information such as financial statements .
Creditors: Creditors make decisions about extending credit or lending money to a company. They require information like financial statements, including balance sheets and income statements, to assess the company's liquidity, cash flow, debt levels, and ability to meet financial obligations.
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If ABC Corporation's sales and average operating assets remain the same, ABC's return on investment will: increase if net operating income increases. increase if margin decreases. decrease if net operating income decreases. O decrease if margin increases.
**If ABC Corporation's sales and average operating assets remain the same, ABC's return on investment will increase if net operating income increases.**
Return on investment (ROI) is calculated by dividing net operating income by average operating assets.
If net operating income increases while sales and average operating assets remain the same, the numerator (net operating income) of the ROI formula increases. As a result, the ROI will also increase because the higher net operating income generates a greater return in proportion to the same level of average operating assets.
In essence, a higher net operating income indicates that the company is generating more profits from its operations, which translates into a higher ROI. This increase reflects improved efficiency and effectiveness in utilizing the company's operating assets to generate income.
Therefore, if net operating income increases while sales and average operating assets remain constant, ABC Corporation's return on investment will increase.
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Assume the credit terms offered to your firm by your suppliers are 4/10, net 60 . Calculate the cost of the trade credit if your firm does not take the discount and pays on day 60 . (Hint: Use a 365-day year.) The cost of trade credit is \%. (Rounded to two decimal places.)
The correct option is The cost of trade credit is 30%.
Given that the credit terms offered to your firm by your suppliers are 4/10, net 60. We have to calculate the cost of trade credit if your firm does not take the discount and pays on day 60. (Hint: Use a 365-day year.)Trade credit cost is the cost associated with not taking a cash discount when making a purchase and paying for the purchase at a later date. The cost of not taking the discount is the effective interest rate of a loan. The formula for the cost of trade credit is: Cost of trade credit = (Discount % ÷ (100 - Discount %)) x (365 ÷ (Credit period - Discount period))According to the question, the credit terms are 4/10, net 60. This means that the supplier will give a 4% discount if you pay within 10 days of purchase, otherwise the full payment is due in 60 days. Credit period = 60 days Discount period = 10 days Discount % = 4%Cost of trade credit = (Discount % ÷ (100 - Discount %)) x (365 ÷ (Credit period - Discount period))= (4 ÷ (100 - 4)) x (365 ÷ (60 - 10))= (4 ÷ 96) x (365 ÷ 50)= 0.04167 x 7.3= 0.30333The cost of trade credit is 0.30 or 30% (rounded to two decimal places).
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You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank will lend you the money at a 5.85% APR (semi-annual) for this 360-month loan. However, you can afford monthly payments of only $1,300, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $1,300?
To keep monthly payments at $1,300, the balloon payment needed at the end of the 30-year loan would be approximately $94,928.
To determine the size of the balloon payment, we can use the loan amortization formula.
Given a loan amount of $290,000, an APR of 5.85% (semi-annual), and a loan term of 360 months, we need to find the balloon payment that keeps the monthly payments at $1,300.
Using the formula for calculating the monthly payment on a mortgage:
Monthly Payment = Loan Amount * (r(1+r)^n) / ((1+r)^n - 1),
where r is the monthly interest rate and n is the number of payments, we can rearrange the formula to solve for the loan amount:
Loan Amount = Monthly Payment * ((1+r)^n - 1) / (r(1+r)^n).
Plugging in the given values, we have:
Loan Amount = $1,300 * ((1+(0.0585/2))^(30*12) - 1) / ((0.0585/2)*(1+(0.0585/2))^(30*12)).
Calculating this expression will give us the loan amount, which represents the balloon payment needed to keep the monthly payments at $1,300.
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businessaccountingaccounting questions and answersuse the following informatlon to prepare the september cash budget for pto company. ignore the "loan activity" section of the budget a. beginning cash balance, september 1,$50,000. b. budgeted cash recelpts from september sales, $263,000. c. direct materials are purchased on credit. purchase amounts are august (actual), $73,000; and september (budgeted),
Question: Use The Following Informatlon To Prepare The September Cash Budget For PTO Company. Ignore The "Loan Activity" Section Of The Budget A. Beginning Cash Balance, September 1,$50,000. B. Budgeted Cash Recelpts From September Sales, $263,000. C. Direct Materials Are Purchased On Credit. Purchase Amounts Are August (Actual), $73,000; And September (Budgeted),
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Use the following informatlon to prepare the September cash budget for PTO Company. Ignore the "Loan activity" section of the budget a. Beginning cash balance, September 1,$50,000. b. Budgeted cash recelpts from September sales, $263,000. c. Direct materials are purchased on credit. Purchase amounts are August (actual), $73,000; and September (budgeted), $109,000. Payments for direct materials follow: 65% in the month of purchase and 35% In the first month after purchase. d. Budgeted cash payments for direct labor in September, $38,000 e. Budgeted depreclation expense for September, $3,300. f. Budgeted cash payment for dividends in September, $57,000. 9. Budgeted cash payment for income takes in September, \$10,700. h. Budgeted cash payment for loan interest in September, $1,800.
