When number of units produced is greater than number of units sold: Select one: Oa. Absorption OI = Variable Ol b. Variable Ol > Absorption Ol Oc. Absorption Ol< Variable Ol Od. Absorption Ol> Variable Ol

Answers

Answer 1

When the number of units produced is greater than the number of units sold, it leads to an inventory of the unsold products. This phenomenon is known as absorption. The correct option among the given alternatives is option (c).Absorption Ol < Variable Ol

In absorption costing, both fixed and variable manufacturing costs are included in the cost of production. Therefore, the cost of goods sold consists of direct material, direct labor, variable manufacturing overhead, and fixed manufacturing overhead. The fixed overhead cost is absorbed into the product cost in this method of costing. On the other hand, in variable costing, only variable manufacturing costs are included in the cost of production.

Therefore, the cost of goods sold only consists of direct material, direct labor, and variable manufacturing overhead. The fixed manufacturing overhead is treated as a period cost and charged off to the period it is incurred. In a situation where the number of units produced is greater than the number of units sold, it results in an inventory of unsold goods. Since absorption costing includes the fixed overhead cost in the cost of production, the cost of unsold goods will be higher than that of variable costing. Hence, Absorption Ol < Variable Ol.

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Related Questions

Alpha Ltd standard deviation (σ) of the daily cash balance during the last year was $500, and the transaction cost was $5. The company also has the opportunity to invest idle cash in marketable securities at an annual interest rate of 10%.
Required
Determine the daily opportunity cost ( interest rate) and the variance of daily cash flow
Calculate the targeted cash balance for the firm
The upper limit of cash balance and the average cash balance.
State the amount of short-term securities to be purchase or sold once the upper limit or lower limit is reach.
How would you evaluate this approach to cash management

Answers

Alpha Ltd standard deviation (σ) of the daily cash balance during the last year was $500, and the transaction cost was $5.

The company also has the opportunity to invest idle cash in marketable securities at an annual interest rate of 10%. Calculate the daily opportunity cost ( interest rate) and the variance of daily cash flow.

The given information to solve this question is as follows:

Alpha Ltd standard deviation (σ) of the daily cash balance during the last year was $500, and the transaction cost was $5. The company also has the opportunity to invest idle cash in marketable securities at an annual interest rate of 10%

The daily opportunity cost (interest rate) can be determined by multiplying the annual interest rate by the number of days in a year:

Daily opportunity cost = (10/365) = 0.0274

The variance of daily cash flow is calculated using the below formula:

Variance = σ² = $500² = $250,000

The targeted cash balance for the company can be calculated using the formula:

Target cash balance = transaction cost / daily opportunity cost = $5/0.0274 = $182.48

The upper limit of cash balance can be found by adding two times the target cash balance to the targeted cash balance:

Upper limit = Target cash balance + (2 × Target cash balance) = $182.48 + (2 × $182.48) = $547.44

The average cash balance can be calculated by dividing the upper limit and the targeted cash balance by 2:

Average cash balance = (Upper limit + Target cash balance)/2 = ($547.44 + $182.48)/2 = $364.96

The amount of short-term securities to be purchased or sold once the upper limit or lower limit is reached is found by calculating the difference between the upper limit and lower limit and dividing the result by 2:

Amount of short-term securities to be purchased or sold = (Upper limit - Target cash balance)/2 = ($547.44 - $182.48)/2 = $182.48

Finally, this approach to cash management can be evaluated as a good one since it allows the company to manage its cash balance effectively. The approach allows the company to earn an interest rate of 10% on its idle cash while at the same time reducing transaction costs. The approach also ensures that the company has sufficient cash on hand to meet its daily financial obligations.

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Suppose that there is parity between the Australian dollar and the United States dollar. Let x be a positive number and assume that the United States dollar increases by 100x % in Australian dollars.

(a) Calculate the percentage decrease for one Australian dollar in United States dollars in terms of x. Simplify your answer.

(b) Using your answer to (a), if the United States dollar increases by 10% in Australian dollars, calculate the percentage change for one Australian dollar in United States dollars.

Answers

(a) To calculate the percentage decrease for one Australian dollar in United States dollars in terms of x, we need to consider that the United States dollar increases by 100x% in Australian dollars.

Let's assume the initial exchange rate is 1 Australian dollar to 1 United States dollar. After the increase of 100x% in Australian dollars, the new exchange rate becomes (1 + 100x)% Australian dollars to 1 United States dollar.

To find the percentage decrease, we can calculate the reciprocal of the new exchange rate and subtract 1.

Reciprocal of (1 + 100x)% = 1 / (1 + 100x)

Percentage decrease = (1 / (1 + 100x) - 1) * 100%

Explanation:

In (a), we are given that the United States dollar increases by 100x% in Australian dollars. By assuming the initial exchange rate and calculating the reciprocal of the new exchange rate, we can find the percentage decrease for one Australian dollar in United States dollars.

(b) Now, using the answer from (a), if the United States dollar increases by 10% in Australian dollars, we can calculate the percentage change for one Australian dollar in United States dollars.

Let's substitute x with 10 in the equation we obtained in (a):

Percentage decrease = (1 / (1 + 100*10) - 1) * 100%

By simplifying the equation and calculating, we can find the percentage change for one Australian dollar in United States dollars when the United States dollar increases by 10% in Australian dollars.

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Please explain how to complete this problem with a financial
calculator rather than with excel. ThanksAnnuity due. Reginald is about to lease an apartment for 30 months. The landlord wants him to make the lease payments at the start of the month. The monthly payments are $1,400 per month. The landlord says he will allow Reg to prepay the rent for the entire lease with a discount. The one-time payment due at the beginning of the lease is $37,506. What is the implied monthly discount rate for the rent? If Reg is earning 1.3% on his savings monthly, should he pay by month or make the one-time payment? What is the implied monthly discount rate for the rent? % (Round to two decimal places.) (I)

Answers

The implied monthly discount rate is approximately 0.9984% or 0.99%. Since Reg is earning 1.3% on his savings monthly, which is higher than the implied monthly discount rate for the rent.

To calculate the implied monthly discount rate for the rent, we can use the formula for the present value of an annuity:

PV = PMT × [(1 - (1 + r)⁽⁻ⁿ⁾) / r],

where PV is the present value (one-time payment), PMT is the monthly payment, r is the monthly discount rate, and n is the number of months.

We know:

PV = $37,506

PMT = $1,400

n = 30 months

Substituting the values into the formula, we have:

37,506 = 1,400 × [(1 - (1 + r)⁽⁻³⁰⁾) / r].

This equation cannot be easily solved algebraically, but we can use numerical methods to find the value of r that satisfies the equation. Using a financial calculator or software, we find that the implied monthly discount rate is approximately 0.9984% or 0.99%.

