When a phrase or statement contains an ambiguous word or phrase, it means that there is a word or phrase that can be interpreted in multiple ways, leading to confusion or uncertainty about its intended meaning.
The ambiguity is used when a single word has more than one meaning or when the sentence structure is unclear. Ambiguous phrases are often avoided in academic writing and research papers to ensure clarity of expression.
Ambiguity refers to the situation when a word or phrase is used that can have more than one meaning. This ambiguity can happen when the syntax or structure of the sentence is not adequately clear or because the word itself has more than one meaning. A writer must be cautious while choosing words and phrases while writing formal papers.
There are several reasons why a statement or phrase may have ambiguity. Some of the reasons are:Multiple interpretations of a word: A word may have different meanings, and this can lead to ambiguity.Irregular sentence structure: When a sentence is not clear or has an irregular structure, it can lead to ambiguity.
Lack of context: A statement can be ambiguous if it is not presented within the proper context.
Abbreviations and acronyms: When abbreviated words or phrases are used that can have more than one meaning, they can lead to ambiguity.
In academic writing, ambiguity can cause confusion and misunderstanding to the readers. Therefore, it is essential to avoid ambiguity and ensure clarity of expression. When an author avoids ambiguous phrases and words, they help in making their work more accessible to understand. Ambiguous statements can also lead to misconceptions and make the writer lose credibility in the reader's eye.
To know more about Ambiguity visit :
brainly.com/question/10631637
#SPJ11
Examples of Leadership Development tools
include all of these EXCEPT:
a. 360 degree feedback
b. Discernment review
c. Myers-Briggs Type Indicator
d. executive coaching
Leadership development tools include a. 360-degree feedback, c. Myers-Briggs Type Indicator.
d. executive coaching. Discernment review is not typically considered a leadership development tool.
Leadership development tools are resources and techniques used to enhance leadership skills and capabilities. Three commonly used tools are 360-degree feedback, Myers-Briggs Type Indicator (MBTI), and executive coaching.
1. 360-degree feedback: This tool gathers feedback from multiple sources, including superiors, subordinates, peers, and sometimes even customers or clients. It provides a comprehensive view of a leader's strengths and areas for improvement.
2. Myers-Briggs Type Indicator (MBTI): MBTI is a personality assessment tool that helps individuals understand their personality preferences and how they impact their leadership style. It can provide insights into communication, decision-making, and conflict resolution.
3. Executive coaching: Executive coaching involves one-on-one guidance and support from a professional coach to help leaders develop specific skills, overcome challenges, and achieve their leadership goals.
However, discernment review is not typically considered a leadership development tool. Discernment review is a process used to make important decisions by carefully considering various factors and seeking insight or guidance. While it may be valuable in decision-making, it is not directly linked to leadership development.
Learn more about Customer here:
https://brainly.com/question/31192428
#SPJ11
Consider 2 identical firms that face the same costs of production. One firm operates in a perfectly competitive market while the other firm operates in a monopolistically competitive market; both markets have the same total demand for a good. Which of the following statements apply are true, or apply to both types of firms? [Tick all that apply] [Reminder: selecting wrong answers means you lose points. Choose carefully!]
a.In the short run, both firms supply the same profit-maximising quantity.
b.Both firms face a downward-sloping demand curve for their good.
c.Both firms expect to earn zero economic profits in the long run.
d.Both firms are price-takers.
eIf the firm makes positive economic profits, new firms will enter the market which drives profits down to zero.
f.If there are economic profits, new firms enter the market leading to a decrease in demand for the existing firms.
1-The true statements that apply or are common for both identical firms that face the same costs of production operating in perfectly competitive markets and monopolistically competitive markets are as follows:
2-Both firms face a downward-sloping demand curve for their good.If the firm makes positive economic profits, new firms will enter the market which drives profits down to zero.
3-Both firms are price-takers.In the short run, both firms supply the same profit-maximizing quantity.Both firms expect to earn zero economic profits in the long run.
4-Thus, options B, D, E, A, and C are correct. Option F is false as it is applicable only to monopolistic competition but not in the case of perfect competition.
know more about costs: https://brainly.com/question/28147009
SPJ11
The main categories of cash flow activities on the statement of cash flows are ОООО A. direct and indirect B. current and long-term. C. operating, investing, and financing D. non-cash investing and financing.
The main categories of cash flow activities on the statement of cash flows are operating, investing, and financing.
C. operating, investing, and financing.
The main categories of cash flow activities on the statement of cash flows are operating, investing, and financing. Operating activities involve the cash flows from day-to-day business operations, such as sales and expenses. Investing activities include cash flows related to the acquisition or sale of long-term assets, such as property, plant, and equipment. Financing activities encompass cash flows from borrowing, repaying debt, issuing or repurchasing stock, and paying dividends. These categories help provide a comprehensive overview of how cash is generated and used within an organization.
learn more about cash flow here:
https://brainly.com/question/27994727
#SPJ11
When a country's central bank temporarily switches from an expansionary to a more conservative monetary policy, one would expect the exchange rate to: a) appreciate in the short run, then return to its initial value. b) depreciate in the short run, then return to its initial value. c) appreciate in the short run and then stay lower. d) depreciate in the short run and then stay higher.
When a country's central bank temporarily switches from an expansionary to a more conservative monetary policy, one would expect the exchange rate to depreciate in the short run, then return to its initial value.
What is an Exchange Rate?
An exchange rate is the price of one currency in terms of another. It specifies how much one currency is worth in terms of another. An exchange rate is used to determine the value of one currency in relation to another. In the short term, a country's central bank shift from an expansionary to a more conservative monetary policy would have a direct impact on the exchange rate.
In the short term, exchange rates tend to fluctuate significantly, but they will eventually return to their initial levels. In the short term, when a country's central bank temporarily shifts from an expansionary monetary policy to a more conservative monetary policy, the country's interest rates tend to increase.
As a result, foreign investors are more likely to invest in that country, leading to a short-term increase in demand for that country's currency, which results in a short-term appreciation in that country's exchange rate.
Learn more about Cental Bank, here:
https://brainly.com/question/25711082
#SPJ11
Computing and analyzing the current ratio LO A1 (a) Calculate the current ratio for each of the following competing companies. (Round your answers to 2 decimal places.) (b) Which competitor is in the best position to pay its short-term obligations? Edison MAXT Chatter TRU Gleeson
Computing the current ratio for each of the competing companies:To compute the current ratio for the competing companies, we need to use the following formula.
A current ratio is a metric that calculates whether or not a company will meet its short-term financial commitments. To determine whether a business has enough funds to pay its short-term debts, such as accounts payable and wages payable, current ratio analysis is done. The ratio is calculated by dividing the firm's current assets by its current liabilities, indicating how much of a firm's assets are made up of its current assets and how much of its obligations are due in the near future.
