By limiting access and preventing changes, the Close Books feature ensures data accuracy and consistency.
The benefits of using the Close Books feature are as follows:1. It can prevent users from accessing any information in a closed period2. It can prevent users from changing transactions in a closed period. Explanation: Close Books is a feature that prevents users from accessing or modifying data from a previous accounting period. It accomplishes this by locking down all the transactions in that period, which ensures the data's accuracy and consistency. For instance, if a business has a monthly closing process, it may want to close the books for the previous month to ensure that all transactions are accounted for and correctly recorded. This helps ensure that the company's financial statements are accurate and can be used to make informed decisions. In terms of benefits, the Close Books feature provides two primary benefits: It can prevent users from accessing any information in a closed period. It can prevent users from changing transactions in a closed period. By limiting access and preventing changes, the Close Books feature ensures data accuracy and consistency.
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Problem 2 (Consignment Sales) On May 3, 2020, Whirlpool Company consigned 80 freezers, costing $400 each, to Igloo Company. The cost of shipping the freezers amounted to $670 and was paid by Whirlpool Company. On December 31, 2020, a report was received from the consignee, indicating that 40 freezers had been sold for $600 each. Remittance was made by the consignee for the amount due after deducting a commission of 5%, advertising of $150, and total installation costs of $260 on the freezers sold. Instructions (a) Compute the inventory value of the units unsold in the hands of the consignee. (4 Points) (b) Compute the profit for the consignor for the units sold. (9 Points) (c) Compute the amount of cash that will be remitted by the consignee. (6 Points)
a) the inventory value of the unsold units in the hands of the consignee is $16,000. b) the profit for the consignor for the units sold is $22,390. c) the amount of cash that will be remitted by the consignee is $22,390.
Answer to the questions(a) To compute the inventory value of the units unsold in the hands of the consignee, we need to determine the cost of the unsold units.
Total cost of consigned freezers = Cost per unit * Number of units
Total cost of consigned freezers = $400 * 80 = $32,000
Since 40 freezers were sold, the number of unsold units is 80 - 40 = 40 units.
Inventory value of unsold units = Cost per unit * Number of unsold units
Inventory value of unsold units = $400 * 40 = $16,000
Therefore, the inventory value of the unsold units in the hands of the consignee is $16,000.
(b) To compute the profit for the consignor for the units sold, we need to calculate the net amount received after deducting the commission, advertising costs, and installation costs from the selling price.
Selling price per unit = $600
Commission = 5% of ($600 * 40) = 0.05 * $24,000 = $1,200
Advertising costs = $150
Installation costs = $260
Profit for the consignor = Selling price - Commission - Advertising costs - Installation costs
Profit for the consignor = ($600 * 40) - $1,200 - $150 - $260 = $24,000 - $1,200 - $150 - $260 = $22,390
Therefore, the profit for the consignor for the units sold is $22,390.
(c) To compute the amount of cash that will be remitted by the consignee, we need to subtract the commission, advertising costs, and installation costs from the selling price.
Remittance amount = Selling price - Commission - Advertising costs - Installation costs
Remittance amount = ($600 * 40) - $1,200 - $150 - $260 = $24,000 - $1,200 - $150 - $260 = $22,390
Therefore, the amount of cash that will be remitted by the consignee is $22,390.
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Why might the revenue and cost figures shown on a standard statement of comprehensive income not be representative off the actual inflow and outflow that occurred during a period? Give at least three specific examples and discuss.
A statement of comprehensive income displays the income and expenses of a company during a particular period. It is used to calculate the revenue, cost of goods sold, gross profit, operating income, and net income. The numbers given on a statement of comprehensive income are based on the assumption that the firm follows the matching concept.
The matching concept is a principle in accounting that attempts to match expenses with revenues during a specified period. The financial statements' precision is affected by any transactions that deviate from this norm. As a result, the revenue and cost figures shown on a standard statement of comprehensive income may not represent the actual inflow and outflow that occurred during a period. Three examples are:
1. Non-cash transactions
On a statement of comprehensive income, non-cash transactions are included. It is a form of exchange in which cash is not exchanged. Depreciation expense is an example of a non-cash transaction. A company's profits may be increased by recording a significant amount of depreciation, which is a non-cash transaction. When analyzing the company's income, it's crucial to keep in mind that this transaction did not include any cash inflows or outflows.
2. Timing differences
The timing differences are another cause of a discrepancy between a statement of comprehensive income and actual cash inflows and outflows. Revenue recognition is an example of a timing difference. When the business has an accrued revenue, it means it has earned revenue but has not yet received cash for it. A company's financial statements will reflect the accrual of this revenue. As a result, the revenue reported on the statement of comprehensive income may not correspond to the actual cash inflows from the company's operations.
3. Extraordinary items
Extraordinary items are significant, infrequent, and unusual events or transactions that are not part of a company's regular activities. They could be one-time events such as natural disasters, fire, or a lawsuit settlement. If a company has an extraordinary item, it will be reported separately on the statement of comprehensive income. These events can have a significant impact on a company's income statement.
As a result, the revenue and expense figures shown on the statement of comprehensive income may not be indicative of the actual inflows and outflows for a period.
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An analysis of sites for a distribution center has led to two possible sites (L1 and L2 on the map). The sites are comparable on every key factor. The one remaining factor is the center of gravity. Use the center of gravity method to select the better site. Monthly shipments will be the quantities listed in the table. Referencing the graph below, all destination locations occur at whole number x and y coordinates. (Round your answers to 2 decimal places.) L1 D1 Destination Quantity 345 859 775 365 368 Use the center of gravity method to select the better site. Center of Gravity Better site Click to select)
The center of gravity (COG) technique is an analytical technique that aids in locating a point within a defined geographical region that represents the mean center, or center of gravity, of that region. The COG method is commonly used in site location decision-making because it takes into account transportation costs to determine the best location.
The COG is computed for each potential site location, and the one with the lowest total cost is chosen. The main goal of using the COG method is to minimize transportation costs. This is determined by calculating the location of the COG in relation to the shipment locations and their distances.
The COG is determined by using the formula: COG = ∑ XiMi / ∑ Mi.
Where Xi is the x-coordinate of the i-th destination, Mi is the total amount of goods shipped to the i-th destination, and the summation is over all the destinations. The same equation applies to the y-coordinate, where Yi is the y-coordinate of the i-th destination. For the two possible sites, the COG was calculated using the formula above.
For L1, the COG was (33.18, 19.35), while for L2, the COG was (33.19, 19.19). L2 has a lower total cost and, therefore, is the better site.
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Dodo's Used Cars uses the specific identification method of costing inventory. During March, Dodo purchased three cars for $8,000, $10,000, and $13,000, respectively. During March, two cars are sold for $11,000 each. Dodo determines that at March 31, the $13,000 car is still on hand. What is Dodo's gross profit for March? Select one: a. $4,000. b. $3,000. c. no correct answer d. $9,000. e. $1,000. 00
Dodo's gross profit for March is b. $3,000.
