The policy action by the Fed that would cause the money supply to increase is D. An open-market purchase of government securities. When the Fed conducts an open-market purchase of government securities, it buys these securities from banks and other financial institutions, injecting money into the economy.
This increases the reserves held by banks, allowing them to lend out more money. As banks extend more loans, the money supply in the economy expands .On the other hand, option A, an open market sale of government securities, would have the opposite effect. When the Fed sells government securities to banks and financial institutions, it removes money from circulation, reducing the reserves held by banks and limiting their ability to lend. This contractionary action decreases the money supply.
Option B, an increase in required reserve ratios, would also reduce the money supply as banks would be required to hold a larger portion of their deposits in reserves, leaving less available for lending. Option C, an increase in the discount rate, is a tool used by the Fed to influence short-term interest rates and borrowing costs. While it affects bank lending and borrowing, it does not directly impact the money supply.
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James Berhad current’s capital structure is as follows:• Property loan of RM1,000,000, paid in instalment of RM6,500 per months for the next 20 years.• Business Financing, RM800,000, for 9 years, instalment of RM12,628 per month.• Vehicles financing is RM240,000, monthly instalment of RM3,132 for 8 years.• The bond was sold for RM875 each with a maturity of 25 years. The coupon rate is 4%, semi-annual. Outstanding issuance is 3,000 units.• The company’s outstanding common stock is 3,000,000 units, and recently paid dividend of RM0.08 and is expected to do so indefinitely. Price of stock now is RM2.52 each, and the growth rate is 5%.• The company's preferred stock is sold for RM83.00 each, dividend is fixed at 7% at par value of RM100, with total outstanding issued stocks of 400,000 units.The company wishes to increase the leverage by the following options:Option 1To issue additional 1,000,000 units of common stock. The price has been estimated to be at RM1.42, and the fee is 2% each. The expected dividend will be RM0.035 per share, and the growth rate is also at 5%.Option 2To undertake a loan of RM1.5 million, which will be paid monthly, RM21,425, for the next 10 years.Required:1. Calculate the cost of capital for the existing capital structure and the proposed structure.2. Determine the wacc and adjusted wacc of the existing capital structure.3. Determine the wacc and adjusted wacc of the new capital structure with Option 1.4. Determine the wacc and adjusted wacc of the new capital structure with Option 2.5. If the company wants to recall the bond, and replace it with Option 1, how that affect the company’s adjusted wacc.6. Given the cost of risk free rate instrument is 2.00%, and the average market cost is 7.5%. The company’s beta is 1.4. Determine the company’s cost of capital based on CAPM.
To calculate the cost of capital for the existing and proposed capital structures of James Berhad, various components need to be considered, including loans, financing, stock issuance, and bonds.
The weighted average cost of capital (WACC) is determined based on the proportions of each component in the capital structure and their respective costs. Adjusted WACC takes into account the changes in the capital structure resulting from the proposed options. Additionally, the company's cost of capital based on the Capital Asset Pricing Model (CAPM) can be calculated using the risk-free rate, market cost, and beta.
To calculate the cost of capital for the existing capital structure, the cost of each component needs to be determined. The cost of loans, financing, and vehicles financing can be obtained by dividing the annual installment by the respective outstanding amounts. The cost of the bond can be calculated by discounting the semi-annual coupon payments and the bond's maturity value using the prevailing market rate. The cost of common stock can be calculated using the dividend yield and the growth rate.
The WACC of the existing capital structure is determined by weighting the cost of each component based on its proportion in the total capital structure. Adjusted WACC for the new capital structure with Option 1 or Option 2 is calculated by incorporating the costs and proportions of the additional common stock or the loan.
If the company wants to recall the bond and replace it with Option 1, the adjusted WACC will be affected by the change in the capital structure, specifically the removal of the bond and the addition of the new common stock.
To determine the company's cost of capital based on CAPM, the risk-free rate, market cost, and beta are considered. The cost of capital is calculated using the formula: Cost of Capital = Risk-Free Rate + Beta * (Market Cost - Risk-Free Rate).
By calculating these various components and incorporating them into the respective formulas, the cost of capital for the existing and proposed capital structures can be determined, allowing James Berhad to assess the financial implications of their options and make informed decisions regarding their leverage and capital structure.