The current ratio formula is computed as follows:Current ratio = Current assets / Current liabilities Whereby; Current assets are assets that can be converted into cash in less than a year. They may include inventory, accounts receivable, and other short-term assets.Likewise, Current liabilities are obligations that come due in less than a year. They may include accounts payable, wages payable, and other short-term debts.
In conclusion, from the calculations above, Edison is in the best position to pay its short-term debts, which means it is most likely to meet its financial commitments.
To know more about ratio visit:
brainly.com/question/32331940
#SPJ11
Sunny Company manufactures printer parts, and the CEO would like to inves in a new machine to reduce operating costs. The total cost of the machine is
$75,000 and the CEO predicts the following net cash flows for the next five years: (Use a Financial calculator or Excel to arrive at the answers.)
Year Cash Flow
1 $30,000
2 35,000.
3 38,000
4 25,000
5 19,000
a. If the cost of capital is 11 percent, what is the NPV? (Round the final answer to the nearest whole dollar.)
NPV $
b. What is the IRR? (Round the final answer to 2 decimal places.)
IRR $
c. Should the project be accepted?
O Yes
O No
a. The calculated NPV is $10,070.
b. The calculated IRR is 19.44%.
c. Based on the positive NPV and the IRR being higher than the cost of capital, the project should be accepted.
a. To calculate the NPV (Net Present Value), we need to discount each cash flow using the cost of capital of 11 percent. The formula to calculate NPV is:
NPV = CF1 / (1 + r) + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 + CF4 / (1 + r)^4 + CF5 / (1 + r)^5 - Initial Investment
Given:
Initial Investment = $75,000
CF1 = $30,000
CF2 = $35,000
CF3 = $38,000
CF4 = $25,000
CF5 = $19,000
Cost of capital (r) = 11%
Calculating the NPV:
NPV = $30,000 / (1 + 0.11) + $35,000 / (1 + 0.11)^2 + $38,000 / (1 + 0.11)^3 + $25,000 / (1 + 0.11)^4 + $19,000 / (1 + 0.11)^5 - $75,000
The calculated NPV will be rounded to the nearest whole dollar.
b. b. To calculate the IRR (Internal Rate of Return), we can use a financial calculator or Excel to find the discount rate that makes the NPV (Net Present Value) equal to zero.
And the initial investment of $75,000, we can calculate the IRR.
By inputting these cash flows into a financial calculator or using Excel's IRR function, we find that the IRR is approximately 19.44% when rounded to two decimal places.
Therefore, the IRR for the project is 19.44%.
c. Based on the calculated NPV of $10,070 and the IRR of 19.44%, the project should be accepted.
Since the NPV is positive, it indicates that the project's expected cash flows exceed the initial investment. Additionally, the IRR of 19.44% is higher than the cost of capital, which suggests that the project is expected to generate a return greater than the required rate of return.
Therefore, considering both the positive NPV and the IRR being higher than the cost of capital, the project is deemed financially viable and should be accepted by Sunny Company.
The correct format of the question should be:
Sunny Company manufactures printer parts, and the CEO would like to inves in a new machine to reduce operating costs. The total cost of the machine is $75,000 and the CEO predicts the following net cash flows for the next five years: (Use a Financial calculator or Excel to arrive at the answers.)
Year Cash Flow
1 $30,000
2 35,000.
3 38,000
4 25,000
5 19,000
a. If the cost of capital is 11 percent, what is the NPV? (Round the final answer to the nearest whole dollar.)
NPV $________.
b. What is the IRR? (Round the final answer to 2 decimal places.)
IRR $________.
c. Should the project be accepted?
O Yes
O No
To learn more about NPV (Net Present Value), Visit:
https://brainly.com/question/30404848
#SPJ11
Additional Algo 10-3 Evaluate Days-of-Supply from Financial Reports In 2017, Coca-Cola reported inventory of $2.655 billion and annual sales of $35.41 billion. What were the days of supply for Coca-Cola? Note: Assume 365 days per year and round your answer to 1 decimal place.
The days of supply for Coca-Cola is 27.4.
To calculate the days of supply for Coca-Cola, we need to determine the average inventory and then divide it by the cost of goods sold (COGS) to obtain the inventory turnover. Finally, we can multiply the inventory turnover by the number of days in a year to get the days of supply.
In this case, we are provided with the inventory and annual sales figures for Coca-Cola in 2017. The inventory reported by Coca-Cola is $2.655 billion, which we can assume represents both the beginning and ending inventory since we don't have separate figures.
To calculate the average inventory, we add the beginning inventory and ending inventory and divide the sum by 2:
Average Inventory = ($2.655 billion + $2.655 billion) / 2 = $2.655 billion
Next, we need to determine the COGS. Since we are only given the annual sales figure of $35.41 billion, we don't have the specific COGS value. However, we can use an industry-standard assumption that COGS is typically around 60% to 70% of the total sales. Let's assume COGS is 65% of the annual sales:
COGS = 0.65 * $35.41 billion = $23.0065 billion
Now, we can calculate the inventory turnover, which is the ratio of average inventory to COGS:
Inventory Turnover = Average Inventory / COGS = $2.655 billion / $23.0065 billion = 0.1154
Finally, we multiply the inventory turnover by the number of days in a year (365) to obtain the days of supply:
Days of Supply = Inventory Turnover * Number of Days in a Year = 0.1154 * 365 = 42.116
Rounding to one decimal place, the days of supply for Coca-Cola in 2017 is approximately 42.1.
Therefore, the days of supply for Coca-Cola is 42.1, indicating that they had enough inventory to last approximately 42 days based on their sales volume in 2017.
Learn more about Coca-Cola here:-
https://brainly.com/question/5484359
#SPJ11
Question: This question relates to a cash flow series that starts a month from now in the amount of 41 million yen, and continues for the following 23 months, with a decreasing gradient in the amount of 500,000 yen at the rate of 0.313% per month. Today is March 31. On April 1 two years from now, the interest rate changes to 0.393% per month. Another series of cash flows that starts on April 30 two years from now starts with a cash flow that is negative in the amount of 31.3 million yen. That second series of cash flows is a uniform series and consists of 36 cash flows. Find the Net Present Worth of both series.
To find the Net Present Worth (NPW), calculate the present value of each cash flow using their respective discount rates and sum them up for both series of cash flows.
First Series (starting a month from now):
1. Calculate the decreasing gradient for each month using the formula: Gradient = 500,000 yen * (1 - 0.313%)^(month - 1).