Since Reg is earning 1.3% on his savings monthly, which is higher than the implied monthly discount rate for the rent, it would be more beneficial for him to make the one-time payment and take advantage of the discount offered by the landlord. By paying upfront, Reg would save money compared to paying monthly over the lease period.

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Required information [The following information applies to the questions displayed below.) Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha Beta Direct materials $40 $24 Direct labor 20 25 Variable manufacturing overhead 15 14 Traceable fixed manufacturing overhead 25 27 Variable selling expenses 21 17 Connon fixed expenses 24 19 Total cost per unit $154 $126 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 8. Assume that Cane normally produces and sells 69.000 Betas and 89,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Financial (disadvantage) $ 4,941,000

Answers

This means that discontinuing the Beta product line would have a financial disadvantage of $3,068,000.

To determine the financial advantage or disadvantage of discontinuing the Beta product line, we need to compare the total contribution margin earned from both products with and without Beta.

Currently, Cane produces and sells 69,000 Betas and 89,000 Alphas per year. The contribution margin per unit for Beta is:

Selling price - Variable cost per unit

$130 - ($24 + $25 + $14 + $17) = $50

The contribution margin per unit for Alpha is:

Selling price - Variable cost per unit

$165 - ($40 + $20 + $15 + $21) = $69

The total contribution margin earned from producing and selling both products is:

(69,000 units x $50 contribution margin per unit for Beta) + (89,000 units x $69 contribution margin per unit for Alpha) = $10,106,000

If Cane discontinues the Beta product line, it can increase sales of Alpha by 13,000 units, which means the new sales volume for Alpha would be 102,000 units. The contribution margin per unit for Alpha remains the same at $69 per unit.

The total contribution margin earned from only producing and selling Alpha is:

102,000 units x $69 contribution margin per unit for Alpha = $7,038,000

Therefore, if Cane discontinues the Beta product line, the financial disadvantage would be:

Total contribution margin from both products - Total contribution margin from only Alpha

$10,106,000 - $7,038,000 = $3,068,000

This means that discontinuing the Beta product line would have a financial disadvantage of $3,068,000.

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The Location Cross-Over Model makes an assumption that moving production from one facility to another is: a. Imminent b. Priceless c. Two-Stage Least Squared regressed d. Transitory e. Costless

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The Location Cross-Over Model makes an assumption that moving production from one facility to another is Costless(E).

The Location Cross-Over Model assumes that moving production from one facility to another is costless. This means that there are no costs associated with relocating production, such as transportation costs or costs of setting up new facilities. The model assumes that production can be seamlessly transferred from one facility to another without any financial impact.

This assumption allows the model to focus solely on other factors influencing the decision to relocate production, such as market demand or resource availability. It simplifies the analysis by disregarding cost considerations related to facility relocation.

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You are given (i) The current price of a nondividend-paying stock is RM50. (ii) The price of a 48-strike 11-month European call option is RM7.71. (iii) The price of a 48-strike 11-month European put option is RM0.64. Determine the effective rate of interest per annum.

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When the current price of a nondividend-paying stock is RM50 ,the price of a 48-strike 11-month European call option is RM7.71 , the price of a 48-strike 11-month European put option is RM0.64 then the effective rate of interest per annum is 6.13%.

Here are the steps involved in calculating the effective rate of interest:

Calculate the risk-free interest rate.

The risk-free interest rate is the rate of return that an investor can expect to earn on a risk-free investment, such as a government bond.

In this case, the risk-free interest rate is equal to the difference between the price of the call option and the price of the put option, divided by the current price of the stock.

Risk-free interest rate = (Call option price - Put option price) / Stock price = RM7.71 - RM0.64 = RM7.07 / RM50 = 0.1414

Calculate the number of compounding periods per year.

In this case, the number of compounding periods per year is equal to 12, because the options expire in 11 months.

Calculate the effective rate of interest.

The effective rate of interest is calculated using the following formula:

Effective rate of interest = (1 + Risk-free interest rate)^Number of compounding periods per year - 1

Effective rate of interest = (1 + 0.1414)^12 - 1 = 0.0613 = 6.13%

Thus, the effective rate of interest per annum is 6.13%.

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"X", "Y" and "Z" agreed to establish a partnership "X" paid $1,000 cach and $4,000 inventory "Y" paid $2,000 cash and $8,000 machines "Z" paid Land of $15,000 Required: Compute total capital of each partner. Please DO NOT use "S" and "" signs in you answer. For example, if the answer is $10,000 for $20.000 tox and 500 000 for "Z", the answer should be exactely as 10000 20000 50000 "X" "y" "Z"

Answers

The total capital of each partner is as follows: "X": $5,000 ($1,000 cash + $4,000 inventory), "Y": $10,000 ($2,000 cash + $8,000 machines), and "Z": $15,000 (Land). Therefore, the total capital for each partner is: "X": $5,000, "Y": $10,000, and "Z": $15,000

The total capital of each partner can be calculated as follows:

Partner "X" contributed $1,000 in cash and $4,000 worth of inventory. Therefore, the total capital contributed by "X" is $5,000.Partner "Y" contributed $2,000 in cash and $8,000 worth of machines. Thus, the total capital contributed by "Y" amounts to $10,000.Partner "Z" made a land contribution valued at $15,000. Hence, the total capital contributed by "Z" is $15,000.

Consequently, the total capital of each partner is as follows:

Partner "X": $5,000Partner "Y": $10,000Partner "Z": $15,000

These figures represent the individual contributions made by each partner towards the partnership's capital. It is essential to maintain accurate records of the capital contributed by each partner to ensure proper allocation and distribution of profits and losses within the partnership.

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Concerned about softening sales for its Economics Textbook, EconText, which sells in a fairly competitive market, the management of the company has hired a consultant to help study its cost structure. The consultant estimates the following short run cost function for the production of EconText: TC = 450 + 15q + 2q^2 (Hint: Much easier done using Excel solver, but you can also solve analytically.)
a) The consultant reports that the firm should shut down cost if the EconText cannot be priced above $18. Do you agree with the consultant? Why is this information relevant to the owners of this business? Please show appropriate computations.
b) The consultant also reports that to make a profit, the textbook has to be priced above $90. Is the consultant correct? Show computations and briefly explain.
c) The consultant sketches out a short run supply curve for this firm. Can you do the same?
d) Suppose that after much market research, the price of EconText is set at $130. Calculate the profit the company will earn from the sale of the textbook.