he budgeted cash payment for loan interest in September is $1,800.
Using this information, we can calculate the September cash budget for PTO Company by considering the cash inflows (cash receipts) and cash outflows (cash payments).
Subtracting the total cash outflows from the total cash inflows will give us the ending cash balance for September.
a. Beginning cash balance on September 1 is $50,000.
b. Budgeted cash receipts from September sales are $263,000.
c. Direct materials are purchased on credit. The purchase amount for August (actual) is $73,000, and for September (budgeted) is $109,000. Payments for direct materials are made as follows: 65% in the month of purchase and 35% in the first month after purchase.
d. The budgeted cash payments for direct labor in September are $38,000.
e. The budgeted depreciation expense for September is $3,300.
f. The budgeted cash payment for dividends in September is $57,000.
g. The budgeted cash payment for income taxes in September is $10,700.
h. The budgeted cash payment for loan interest in September is $1,800.
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To prepare the September cash budget for PTO Company consider the cash inflows and outflows for each category to determine the ending cash balance for September.
Let's break it down step by step:
1. Beginning Cash Balance: On September 1, the company has a cash balance of $50,000.
2. Budgeted Cash Receipts from September Sales: The company expects to receive $263,000 from sales during September.
3. Direct Materials: The company purchases direct materials on credit. In August (actual), they spent $73,000, and in September (budgeted), they plan to spend $109,000. Payments for direct materials follow the following schedule: 65% in the month of purchase and 35% in the first month after purchase.
4. Budgeted Cash Payments for Direct Labor: In September, the company plans to pay $38,000 for direct labor.
5. Budgeted Depreciation Expense: The company expects depreciation expense to be $3,300 in September.
6. Budgeted Cash Payment for Dividends: The company plans to pay $57,000 for dividends in September.
7. Budgeted Cash Payment for Income Taxes: The company expects to pay $10,700 for income taxes in September.
8. Budgeted Cash Payment for Loan Interest: The company plans to pay $1,800 for loan interest in September.
By taking into account all these factors, you can prepare
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.Presented below is information related to Oriole Company.
1. On July 6, Oriole Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:
Land $500,000
Buildings 1,500,000
Equipment 1,000,000
Total $3,000,000
Oriole Company gave 12,400 shares of its $100 par value common stock in exchange. The stock had a market price of $168 per share on the date of the purchase of the property.
2. Oriole Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.)
Repairs to building $304,500
Construction of bases for equipment to be installed later 391,500
Driveways and parking lots 353,800
Remodeling of office space in building, including new partitions and walls 466,900
Special assessment by city on land 52,200
3. On December 20, the company paid cash for equipment, $754,000, subject to a 2% cash discount, and freight on equipment of $30,450.
Prepare entries on the books of Oriole Company for these transactions. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts.)
The entries on the books of Oriole Company for these transactions are Land $500,000Buildings $1,500,000Equipment $1,000,000Common Stock $24,691,200 Paid-in capital in excess of par value $1,308,800
The solution for the transactions on the books of Oriole Company are as follows:
1. For the acquisition of plant assets of Doonesbury Company, the Oriole Company will record the following entry: Accounts DebitCreditLand$500,000Buildings$1,500,000Equipment$1,000,000Common Stock [$100 par * 12,400 shares * $168] $24,691,200Paid-in capital in excess of par value $1,308,800 [$24,691,200 - ($1,200,000 + $12,400,000)]
2. For the cash transactions between July 6 and December 15, the company will record the following entry: Accounts Debit Credit Repairs to building$304,500Construction of bases for equipment to be installed later$391,500Driveways and parking lots$353,800Remodeling of office space in building, including new partitions and walls$466,900Land$52,200Cash $1,569,900
3. For the purchase of equipment on December 20, Oriole Company will record the following entry: Accounts Debit Credit Equipment $754,000Freight-in $30,450Cash $726,110 [($754,000 - ($754,000 x 2%)]
Therefore, the entries on the books of Oriole Company for these transactions are:
1. Land $500,000Buildings $1,500,000Equipment $1,000,000Common Stock $24,691,200Paid-in capital in excess of par value $1,308,800
2. Repairs to building $304,500Construction of bases for equipment to be installed later $391,500 Driveways and parking lots $353,800 Remodeling of office space in building, including new partitions and walls $466,900Land $52,200Cash $1,569,900 3. Equipment $754,000Freight-in $30,450Cash $726,110.