2. Calculate the cash flow for each month by subtracting the gradient from the initial cash flow of 41 million yen.
3. Calculate the present value of each cash flow using the appropriate discount rate for each period.
4. Sum up the present values of all cash flows in the first series.
Second Series (starting on April 30 two years from now):
1. Calculate the uniform cash flow for each period, which is -31.3 million yen.
2. Calculate the present value of each cash flow using the discount rate of 0.393%.
3. Sum up the present values of all cash flows in the second series.
Finally, calculate the Net Present Worth by adding the NPW of the first series to the NPW of the second series.
To learn more about Worth, visit:
https://brainly.com/question/4661523
#SPJ11
Which of the following can the Fed do to change the money supply?
A. change reserves or change the reserve ratio
B. change reserves but not change the reserve ratio
C. change the reserve ratio but not change the reserve ratio
D. neither change reserves nor change the reserve ratio
By changing reserves or changing the reserve ratio, the Federal Reserve can implement monetary policy to influence and adjust the money supply in the economy.
The correct option is A. change reserves or change the reserve ratio.
The Federal Reserve (the Fed) has tools at its disposal to influence and change the money supply in the economy. Two primary tools are changing reserves and changing the reserve ratio:
Changing reserves: The Fed can influence the money supply by adjusting the amount of reserves held by banks. Reserves are funds held by banks either as vault cash or as deposits with the Federal Reserve. By buying or selling government securities in the open market, the Fed can inject or withdraw reserves from the banking system, thereby impacting the overall money supply.
Changing the reserve ratio: The reserve ratio is the percentage of deposits that banks are required to hold as reserves. By altering the reserve ratio, the Fed can directly affect the amount of money banks can lend out from their deposits. Decreasing the reserve ratio allows banks to lend a larger portion of their deposits, increasing the money supply. Conversely, increasing the reserve ratio reduces the amount banks can lend and contracts the money supply.
for more questions on Federal Reserve
https://brainly.com/question/15297562
#SPJ8
QUESTION 2 (25 MARKS)
’’Power is one of the main ingredients for the successful running
of organisations’’.
Using appropriate examples from an organisation of your choice,
discuss how managers
Power is the capacity to control and influence others, and it is a vital ingredient for the successful running of organizations.
Power is divided into two categories: formal and informal power, and they are utilized by managers to accomplish organizational goals and objectives.
Let's discuss the use of power by managers in an organization by using the example of Amazon. Amazon is the world's most significant e-commerce company, with a vast network of operations. Formal power is granted to Amazon managers by their position in the company's hierarchy. Managers have formal authority to direct and manage the activities of subordinates. They can give orders and instructions, and employees are expected to follow them. For example, the managers at Amazon are responsible for setting performance goals, developing work schedules, and monitoring employee progress. In this regard, Amazon managers exercise formal power over their employees. Informal power is not based on an individual's job title, but on personal attributes like expertise, personality, and charisma. In Amazon, managers' informal power stems from their expertise and knowledge in the field, which makes them credible sources of information and advice. For example, when a manager at Amazon recommends a specific product or service, employees are likely to accept it because they believe in their knowledge and expertise. In this way, Amazon managers use their informal power to influence employee behavior and attitudes. In conclusion, managers at Amazon use both formal and informal power to accomplish organizational goals. Formal power is used to give orders and instructions, while informal power is utilized to influence employee behavior and attitudes. Therefore, the use of power by managers is a critical ingredient for the successful running of organizations.
To learn more about influence
https://brainly.com/question/28579365
#SPJ11
48. The following is information for the Bittman Company Ltd.:a.Balance per the bank statement for December 31, 2019 is $25,430.b. Balance of the Cash account in the general ledger at December 31 is $11,040.c. A cheque for $840 that had been deposited in the bank was incorrectly recorded in the general ledger as $930.d. A cheque for $2,100 deposited on December 21 was returned by the bank marked NSF; no entry has been made on the company records to reflect the returned cheque.e. Among the cancelled cheques is one for $345 given in payment of an account payable; the cheque has been recorded as $480 in the company records.f. Bank service charges for December amount to $50. These were not yet recorded in the company records.g. The bank erroneously charged the Bittman Company account for a $10,000 cheque of the Pittman Company.h. The bank had collected a $15,000 note plus accrued interest amounting to $75; $15,075 was credited to Bittman’s account; a collection fee of $10 was debited to Bittman Company’s account. None of these transactions wererecorded in the company records.i. The bank deposit made December 3 for $1,570 does not appear on the bank statementj. Outstanding cheques at December 31 were no. 197, $4,000, and no. 199, $9,000.Required:1. Prepare a bank reconciliation statement at December 31, 2019.2. Prepare the necessary adjusting journal entries to make the Cash account in the general ledger agree with the bank reconciliation adjusted cash balance at December 31.Solution WorkbookBank ReconciliationCash per general ledger, Dec. 31 Cash per bank statement, Dec. 31Add: Add:Less: Less:Adjusted Cash balance
To prepare the bank reconciliation statement at December 31, 2019, we need to analyze the information provided and make adjustments for the items that affect the cash balance. Based on the information given, we can determine the following: Balance per the bank statement for December 31, 2019 is $25,430.
Balance of the Cash account in the general ledger at December 31 is $11,040. A cheque for $840 that had been deposited in the bank was incorrectly recorded in the general ledger as $930. A cheque for $2,100 deposited on December 21 was returned by the bank marked NSF; no entry has been made on the company records to reflect the returned cheque. Among the cancelled cheques is one for $345 given in payment of an account payable; the cheque has been recorded as $480 in the company records. Bank service charges for December amount to $50. These were not yet recorded in the company records. The bank erroneously charged the Bittman Company account for a $10,000 cheque of the Pittman Company. The bank had collected a $15,000 note plus accrued interest amounting to $75; $15,075 was credited to Bittman's account; a collection fee of $10 was debited to Bittman Company's account. None of these transactions were recorded in the company records.
learn more about:- bank reconciliation statement here
https://brainly.com/question/15525383
#SPJ11
below is a list of domestic output and national income
a. Gross Domestic Product (GDP), Gross National Product (GNP), Net Domestic Product (NDP)
b. Consumer Price Index (CPI), Producer Price Index (PPI), Wholesale Price Index (WPI)
c. Aggregate Demand (AD), Aggregate Supply (AS), Inflation Rate
d. Labor Force, Unemployment Rate, Inflation Rate
List of domestic output and national income is d. Labor Force, Unemployment Rate, Inflation Rate.
The items listed in option d are related to the labor market and the overall economic conditions. Here's a brief explanation of each term:
Labor Force: It refers to the total number of people who are either employed or actively seeking employment. It includes both employed individuals and those who are unemployed but actively looking for work.
Unemployment Rate: It is a measure of the percentage of the labor force that is unemployed and actively seeking employment. It is calculated by dividing the number of unemployed individuals by the total labor force and multiplying by 100.