Answers

a) Yes, shut down costs are higher than revenue at $18. b) No, profit can be made even below $90. c) Unable to provide answer without additional information. d) Profit from sales: $1,790.

a) The consultant is correct in advising the firm to shut down if EconText cannot be priced above $18. This information is relevant to the owners of the business as it helps them determine whether it is financially viable to continue production. To assess this, we can compute the average variable cost (AVC) and compare it to the price. In the short run, the AVC is given by AVC = VC / q, where VC represents variable costs. In this case, VC = 15q + 2q^2. Plugging in the values, we have AVC = (15q + 2q^2) / q = 15 + 2q. Since the total cost (TC) is given as TC = 450 + 15q + 2q^2, the fixed cost (FC) can be calculated as FC = TC - VC = 450. Now, if the price is below the AVC, the firm should shut down. Setting AVC = $18 and solving for q gives us q = (18 - 15) / 2 = 1.5. Substituting q = 1.5 into the TC function, we find that TC = 450 + 15(1.5) + 2(1.5^2) = 481.5. Since $18 < $18.50 (rounded up), it is advisable to shut down the production.

b) The consultant is incorrect in stating that the textbook has to be priced above $90 to make a profit. To determine the profit, we need to compare the price to the average total cost (ATC). In the short run, ATC is given by ATC = TC / q. Using the TC function provided (TC = 450 + 15q + 2q^2), we can substitute it into the ATC formula to get ATC = (450 + 15q + 2q^2) / q = 450/q + 15 + 2q. To make a profit, the price must be greater than the ATC. Setting ATC = $90 and solving for q yields q = 5. Substituting q = 5 into the TC function, we find that TC = 450 + 15(5) + 2(5^2) = 545. Therefore, the textbook can be priced above $90 and still make a profit.

c) In order to sketch the short run supply curve, we need to determine the firm's marginal cost (MC) function. In this case, MC is the derivative of the TC function with respect to q. Differentiating TC = 450 + 15q + 2q^2 with respect to q, we get MC = 15 + 4q. The short run supply curve is derived from the MC curve. It represents the quantity supplied at different prices, assuming that all fixed costs remain the same. Therefore, the short run supply curve for this firm is a line that starts at the point where MC intersects the average variable cost (AVC) curve and continues upwards with the same slope as MC.

d) If the price of EconText is set at $130, we need to calculate the profit the company will earn. Profit (π) is given by π = TR - TC, where TR represents total revenue. Total revenue is equal to the price (P) multiplied by the quantity (q), so TR = P * q. In this case, P = $130 and q can be determined by solving the TC function for q when TC = TR. Setting 450 + 15q + 2q^2 = 130q and solving for q, we find q ≈ 6.

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Should the NIKE company participate in such efforts as
the Sustainable Development Goals, or should their focus be on the
bottom line and returning dividends to shareholders?
(2 paragraph and key ref

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Nike should prioritise sustainability objectives. Nike aspires to produce no waste or carbon in the future.

Numerous billions of plastic jugs have been diverted from landfills and converted into repurposed polyester for Nike execution goods starting around 2010. The business concentrates on enhancing its sourcing and production procedures and designs its items to safeguard sustainable development for coming generations.

Nike's "move to zero" initiative fights climate change by setting ambitious, fact-based goals. Considering the magnitude of Nike, even modest adjustments like using recycled materials can have a big impact. Nike's sustainability strategy is still developing. Nike is changing its manufacturing cycle and resources through its multifaceted strategy.

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Sleepy Time is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Sleepy Time fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below.
Sales price per unit $ 3,350.00
Per-unit variable costs: Invoice cost 2,568.80
Sales commissions 351.20
Total per-unit variable costs $ 2,920.00
Total annual fixed costs: Advertising $ 236,700
Rent 178,700
Salaries 386,700
Total annual fixed costs $ 802,100
If 4,350 bed frames were sold, Sleepy Time's operating income (πB) would be: (Do not round intermediate calculations.)
Multiple Choice
$1,108,400.
$1,148,400.
$1,068,400.
$1,208,400.
$988,400.

Answers

Answer:

Explanation:

To calculate Sleepy Time's operating income (πB), we need to subtract the total variable costs and total fixed costs from the total sales revenue.

Total variable costs per unit: $2,920.00

Number of units sold: 4,350

Total variable costs = Total variable costs per unit x Number of units sold

Total variable costs = $2,920.00 x 4,350 = $12,702,000

Total fixed costs: $802,100

Total sales revenue = Sales price per unit x Number of units sold

Total sales revenue = $3,350.00 x 4,350 = $14,572,500

Operating income (πB) = Total sales revenue - Total variable costs - Total fixed costs

Operating income (πB) = $14,572,500 - $12,702,000 - $802,100 = $1,068,400

Therefore, Sleepy Time's operating income (πB) would be $1,068,400.

The correct answer is:

$1,068,400.

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Holstein Computing manufactures an inexpensive audio card (Audio Max) for assembly into several models of its microcomputers. The annual demand for this part is 100,000 units. The annual inventory carrying cost is $5 per unit and the cost of preparing an order and making production setup for the order is $750. The company operates 250 days per year. The machine used to manufacture this part has a production rate of 2000 units per day. Based on your answer in previous question, please answer the following question. In each order cycle, how long will it take to produce the optimal order quantity? 15 days 6 days 3.1 days
2.7 days

Answers

The optimal order quantity is 5000 units. Each order cycle takes 2.7 days to produce the optimal order quantity.

Optimal order quantity refers to the best order size, i.e., the order size which results in the lowest ordering cost and carrying cost. It is calculated by considering the trade-off between these two costs. The optimal order quantity formula is as follows:Optimal order quantity = √[(2DS)/H]

where, D = annual demand for the item,

S = cost of placing one order, and

H = annual carrying cost per unit.

As per the given data, we haveD = 100,000 units

S = $750H = $5/unit

So,Optimal order quantity = √[(2 × 100,000 × 750)/5] = √(2 × 100,000 × 150) = 5000 units

Therefore, the optimal order quantity is 5000 units.In each order cycle, the machine produces 2000 units per day. Therefore, the time taken to produce the optimal order quantity is calculated as follows: Number of units produced per day = 2000

Number of units in the optimal order quantity = 5000

Number of days required to produce the optimal order quantity = (Number of units in the optimal order quantity) ÷ (Number of units produced per day) = 5000/2000 = 2.5 days

Hence, each order cycle takes 2.7 days to produce the optimal order quantity.

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Intro Value Equivalence Part 1 Which of the following identities are true about a firm? Check all that apply: The discounted present value of the liabilities and equity must equal the discounted present value of the assets The accounting value of the liabilities and equity must equal the accounting value of the assets The value of the equity is always equal to 5,000 Dogecoin The cash flows accruing to/from or paid to/from the liability and equity holders must equal the cash flows to/from the assets Save

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The identities which are true about a firm are the discounted present value of the liabilities and equity must equal the discounted present value of the assets.

The accounting value of the liabilities and equity must equal the accounting value of the assets. The cash flows accruing to/from or paid to/from the liability and equity holders must equal the cash flows to/from the assets. Value equivalence is the concept that values in different time periods may be compared and are therefore equivalent provided that a standard rate of return can be applied to the amounts in question and the resulting calculations are the same.