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Security markets exist to aid the allocation of capital among which of the following?
A. Households
B. Corporations
C. Governmental units
D. All of the listed answers are correct.
Q. Which of the following best describes the role of an electronic communication network (ECN)?
A. A network that utilizes satellite technology to ensure efficient markets.
B. Trading systems that automatically match buy and sell orders at specific prices via computers.
C. Networks that link international exchanges to the government's regulatory agencies.
D. A system of organized rules that are designed to ensure validity of security trades.
Q. If stock markets are efficient, it's difficult for investors to select portfolios of common stocks that can outperform the stock market in general.
A. True
B. False
Q. Which legislative act specifies additional regulation of hedge funds, derivatives, credit cards, mortgages and other financial products.
A. The Securities and Derivatives Act of 2008
B. The Securities Act of 1933
C. The Securities Act of 1934
D. The Dodd-Frank Wall Street Reform and Consumer Protection Act
Security markets exist to aid the allocation of capital among households, corporations, governmental units, and all of the listed answers are correct.
The role of an electronic communication network (ECN) is to automatically match buy and sell orders at specific prices via computers, which is option B. If stock markets are efficient, it is difficult for investors to select portfolios of common stocks that can outperform the stock market in general, so the answer is True. The legislative act that specifies additional regulation of hedge funds, derivatives, credit cards, mortgages, and other financial products is the Dodd-Frank Wall Street Reform and Consumer Protection Act, so the answer is D.
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Describe the type of fraud and the impact of the fraud triangle
to KBR and Halliburton FCPA (2009).
The type of fraud in the KBR and Halliburton FCPA case (2009) is bribery and corruption.
This fraud involved the payment of bribes to foreign officials in order to obtain or retain business contracts. The fraud triangle is a concept that helps to explain the conditions that lead to fraudulent behavior. It consists of three components:
1. Opportunity: This refers to the circumstances or conditions that allow fraud to occur. In the case of KBR and Halliburton, the opportunity arose from the complex nature of international business transactions, weak internal controls, and the lack of transparency in the countries where they operated. These factors provided the opportunity for bribery and corruption to take place.
2. Pressure: Pressure refers to the financial or personal motivations that drive individuals to commit fraud. In this case, the pressure came from the intense competition in the global market, the need to secure lucrative contracts, and the desire for personal gain. The pressure to win contracts and increase profits can push individuals to engage in unethical and illegal activities like bribery.
3. Rationalization: Rationalization refers to the mental process individuals go through to justify their fraudulent behavior. It involves creating reasons or excuses that make their actions seem acceptable or necessary. In the case of KBR and Halliburton, individuals involved in the fraud may have rationalized their actions by believing that bribery was a common business practice in certain countries or that it was necessary to compete effectively.
The impact of the fraud triangle on KBR and Halliburton was significant. The bribery and corruption exposed in the FCPA case tarnished the reputation of both companies and resulted in legal consequences. The FCPA case led to investigations, fines, and legal settlements, which had financial implications for the companies involved. Additionally, their involvement in bribery damaged their relationships with stakeholders, including shareholders, customers, and the general public.
Overall, the fraud triangle highlights the complex interplay between opportunity, pressure, and rationalization in facilitating fraudulent behavior. Understanding and addressing these factors is crucial for organizations to prevent and detect fraud, and to maintain ethical business practices.
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Given your chosen Macro-economic variables (please use one measuring consumer spending and one measuring business spending), briefly explain how each can be used to gauge general U.S. economic growth/activity. Also, how can each indicator be a proxy for the anticipate direction of interest rates – tied to your firm’s cost of capital? Why is monitoring this measure of economic activity important to your personal and business lending choices...especially with regard to your firm’s growth and profitability (NPV...and EPS growth)...and its ultimate valuation?
One commonly used macroeconomic variable to measure consumer spending is Personal Consumption Expenditures (PCE). Monitoring these measures of economic activity is important for lending choices and overall business decisions because they provide insights into the broader economic environment.