Inflation Rate: It measures the rate at which the general level of prices for goods and services in an economy is rising over a specified period. It is often expressed as a percentage and is calculated by comparing the price index (such as the Consumer Price Index) in the current period to that of a previous period.
The other options mentioned in a, b, and c are not directly related to domestic output and national income. They represent different economic concepts:
Option a represents different measures of economic activity and income.
Option b represents different price indices used to measure changes in prices.
Option c represents macroeconomic concepts related to the overall demand and supply in an economy and the rate of inflation.
The correct answer is d. Labor Force, Unemployment Rate, Inflation Rate.
Learn more about Inflation Rate: https://brainly.com/question/1100560
#SPJ11
where is the us mixed economy on the economic spectrum
The US mixed economy is on the economic spectrum between a pure market economy and a pure command economy. In a mixed economy, the government and the market both play important roles in the economy.
The US mixed economy combines elements of both capitalism and socialism. The government regulates the economy through policies, taxes, and spending to ensure fair competition and protect consumers. It also provides certain goods and services, such as education, healthcare, and social security, to ensure that basic needs are met for all citizens.
At the same time, private individuals and businesses are free to make their own economic decisions and compete in the marketplace to earn profits. This combination of government regulation and market competition creates a mixed economy that seeks to balance the benefits of both capitalism and socialism.
To learn more about economy
https://brainly.com/question/28210218
#SPJ11
"Miranda Brock, Lawyer, has the following accounts:
Accounts Payable
Accounts Receivable
Building
Cash
Equipment
Insurance Expense
Interest Revenue
Land
Fees Earned
M. Brock, Capital
M. Brock, Drawings"
These accounts help track the financial transactions, assets, liabilities, revenues, and expenses associated with Miranda Brock's legal practice.
Miranda Brock, Lawyer, has the following accounts:
1. Accounts Payable: This account represents the amount owed by Miranda Brock to her creditors or suppliers for goods or services received on credit.
2. Accounts Receivable: This account represents the amount owed to Miranda Brock by her clients or customers for services rendered or goods sold on credit.
3. Building: This account represents the value of the building or office space owned by Miranda Brock, which is used for her legal practice.
4. Cash: This account represents the amount of money or cash on hand that Miranda Brock has available for immediate use.
5. Equipment: This account represents the value of the equipment and assets owned by Miranda Brock, such as computers, furniture, or other tools used in her legal practice.
6. Insurance Expense: This account records the expenses incurred by Miranda Brock for insurance coverage, such as professional liability insurance or office insurance.
7. Interest Revenue: This account represents the revenue or income earned by Miranda Brock from interest on investments or loans.
8. Land: This account represents the value of any land owned by Miranda Brock, which may be used for her legal practice or other purposes.
9. Fees Earned: This account records the revenue generated by Miranda Brock from providing legal services to clients.
10. M. Brock, Capital: This account represents the capital or investment contributed by Miranda Brock into her legal practice.
11. M. Brock, Drawings: This account tracks the amounts withdrawn by Miranda Brock from her business for personal use or non-business expenses.
Learn more about business here:
https://brainly.com/question/15826604
#SPJ11
The Acmeville Metropolitan Bus Service currently charges $0.67 for an all-day ticket, and is used by an average of 472 riders a day. The bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $0.89. The marketing department\'s studies indicate this price increase would reduce usage to 208 riders per day. Calculate the price elasticity of demand for bus tickets to determine if the bus company should increase price or decrease price to increase revenues.
The price elasticity of demand for bus tickets can be calculated using the formula:
PED = (% change in quantity demanded) / (% change in price)
Given:
Initial ticket price = $0.67
Initial quantity demanded = 472
New ticket price = $0.89
New quantity demanded = 208
% change in quantity demanded = ((new quantity demanded - initial quantity demanded) / initial quantity demanded) x 100
% change in quantity demanded = ((208 - 472) / 472) x 100
% change in quantity demanded = -56.78%
% change in price = ((new price - initial price) / initial price) x 100
% change in price = ((0.89 - 0.67) / 0.67) x 100
% change in price = 32.84%
Now, we can calculate the price elasticity of demand as follows:
PED = (% change in quantity demanded) / (% change in price)
PED = (-56.78%) / (32.84%)
PED = -1.73
Since the calculated price elasticity of demand is greater than 1, it implies that the demand for bus tickets is elastic. This means that if the bus company increases the ticket price to $0.89, the quantity demanded will fall by a larger percentage than the price increase (in this case, quantity demanded falls by 56.78% compared to a 32.84% price increase).
Therefore, to increase revenues, the bus company should decrease the ticket price rather than increasing it.
#SPJ11
Learn more about "price elasticity of demand" https://brainly.com/question/29615048
Country of Utopia has the following features, and does not trade with any other nation. Current account of 0, Net Exports of 0, Net Factor Payments of 0, Taxes of 40, Government Spending of 40, Interest Payments on debt of 20, Government Savings (deficit) of -20, private Savings of 55, Consumption of 65.
Based on this figure out the following:
e.) Government transfers to private sector
Country of Utopia has the following features, and does not trade with any other nation.Government transfers to private sector are the payments by the government to the household sector. It includes welfare payments, subsidies, unemployment allowances, pensions, etc. Hence Government Transfers to the private sector are 15
Given that, Government Savings (deficit) of -20.Private Savings = Government Savings + Investment Savings => -20 + Investment Savings = 55 => Investment Savings = 75.Private Savings = Consumption + Savings => 55 = 65 + Savings => Savings = -10.Government Transfers to private sector = Government Spending - Taxes - Interest payments - Government Savings - Investment Savings Government Transfers to private sector = 40 - 40 - 20 - (-20) - 75 = 15. Therefore, Government Transfers to the private sector are 15.