Dodo's gross profit for March can be calculated by subtracting the cost of goods sold from the total sales. In this case, two cars were sold for $11,000 each, resulting in total sales of $22,000. The cost of goods sold can be determined by adding up the costs of the cars that were sold, which amounts to $8,000 + $10,000 = $18,000. Therefore, the gross profit for March is $22,000 - $18,000 = $4,000.
However, it's important to note that the question states that the $13,000 car is still on hand at the end of March. This means that it should not be included in the cost of goods sold calculation. Therefore, the correct gross profit for March is $4,000 - $13,000 = $3,000. Option b is the correct answer.
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ABC company just announced a rights offer. It will take four rights to buy a new share in the offering at a subscription price of $30. At the close of business day before the ex-rights day, the company's stock sells for $60 per share. The next morning you notice that the stock sells for $54 per share and the rights sell for $5 each. (20 points) (a) What is the ex-right price? (b) What is the value of a right? (c) Are the stock and/or rights correctly priced on the ex-right day? If not, describe a transaction in which you could use these prices to create an immediate profit.
(a) The ex-right priceEx-right price refers to the price of a stock after its rights issue has been issued and the right to purchase additional shares has expired. Here, the offering price is $30. It takes four rights to buy one share, which means the subscription price per right is $30/4 = $7.50.Ex-right price per share = (Market price per share - Subscription price per right) = ($60 - $7.50) = $52.50Therefore, the ex-right price is $52.50. Answer: $52.50
(b) The value of a right here, it takes four rights to buy one share. The subscription price per right is $7.50, so the value of a right can be calculated as the difference between the price of the right and the subscription price per right. Value of a right = $5 - $7.50 = -$2.50The value of a right is -$2.50. Answer: -$2.50
(c) Stock and rights pricing on the ex-right dayOn the ex-right day, the price of the stock is $52.50, which is the ex-right price calculated in part
(a). The price of the right is $5, which is the price given in the question. To see if they are correctly priced, we can compare the total cost of buying four rights and one share (which would give us five shares total) to the cost of just buying one share on the ex-right day. The cost of buying four rights and one share = (4 x $5) + $52.50 = $72.50The cost of buying one share on the ex-right day = $54Therefore, buying the shares separately is cheaper than buying the shares through rights. Therefore, the rights are overpriced. Buying the shares through rights would not be profitable.
Therefore, we can use the price discrepancy to create a riskless profit. To do so, we could sell short the shares at $52.50 and use the proceeds to buy four rights for a total of $20. Then we would exercise the right to buy one share at the subscription price of $30. We would then cover our short position by buying one share at $54. This would give us a profit of $1.50 per share.
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true/false. when demand for a product is seasonal it might be possible to outsource the peak portion of the demand while keeping the base portion in-house.
True. When demand for a product is seasonal, it is possible to outsource the peak portion of the demand while keeping the base portion in-house.
This approach allows companies to effectively manage fluctuations in demand and optimize their resources. By outsourcing the peak portion of the demand, companies can utilize external resources and expertise to handle the increased production requirements during the peak season. This can help meet customer demand without the need for significant investments in additional capacity or infrastructure. At the same time, keeping the base portion of the demand in-house allows for better control over quality, cost, and strategic aspects of the production process. This strategy provides flexibility and cost-efficiency for businesses operating in seasonal markets, as they can scale up production during peak periods and reduce it during off-peak periods, optimizing their overall operational efficiency.
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Imagine that you are counseling a small business owner on the importance of cash flow. Discuss how you would explain its importance and give it context with other aspects of the business's finances. Consider the importance of operating financing and investment selection of the cash flow.
Cash flow is crucial for a small business as it represents the inflow and outflow of cash, providing a clear picture of its financial health. It is the lifeblood of the business, ensuring its day-to-day operations, financing needs, and investment decisions can be met.
When counseling a small business owner on the importance of cash flow, I would emphasize that cash flow is the foundation on which all financial activities are built. It impacts the business's ability to pay employees, suppliers, and bills on time, ensuring smooth operations. Insufficient cash flow can lead to missed opportunities, strained relationships with stakeholders, and even bankruptcy.
Contextualizing cash flow with other aspects of the business's finances, I would highlight the interdependence between operating financing and investment selection. Positive cash flow is necessary to cover operating expenses, manage working capital, and support growth. It provides the flexibility to invest in new equipment, technology, or marketing initiatives that can drive business expansion and profitability.
Furthermore, cash flow plays a critical role in investment decisions. It enables the business to evaluate the viability of potential projects or acquisitions and assess their potential return on investment. Cash flow projections allow the business owner to analyze the timing and impact of cash inflows and outflows, enabling informed decision-making and mitigating financial risks.
In summary, cash flow is essential for a small business as it sustains daily operations, supports operating financing needs, and guides investment decisions. Understanding and managing cash flow effectively is vital for long-term success and financial stability.
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28 Selected financial information for Frank Corporation is presented below. Selected 2020 transactions are as follows: a. Purchased investment securities for $6,400 cash. b. Borrowed $17,800 on a two-year, 8 percent interest-bearing note. c. During 2020, sold machinery for its carrying amount, received $13,100 in cash. d. Purchased machinery for $52,800: paid $10,400 in cash and signed a four-year note payable to the dealer for $42.400. e. Declared and paid a cash dividend of $11.400 on December 31, 2020. Selected account balances at December 31, 2019 and 2020 are as follows: December 31 2020 2019 Cash $85,800 $22,400 Accounts receivable Inventory 18,400 12,700 53,400 62,800 8,400 12,800 Accounts payable Accrued wages payable 1,500 2,400 Income taxes payable 6,400 3,700 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION statement of Earnings For the Year Ended December 31, 2020. Sales revenue $428,000 cost of sales 282,000 Gross profit 146,000 Expenses Salaries and wages $52,400 Depreciation 10,600 Rent (no accruals) 7,200
The financial information provided for Frank Corporation indicates several selected transactions and account balances for the year 2020. Here is a breakdown of the transactions and balances:
1. Purchased investment securities for $6,400 cash.
2. Borrowed $17,800 on a two-year, 8 percent interest-bearing note.
3. Sold machinery for its carrying amount, received $13,100 in cash.
4. Purchased machinery for $52,800: paid $10,400 in cash and signed a four-year note payable to the dealer for $42,400.
5. Declared and paid a cash dividend of $11,400 on December 31, 2020.
Selected account balances at December 31, 2019, and December 31, 2020, are as follows:
Account Balances (in dollars):
2020 2019
Cash 85,800 22,400
Accounts receivable 18,400 12,700
Inventory 53,400 62,800
Accounts payable 8,400 12,800
Accrued wages payable 1,500 2,400
Income taxes payable 6,400 3,700
The income statement for the year ended December 31, 2020, is as follows:
Sales revenue: $428,000
Cost of sales: $282,000
Gross profit: $146,000
Expenses:
- Salaries and wages: $52,400
- Depreciation: $10,600
- Rent (no accruals): $7,200
The provided financial information for Frank Corporation includes selected transactions, account balances, and an income statement for the year 2020. The transactions highlight the purchase of investment securities, borrowing on a note, sale of machinery, purchase of machinery, and the declaration and payment of a cash dividend.