Personal Consumption Expenditures represents the value of goods and services purchased by individuals and households in the United States. It includes items such as durable goods (cars, appliances), non-durable goods (food, clothing), and services (healthcare, education).
Consumer spending can be used as a proxy for the anticipated direction of interest rates because it reflects the overall health of the economy. When consumer spending is strong, it indicates that individuals have confidence in the economy, leading to increased demand for goods and services.
Monitoring these measures of economic activity is important for lending choices and overall business decisions because they provide insights into the broader economic environment. As a lender, understanding the state of the economy helps assess the creditworthiness of borrowers, determine the level of risk associated with lending, and set appropriate interest rates for loans.
For example, if consumer spending is strong and business spending is robust, it suggests a healthy economy with potential opportunities for growth. In such a scenario, lenders might be more willing to extend credit and invest in businesses with favorable growth prospects.
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What the difference between a realized gain/loss and recognized
gain/loss?
Realized gain/loss refers to the profit/loss from selling an investment, while recognized gain/loss is officially acknowledged in financial statements.
Realized gain/loss and recognized gain/loss are two terms commonly used in accounting and finance to describe different aspects of investment performance. While they are related, there are some important distinctions between the two.
Realized gain/loss refers to the profit or loss that is generated when an investment or asset is sold or disposed of. It represents the difference between the selling price and the original cost or basis of the investment. Realized gains are typically considered taxable events and may be subject to capital gains taxes.
On the other hand, recognized gain/loss refers to the portion of the realized gain or loss that is officially acknowledged or accounted for in financial statements. Recognition occurs when certain criteria are met, such as the completion of a transaction or the fulfillment of specific accounting rules or regulations. Recognized gains/losses are reflected in financial statements and can impact an entity's profitability, net income, and shareholders' equity.
while realized gain/loss focuses on the actual profit or loss resulting from an investment sale, recognized gain/loss takes into account the formal acknowledgment and inclusion of the gain or loss in financial reporting. Realized gains/losses are typically recognized, but not all realized gains/losses may be recognized due to accounting rules and requirements.
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Broker Bank issues $450,000 of 8% of bonds, due in apx 9 years, with intrest payable semiannually, at the time of issue, the market rate for such bond is 10%
compute the issue price of the bonds
To compute the issue price of the bonds, we need to use the present value of the bond's future cash flows. Here's the step-by-step calculation:
1. Determine the bond's face value:
The face value of the bond is given as $450,000.
2. Determine the bond's interest rate:
The bond has an 8% coupon rate, which is the stated rate on the bond.
3. Determine the bond's market rate:
The market rate for similar bonds is stated as 10%.
4. Determine the bond's payment periods:
The bond's interest is payable semiannually, so there will be a total of 18 payment periods (9 years * 2).
5. Calculate the bond's periodic interest payment:
The periodic interest payment is calculated as the face value multiplied by the coupon rate divided by the number of payment periods per year:
Periodic interest payment = ($450,000 * 8%) / 2 = $18,000
6. Calculate the discount rate:
The discount rate is the market rate divided by the number of payment periods per year:
Discount rate = 10% / 2 = 5%
7. Calculate the present value of the bond's future cash flows:
To calculate the present value, we discount each semiannual interest payment and the final principal repayment at the discount rate. Then we sum up these present values:
Present value = (PV of semiannual interest payments) + (PV of final principal repayment)
PV of semiannual interest payments = $18,000 * [(1 - (1 + 5%)^(-18)) / 5%]
PV of final principal repayment = $450,000 / (1 + 5%)^18
8. Calculate the issue price of the bonds:
The issue price of the bonds is the sum of the present values of the cash flows:
Issue price = PV of semiannual interest payments + PV of final principal repayment
Calculating the exact numerical values requires plugging in the numbers into the formulas above. However, following the provided steps, you can use these formulas to compute the issue price of the bonds.
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A put option is available for British pound with an exercise price of EUR0.7192 and a premium of EUR0.0111. Assume that there are no brokerage fees. The future spot rate at which of the option breaks even is EUR a. the seller; EUR0.7081 b. both the buyer and the seller, EUR0.7303 c. the buyer; EUR0.7303 d. the seller; EUR0.7303 e. both the buyer and the seller; EUR0.7081 f. The correct answer is not present in the other listed choices g. the buyer; EUR0.7081
Both the buyer and the seller; EUR0.7081 is the right response.