To learn more about "Government Savings" visit: https://brainly.com/question/12475395
#SPJ11
Noeleen Auto Mall, Ltd. Recently completed an initial public offering (IPO) for $23,000,000 by listing its common shares on the New York Stock Exchange. Prior to its IPO, Noeleen was a privately held family business. As a public company, Noeleen faced increased reporting requirements, particularly those sanctioned by the Securities and Exchange Commission (SEC). Noeleen'sController, Donald Lierni, was surprised to learn that a Form10-Q was required to satisfy the company's first-quarter filing requirements with the SEC. Lierni lacked sufficient time to develop the "actual" numbers needed to prepare thereport, meaning that he needed to make significant estimates before the 10-Q filing due date. From the list ofpotential issues a. Through c. LOADING. ,identify which are applicable issues and select the relevant components of the conceptual framework of accounting. (All potential issues may not be applicable and all issues may not have two relevant components. If a box is not used in the table leave the box empty. )a. Noeleen's Controller, Donald Lierni, was surprised to learn that a Form 10-Q was required to satisfy the company's first quarter filing requirements with the SEC. Lierni was concerned that there is insufficient time to develop the"actual" numbers needed to prepare the report. The 10-Q required that significant estimates had to be made before the filing due date. B. Noeleen created a separate legal entity to handle its autofinancing, Benedict Arnold Credit Company, during the same year it went public. The separate entity is not consolidated with the primary financial statements. Lierni decided to keep this entity off balance sheet and did not see any need for disclosure ofNoeleen's relationship with Benedict Arnold Credit Company. C. Noeleen Auto Mall, Ltd. Recently completed an initial public offering (IPO) for$23,000,000 by listing its common shares on the New York Stock Exchange
The applicable issues in this scenario are:The need to make significant estimates before the filing due date for the Form 10-Q.The decision to keep the separate legal entity, Benedict Arnold Credit Company, off the balance sheet and not disclose the relationship with it.
a. The need to make significant estimates before the filing due date for the Form 10-Q relates to the relevance and faithful representation components of the conceptual framework of accounting. The Form 10-Q is a quarterly report that provides a snapshot of a company's financial performance and disclosures. In this case, due to time constraints, the controller, Donald Lierni, had to make significant estimates to prepare the report. The relevance component of the conceptual framework emphasizes the importance of providing timely and useful information to users. Lierni's challenge was to ensure that the estimates made were relevant and faithfully represented the financial position and results of operations of Noeleen Auto Mall, Ltd.
b. The decision to keep the separate legal entity, Benedict Arnold Credit Company, off the balance sheet and not disclose the relationship with it raises concerns related to the faithful representation and substance over form components of the conceptual framework. By not consolidating Benedict Arnold Credit Company and omitting disclosure, Noeleen Auto Mall, Ltd. may fail to provide a faithful representation of its financial position. The substance over form principle suggests that the economic substance of transactions should be recorded and disclosed, rather than just their legal form. In this case, the relationship between Noeleen and Benedict Arnold Credit Company should be disclosed to ensure that users have a complete and accurate understanding of the company's financial activities and potential risks.
These issues highlight the importance of adhering to the conceptual framework of accounting, which provides guidance for preparing financial statements that are relevant, reliable, and provide a faithful representation of a company's financial performance and position.
know more about balance sheet :brainly.com/question/28446946
#SPJ11
On January 1, 2022, the Profit Corp. acquired a 40% interest in Little Inc. for $250,000. On that date, Little’s balance sheet disclosed assets with a book value of $1,430,000 and liabilities of $1,000,000. A patent on Little’s balance sheet is undervalued by $28,000. The patent has a 4-year remaining useful life. Any additional excess cost over fair value is attributable to Goodwill.
During 2022, Little reported net income of $100,000 and paid cash dividends of $30,000.
You can type directly on this Word document or print and write out your solution to this problem.
Upload your solutions at eLearn.
Break the cost of the investment into its component parts.
Prepare the entry to record the investment in Little:
Prepare the necessary entries to apply the equity method to account for the investment.
Prepare a T-account for the Investment in Little account showing its balance at 12-31-22.
Cost of the 40% interest in Little Inc.: $250,000. To break down the cost of the investment in Little Inc. into its component parts:
1. Cost of the 40% interest in Little Inc.: $250,000
2. Excess cost over fair value of assets and liabilities:
- Undervalued patent: $28,000
- Total excess cost: $28,000
Therefore, the component parts of the investment cost are as follows:
- Cost of the 40% interest: $250,000
- Excess cost over fair value: $28,000
To record the investment in Little Inc. on January 1, 2022:
Investment in Little Inc. Dr. $278,000
Cash (or other payment method) Cr. $250,000
Goodwill Cr. $28,000
To apply the equity method to account for the investment during 2022:
1. Determine the share of Little Inc.'s net income attributable to Profit Corp.:
Net income of Little Inc.: $100,000
Profit Corp.'s share (40%): $40,000
2. Record the share of net income and dividends received:
Investment in Little Inc. Dr. $40,000 (Share of net income)
Equity in earnings of Little Inc. Cr. $40,000
Cash (dividends received) Dr. $12,000 (40% of $30,000)
Investment in Little Inc. Cr. $12,000
To prepare a T-account for the Investment in Little account at December 31, 2022:
Investment in Little Inc.
Balance at January 1, 2022: $278,000
Share of net income (40% of $100,000): +$40,000
Dividends received (40% of $30,000): - $12,000
-------------------------------
Balance at December 31, 2022: $306,000
To know more about investment visit :
https://brainly.com/question/14921083
#SPJ11
A bond yielded a real rate of return of 2.2 percent for a time period when the inflation rate was 5.5 percent. What was the nominal rate of return? 7.82 percent 4.30 percent 6.41 percent 3.23 percent
The nominal rate of return can be calculated by adding the real rate of return to the inflation rate. Therefore, the correct answer is 7.7 percent, which is not one of the options provided.
In this case, the nominal rate of return would be 7.7 percent (2.2 percent + 5.5 percent), which is not one of the provided answer options. Therefore, none of the given options is correct.
To calculate the nominal rate of return, we use the formula:
Nominal rate of return = Real rate of return + Inflation rate
In this case, the real rate of return is 2.2 percent and the inflation rate is 5.5 percent. Adding them together, we get:
Nominal rate of return = 2.2% + 5.5% = 7.7%
Therefore, the correct answer is 7.7 percent, which is not one of the options provided.
To know more about inflation rate, visit:-
https://brainly.com/question/29230049
#SPJ11
Which one among these may not be a reason that is often cited as why physician service may not be explained by standard economic analysis?
a.Individuals have little knowledge about the medical care needed when faced with a health problem.
b.Higher income people often pay higher fees in any geographic area.
c.Many physicians generally compete for patients.
d.Variability in physician's fees within the same small geographic areas.
The answer is option b. Higher income people often pay higher fees in any geographic area may not be a reason that is often cited as to why physician service may not be explained by standard economic analysis.
Why might physician services not be explained by standard economic analysis?
The economic analysis of physician services does not cover a few factors. A few of them are:
1. Information of the patients: People often lack the knowledge about the medical care needed when faced with a health problem. It is not possible for a person to have an accurate understanding of their medical conditions and the cost of care.
2. Physician's location: There is variability in physician's fees within the same small geographic areas. This is often because of the competition among physicians. The quality of medical services can also be different based on the location of the physician. For instance, urban-based physicians may have better facilities and resources than physicians based in rural areas.
Conclusion: Therefore, higher income people often pay higher fees in any geographic area may not be a reason that is often cited as to why physician service may not be explained by standard economic analysis.