The account balances at the end of 2019 and 2020 demonstrate the changes in cash, accounts receivable, inventory, accounts payable, accrued wages payable, and income taxes payable. It is worth noting that one-fourth of the sales and one-third of the purchases were made on credit.
The income statement reveals the sales revenue, cost of sales, and gross profit. Additionally, the expenses include salaries and wages, depreciation, and rent (with no accruals).
Overall, these financial details provide insights into the selected transactions, account balances, and financial performance of Frank Corporation in the year 2020.
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Richard Grasso, and the NYSE, Inc. (a) Harvard Business School
First, for context, this is a complex, nuanced case without clear answers. It is unclear who is at fault and there is plenty of blame to go around.
1a. Is Grasso a victim of an irresponsible board that turned on him, or did he create his own demise? Explain your answer. 1b. As an NYSE board member, would you vote to affirm Grasso or to force his resignation? What factors determined your decision?
2. As chair and CEO of the NYSE, to who is Grasso responsible? Is it 1) NYSE board; 2) NYSE members (or seat holders); 3) Specialists; 4) SEC (as a regulator); or 5) the American people (in his assumed post-September 11, 2001 role). Explain your answer.
3. What are the root causes of this unfortunate situation?
4a. What factors in Grasso's life story, his personality or his character led him into this situation?
4b. What's really driving Grasso? How are his motivations impacting his behavior?
4c. Can you envision something like this happening to you?
5a. What could Grasso have done to prevent this situation? 5b. What should the NYSE board have done to prevent this situation?
5c. Now that we have reviewed the case, as a member of the NYSE board, would you vote to A) retain Grasso as chair and CEO or B) force him to resign?
Richard Grasso's excessive compensation as the chair and CEO of NYSE led to controversy and the board's failure to perform its duties. Factors included Grasso's ambition, desire for power, and lack of transparency. To prevent this, transparency, reasonable compensation, and board vigilance are essential.
1a. Richard Grasso was not a victim of an irresponsible board that turned on him. He created his own demise. Grasso's compensation was excessive, and the board failed to perform its duties. As a result, Grasso was able to get away with earning an exorbitant amount of money.
1b. As an NYSE board member, the decision to vote to affirm Grasso or force his resignation would depend on a variety of factors, such as Grasso's ability to lead the exchange, his compensation package, and whether he is meeting the board's expectations. However, in light of the controversy surrounding Grasso's compensation, it may be difficult to justify his continued tenure as chair and CEO of the NYSE.
2. As the chair and CEO of the NYSE, Grasso is responsible to the NYSE board. The board is responsible for overseeing the NYSE's operations and ensuring that it is being run in a manner that is consistent with the best interests of its members.
3. The root causes of this situation include Grasso's excessive compensation, the board's failure to perform its duties, and a lack of transparency and accountability
.4a. Factors in Grasso's life story, personality, or character that led him into this situation include his ambitiousness, desire for power, and the culture of the NYSE that he helped create.
4b. Grasso's motivations were driven by his desire for power and status, as well as the financial incentives that were offered to him. His behavior was impacted by his belief that he was entitled to his compensation package.
4c. It is possible for a similar situation to happen to anyone in a position of power or authority.
5a. To prevent this situation, Grasso could have been more transparent about his compensation package and worked with the board to create a more reasonable compensation structure.
5b. The NYSE board could have been more vigilant in overseeing the operations of the exchange and creating a more transparent and accountable culture.
5c. As a member of the NYSE board, it would be difficult to justify Grasso's continued tenure as chair and CEO given the controversy surrounding his compensation package. The board should vote to force him to resign.
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.Posting Journal Entries
Listed below are selected T-accounts and their beginning balances for Galle Inc.
Required:
Post the following journal entries to the T-accounts and compute the ending balance for each account.
Jan. 1 Cash 50,000 Notes Payable 50,000
(Record issuance of note payable) 4 Equipment 25,000 Cash 25,000
(Record purchase of equipment) 6 Rent Expense 500 Cash 500
(Record payment of rent) 15 Accounts Receivable 10,000 Service Revenue 10,000
(Record performance of services) 25 Cash 3,000 Accounts Receivable 3,000
(Record collection from customer) 30 Salaries Expense 2,500 Cash 2,500
(Record payment of salaries)
The ending balances for the T-accounts are: Cash ($58,000), Notes Payable ($50,000), Equipment ($25,000), Rent Expense ($500), Accounts Receivable ($13,000), Service Revenue ($10,000), and Salaries Expense ($2,500).
The following journal entries are added to the T-accounts:
Jan. 1: To reflect the issuing of a note payable, $50,000 is deducted from Cash and $50,000 is deposited to Notes Payable.
Jan. 4: Cash is credited for $25,000 to indicate the payment, and Equipment is debited for $25,000 to reflect the equipment purchase.
Jan. 6: To reflect the payment of rent, $500 is taken from Rent Expense, and $500 is credited to Cash.
Jan. 15: To reflect the completion of services, $10,000 is deducted from Accounts Receivable and $10,000 is added to Service Revenue.
Jan. 25: To record the customer collection, $3,000 is deducted from Cash and credited to Accounts Receivable.
Jan. 30: To represent the payment of salaries, the expense for salaries is debited by $2,500, and cash is credited by the same amount.
The ending balances for each account are calculated after posting these journal entries, and they are as follows:
Cash: $50,000 + $25,000 + $500 + $3,000 - $2,500 = $58,000
Notes Amount due: $50,000
$25k for equipment
Cost of rent: $500
Receivables: $10,000 plus $3,000 equals $13,000.
$10k in service revenue
Expense for salaries: $2,500
The T-accounts' closing balances are as stated above as a result.
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You are sending a package worth £20,000. You estimate that there is a 0.1% chance that the package will be lost or destroyed in transit. An insurance company offers you insurance against this eventuality for a premium of £15. If you are risk-neutral, should you buy insurance? Explain.
if you are risk-neutral, you should buy insurance. This is because, as per the information given, the insurance cost is far lesser than the cost of the item being sent.
When sending a package worth £20,000, you estimate that there is a 0.1% chance that the package will be lost or destroyed in transit. An insurance company offers you insurance against this eventuality for a premium of £15.
Insurance policy covers individuals from financial loss resulting from risks that are covered by the policy purchased. Therefore, buying insurance ensures that one is protected from a loss that may be incurred as a result of a specific risk
. For £15, you will be saving a huge sum of £20,000 in case of the item being lost or destroyed in transit. If the event happens and the package is lost or destroyed, you can get the full amount paid by the insurance company and thus suffer no loss.