One may get the put option's break-even spot rate by subtracting the premium from the exercise price. In this case, EUR0.7192 minus EUR0.0111 equals EUR0.7081. The break-even point for both the buyer and the seller is represented by this rate.
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The following information is available for Orset, a sole trader who does not keep full accounting records: $ Inventory 1 July 20X4 138,600 30 June 20X5 149,100 Purchases made for year ended 30 June 20X5 716,100
Orset makes a standard gross profit of 30% on sales. Based on these figures, what is Orset's sales figure for the year ended 30 June 20X5? a. $2,352,000 b. $1,038,000 c. $917,280 d. $1.008.000
The correct option is d) $1,008,000. To calculate Orset's sales figure for the year ended 30 June 20X5, we can use the gross profit percentage and the information provided.
Here's how we can calculate it:
Calculate the cost of goods sold (COGS):
COGS = Inventory on 1 July 20X4 + Purchases - Inventory on 30 June 20X5
COGS = $138,600 + $716,100 - $149,100
COGS = $705,600
Calculate the gross profit:
Gross Profit = Gross Profit Percentage * Sales
Gross Profit = 0.30 * Sales
Set up the equation:
Gross Profit = Sales - COGS
Substitute the values into the equation and solve for Sales:
0.30 * Sales = Sales - $705,600
Simplifying the equation:
0.30 * Sales - Sales = $705,600
-0.70 * Sales = $705,600
Sales = $705,600 / -0.70
Sales = $1,008,000
Based on the calculations, Orset's sales figure for the year ended 30 June 20X5 is $1,008,000.
Therefore, the correct option is d) $1,008,000.
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STRATEGY IMPLEMENTATION. (How are you going to do what you want to do? Where will the company obtain the $$, the resources, the people, etc. Discuss each major department’s specific duties in implementation of this strategy (management, marketing, R&D/engineering, accounting, HRM, production, MIS, finance, legal).
Each major department has specific duties in strategy implementation. They collaborate to allocate resources, define responsibilities, and ensure effective execution of the chosen strategy.
Strategy implementation is the process of putting a chosen strategy into action to achieve the desired organizational goals. It involves allocating resources, defining responsibilities, and coordinating efforts across different departments within the company. Let's discuss the specific duties of each major department in the implementation of a strategy:
1. Management: The management department plays a crucial role in strategy implementation. They are responsible for setting clear objectives, allocating resources, and providing overall direction to ensure the strategy is executed effectively. They oversee the implementation process, monitor progress, and make necessary adjustments as needed.
2. Marketing: The marketing department is responsible for promoting the company's products or services to the target market. In strategy implementation, they develop marketing plans and campaigns aligned with the strategy. They conduct market research, analyze customer needs, and develop strategies to attract and retain customers.
3. R&D/Engineering: The research and development/engineering department focuses on innovation and product development. In strategy implementation, they work to align their efforts with the strategic goals. They conduct research, develop new products or improve existing ones, and ensure that the organization stays competitive in the market.
4. Accounting: The accounting department handles financial management and reporting. They play a critical role in strategy implementation by managing budgets, tracking costs, and providing financial information for decision-making. They ensure that financial resources are allocated efficiently and that the strategy remains financially viable.
5. HRM (Human Resource Management): The HRM department is responsible for managing the organization's human capital. In strategy implementation, they recruit, select, and train employees with the necessary skills to execute the strategy. They also develop performance management systems, provide employee support, and foster a positive organizational culture.
6. Production: The production department is responsible for manufacturing or delivering the company's products or services. In strategy implementation, they ensure that production processes align with the strategic goals. They optimize production efficiency, manage inventory, and ensure quality control to meet customer demands.
7. MIS (Management Information Systems): The MIS department manages the company's information systems and technology infrastructure. In strategy implementation, they play a vital role in providing accurate and timely information to support decision-making. They develop and maintain information systems that enable effective communication, data analysis, and monitoring of progress.
8. Finance: The finance department manages the organization's financial resources and investments. In strategy implementation, they secure funding and manage financial risks. They evaluate investment opportunities, monitor financial performance, and ensure compliance with financial regulations.
9. Legal: The legal department handles legal matters and ensures compliance with laws and regulations. In strategy implementation, they provide legal advice, review contracts, and ensure that the company's actions align with legal requirements.
In summary, effective coordination and alignment across departments are essential for successful strategy implementation.
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Company A received maintenance services before the financial year end amounting to RM100,000 but has yet to receive the invoice from the supplier。 Under the accrual method of accounting，what should the double entry be？
The accrual method of accounting records financial events as they occur, regardless of when payment is made or received.