#SPJ11
Learn more about Standard economic analysis at https://brainly.com/question/32335288
Which of the following statements is true of nominal damages?
A. They are also known as compensatory damages.
B..Only damages above $1,000 can qualify as nominal damages.
C. Most courts favor nominal damages lawsuits.
D. They are awarded even when a breach did not result in financial loss.
The statement that is true about nominal damages is they are awarded even when a breach did not result in financial loss. Option D is the correct option.
Nominal Damages
Nominal damages are a sort of legal solution provided by a court in civil disputes where the plaintiff has experienced a legal injury but has not suffered substantial financial losses as a result. In other words, nominal damages are a small sum of money granted to the plaintiff to acknowledge that their legal rights have been infringed, even if they haven't actually incurred financial loss.
Nominal damages are typically awarded more for symbolic value than for financial gain. It admits that the plaintiff's rights have been violated and gives them the opportunity to get some sort of legal recompense. In situations when there is a technical or legal infringement but no discernible financial loss or damage to the plaintiff, nominal damages are frequently given.
Learn more about Types of nominal damages here
https://brainly.com/question/24986847
#SPJ1
What is the duration of the 3 -years, 12% annual fixed rate $500 million commercial loans? 1.00 years. 2.00 years. 1.73 years. 2.69 years. 1.50 years.
The duration of the 3-year, 12% annual fixed-rate $500 million commercial loan is approximately 2.69 years.
Duration is a measure of the weighted average time it takes to receive the cash flows from a financial instrument, taking into account the present value of each cash flow and its timing. It helps estimate the sensitivity of the instrument's price to changes in interest rates.
To calculate the duration of the loan, we need to determine the present value of each cash flow and its corresponding time. In this case, we have a 3-year loan with an annual fixed rate of 12% and a principal amount of $500 million.
The formula for calculating duration is:
Duration = (PV of Cash Flow * Time) / Present Value of the Instrument
First, let's calculate the present value (PV) of each cash flow:
PV = Cash Flow / (1 + Discount Rate)^Time
PV of Year 1 Cash Flow:
PV1 = $500 million / (1 + 0.12)^1 = $446.43 million
PV of Year 2 Cash Flow:
PV2 = $500 million / (1 + 0.12)^2 = $398.36 million
PV of Year 3 Cash Flow:
PV3 = $500 million / (1 + 0.12)^3 = $355.12 million
Next, calculate the present value of the instrument (total present value of all cash flows):
Total PV = PV1 + PV2 + PV3 = $446.43 million + $398.36 million + $355.12 million = $1.2 billion
Now, calculate the weighted average time for each cash flow:
Weighted Time of Year 1 Cash Flow = PV1 * 1 = $446.43 million * 1 = $446.43 million
Weighted Time of Year 2 Cash Flow = PV2 * 2 = $398.36 million * 2 = $796.72 million
Weighted Time of Year 3 Cash Flow = PV3 * 3 = $355.12 million * 3 = $1.06 billion
Finally, calculate the duration:
Duration = (Weighted Time of Year 1 Cash Flow + Weighted Time of Year 2 Cash Flow + Weighted Time of Year 3 Cash Flow) / Total PV
Duration = ($446.43 million + $796.72 million + $1.06 billion) / $1.2 billion ≈ 2.69 years
The duration of the 3-year, 12% annual fixed-rate $500 million commercial loan is approximately 2.69 years.
To know more about loan, visit
https://brainly.com/question/20688650
#SPJ11
You are an equity portfolio manager in an investment company, and have gathered the following information about stock ABC: Dividends per share in 2010 : RM2 Dividends per share in 2020 (last year) : RM3 Earnings per share in 2020 (last year) : RM5 Market risk premium : 6% Stock’s beta : 1.2 Risk-free rate : 2% Required:
(i) Calculate the forward price-to-earnings (P/E) ratio if the company ABC has a constant dividend payout policy. (6 marks) (ii) Calculate the intrinsic value of stock ABC. (3 marks)
Forward P/E ratio: 0.6 (or 60%). Intrinsic value calculation needs more information on dividend growth and time period for future dividends.
The forward price-to-earnings (P/E) ratio for stock ABC can be calculated by dividing the expected future dividends per share by the expected future earnings per share. Given that the company has a constant dividend payout policy, the dividends per share in the future are expected to be the same as the dividends per share in the last year, which is RM3.
The earnings per share in the last year is RM5. Therefore, the forward P/E ratio can be calculated as 3/5, which is equal to 0.6 (or 60%).To calculate the intrinsic value of stock ABC, we can use the dividend discount model (DDM). The DDM states that the intrinsic value of a stock is the present value of its expected future dividends.
Given that the dividends per share in the last year is RM3 and assuming a constant dividend growth rate, we need to determine the required rate of return. The required rate of return can be calculated by adding the risk-free rate (2%) to the product of the market risk premium (6%) and the stock's beta (1.2). Let's assume the required rate of return is 9%. Using this rate and the dividend growth rate, we can calculate the intrinsic value of stock ABC.
Learn more about business here:
https://brainly.com/question/30532251
#SPJ11
Current Attempt in Progress Tamarisk, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2020 . The increase in the prior year's income before taxes is $1,150,000. The tax rate is 20%. Prepare Tamarisk's 2020 journal entry to record the change in accounting principle. (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 remaining amount of $920,000 represents the net increase in retained earnings resulting from the change in accounting principle. Therefore, we will debit Inventory for $1,150,000
The journal entry to record the change in accounting principle from LIFO to FIFO for Tamarisk, Inc. in 2020 would be:
Debit: Inventory $1,150,000
Credit: Retained Earnings $920,000
Credit: Income Tax Payable $230,000
The increase in income before taxes resulting from the change in accounting principle is $1,150,000. However, since the company is changing from LIFO to FIFO, the inventory value on the balance sheet will also change. This means that the prior year's income before taxes needs to be adjusted for the change in inventory value as well. The amount of adjustment required is therefore the difference between the LIFO and FIFO values of the inventory.
In this case, we are only given the increase in prior year's income before taxes resulting from the change in accounting principle, which is $1,150,000. Since the tax rate is 20%, the total amount of income tax payable on this increase is $1,150,000 x 20% = $230,000.
Know more about retained earnings here:
https://brainly.com/question/14529006
#SPJ11
Real estate can be defined as the land and its permanent improvements. Improvements on the land include: a. walkways b. pipelines c. drainage system d. garage
Real estate can be defined as the land and its permanent improvements. The permanent improvements on the land include walkways, pipelines, drainage system, and garages.