This concept is utilized in finance and economics when computing present value of future cash flows to make these values equivalent to a single amount of money presently. Value equivalence aids in determining which of two choices provides the greatest return or amount of income given the cash flow and time period involved. An introduction to value is a component of a company that concentrates on the perceived value of a service or product. The introduction to value refers to how a service or product satisfies or surpasses the expectations of customers and provides them with the most benefit for their money. Value can be determined by a variety of criteria, including price, quality, and reputation.

The first part of equivalence is simply the idea that money received in the future is worth less than money received now. In general, money you get right now is worth more than money you get later, because if you have the money now you can use it to make more money or to purchase things you need or want. That is, you would want to have money now rather than later, and would be willing to give up some amount of money later to get it now. This is true for everyone, so we say that the present value of any amount received in the future is less than the future value of that same amount.

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a. NFP Inc., a registered charity, has received four contributions during the past year:
• a delivery van with a value of $30,000 and a useful life of 5 years (with no salvage value); the charity would
otherwise have had to purchase such a van.
• an endowment contribution received at the beginning of the year in the amount of $100,000 which was
invested and earned $3,000 interest during the year. There were no restrictions as to the spending of the
investment income from this endowment.
• a cash contribution of $20,000 to be used for a special program; $12,000 was spent on this program during the
past year with the balance to be spent next year.
• a cash donation of $10,000 to be used as the board of directors decided.
Prepare journal entries to record these events (including the amortization of the cost of the van) assuming NFP Inc.
does not use fund accounting but accounts for donations using the deferred contribution method.
b. Prepare journal entries for the following selected transactions of the Eastern Kidney Association, which uses the
restricted fund method and has an operating fund, a capital fund and an endowment fund:
• Pledges totaling $325,000 were received of which $65,000 applies to the operations of the following year. It is
estimated that 3% of the pledges will be uncollectible.
• The association purchased office equipment at a cost of $5,100.
• Pledges of $285,000 were collected and pledges totaling $3,750 were written off as uncollectible.
• Air time with a value of $7,200 was donated by a local radio station.
• Interest and dividends received were $13,700 on endowment fund investments. Endowment fund earnings are
unrestricted.
• Depreciation for the year amounted to $35,600.

Answers

A)The accounting treatment for NFP Inc. using the deferred contribution method is as follows:The following journal entries should be made for the four contributions received by NFP Inc.:1. For the delivery van:

No. Accounts Debit Credit 1 Delivery van 30,000 2 Deferred contribution 30,0002. For the investment:No. Accounts Debit Credit 1 Cash 100,000 2 Deferred contribution 100,0003. For the interest earned:No. Accounts Debit Credit 1 Cash 3,000 2 Endowment earnings 3,0004. For the special program:No. Accounts Debit Credit 1 Cash 20,000 2 Deferred contribution 20,0005. For the portion spent:No. Accounts Debit Credit 1 Expense 12,000 2 Deferred contribution 12,000.The amortization of the delivery van is as follows:30,000/5 years = 6,000.The following journal entry should be made to record the amortization:No. Accounts Debit Credit 1 Depreciation expense 6,000 2 Accumulated depreciation 6,000

B) The accounting treatment for Eastern Kidney Association using the restricted fund method is as follows:

1. For the pledges:No. Accounts Debit Credit 1 Cash 260,875 2 Pledges receivable 64,125 3 Allowance for uncollectible pledges 9,750 4 Contribution revenue 315,0002.

For the office equipment:No. Accounts Debit Credit 1 Equipment 5,100 2 Cash 5,1003. For the collected pledges:No. Accounts Debit Credit 1 Cash 281,250 2 Pledges receivable 3,750 3 Allowance for uncollectible pledges 9,7504.

For the donated air time:No. Accounts Debit Credit 1 Advertising expense 7,200 2 Air time donation 7,2005.

For the endowment earnings:No. Accounts Debit Credit 1 Cash 13,700 2 Endowment earnings 13,7006. For the depreciation:No. Accounts Debit Credit 1 Depreciation expense 35,600 2 Accumulated depreciation 35,600.

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Kress Products' corporate charter authorized the firm to sell 800,000 shares of $10 par common stock. At the beginning of 2019, Kress sold 233,200 shares and reacquired 1,650 of those shares. The reacquired shares were held as treasury stock. During 2019, Kress sold an additional 16,300 shares and purchased 3,100 more treasury shares. Required: Determine the number of issued and outstanding shares at December 31, 2019. Issued shares _____shares Outstanding shares ______ shares

Answers

The number of outstanding shares at December 31, 2019 is 244,750 shares.

The number of issued shares at December 31, 2019 can be calculated as follows:

Shares authorized = 800,000

Less: Shares reacquired = 1,650

Total shares issued = 233,200 + 16,300 = 249,500

Therefore, the number of issued shares at December 31, 2019 is 249,500 shares.

To determine the number of outstanding shares at December 31, 2019, we need to subtract the treasury shares from the issued shares. The number of treasury shares held by the company at the end of 2019 is 1,650 + 3,100 = 4,750.

Outstanding shares = Issued shares - Treasury shares

Outstanding shares = 249,500 - 4,750

Therefore, the number of outstanding shares at December 31, 2019 is 244,750 shares.

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The term cash as used on the statement of cash flows includes all the following EXCEPT:
A) cash due from customers within 30 days.
B) cash on hand.
C) cash equivalents.
D) cash in bank
Which of the following statements accurately describes the statement of cash flows?
A) It shows the relative proportion of debt and assets.
B) It shows the link between accrual-based income and the cash reported on the balance sheet.
C) It indicates when long-term debt will mature.
D) It shows the link between book income and earnings per share.
Which of the following is NOT a true statement about the statement of cash flows?
A) It shows where cash came from and how it was spent.
B) It reports why cash increased or decreased.
C) It covers a specific span of time the same as the income statement.
D) It shows how the profits or losses of the company were generated.
Which one of the following is a principal function of the statement of cash flows?
A) To predict future net income
B) To evaluate management decisions
C) To evaluate the company's earnings per share
D) To predict the growth of company assets

Answers

1. The term cash as used on the statement of cash flows includes all the following except cash due from customers within 30 days.The correct answer is option A. 2. The following statement "It shows the link between accrual-based income and the cash reported on the balance sheet" describes the statement of cash flows.The correct answer is option B. 3. It shows how the profits or losses of the company were generated is not true statement. 4. To evaluate management decisions is a principal function of the statement of cash flows.The correct answer is option B.

1. The correct answer is A) cash due from customers within 30 days.

The term "cash" on the statement of cash flows refers to actual physical currency, cash equivalents, and cash held in bank accounts. It does not include amounts due from customers within a specific time frame, such as cash due from customers within 30 days.

While these amounts may be classified as accounts receivable on the balance sheet, they are not considered cash for the purpose of the statement of cash flows.