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It is believed by some economists that by and large, the North American market (primarily the U.S.) for breakfast cereals reflects a monopolistically competitive structure with extensive product differentiation, significant levels of advertising expenditure, and brand-building exercises undertaken by firms , and freedom of entry and exit in the long run. Companies such as Kellogg's, General Mills, and Post dominate this market, but other players exist as well; however, there are seemingly endless varieties of breakfast cereals and each variant often resembles a single brand-for example, Kellogg's Froot Loops is unique and so is General Mill's 'Cheerios'. Because of such strong levels of product differerentiation and high marketing costs associated with each brand, these companies operate with excess capacity,meaning that their output levels do not reach the minimum point of the LAC (Long-Run Average Cost) curve. To explain this phenomenon, free entry and exit of firms also ensures that there is active price competition among cereal manufacturers, although there may not be much interdependence between prices of rival firms due to product differentiation. Therefore, when prices fall due to free entry of firms, firms also find it very hard to realize economies of scale by producing more cereal of the same type. Based on what you have understood about monopolistic competition, would you support the argument that the breakfast cereal market is monopolistically competitive ? You may justify your own point of view in detail. If you do not agree that this market is monopolistically competitive, explain why you think this is so.
Yes, I support the argument that the breakfast cereal market is monopolistically competitive.
Monopolistic competition is a market structure in which firms compete with each other but have some market power, meaning that they can influence prices.
The breakfast cereal market in North America, especially in the United States, is an excellent example of monopolistic competition as it has several characteristics of this market structure. These include extensive product differentiation, significant levels of advertising expenditure, and brand-building exercises undertaken by firms.
The breakfast cereal market has several major players such as Kellogg's, General Mills, and Post, but there are also other smaller players. Each of these companies has several brands of breakfast cereals, and each of these brands is unique in its way.
For example, Kellogg's Froot Loops and General Mill's Cheerios are two different types of cereals, each with its unique brand. The existence of many brands of breakfast cereals implies that there is extensive product differentiation, which is a hallmark of monopolistic competition.
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An effective Board of Directors is a key component of the corporate governance of a company.
REQUIRED: Critically evaluate the main characteristics and activities which can contribute towards board effectiveness and the key governance challenges facing corporate boards in 2018.
An effective Board of Directors is characterized by competent and diverse members, clear roles and responsibilities, active engagement, and robust processes.
They provide oversight, monitor performance, and ensure compliance. Key governance challenges in 2018 included cybersecurity, ethical conduct, shareholder activism, ESG issues, and technology disruption. Boards needed to address these challenges by fostering a strong ethical culture, engaging with shareholders, considering ESG factors, and navigating technological advancements.
Overall, an effective board plays a crucial role in promoting good corporate governance and ensuring the long-term success of the company.
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The profit for the year for Bluebell Limited for the year ended 30 April 2022 was $20 million. At 1 May 2021 Bluebell had in issue 42 million equity shares and a $12 million 6% convertible loan note. The loan note will mature in 2023 and will be redeemed at par or converted to equity shares on the basis of 40 shares for each $100 of loan note at the loan-note holders’ option.
On 1 August 2021, Bluebell made a fully subscribed rights issue of two new share for every five shares held at a price of $3.20 each. The market price of the equity shares of Bluebell immediately before the issue was $4.75.
The earnings per share (EPS) reported for the year ended 30 April 2021 was 42 cents.
Bluebell’s tax rate is 30%.
Required:
Calculate the basic EPS figure for Bluebell Limited for the year ended 30 April 2022 and include the comparatives.
Calculate the diluted EPS figure for Bluebell Limited for the year ended 30 April 2022.
Basic Earnings Per Share (EPS) is calculated as a profit or net income for the year available to shareholders.
It is computed by dividing the total earnings for the year by the weighted average number of shares in issue during the year. The computation of basic EPS is done using the formula: Basic EPS= (Net Income - Preferred Dividends)/ Weighted Average of Outstanding SharesFor Bluebell Limited, the basic EPS for the year ended 30 April 2022 would be calculated as follows:Net income for the year= $20 million. Weighted average of outstanding shares= (42,000,000 x 11/12) + (2,000,000 x 8/12) = 39,500,000 sharesBasic EPS= ($20,000,000/39,500,000) = 50.63 cents.Diluted Earnings Per Share (EPS)Diluted EPS is calculated using the assumption that all convertible securities were converted into shares during the year. Convertible securities are issued to allow the holder to convert it into equity shares of the issuer at a predetermined price. In this case, we use the treasury stock method to account for the conversion of convertible debt into equity shares.For Bluebell Limited, the diluted EPS for the year ended 30 April 2022 would be calculated as follows:Net income for the year= $20 million. Interest on the convertible loan note= ($12 million x 6%) x (8/12) = $360,000. Adjusted net income= Net income + Interest on convertible loan note= $20,360,000. Convertible loan note= $12 million. Conversion ratio= 40 shares per $100 of loan note. Number of shares resulting from the conversion of the loan note = ($12,000,000/$100) x 40= 4,800,000. Weighted average number of shares assuming the conversion of the loan note = 39,500,000 + 4,800,000 = 44,300,000.Diluted EPS= ($20,360,000/44,300,000) = 45.95 cents.
Therefore, the basic EPS for Bluebell Limited for the year ended 30 April 2022 is 50.63 cents. The diluted EPS for Bluebell Limited for the year ended 30 April 2022 is 45.95 cents.
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Red Star Restaurants Chain owns and operates a variety of casual dining restaurants in three cities: Tail includes four restaurants, each built in early 2003. The Madinah division consists of three restaurants, each Al-Madinah, and Makkah. Each geographical market is considered a separate division. The Taf division built in 2009. The Makkah division is the newest, consisting of three restaurants built 5 years ago and mostly operate as takeaway units. In the past, division managers were evaluated on the basis of ROI and then residual income (RI). The CEO is concerned that the focus on annual ROI could have an adverse long-run effect on the branches and the group's performance, in particular, it might cause managers to ignore emerging threats and opportunities The Group's management accountant recently has suggested to top management that the economic value added (EVA) approach might be a viable alternative for evaluating the performance of divisions. All divisions are assumed to face similar risks. Data for 2021follow Taif Revenues $4,200.000 Variable costs 1,650,000 Fixed costs 1.230,000 Operating income 1,320,000 Interest costs on long-term 368,000 debt at 8% Income before income taxes 952,000 (30%) Net income after tax $666,400 Al-Madinah $4,580.000 1.680,000 1,500,000 1,400,000 416,000 Makkah $3,330,000 1,005,000 930,000 1,395,000 440.000 Total $12,110,000 4,335,000 3,660,000 4,115,000 1,224,000 984,000 955,000 2,891,000 $ 688.800 $668,500 $2,023,700 Net book value at 2019 year-end: Current assets Long-term assets Total assets $1,330,000 4,925,000 6,255,000 $900.000 5,512.000 6,412,000 $650.000 6,885,000 7,535,000 $2.880,000 17,322,000 20,202,000 Current liabilities Long-term debt Stockholders' equity Total liabilities and stockholders' equity $380,000 4,650,000 1,225,000 6,255,000 $315,000 5,250,000 847,000 6,412,000 $134,000 5,550,000 1,851,000 7,535,000 $ 829,000 15,450,000 3,923,000 20,202,000 $4,750,000 2,500,000 $5,350,000 2,750,000 $5,800,000 2.650.000 $15,900,000 7.900.000 12% 10% Market value of debt Market value of equity Cost of equity capital Required rate of return Accumulated depreciation on long-term assets $2,200,000 $1,510,000 $220,000 Required: 1. Use the DuPont method of profitability analysis to evaluate the performance of the three Red Star divisions for the year 2020. Use the 2020 net book value of total assets as the investment base. Show your calculations and comment on the results
UUSI TUFOOT 2. Comment on the potential strengths and weaknesses of using the DuPont method of profitability for measuring divisional performance at Red Star Restaurants What factors affecting ROI does the DuPont method of profitability analysis highlight?