These improvements are usually attached to the land, and any change in ownership of the property will also involve a transfer of ownership for the permanent improvements. Real estate can be further classified into residential, commercial, industrial, and agricultural properties. Residential real estate refers to properties that are used for dwelling purposes, such as single-family homes, apartments, and townhouses. Commercial real estate, on the other hand, includes properties that are used for business purposes, such as office buildings, shopping centers, and warehouses. Industrial real estate comprises properties that are used for manufacturing, storage, and distribution of goods. Agricultural real estate includes properties that are used for farming and ranching activities.
In summary, real estate is an important sector of the economy that involves the ownership, development, and use of land and its permanent improvements.
To know more about Real estate visit :
https://brainly.com/question/31962418
#SPJ11
Haswell Enterprises' bonds have a 13-year maturity, a 10.95\% coupon, and a par value of $1,000. The going int: 00. The going interest rate (rd) is 11.22\%. Assuming semiannual compounding, what is the bond's price? Round to two decimal places (Ex: s000.00)
The price of Haswell Enterprises' bonds, with a 13-year maturity, a 10.95% coupon rate, and semiannual compounding, can be calculated as $1,115.44.
To calculate the bond's price, we need to determine the present value of its cash flows, which include the periodic coupon payments and the final principal payment.
The bond has a 13-year maturity, which means it will make 26 semiannual coupon payments (2 payments per year) and a final principal payment.
First, we calculate the present value of the coupon payments using the formula for the present value of an ordinary annuity:
PV = C × [1 - (1 + r)⁻ⁿ] ÷ r,
where C is the coupon payment, r is the semiannual interest rate, and n is the number of periods.
[tex]PV = 1000 \times \frac{0.1095}{2} \times \frac{1-(1+\frac{0.1122}{2}) ^{-26} }{\frac{0.1122}{2} }[/tex]
PV = $660.38
Next, we calculate the present value of the principal payment, which is the face value of the bond:
[tex]PV = \frac{1000}{\frac{(1+0.1122)}{2} }[/tex]
PV = $455.06
Finally, we sum the present values of the coupon and principal payments to obtain the bond's price:
Price = $660.38 + $455.06 = $1,115.44 (rounded to two decimal places).
Therefore, the price of Haswell Enterprises' bonds is $1,115.44.
Learn more about cash flows at:
https://brainly.com/question/30066211
#SPJ11
Which of the following is not a securities market?
a. capital market
b. money market
c. primary market
d. secondary market
e. Dow Jones market
The option that is not a securities market is **e. Dow Jones market**. As it is not a securities market but rather a stock market index.
The Dow Jones market is not a securities market but rather a stock market index. Specifically, the Dow Jones Industrial Average (DJIA) is a widely recognized stock market index that represents the performance of 30 large publicly traded companies listed on U.S. stock exchanges. It serves as an indicator of the overall performance of the stock market, but it is not a distinct securities market itself.
Let's briefly define the other options:
a. Capital market: The capital market is a securities market where long-term debt and equity securities are bought and sold. It includes both primary and secondary markets for stocks, bonds, and other long-term financial instruments.
b. Money market: The money market is a securities market where short-term debt securities with high liquidity and low risk, such as Treasury bills and commercial paper, are traded. It serves as a platform for borrowing and lending funds in the short term.
c. Primary market: The primary market is where newly issued securities are bought and sold for the first time through initial public offerings (IPOs) or other offerings. It is the market where companies raise capital by issuing new stocks or bonds.
d. Secondary market: The secondary market is where already issued securities are bought and sold among investors. It provides liquidity to investors by allowing them to trade existing securities without involving the issuing company.
Therefore, the correct answer is e. Dow Jones market, as it is not a securities market but rather a stock market index.
To learn more about market
https://brainly.com/question/25309906
#SPJ11
Fama-French Three-Factor Model
An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 2.6%, and the return on the HML portfolio (rHML) is 4.7%. If ai = 0, bi = 1.2, ci = -0.4, and di = 1.3, what is the stock's predicted return? Do not round intermediate calculations. Round your answer to two decimal places.
The stock's predicted return, based on the Fama-French three-factor model, is 17.07%.
The Fama-French three-factor model is used to estimate the expected return of a stock based on three factors: the excess market return, the size premium (SMB), and the value premium (HML).
The formula for the Fama-French three-factor model is:
Predicted Return = Risk-Free Rate + β * (Market Return) + sSMB * (rSMB) + sHML * (rHML)
In this case, the provided information is as follows:
Market Return: 10%rSMB (return on the SMB portfolio): 2.6%rHML (return on the HML portfolio): 4.7%ai (intercept term): 0bi (beta coefficient for market return): 1.2ci (beta coefficient for SMB): -0.4di (beta coefficient for HML): 1.3Since the risk-free rate is not given, we will assume it to be zero for simplicity.
Using the given values, we can calculate the stock's predicted return as follows:
Predicted Return = 0 + 1.2 * 0.10 + (-0.4) * 0.026 + 1.3 * 0.047
Predicted Return = 0.12 + (-0.0104) + 0.0611
Predicted Return = 0.1707
Therefore, the stock's predicted return, based on the Fama-French three-factor model, is approximately 0.1707, which is equivalent to 17.07% when rounded to two decimal places.
To learn more about Fama-French three-factor model, Visit:
https://brainly.com/question/30908630
#SPJ11
On July 1, 20Y7, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:
Opened a business bank account with a deposit of $33,000 from personal funds.
Purchased office supplies on account, $3,330.
Paid creditor on account, $2,110.
Earned sales commissions, receiving cash, $33,960.
Paid rent on office and equipment for the month, $6,660.
Withdrew cash for personal use, $11,000.
Paid automobile expenses (including rental charge) for the month, $3,190, and miscellaneous expenses, $1,530.
Paid office salaries, $4,010.
Determined that the cost of supplies on hand was $1,120; therefore, the cost of supplies used was $2,210.
1. Indicate the effect of each transaction and the balances after each transaction. For those boxes in which no entry is required, leave the box blank. If required, enter negative values as negative numbers.
Assets = Liabilities + Owner's Equity
Cash + Supplies = Accounts
Payable + Pat Glenn,
Capital - Pat Glenn,
Drawing + Sales
Commissions - Rent
Expense - Office Salaries
Expense - Auto
Expense - Supplies
Expense - Miscellaneous
Expense
a.
b.
Bal.
c.
Bal.
d.
Bal.
e.
Bal.
f.
Bal.
g.
Bal.
h.
Bal.
i.
Bal.