2. The correct answer is B) It shows the link between accrual-based income and the cash reported on the balance sheet.

The statement of cash flows provides information on how a company's cash position changed over a specific period. It reconciles the differences between net income (which is based on accrual accounting) and the actual cash flows from operating, investing, and financing activities.

It explains the sources and uses of cash, showing how the reported net income on the income statement relates to the cash reported on the balance sheet.

3. The correct answer is D) It shows how the profits or losses of the company were generated.

The statement of cash flows focuses on the cash inflows and outflows of a company, rather than detailing how profits or losses were generated. While the statement provides information on cash flows from operating activities, which includes net income, it does not break down the specific components of profits or losses.

Instead, it presents a summary of the company's cash flows from various activities, such as operating, investing, and financing, during a specific period.

4. The correct answer is B) To evaluate management decisions.

One of the principal functions of the statement of cash flows is to evaluate management decisions. It provides valuable insights into the company's cash management, liquidity position, and ability to generate and use cash.

By analyzing the cash flows from operating, investing, and financing activities, stakeholders can assess how effectively management has utilized the company's resources and made decisions that impact cash flows.

It helps to identify the sources of cash and how it has been allocated, enabling investors, creditors, and other stakeholders to evaluate the company's financial health and make informed decisions.

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Which of the following best describe the term sensitivity analysis. Multiple Choice The change in costs that occurs when there is a small change in output. Investigation of what happens to NPV when only one variable is changed. The determination of what happens to NPV estimates when we ask what-if questions. The degree to which a firm or project relies on fixed costs. Taking into account the managerial options that are implicit in a project.

Answers

Sensitivity analysis is the investigation of what happens to the net present value (NPV) when only one variable is changed. Sensitivity analysis refers to a technique that can be used to analyze the effects of fluctuations in one variable on the overall output.

The aim of a sensitivity analysis is to determine how changes in one input variable affect an output variable. The analysis is usually conducted to determine the impact of changes in one or more inputs on the overall output. The process is used to make decisions about the appropriateness of a particular course of action or investment.

Sensitivity analysis is the investigation of what happens to the net present value (NPV) when only one variable is changed. Sensitivity analysis is a technique that is used to analyze the effects of fluctuations in one variable on the overall output. The aim of a sensitivity analysis is to determine how changes in one input variable affect an output variable. The analysis is usually conducted to determine the impact of changes in one or more inputs on the overall output. The process is used to make decisions about the appropriateness of a particular course of action or investment. Sensitivity analysis is a powerful tool that can be used to help managers make better decisions about investment opportunities. It can be used to determine the impact of changes in the market, customer preferences, production costs, and other factors on the overall output. The process can also be used to identify potential risks and opportunities, as well as to evaluate alternative investment strategies.

Sensitivity analysis is the investigation of what happens to the net present value (NPV) when only one variable is changed. The process is used to make decisions about the appropriateness of a particular course of action or investment. Sensitivity analysis is a powerful tool that can be used to help managers make better decisions about investment opportunities. The process can also be used to identify potential risks and opportunities, as well as to evaluate alternative investment strategies.

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(a) Many Malaysians think that Takaful agents are considered salesman and pushing product to solicit the solution for their prospective clients. Elaborate TWO (2) aspects of agent roles in order to focus on a consultative approach based.

(b) Describe TWO (2) importances of evaluating Cash Flow in the risk management process.

(c) Discuss the use of evaluating personal Net Worth in constructing risk assessment for individuals.

Answers

The answers to the above questions are as follows:

(a) Takaful agents' role is to provide protection and promote risk awareness to their clients. Instead of merely pushing products to their potential clients, the consultative approach emphasizes the value of the consultation process. This approach leads to a better understanding of the client's needs and expectations. A more consultative approach will provide the agents with a better understanding of the client's risk profile.
Therefore, the two aspects of the agents' roles that are critical to developing a consultative approach are:
Client relationship management: Effective communication and building long-term relationships with clients are critical to consultative selling. Clients will only trust agents who are knowledgeable and passionate about their jobs. An agent's role is to educate clients about the protection products available and how the products can benefit them. Agents must focus on understanding the client's needs, identifying gaps, and matching them with the right product offerings.
Collaboration with the underwriter: Agents should work closely with the underwriter to understand the products, pricing, and terms. They must possess the knowledge to explain the product benefits and terms clearly. They can also provide feedback to the underwriters on the suitability of products and services to clients based on their unique needs and risk profile. 
(b) Cash flow is an essential part of risk management because it helps to assess the sustainability of a business or investment.
The two importances of evaluating cash flow in the risk management process are as follows:
Cash flow helps businesses to meet financial obligations: Cash flow analysis is vital to risk management as it helps businesses to plan for short and long-term cash needs. Understanding how cash is generated and used in a business can help the management team make decisions that will support the growth and profitability of the company.
Cash flow supports investment decisions: Evaluating cash flow is critical to making investment decisions. It helps to determine if a particular investment will generate sufficient cash to support the investment. Evaluating cash flow can help investors understand the potential risks and returns of a particular investment.
(c) Net worth is a measure of an individual's financial position. Evaluating net worth is important in risk assessment for individuals.
The two reasons why personal net worth is important in constructing risk assessment are as follows:
Net worth is a measure of financial stability: Evaluating personal net worth can help individuals assess their financial stability and security. It provides an understanding of how much they own and owe, which can help them determine their risk tolerance and appetite.
Net worth helps in determining insurance needs: Personal net worth is an essential factor when determining the appropriate insurance coverage for an individual. A person's net worth can be used to evaluate the adequacy of coverage for life, disability, and health insurance. A higher net worth may require higher coverage levels to provide adequate protection.

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Jason and Clare are Indigenous Australians who reside in Armidale NSW. Jason is a local
doctor and Clare teaches in the local primary school. Jason and Clare have lived in Armidale
all their lives except for a short period of time when they studied in Sydney.
Jason, Clare and other members of their community are considering making a claim for
native title over land at Ebor Falls. The Ebor Falls themselves are within the National Park
which is Crown land. The area surrounding the Ebor Falls is grazing land with the fee simple
title held by a number of graziers.
Advise
• Jason and Clare whether they can make a native title claim in relation to the Ebor
Falls and /or the surrounding grazing land.
• In answering this question focus on the decision of the High Court in Mabo (No 2) v
State of Queensland (1992) 175 CLR 1 specifically the decision of Justice Brennan.

Answers

Based on the decision of the High Court in Mabo (No 2) v State of Queensland (1992) 175 CLR 1, Jason and Clare may potentially make a native title claim in relation to the Ebor Falls and/or the surrounding grazing land.

Justice Brennan's decision in the Mabo case recognized the existence of native title rights for Indigenous Australians over land that has not been extinguished by valid legislation or other acts. The Ebor Falls being within a National Park, which is Crown land, and the surrounding grazing land held under fee simple title by graziers, does not automatically extinguish the possibility of a native title claim. However, a detailed assessment of the specific circumstances, including the history of land tenure and any legislative or legal actions, would be necessary to determine the viability of a native title claim in this case.