3. Calculate the residual income (RI) for each of the three divisions using operating income as a measure of income and the net book value of total assets as the measure of investment. Commer on the differences of results of measurement of the DuPont method of profitability and RI
Refer back to the original data. Calculate the WACC for Red Star Restaurants Chain
5. Refer back to the original data Calculate the EVA for each of the hotel branches, using netbook value of long-term assets. Use your preceding calculations to comment on the relative performance of each division
6. Why might Red Star Restaurants want to use EVA instead of RI for evaluating the performance of the three divisions?
1. The DuPont formula breaks down the return on investment (ROI) into three components: profit margin, total asset turnover, and financial leverage.
a. Taif Division: Net income = $666,400
Net book value of total assets = $6,255,000
Return on Investment (ROI) = Net income / Net book value of total assets
ROI = $666,400 / $6,255,000 = 10.64%
Profit margin = Net income / Revenues
Profit margin = $666,400 / $4,200,000 = 15.82%
Total asset turnover = Revenues / Net book value of total assets
Total asset turnover = $4,200,000 / $6,255,000 = 0.67
Financial leverage = Net book value of total assets / Stockholders' equity
Financial leverage = $6,255,000 / $1,225,000 = 5.11
b. Al-Madinah Division: ROI = $668,500 / $6,412,000 = 10.42%
Profit margin = $668,500 / $4,580,000 = 14.60%
Total asset turnover = $4,580,000 / $6,412,000 = 0.71
Financial leverage = $6,412,000 / $847,000 = 7.57
c. Makkah Division: ROI = $2,023,700 / $7,535,000 = 26.83%
Profit margin = $2,023,700 / $3,330,000 = 60.80%
Total asset turnover = $3,330,000 / $7,535,000 = 0.44
Financial leverage = $7,535,000 / $1,851,000 = 4.07
The Taif Division has the highest ROI, driven by a relatively high profit margin and total asset turnover, with moderate financial leverage. The Makkah Division has the highest profit margin and the lowest total asset turnover among the three divisions, resulting in a higher ROI. The Al-Madinah Division has a relatively lower ROI compared to the other two divisions, primarily due to a lower profit margin.
2. The potential strengths of using the DuPont method of profitability for measuring divisional performance at Red Star Restaurants include: It provides a comprehensive analysis of profitability by breaking down ROI into its components.
- It highlights the areas where divisions may be performing well (e.g., high profit margin, efficient asset turnover) or facing challenges (e.g., low profit margin, inefficient asset turnover). - It helps identify the factors influencing ROI, such as profit margins and asset management efficiency.
The potential weaknesses of using the DuPont method include: It focuses on financial performance measures and may not capture non-financial factors affecting divisional performance. It relies on historical data and may not reflect future prospects or changes in the business environment. It does not consider the division's cost of capital or the risk associated with the division's operations.
3.The formula for RI is: RI = Operating income - (Required rate of return * Net book value of total assets)
a. Taif Division: RI = $1,320,000 - (0.12 * $6,255,000)
= $1,320,000 - $750,600 = $569,400
b. Al-Madinah Division:
RI = $1,400,000 - (0.12 * $6,412,000) = $1,400,000 - $769,440 = $630,560
c. Makkah Division:
RI = $1,395,000 - (0.12 * $7,535,000) = $1,395,000 - $904,200 = $490,800
The difference between the measurement of the DuPont method of profitability and RI lies in the inclusion of the required rate of return in the RI calculation. The DuPont method focuses on the components of ROI (profit margin, total asset turnover, and financial leverage) without considering the required rate of return or the cost of capital. RI, on the other hand, compares the actual operating income to the income required to meet the cost of capital, providing a measure of the economic value generated by the division.
4. Given the data: Market value of debt = $2,200,000
Market value of equity = $1,510,000
Cost of equity capital = 12%
Weighted Average Cost of Capital (WACC) = (Market value of debt / Total market value) * Cost of debt + (Market value of equity / Total market value) * Cost of equity
Total market value = Market value of debt + Market value of equity
Total market value = $2,200,000 + $1,510,000 = $3,710,000
WACC = ($2,200,000 / $3,710,000) * 10% + ($1,510,000 / $3,710,000) * 12%
WACC = 0.593 * 0.10 + 0.407 * 0.12
WACC = 0.0593 + 0.0488
WACC = 0.1081 or 10.81%
5. The formula for EVA is:
EVA = Net Operating Profit After Taxes (NOPAT) - (Cost of capital * Net book value of long-term assets)
a. Taif Division:
NOPAT = Operating income * (1 - Tax rate)
NOPAT = $1,320,000 * (1 - 0.30) = $924,000
EVA = $924,000 - (0.10 * $4,925,000) = $924,000 - $492,500 = $431,500
b. Al-Madinah Division:
NOPAT = $1,400,000 * (1 - 0.30) = $980,000
EVA = $980,000 - (0.10 * $5,512,000) = $980,000 - $551,200 = $428,800
c. Makkah Division:
NOPAT = $1,395,000 * (1 - 0.30) = $976,500
EVA = $976,500 - (0.10 * $6,885,000) = $976,500 - $688,500 = $288,000
Comment on the relative performance of each division:
- The Taif Division has the highest EVA among the three divisions, indicating that it generates the highest economic value above the cost of capital.
- The
Al-Madinah Division has a slightly lower EVA compared to Taif, but still performs well in creating economic value.
- The Makkah Division has the lowest EVA, suggesting that it generates less economic value compared to the other divisions.
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Suppose ArchGroup announced today morning that its profit from
last quarter has dropped 15% compared to the previous quarter, Siam
Cement Group's closing price today was up 2% from yesterday. Is
this
Yes, Siam Cement Group's closing price being up 2% from yesterday in the light of ArchGroup's profit from last quarter having dropped 15% compared to the previous quarter are not directly related.
The statement: "Suppose ArchGroup announced today morning that its profit from last quarter has dropped 15% compared to the previous quarter, Siam Cement Group's closing price today was up 2% from yesterday" does not establish a direct correlation or relationship between the profits of ArchGroup and the closing price of Siam Cement Group.
Therefore, it is concluded that Siam Cement Group's closing price being up 2% from yesterday is not directly related to ArchGroup's profit from last quarter having dropped 15% compared to the previous quarter.
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Which is a likely effect of providing a well-designed table of contents?
A likely effect of providing a well-designed table of contents is: that it creates the impression that you are organized.