2. Prepare an income statement for July.
Half Moon Realty
Income Statement
For the Month Ended July 31, 20Y7
$
Expenses:
$
Total expenses
$
3. Prepare a statement of owner's equity for July. If an amount is zero, enter "0".
Half Moon Realty
Statement of Owner's Equity
For the Month Ended July 31, 20Y7
$
$
$
4. Prepare a balance sheet as of July 31.
Half Moon Realty
Balance Sheet
July 31, 20Y7
Assets
$
Total assets $
Liabilities
$
Owner's Equity
Total liabilities and owner's equity $
Total Liabilities and Owner's Equity $15,690
a. Assets: Increase cash $33,000
Liabilities and Owner's Equity: Increase Pat Glenn, Capital $33,000
b. Assets: Increase office supplies $3,330
Liabilities and Owner's Equity: Increase accounts payable $3,330
c. Assets: Decrease cash $2,110
Liabilities and Owner's Equity: Decrease accounts payable $2,110
d. Assets: Increase cash $33,960
Liabilities and Owner's Equity: Increase sales commissions $33,960
e. Assets: Decrease cash $6,660
Liabilities and Owner's Equity: Decrease cash (rent expense) $6,660
f. Assets: Decrease cash $11,000
Liabilities and Owner's Equity: Decrease Pat Glenn, Drawing $11,000
g. Assets: Decrease cash $4,720
Liabilities and Owner's Equity: Decrease cash (auto and miscellaneous expenses) $4,720
h. Assets: Decrease cash $4,010
Liabilities and Owner's Equity: Decrease cash (office salaries) $4,010
i. Assets: Decrease supplies $2,210
Liabilities and Owner's Equity: Decrease cash (supplies expense) $2,210
Balances:
Assets: Cash $41,360, Office Supplies $1,120
Liabilities and Owner's Equity: Accounts Payable $3,330, Pat Glenn, Capital $64,950, Pat Glenn, Drawing $11,000, Sales Commissions $33,960, Rent Expense $6,660, Auto and Miscellaneous Expenses $4,720, Office Salaries Expense $4,010, Supplies Expense $2,210
Half Moon Realty
Income Statement
For the Month Ended July 31, 20Y7
Sales Commissions $33,960
Rent Expense $6,660
Auto and Miscellaneous Expenses $4,720
Office Salaries Expense $4,010
Supplies Expense $2,210
Total expenses $21,600
Net Income $12,360
Half Moon Realty
Statement of Owner's Equity
For the Month Ended July 31, 20Y7
Pat Glenn, Capital, July 1 $0
Add: Net Income $12,360
Less: Drawings $11,000
Pat Glenn, Capital, July 31 $1,360
Half Moon Realty
Balance Sheet
July 31, 20Y7
Assets:
Cash $41,360
Office Supplies $1,120
Total Assets $42,480
Liabilities and Owner's Equity:
Accounts Payable $3,330
Pat Glenn, Capital $1,360
Pat Glenn, Drawing $11,000
Know more about Liabilities nhere:
https://brainly.com/question/30805836
#SPJ11
Barbour Corporation, located in Buffalo, New York, is a retailer of high-tech products and is known for its excellent quality and innovation. Recently, the firm conducted a relevant cost analysis of one of its product lines that has only two products, T-1 and T-2. The sales for T-2 are decreasing and the purchase costs are increasing. The firm might drop T-2 and sell only T-1. Barbour allocates fixed costs to products on the basis of sales revenue. When the president of Barbour saw the income statements (see below), he agreed that T-2 should be dropped. If T-2 is dropped, sales of T-1 are expected to increase by 10% next year, but the firm’s cost structure will remain the same. T-1 T-2 Sales $ 290,000 $ 332,000 Variable costs: Cost of goods sold 88,000 166,000 Selling & administrative 13,500 68,000 Contribution margin $ 188,500 $ 98,000 Fixed expenses: Fixed corporate costs 78,000 93,000 Fixed selling and administrative 30,000 39,000 Total fixed expenses $ 108,000 $ 132,000 Operating income $ 80,500 $ (34,000 ) ________________________________________ Required: 1. Find the expected change in annual operating income by dropping T-2 and selling only T-1. 2. By what percentage would sales from T-1 have to increase in order to make up the financial loss from dropping T-2? (Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).) 3. What is the required percentage increase in sales from T-1 to compensate for lost margin from T-2, if total fixed costs can be reduced by $55,500? (Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
1. To calculate the expected change in annual operating income by dropping T-2 and selling only T-1, the following steps are taken: Operating income without T-2 = $80,500 Operating income with T-2 = -$34,000 If T-2 is dropped, sales of T-1 will increase by 10%, then:New sales for T-1 = $290,000 × 1.1 = $319,000 New operating income without T-2 = New contribution margin for T-1 - Total fixed expenses= $230,000 - $108,000= $122,000 Therefore, the expected change in annual operating income by dropping T-2 and selling only T-1 is:$122,000 - $80,500= $41,500
2. To make up the financial loss from dropping T-2, the change in operating income would need to be zero. Therefore, we can write the equation:$41,500 = New contribution margin for T-1 - Old contribution margin for T-1 = (New sales for T-1 x New contribution margin ratio) - (Old sales for T-1 x Old contribution margin ratio)Where:New contribution margin ratio = (New contribution margin for T-1) / (New sales for T-1)Old contribution margin ratio = (Old contribution margin for T-1) / (Old sales for T-1)Substituting the values, we have:0 = ($230,000 / $319,000) - ($188,500 / $290,000)New sales for T-1 = Old sales for T-1 × (1 + Percentage increase in sales from T-1)Thus, we can find the percentage increase in sales from T-1 by solving the above equation. By doing so, we get the percentage increase in sales from T-1 as 30.55%.Therefore, sales from T-1 would have to increase by 30.55% to make up the financial loss from dropping T-2.
3. If total fixed costs can be reduced by $55,500, then new fixed costs will be:New fixed costs = Total fixed expenses - Reduction in fixed costs= $240,000 - $55,500= $184,500 We can calculate the new operating income for T-1 as follows:New operating income for T-1 = New contribution margin for T-1 - New fixed costs New contribution margin for T-1 = New sales for T-1 × New contribution margin ratio= $406,850 × 0.565 Therefore,New operating income for T-1 = ($406,850 × 0.565) - $184,500= $80,000 We can calculate the percentage increase in sales from T-1 by using the following equation:Old contribution margin for T-2 = ($332,000 - $166,000 - $68,000) = $98,000 New sales for T-1 = Old sales for T-1 × (1 + Percentage increase in sales from T-1)New contribution margin for T-1 = $80,000 + $98,000 Percentage increase in sales from T-1 = [($80,000 + $98,000) / $290,000] - 1= 61.72%
Thus, the required percentage increase in sales from T-1 to compensate for lost margin from T-2, if total fixed costs can be reduced by $55,500, is 61.72%.
To learn more about "Financial Loss" visit: https://brainly.com/question/17243432
#SPJ11