In Mabo (No 2) v State of Queensland, Justice Brennan's decision acknowledged the existence of native title rights for Indigenous Australians. The key principle established was that native title rights could continue to exist if they had not been extinguished by valid legislation or other acts. Extinguishment can occur through acts such as the grant of fee simple title or the creation of a National Park.

However, the mere fact that land is Crown land or held under fee simple title does not automatically extinguish native title. Therefore, Jason and Clare, along with members of their community, may have the potential to make a native title claim over the Ebor Falls and/or the surrounding grazing land. To assess the viability of such a claim, it would be necessary to examine the specific circumstances, including the history of land tenure and any legislative or legal actions that may have affected native title rights in the area.

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A research journal is an important part of any research project. The journal helps the researcher organize and analyze the progress of his project. While there typically is not a specific way a research journal is organized, its content should include information necessary to show the direction of the research as well as the progress made each day toward the end result. A good research journal is written to record the process of the project and to help keep you on target.

Write the names of all researchers, the topic of your research project and the research question or problem on the inside cover of your journal. The topic, for example, might be Deciding On Laptops. The question or problem might be the laptop prices v the needs of the family and budget.

Make an initial entry that summarizes the research and experiments you plan to undertake. You can write in first person. If you're working with another researcher, make sure that each of you indicates his name on any journal entry for clarification. Write clearly and with as many details as you can. A research journal should be rich in detail, including any experiments you do, dates, times and results.

Finish each daily journal entry with a summary of what was accomplished in the week's research and how you feel about what you accomplished. If you feel you are heading in the wrong direction, write a couple of suggestions that will take you in a better direction. Include a paragraph or two that explains why your current research will not take you in the direction you need to go. If nothing is accomplished on a week's research, be sure to note that information. Copious documentation is key to successful journal entries.

Begin each new journal entry with a brief synopsis of the research or experiments that went on the previous week. Brainstorm with yourself on paper. Write down a few random thoughts about your project and make notes about how to put those ideas into motion. Record the week's events and finish with another summary, adding specific progress you made over the previous week's work. Conclude with a suggestion or two about where you will go with the next session.

Answers

In any research project, keeping a research journal is essential as it assists in organizing and analyzing the progress of the study.

The content of the research journal should include information necessary to reveal the direction of the research and the progress made every day towards the final result. A good research journal is written to record the proceedings of the project and to help the researcher stay on target. Writing the names of all researchers, the research project's topic and the research question or problem is necessary on the inside cover of the journal. The initial entry should summarize the research and experiments that will be undertaken. Additionally, each daily journal entry should end with a summary of the week's research and how it went. A research journal should be rich in detail, including any experiments done, dates, times, and outcomes.

The research journal is a vital part of any research project. It helps the researcher to keep track of the progress of the study and organize it. There is no specific way to organize a research journal, but its content must contain information that shows the direction of the research and progress made towards the final outcome every day. It is essential to write the names of all researchers, the topic of the research project, and the research question or problem on the inside cover of the journal. The initial entry should contain a summary of the research and experiments that will be undertaken.

The researcher should make sure to write with as much detail as possible, including any experiments done, dates, times, and outcomes. If working with another researcher, ensure that each indicates his name on any journal entry for clarification. A research journal should contain a lot of information and be rich in detail, including any experiments done dates, times, and outcomes. It is essential to document everything and finish each daily journal entry with a summary of what was accomplished in the week's research and how the researcher feels about the outcome.

If the researcher feels that they are heading in the wrong direction, they should write a couple of suggestions that will take them in a better direction. They should include a paragraph or two that explains why their current research will not take them in the direction they need to go. If nothing is accomplished on a week's research, note that information down. It is essential to document everything. Start each new journal entry with a brief summary of the previous week's research or experiments. Conclude with a suggestion or two about where the researcher will go with the next session.

Therefore, keeping a research journal is crucial for the success of a research project. A good research journal should contain a lot of information and be rich in detail, including any experiments done dates, times, and outcomes. It is essential to document everything and finish each daily journal entry with a summary of what was accomplished in the week's research and how the researcher feels about the outcome.

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13. (01.04 HC) Use the production possibilities table below to answer the following question. Assume constant opportunity costs for Tommy and Gina. Pillows per Day Rugs per Day Tommy 5 10 Gina 15 15 Given the data above, which statement provides the correct rationale for a trade agreement of 1.5 rugs for 1 pillow? (2 points) O Gina's opportunity cost for producing pillows is less than Tommy's. O Tommy has a comparative advantage in both products, so he can dictate the terms of trade. Gina has no incentive to trade with Tommy, because she has an absolute advantage in both products. Tommy has a comparative advantage in rugs, and Gina has a comparative advantage in pillows. O Tommy has an opportunity cost that is lower than Gina for pillows, so he will want to trade pillows for rugs at a lower cost than he can produce ther

Answers

The correct statement that provides the rationale for a trade agreement of 1.5 rugs for 1 pillow is: Tommy has an opportunity cost that is lower than Gina for pillows, so he will want to trade pillows for rugs at a lower cost than he can produce them.

In the given production possibilities table, Tommy can produce 5 pillows or 10 rugs, while Gina can produce 15 pillows or 15 rugs. The opportunity cost is determined by the trade-off between producing one good over the other.

Tommy's opportunity cost of producing pillows is 2 rugs (10 rugs / 5 pillows), while Gina's opportunity cost of producing pillows is 1 rug (15 rugs / 15 pillows). Since Tommy's opportunity cost for pillows is higher than Gina's, it means that Tommy has a comparative advantage in producing rugs, and Gina has a comparative advantage in producing pillows.

Therefore, Tommy will be willing to trade pillows for rugs at a lower cost (1.5 rugs for 1 pillow) because it is more beneficial for him to specialize in producing rugs where he has a comparative advantage, and obtain pillows from Gina where she has a comparative advantage.

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: Assume that inflation expectations are formed rationally. Use the 3-equation model to show the adjustment of the economy to a permanent demand and a permanent supply shock. Provide a period by period explanation of the adjustment process (as done in chapter 3 ). How does the central bank reaction differ from the cases where we assumed adaptive inflation expectations (as shown in chapter 3 )?

Answers

Assumptions

The economy is initially at its long-run equilibrium.

The central bank follows a Taylor rule.

Inflation expectations are formed rationally.

1. Initially, assume the economy is in equilibrium with expected inflation equal to actual inflation, and output equal to potential output.

2. Permanent Demand Shock:

  a. The demand shock increases aggregate demand, shifting the IS curve to the right.

  b. Output rises above potential output, putting upward pressure on prices.

  c. In response, the rational expectations of inflation increase, shifting the Phillips curve upwards.

  d. The central bank, following its monetary policy rule, raises interest rates to counteract the increase in inflation.

  e. Higher interest rates reduce investment and consumption, shifting the IS curve back towards potential output.

  f. The economy gradually adjusts, with output returning to potential and inflation stabilizing at a higher level.