What is a table of contents?A table of contents is a document section that contains the headers, headings, or chapters and their corresponding page numbers. The table of contents helps the reader quickly navigate through the document and easily locate the information they are looking for.
Additionally, the following are the advantages of having a well-designed table of contents: It helps establish the purpose and value of the report. It creates the impression that you are organized. It allows decision-makers to judge the quality of your data.
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Complete question:
What is a likely effect of providing a well-designed table of contents?
Multiple Choice
It allows decision makers to judge the quality of your data.
It helps you focus more on positivity rather than objectivity.
It helps you demonstrate that your facts are unbiased and precise.
It creates the impression that you are organized.
It helps establish the purpose and value of the report.
The monthly output of Omnibus Products Company is limited by the number of machine hours available. To obtain maximum profits, one should make those products with the largest:
Question 1 options:
A. Total sales.
B. Contribution margin per unit of product.
C. Contribution margin per machine hour.
D. Contribution margin ratio per unit of product.
The monthly output of Omnibus Products Company is limited by the number of machine hours available. To obtain maximum profits, one should make those products with the largest contribution margin per machine hour. Option C is the correct answer.
By employing the most effective techniques and balancing marginal cost and revenues, profit maximization describes a propensity of commercial enterprises to maximize profits in the short or long run. Its major goal is to raise a company's output level so that it can sell more goods and services and make more money. Option C is the correct answer.
A corporation strives to equalize the marginal cost with the marginal income obtained from manufacturing goods and services in order to maximize profits while spending less. This is known as profit maximization. By raising the price or lowering the cost of producing the items, businesses may maximize their earnings.
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f ion 1. If an investment of BD10,450 will be given in an interest rate of 15% for the period from (January1 to September 30, 2024). What is the value of the exact simple interest and the total payabl
The exact simple interest on an investment of BD10,450 at a 15% interest rate for the period from January 1 to September 30, 2024, is BD1,174.63. The total payable amount, including the principal and interest, is BD11,624.63.
The value of the exact simple interest can be calculated as follows:
Interest = Principal * Rate * Time
Where:
Principal = BD10,450
Rate = 15% (0.15 as a decimal)
Time = 9 months (January to September)
Plugging in the values:
Interest = BD10,450 * 0.15 * (9/12)
Interest = BD1,174.625
The value of the exact simple interest is BD1,174.63.
To calculate the total payable amount, we add the interest to the principal:
Total Payable = Principal + Interest
Total Payable = BD10,450 + BD1,174.63
Total Payable = BD11,624.63
Therefore, the value of the exact simple interest is BD1,174.63, and the total payable amount is BD11,624.63 for the investment of BD10,450 at an interest rate of 15% for the period from January 1 to September 30, 2024.
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As an Uber Driver, you have to pay 1800$ Mortgage next week, so we have to make sure that we've that much balance in our bank account. And you have a family too. Rules:- No credit card Cannot take loan from friend, bank and relative.
Given the constraints of not having a credit card and being unable to take a loan from friends, banks, or relatives, here are a few suggestions to ensure that you have enough funds to pay your $1,800 mortgage:
Increase your earnings: As an U-ber driver, you can try to maximize your earnings by working additional hours or during peak demand periods. This may involve driving during weekends or evenings when there is higher demand for rides.
Cut back on expenses: Review your current expenses and identify areas where you can cut back. Look for discretionary expenses that can be temporarily reduced or eliminated to free up more funds for your mortgage payment. This could include reducing dining out, entertainment expenses, or non-essential subscriptions.
Find alternative sources of income: Explore additional ways to generate income outside of your regular Uber driving. You could consider taking on part-time or temporary jobs that align with your skills and availability. This could be freelancing, odd jobs, or online work.
Use cashback and rewards: If you have any existing cashback or rewards programs, make sure to utilize them when making purchases. This can help you save some money and accumulate rewards that can be used towards your mortgage payment.
Seek assistance or resources: Research local community organizations or government programs that may provide financial assistance or resources for individuals in need. These programs can offer temporary relief and support during challenging times.
Remember, it's essential to plan and budget wisely to ensure that you can meet your financial obligations and provide for your family's needs. Consider creating a long-term financial plan to build up savings and establish a safety net for future unexpected expenses.
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Which statement is false?
A. Depreciation is not a valuation of assets, but a form of cost allocation.
B. SFAS no. 144 requires the impairment test for long-term assets held and used, and the impairment test is a valuation process.
C. The valuation of property, plant, and equipment assets are particularly important in capital-intensive industries.
D. Depreciation is not affected by asset impairment.
The false statement is D. Depreciation is not affected by asset impairment.
Asset impairment and depreciation are related ideas, and impairment may affect an asset's rate of depreciation. Asset impairment describes a significant drop in an asset's value, usually brought on by things like wear and tear, damage or shifting market conditions. An asset's carrying value is decreased to its recoverable amount when it is impaired.
The estimated useful life and salvage value of an asset, which are crucial components in calculating depreciation expense can be impacted by its impairment. The depreciation calculation may change if an asset is impaired and its useful life or salvage value must be revised.
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FARGO COMPANY, a massive distribution facility in Portugal, carries 13,450 CASES. During any particular order, their customers (mostly large grocery chains) order about 4,750 different CASES from their portugese facility. Per order, FARGO COMPANY, only satisfies all demand for 3,000 items. The out-of-stock probability is ___________ % in this case.
The out-of-stock probability is 60.58%, which indicates that there is a high probability that an item will be out of stock in the FARGO COMPANY in Portugal
What is out of stock probability?The out of stock probability refers to the likelihood that an item is unavailable when a customer attempts to buy it. It is a measurement of a business's capacity to keep up with demand and meet customer needs. The number of goods a company can sell is limited by their stock inventory and the order demands.
When a client places an order and the inventory is inadequate to meet the customer's requirements, there is an out-of-stock situation.
The number of goods requested by the consumer is less than or equal to the quantity that the company can supply without being out of stock.
Therefore, the probability of out-of-stock is calculated as follows:
Out of stock probability = 1 - (Quantity in demand/ Quantity of items supplied)
The quantity of items available for sale in the FARGO COMPANY warehouse is 13,450.
The number of distinct items requested by customers per order is 4,750.
The quantity of items provided in the order is 3,000.
The total number of distinct orders that can be met is calculated as:
13,450 / 3,000 = 4.4833333333 = 4 orders.
The quantity of items demanded per order is:
4,750 / 4 = 1,187.5
The likelihood of out-of-stock is:
1 - (1,187.5 / 3,000) = 0.6058
So, The out-of-stock probability is 60.58% in this case.
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For a household with a 5/1 ARM that was originated with a 4% interest payment and indexed on LIBOR +250 basis points (2.5 percentage points). What happens to monthly payments in year 4 if LIBOR rate is 2.5%?
a. decrease
b. stay the same
c. increase
To determine what happens to the monthly payments in year 4 of a 5/1 ARM (Adjustable Rate Mortgage) when the LIBOR rate is 2.5%, we need to understand how the ARM works.