When Company A receives maintenance services before the financial year end amounting to RM100,000 but has yet to receive the invoice from the supplier, the double entry should be recorded as follows:Accounts Payable (liability) RM100,000Expense (income statement) RM100,000
Under the accrual accounting records, an expense is recognized when goods or services are received, even if the invoice has not yet been received. As a result, when Company A receives the maintenance services before the financial year end amounting to RM100,000 but has yet to receive the invoice from the supplier, the liability account is credited by RM100,000 (Accounts Payable).
At the same time, the expense account is debited by RM100,000, which represents the cost of the maintenance services.
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McDonald’s – Horizontal Analysis: Cash & Equivalents increased in dollars and percentage from 2020 to 2021: Round final answer to dollars WITH one decimal, including zero, and round final answer to whole percentage. Ex: $1,234.5; 65%; or Ex: Ex: $1,234.0; 65%
A. $1,260.1 and 37%
B. <$3,449.1> and <137%>
C. <$1,260.1> and <37%>
D. $3,449.1 and 37%
McDonald’s – Trend Analysis with base year 2019: Total Operating Costs & Expenses increased in dollars from 2019 to 2021: Round final answer to dollars WITH one decimal, including zero. Ex: $1,234.5 or Ex: Ex: $1,234.0
A. $572.3
B. <$572.3>
C. <$410.8>
D. $410.8
Cash & Equivalents increased from $3,902.4 in 2020 to $5,162.5 in 2021 (an increase of $1,260.1). The percentage increase can be calculated by dividing the dollar increase by the base year, which is 2020. The percentage increase in cash and equivalents can be calculated as follows
McDonald's is a fast-food company that is famous for its burgers and fries. McDonald's has been in the industry for a long time and has always maintained its position as one of the top fast-food chains globally. The company has implemented various strategies to maintain its position in the market. One of the ways the company measures its financial performance is through financial analysis. Two types of analysis used in financial analysis are Horizontal and Trend analysis.
Horizontal Analysis is a financial statement analysis technique that compares a company's financial performance over time. The method shows the change in an account balance between two periods. Cash & Equivalents increased in dollars and percentage from 2020 to 2021 in McDonald's. Cash and Equivalents in 2021 is $5,162.5, while it was $3,902.4 in 2020. The dollar increase in Cash & Equivalents can be calculated by subtracting the cash and equivalents in 2020 from the cash and equivalents in 2021.
Hence, the dollar increase is $1,260.1. The percentage increase can be calculated by dividing the dollar increase by the base year, which is 2020. The percentage increase in cash and equivalents is 32.3%.
In conclusion, McDonald's cash and equivalents increased by $1,260.1 and 37% from 2020 to 2021. The increase is a positive sign for the company. It means that the company is generating enough cash and equivalents to finance its operations. Therefore, McDonald's is in a better financial position in 2021 than it was in 2020.
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iv. Give two distinct reasons why inventory turns might be lower
at an apparel store as opposed to a gas station (assume it sells
only gasoline)
Inventory turns might be lower at an apparel store as opposed to a gas station due to factors such as seasonal demand fluctuations and a wider variety of products.
Firstly, seasonal demand fluctuations significantly impact inventory turns in the apparel industry. Apparel stores often experience fluctuating demand based on changing seasons, fashion trends, and consumer preferences.
For example, during winter, there is typically a higher demand for coats, sweaters, and other warm clothing, while summer brings a surge in sales for swimwear and lightweight garments. These seasonal variations require apparel stores to maintain larger inventory levels to cater to the specific demands of each season.
Consequently, the slower turnover of inventory results in lower inventory turns compared to a gas station, where the demand for gasoline remains relatively consistent throughout the year.
Secondly, apparel stores typically offer a wider variety of products compared to a gas station that primarily sells gasoline. Apparel stores carry diverse clothing styles, sizes, colors, and designs to cater to different customer preferences.
The broader product range leads to a more extensive inventory assortment, which can result in lower inventory turns. Managing a diverse inventory requires careful forecasting, assortment planning, and inventory management strategies to avoid stockouts or overstock situations.
In contrast, a gas station has a more limited inventory consisting mainly of fuel types and basic convenience items, leading to faster inventory turnover.
In summary, the lower inventory turns at an apparel store compared to a gas station can be attributed to seasonal demand fluctuations and the wider variety of products offered.
These factors necessitate different inventory management approaches to ensure optimal stock levels and meet customer demands in the respective industries.
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