3. Permanent Supply Shock:

  a. The supply shock reduces potential output, shifting the IS curve to the left.

  b. Output falls below potential, leading to lower price pressures.

  c. Rational expectations of inflation decrease, shifting the Phillips curve downwards.

  d. The central bank lowers interest rates to stimulate demand and counteract the decrease in inflation.

  e. Lower interest rates boost investment and consumption, shifting the IS curve back towards potential output.

  f. Over time, the economy adjusts, with output returning to potential and inflation stabilizing at a lower level.

In the case of rational inflation expectations, the central bank's reaction differs from when adaptive inflation expectations are assumed. With rational expectations, the central bank actively adjusts interest rates to stabilize inflation in response to shocks. This forward-looking behavior leads to quicker and more effective adjustments in output and inflation. In contrast, with adaptive expectations, the central bank may react more slowly or inappropriately, as expectations are based on past inflation rather than future projections.

Overall, rational expectations enable a more efficient adjustment process, as economic agents anticipate and factor in the central bank's response to shocks, leading to smoother transitions and better alignment of output and inflation with their respective targets.

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Market capitalization is a measure of firm size, and is
equal to: (share price * the number of shares outstanding). It
represents the public opinion of a firm's net worth, and can be
easily found for

Answers

Market capitalization is indeed a measure of firm size and is calculated by multiplying the share price by the number of shares outstanding.

It represents the total market value of a company's outstanding shares and is commonly used to gauge the public opinion of a firm's net worth.To find the market capitalization of a company, you need to know the current share price and the number of shares outstanding. The share price can be obtained from stock exchanges or financial websites that provide real-time market data. The number of shares outstanding can be found in the company's financial statements or through reliable financial databases.

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Adrian pays ₱822851 cash and the balance in 41 quarterly
payments of ₱31685 for a house and lot. If money is worth 11%
converted quarterly, what is the cash value of the house and lot?
Round your

Answers

The cash value of the house and lot is approximately ₱1,731,544.65, which is calculated by adding the initial cash payment of ₱822,851 to the present value of the quarterly payments of ₱908,693.65.

To find the cash value of the house and lot, we need to calculate the present value of the quarterly payments and add it to the initial cash payment.

The formula to calculate the present value of quarterly payments is:

PV = C * (1 - (1 + r)^(-n)) / r

Where:

PV = Present Value

C = Payment per period

r = Interest rate per period

n = Number of periods

In this case, C = ₱31685, r = 11% converted quarterly (or 0.11), and n = 41.

Using the formula, we can calculate the present value of the quarterly payments:

PV = ₱31685 * (1 - (1 + 0.11)^(-41)) / 0.11 ≈ ₱908693.65

The cash value of the house and lot is the sum of the initial cash payment and the present value of the quarterly payments:

Cash Value = ₱822851 + ₱908693.65 ≈ ₱1,731,544.65

Therefore, the cash value of the house and lot is approximately ₱1,731,544.65.

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Big data" provides both opportunities and challenges in
managerial accounting. Discuss, providing examples.

Answers

Big data has a great impact on the management accounting process as it provides new opportunities for analysis and decision-making. It is very important to have data-driven insights into business operations in order to remain competitive in the business world.

In order to make decisions, management accountants must analyze large amounts of data. The availability of big data has made this process much easier. Management accountants can use big data to make informed decisions. Large amounts of data can be used to identify trends and patterns in customer behavior, which can then be used to create more accurate budgets and forecasts.

For instance, a company that tracks social media activity can use the information to find out what its customers think about the company's products. This information can be used to improve the company's marketing strategy and create better products.Challenges also come with big data.

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Which one of the following is not a variable of major
importance to investment
analysts?
Expected changes in the company's EPS.
The outlook for the company's industry.
The company's expected ROE.

Answers

The outlook for the company's industry is not a variable of major importance to investment analysts.

While all three variables mentioned—expected changes in the company's EPS, the company's expected ROE, and the outlook for the company's industry—can provide valuable insights to investment analysts, the outlook for the company's industry is relatively less important compared to the other two variables.

Expected changes in the company's EPS (Earnings Per Share) are crucial for investment analysts as it directly reflects the company's profitability and growth potential.

The company's expected ROE (Return on Equity) is also significant as it measures the company's ability to generate returns for shareholders based on its net income and shareholder equity.

However, the outlook for the company's industry, while still relevant, is not as critical for investment analysis. Industry trends can certainly impact a company's performance, but skilled investment analysts focus more on analyzing individual companies and their specific financial indicators rather than relying solely on industry-wide forecasts.

They assess the company's competitive positioning, management quality, financial health, and other internal factors that may influence its success, regardless of industry conditions.

In summary, while the outlook for the company's industry is worth considering, it is not a variable of major importance compared to the expected changes in EPS and the company's expected ROE for investment analysts.

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Unit Price Payment Window (days) Supplier A $64.00 40 Supplier B $64.30 120 Supplier C $65.05 130
The following suppliers all provide an identical part in terms of​ quality, performance, and​ delivery, but each supplier quotes a different price and different payment window. If a​ company's annual cost of capital is 12​%, which supplier should be​ selected?
A. The effective cost of purchasing from Supplier A​ (compared to Supplier​ C) is ​$__________ enter your response here per unit. ​(Enter your response rounded to two decimal​ places.)
B. The effective cost of purchasing from Supplier B​ (compared to Supplier C is ​$___________enter your response here per unit. ​(Enter your response rounded to two decimal​ places.)
C. Based on the graph, what Supplier should be selected? __________ Supplier A, B, or C?

Answers

To determine the most cost-effective supplier, we need to calculate the effective cost of purchasing from each supplier, taking into account the unit price and payment window.

The effective cost considers the time value of money based on the company's annual cost of capital of 12%.A. Effective cost of purchasing from Supplier A (compared to Supplier C):First, calculate the present value of the price difference between Supplier A and C:Price difference = $65.05 - $64.00 = $1.05Using the formula for present value, we can calculate the effective cost:Effective cost = Price difference / (1 + annual cost of capital)^((payment window of Supplier C - payment window of Supplier A) / 365)Effective cost = $1.05 / (1 + 0.12)^((130 - 40) / 365)Calculating this value will provide the effective cost of purchasing from Supplier A compared to Supplier C per unit.B. Effective cost of purchasing from Supplier B (compared to Supplier C):Follow the same steps as above, using the price difference between Supplier B and C and the payment windows of Supplier C and Supplier B.

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Far Side Corporation is expected to pay the following dividends over the next four years: $5,$2,$15, and $2. Afterward, the company pledges to maintain a constant 0.01 growth rate in dividends forever. If the required return on the stock is 0.12, what is the current share price? Answer with 2 decimals (e.g. 45.45).