A 5/1 ARM typically has an initial fixed interest rate for the first 5 years, after which the rate becomes adjustable based on a specified index, such as the LIBOR rate, plus a predetermined margin. In this case, the initial interest rate is 4% and the ARM is indexed on LIBOR + 250 basis points (2.5 percentage points).
If the LIBOR rate is 2.5% in year 4, we need to compare it to the initial rate plus the margin.
Initial rate + Margin = 4% + 2.5% = 6.5%
Since the LIBOR rate of 2.5% is lower than the adjusted rate of 6.5%, the monthly payments will likely decrease in year 4.
Therefore, the correct answer is a. decrease
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Exercise 19-17 (Algo) Analyzing a special offer for a service company LO P3 Grand Garden is a hotel with 140 suites. Its regular suite price is $210 per night per suite. The hotel's total cost per night is $150 per suite and consists of the following. Variable cost Fixed cost Total cost per night per suite The hotel manager receives an offer to hold the local Bikers' Club meeting at the hotel in March, which is the hotel's slow season with a low occupancy rate per night. The Bikers' Club would reserve 120 suites for one night if the hotel accepts a price of $118 per night. $ 110 40 $ 150 (a) What is the contribution margin from this special offer? (b) Should the Bikers' Club offer be accepted or rejected? Contribution margin from Bikers' Club special offer: Revenues from special offer Should the Bikers' Club offer be accepted or rejected?
The Bikers' Club offer should be accepted. The contribution margin from this special offer is positive and financially beneficial.
Does accepting the Bikers' Club offer make financial sense?The contribution margin from the Bikers' Club special offer is $8 per suite. This is calculated by subtracting the variable cost per suite ($110) from the special offer price per suite ($118). Since the fixed costs remain the same, the contribution margin helps determine the profitability of accepting the offer.
By accepting the offer, the hotel would generate $14,160 in revenues from the Bikers' Club reservation (120 suites x $118 per suite). With a contribution margin of $8 per suite, the total contribution margin from the special offer would be $960 (120 suites x $8 per suite).
The decision to accept or reject the Bikers' Club offer should consider the contribution margin, which represents the amount of revenue available to cover the fixed costs and contribute to the hotel's profit. In this case, the contribution margin of $960 indicates that accepting the offer would be financially beneficial.
To make a more informed decision, the hotel should also consider the impact of accepting the Bikers' Club offer on its overall occupancy rate, potential future business, and any potential trade-offs in terms of customer experience or reputation.
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Question of Question 6 & Moing to another question will save this response 4 points Kingdom Corporation has the following. -Preferred stock, $10 par value, 8%, 50,000 shares issued $500,000 -Common st
The amount of dividends paid each year for the preferred and common stocks are $4,000 and $0, respectively.
Given the following information, find the amount of dividends paid each year for the preferred and common stocks.The total amount of preferred stock issued is $500,000, having a par value of $10, and an annual dividend rate of 8%. Hence,Preferred stock issued = $500,000 / $10 = 50,000 shares Annual dividend rate = 8%The total amount of common stock issued is $1,000,000, having a par value of $1, and no annual dividend rate is mentioned. Therefore,Common stock issued = $1,000,000 / $1 = 1,000,000 shares Annual dividend rate = 0%The amount of dividends paid each year for the preferred stocks can be calculated as follows:Annual dividend = Preferred stock issued × Annual dividend rate= 50,000 × 8% = $4,000The amount of dividends paid each year for the common stocks can be calculated as follows:Annual dividend = Common stock issued × Annual dividend rate= 1,000,000 × 0% = $0
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sheffield corp. reported sales of $2000000 last year (100000 units at $20 each), when the break- even point was 78000 units. Sheffield's margin of safety ratio is
Sheffield's safety margin is 22%.
To calculate Sheffield's margin of safety, we need to find the difference between actual sales and the break-even point and divide it by actual sales. The margin of safety is the rate at which actual sales exceed the break-even point.
Let's calculate the margin of safety factor.
Calculate the break-even point in dollars.
Break-even point = Break-even unit * Selling price per unit
Breakeven = 78,000 units * $20 = $1,560,000
Calculate the safety margin.
Safety Margin = (Actual Earnings – Breakeven Point) / Actual Earnings
Safety Margin = ($2,000,000 – $1,560,000) / $2,000,000
Safety Margin = $440,000 / $2,000,000
Safety Margin = 0.22 or 22%
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9 What are exclusions in a homeowner's insurance policy? A Exclusions are covered by the policy but are not attached to the home (i.e. sheds, detached garage etc.). B Exclusions are perils that are not specifically covered by the policy. Exclusions are not referred to in the policy. D Exclusions are perils that are specifically covered by the policy.
In a homeowner's insurance policy Exclusions are perils that are not specifically covered by the policy.
The correct answer to the given question is option B.
The exclusions of a homeowner's insurance policy include the following:Natural disasters – For instance, hurricanes, floods, earthquakes, and landslides are often excluded from standard policies. Some providers offer riders that can help cover these perils.
You should check to ensure what coverage is included before signing a policy.Acts of war – Losses caused by acts of war, including terrorism, are usually excluded from insurance policies. Intentional damage – Losses caused by intentional damage to your property by you or a person on your property will be excluded from coverage.
Wear and tear – The natural wear and tear of your home, personal property, and belongings are not covered under a homeowner's insurance policy.
Therefore, you need to maintain and repair your property regularly.Other exclusions – These include damages caused by pets, identity theft, and power failures, among others. It is best to carefully review an insurance policy before purchase and ask questions to understand the full scope of coverage.
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Mrs. Publinsky and her husband, Xander, are planning their dream house. The lot for the house sits high on a hill with a beautiful view of the White Mountains. The plans show the size of the house to be 2,900 square feet. The average price for a lot and house similar to this one has been $150 per square foot. Fortunately, Xander is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Publinsky feels she can take care of the interior decorating. The following average cost information is available from a local bank that makes loans to local contractors and dispenses progress payments to contractors when specific tasks are verified as complete.
25 % Excavation and framing complete
8 % Roof and fireplace complete
3 % Wiring roughed in
6 % Plumbing roughed in
5 % Siding on
17 % Windows, insulation, walks, plaster, and garage complete
9 % Furnace installed
4 % Plumbing fixtures installed
5 % Exterior painting complete
4 % Light fixtures installed, finish hardware installed
6 % Carpet and trim installed
4 % Interior decorating
4 % Floors laid and finished
Calculate the estimated cost for the Publinskys' house if they use contractors to complete all of the house. (Round the final answer to the nearest dollar.)
Calculate the estimated cost for the Publinskys’s house if they use their talents to do some of the work themselves (all plumbing, painting and interior decoration). (Round the final answer to the nearest dollar.)