Answers

The current share price of Far Side Corporation is approximately $40.31.

To determine the current share price of Far Side Corporation, we need to calculate the present value of the expected future dividends.

Given:

Dividends for the next four years: $5, $2, $15, and $2

Growth rate of dividends after the fourth year: 0.01

Required return on the stock: 0.12

Using the dividend discount model, we can calculate the present value of dividends for the next four years:

PV = D1 / (1 + r)^1 + D2 / (1 + r)^2 + D3 / (1 + r)^3 + D4 / (1 + r)^4

PV = $5 / (1 + 0.12)^1 + $2 / (1 + 0.12)^2 + $15 / (1 + 0.12)^3 + $2 / (1 + 0.12)^4

PV ≈ $4.46 + $1.58 + $10.56 + $1.49

PV ≈ $18.09

To calculate the present value of the perpetuity (dividends after the fourth year), we use the formula:

PV = D5 / (r - g)

PV = $2 / (0.12 - 0.01)

PV ≈ $22.22

Finally, we calculate the current share price by summing up the present values:

Current share price = PV + PV of perpetuity

Current share price = $18.09 + $22.22

Current share price ≈ $40.31

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mability report provides stakeholders with important information about a long-term value creation and prospects for the future. Explain the three key that need to be included in the sustainability report and how these elements ate the long-term value creation of the business. Select one key stakeholder ss what information is of interest to this stakeholder in the sustainability report

Answers

The three key elements that need to be included in a sustainability report are environmental performance, social responsibility, and economic performance.

Environmental Performance: This element focuses on the company's impact on the environment and its efforts to mitigate environmental risks. It includes information on energy and resource consumption, waste management, emissions, and environmental initiatives.

By disclosing environmental performance, businesses can demonstrate their commitment to sustainability, reduce their ecological footprint, and manage potential environmental liabilities.

Improving environmental performance can lead to cost savings through resource efficiency and operational optimization, enhancing long-term value creation.

Social Responsibility: This element pertains to the company's social impact and initiatives that support communities, employees, and other stakeholders. It includes information on labor practices, human rights, diversity and inclusion, community engagement, and philanthropy.

Demonstrating social responsibility enhances the company's reputation, attracts and retains talent, fosters positive relationships with stakeholders, and mitigates social risks.

Investing in social responsibility initiatives can result in increased brand loyalty, customer satisfaction, and long-term stakeholder trust, contributing to the overall value creation of the business.

Economic Performance: This element focuses on the financial aspects of sustainability, including economic growth, profitability, and value generation. It includes information on financial performance, business ethics, governance practices, and risk management.

By integrating sustainability into the core business strategy, companies can identify new market opportunities, enhance operational efficiency, manage risks, and drive long-term financial success.

Strong economic performance is crucial for the sustainability and growth of the business, ensuring the ability to invest in innovation, research and development, and responsible business practices.

Key Stakeholder: Investors

Investors are particularly interested in the economic performance aspect of the sustainability report. They seek information on the financial health of the company, its profitability, and its ability to generate long-term value.

They are interested in understanding the company's financial strategy, risk management practices, and how sustainability factors are integrated into the business model.

Investors assess the company's financial performance and sustainability practices to make informed investment decisions, considering both financial returns and the company's environmental and social impact.

A sustainability report should include key elements such as environmental performance, social responsibility, and economic performance. These elements contribute to the long-term value creation of a business by addressing environmental, social, and financial aspects of sustainability. Investors, as a key stakeholder, are interested in the economic performance of the company and how sustainability factors are integrated into the business strategy. By providing comprehensive and transparent sustainability reporting, companies can meet stakeholder expectations, enhance their reputation, and drive long-term value creation.

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Arvitz and Siri have been friends for thirty years. Arvitz agrees to sell Siri a fifty percent ownership in his bait and tackle shop for $50,000. Because they are such good friends, Avitz thinks they do not need to contact a lawyer to draw up an agreement; after all, a partnership can be created without a formal written agreement. Siri thinks it would probably be a good idea to have a lawyer draft an agreement, so he contacts Attorney Frost about drawing up the contract. What is Attorney Frost's primary goal in drafting the contract?
A. Attorney Frost's primary goal in drafting this contract is to protect Siri from litigation, or, if litigation does occur, making sure the contract has been drafted in such a way that Siri wins.
B. Attorney Frost's primary goal in drafting this contract is to protect both parties from litigation.
C. Attorney Frost's primary goal in drafting this contract is to obtain the best possible price for the fifty percent ownership for Siri.
D. Attorney Frost's primary goal in drafting this contract is to protect Arvitz from litigation, or, if litigation does occur, making sure the contract has been drafted in such a way that Arvitz wins.

Answers

The correct answer is B. Attorney Frost's primary goal in drafting this contract is to protect both parties from litigation.

When drafting a contract, an attorney's primary objective is to ensure that the agreement clearly outlines the rights, responsibilities, and obligations of all parties involved. The contract serves as a legally binding document that establishes the terms of the partnership between Arvitz and Siri. By creating a well-drafted contract, Attorney Frost aims to protect both Arvitz and Siri from potential disputes, misunderstandings, and litigation.

A comprehensive contract will address important aspects such as the ownership structure, profit sharing, decision-making processes, roles and responsibilities, dispute resolution mechanisms, and any other relevant terms that are essential for a successful partnership. Attorney Frost's focus is to create a fair and balanced agreement that safeguards the interests of both parties, reducing the likelihood of future conflicts and providing a legal framework to resolve any disputes that may arise.

While the contract aims to protect both parties, it is not designed to obtain the best possible price for Siri or prioritize the success of either Arvitz or Siri in potential litigation. Its purpose is to establish clear guidelines and expectations for the partnership, ensuring a solid foundation for their business relationship.

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2. Which of the following is an example of money illusion?
A. An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 5 percent.
B. An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 20 percent.
C. An individual will neither increase nor decrease the number of hours she is willing to work
when the nominal wage rises by 10 percent and the overall price level rises by 10 percent.

Answers

Money illusion refers to an economic concept where people are likely to believe that price changes can influence their real incomes.

The option that is an example of money illusion is:

An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 20 percent.

What is Money Illusion?Money illusion is a situation where people believe that changes in price can alter their actual income. It occurs when a person does not recognize that the increase in price will lead to a proportional rise in their nominal income. It is based on the idea that people concentrate on the nominal value of their wages or income rather than on the real value of the same.A person who suffers from the money illusion will focus solely on the numerical value of the money received as their income. As a result, they might be satisfied with receiving the same nominal amount of money even if the purchasing power of the money has decreased because of a change in the prices of goods and services available.The money illusion is generally referred to as a 'misinterpretation of inflation' by economists and occurs when the increase in the price level causes an increase in nominal incomes, which the people believe is an increase in real incomes.

Example of Money Illusion

An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 20 percent.

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