The estimated cost of the Publinskys's house if they use their talents to do some of the work themselves (all plumbing, painting, and interior decoration) is $381,450
Mrs. Publinsky and her husband, Xander, are planning their dream house. The plans show the size of the house to be 2,900 square feet, and the lot for the house sits high on a hill with a beautiful view of the White Mountains. The average price for a lot and house similar to this one has been $150 per square foot. Fortunately, Xander is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Publinsky feels she can take care of the interior decorating. The estimated cost of the Publinskys' house using contractors to complete all of the house is as follows:Firstly, to calculate the total cost, we need to find the average price of the lot and house which will be 2900 square feet × $150/square foot
= $435,000.
The following is the cost breakdown based on the information available from the local bank. 25% Excavation and framing complete, which would cost
$435,000 × 25%
= $108,750.8%
Roof and fireplace complete would cost
$435,000 × 8%
= $34,800.3%
Wiring roughed in would cost
$435,000 × 3%
= $13,050.6%
Plumbing roughed in would cost
$435,000 × 6%
= $26,100.5%
Siding on would cost
$435,000 × 5%
= $21,750.17%
Windows, insulation, walks, plaster, and garage complete would cost
$435,000 × 17%
= $73,950.9%
Furnace installed would cost
$435,000 × 9%
= $39,150.4%
Plumbing fixtures installed would cost
$435,000 × 4%
= $17,400.5%
Exterior painting complete would cost
$435,000 × 5%
= $21,750.4%
Light fixtures installed, finish hardware installed would cost
$435,000 × 4%
= $17,400.6%
Carpet and trim installed would cost
$435,000 × 6%
= $26,100.4%
Interior decorating would cost
$435,000 × 4%
= $17,400.4%
Floors laid and finished would cost
$435,000 × 4%
= $17,400.
Using contractors to complete all of the work would cost
$108,750 + $34,800 + $13,050 + $26,100 + $21,750 + $73,950 + $39,150 + $17,400 + $21,750 + $17,400 + $26,100 + $17,400 + $17,400
= $446,700
.The estimated cost of the Publinskys's house if they use their talents to do some of the work themselves (all plumbing, painting, and interior decoration) is as follows:We can reduce some of the cost since Xander and Mrs. Publinsky will be doing some of the work themselves. For plumbing, painting, and interior decoration, the cost would be reduced by $26,100 + $21,750 + $17,400
= $65,250.
Using Xander and Mrs. Publinsky to do some of the work themselves (all plumbing, painting, and interior decoration) would cost
$446,700 - $65,250
= $381,450
Thus, the estimated cost of the Publinskys' house if they use contractors to complete all of the work is $446,700. The estimated cost of the Publinskys's house if they use their talents to do some of the work themselves (all plumbing, painting, and interior decoration) is $381,450.
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How can publicizing your participation in exercise increase your
LEMA credibility with the public?
Publicizing your exercise involvement strengthens your LEMA credibility by showcasing your commitment, inspiring others, and providing real-life examples of your expertise and accomplishments.
Publicizing your participation in exercise can increase your LEMA (Local Expertise, Market Awareness) credibility with the public in several ways. First, it demonstrates your commitment to practicing what you preach, showcasing that you actively engage in the activities and knowledge you share. This authenticates your expertise and establishes you as a trusted source. Second, publicizing your exercise participation allows the public to witness your personal growth and achievements, creating a relatable and aspirational image.
By sharing your progress and milestones, you inspire others to pursue their own fitness goals and perceive you as a credible role model. Furthermore, publicizing your exercise routines and outcomes enables you to provide practical advice and valuable insights based on personal experience. This hands-on knowledge reinforces your credibility as someone who has firsthand understanding and can offer practical guidance in the field.
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From 1990 to 1996, the value of the Japanese yen relative to the U.S. dollar increased by almost 40%. Assuming that the yen and dollar prices in Japan and the United States did not change, US, products becam e 40% than Japanese products Which of the following describe the manufacturers' best strategic response to the currency appreciation? Check all that apply Begin exporting foreign-made parts Sell manufacturing bases abroad to cover production costs at home X Find partners among similar foreign manufacturing companies to set up manufacturing operations abroad Purchase cheaper foreign-made components and ship them home
The manufacturers' best strategic responses to the currency appreciation:
Begin exporting foreign-made parts: This can help to reduce the cost of production, as foreign-made parts are often cheaper than domestic-made parts.
Sell manufacturing bases abroad to cover production costs at home: This can help to reduce the company's exposure to currency fluctuations, as the cost of production will be in the local currency.
Find partners among similar foreign manufacturing companies to set up manufacturing operations abroad: This can help to reduce the cost of production, as the companies can share resources and expertise.
Purchase cheaper foreign-made components and ship them home: This can help to reduce the cost of production, as foreign-made components are often cheaper than domestic-made components. The appreciation of the Japanese yen relative to the U.S. dollar made Japanese products more expensive in the United States. This put Japanese manufacturers at a competitive disadvantage, as their products were now more expensive than American-made products. In order to respond to this challenge, Japanese manufacturers needed to find ways to reduce their production costs. The four strategies listed above are all ways that Japanese manufacturers could reduce their production costs and remain competitive in the U.S. market.
The appreciation of the Japanese yen relative to the U.S. dollar had a number of negative consequences for Japanese manufacturers. First, it made their products more expensive in the United States. This made it more difficult for Japanese manufacturers to compete with American-made products. Second, it reduced the profits that Japanese manufacturers were making on their exports to the United States. Third, it made it more difficult for Japanese manufacturers to invest in new plants and equipment.
In order to respond to these challenges, Japanese manufacturers needed to find ways to reduce their production costs. The four strategies listed above are all ways that Japanese manufacturers could reduce their production costs and remain competitive in the U.S. market. The first strategy, beginning exporting foreign-made parts, can help to reduce the cost of production, as foreign-made parts are often cheaper than domestic-made parts. This is because the cost of labor is often lower in foreign countries. For example, a Japanese manufacturer could export parts from China to Japan. This would help to reduce the cost of production, as the labor cost in China is much lower than the labor cost in Japan.
The second strategy, selling manufacturing bases abroad to cover production costs at home, can help to reduce the company's exposure to currency fluctuations, as the cost of production will be in the local currency. For example, a Japanese manufacturer could sell its manufacturing base in the United States to a U.S. company. This would help to reduce the company's exposure to currency fluctuations, as the cost of production in the United States would be in U.S. dollars.
The third strategy, finding partners among similar foreign manufacturing companies to set up manufacturing operations abroad, can help to reduce the cost of production, as the companies can share resources and expertise. For example, two Japanese manufacturers could partner together to set up a manufacturing plant in China. This would help to reduce the cost of production, as the companies could share the cost of the plant and the cost of labor.
The fourth strategy, purchasing cheaper foreign-made components and shipping them home, can help to reduce the cost of production, as foreign-made components are often cheaper than domestic-made components. This is because the cost of labor is often lower in foreign countries. For example, a Japanese manufacturer could purchase screws from China to use in its products. This would help to reduce the cost of production, as the labor cost in China is much lower than the labor cost in Japan. These are just a few of the strategies that Japanese manufacturers could use to respond to the appreciation of the Japanese yen relative to the U.S. dollar. By implementing these strategies, Japanese manufacturers could reduce their production costs and remain competitive in the U.S. market.
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