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what is the opportunity cost of one phone (in terms of apps) for a blue collar worker? the opportunity cost is enter your response here app(s). (round your answer to two decimal places.)
The opportunity cost of one phone (in terms of apps) for a blue-collar worker is the value of the alternative apps or activities foregone by having the phone.
The opportunity cost refers to the value of the next best alternative that is given up when choosing one option over another. For a blue-collar worker, who typically engages in manual labor or physical tasks, the opportunity cost of owning a phone in terms of apps may vary. It depends on the individual's preferences, needs, and how they allocate their time and resources.
The specific apps available on the phone could provide various benefits or entertainment value, such as productivity tools, educational resources, or leisure activities. The opportunity cost arises from the trade-off between using the phone and accessing those specific apps versus engaging in alternative activities or using other resources. The actual value of the opportunity cost in terms of apps would depend on the specific choices and trade-offs made by the blue-collar worker.
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Winthrop Corporation produces and sells a single product. Data for that product are: Sales price per unit Variable cost per unit Fixed expenses for the month Currently selling $265 $130 $680,000 10,500 units Upper management is considering using a biodegradable packaging which costs $10 more per unit but it produces less waste in the long run Management plans to increase advertising by $5,000 per month to advertise this new feature to their packaging. They believe that environmentally friendly people will switch to their product resulting in an increase in sales of 3,500 units per month What is the effect to the company's breakeven point if these changes are implemented? O A. They would have to sell 2,771 more units to breakeven. OB. They would have to sell 443 more units to breakeven C. They would have to sell 3,500 fewer units to breakeven. OD. They would have to sell 443 fewer units to breakeven.
Winthrop Corporation is a corporation that produces and sells a single product. Management is considering using a pbiodegradable ackaging that costs $10 more per unit but produces less waste in the long run. Management plans to increase advertising by $5,000 per month to advertise this new feature to their packaging.
They believe that environmentally friendly people will switch to their product resulting in an increase in sales of 3,500 units per month. The effect to the company's breakeven point if these changes are implemented is that they would have to sell 2,771 more units to breakeven.The solution to the problem is shown below:First, we need to calculate the contribution margin per unit of the current scenario. Selling price per unit = $265Variable cost per unit = $130Contribution margin per unit = Selling price per unit - Variable cost per unitContribution margin per unit = $265 - $130 = $135We can then use the contribution margin to calculate the breakeven point (BEP) in units:BEP (units) = Total fixed expenses ÷ Contribution margin per unitBEP (units) = $680,000 ÷ $135 per unitBEP (units) = 5,037 unitsWe now need to calculate the contribution margin per unit in the new scenario. Selling price per unit = $265Variable cost per unit = $140 ($130 + $10 for biodegradable packaging)Contribution margin per unit = Selling price per unit - Variable cost per unitContribution margin per unit = $265 - $140 = $125We can then use the contribution margin to calculate the new breakeven point (BEP) in units:BEP (units) = Total fixed expenses ÷ Contribution margin per unitBEP (units) = ($680,000 + $5,000) ÷ $125 per unitBEP (units) = 5,037 + 443 unitsNew BEP (units) = 5,480 unitsTherefore, the effect to the company's breakeven point if these changes are implemented is that they would have to sell 2,771 more units to breakeven. Therefore, the correct answer is option A. They would have to sell 2,771 more units to breakeven.
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Abacus Ltd manufactures calculators. Each calculator sells for £21 and has variable costs of £7.50. For the coming month fixed costs are estimated to be £54,000 and target profit is £40,000 (10% higher than existing profit).
Q1. To the nearest whole number, how many calculators must be sold to reach the target profit.
a) 2963
b) 4000
c) 6963
d) 7200 (1 mark)
Therefore, the correct answer is:
a) 2963
.To calculate the number of calculators that must be sold to reach the target profit, we need to consider the contribution margin per unit. The contribution margin is the selling price minus the variable cost per unit.
Selling price per calculator = £21
Variable cost per calculator = £7.50
Contribution margin per calculator = Selling price - Variable cost
Contribution margin per calculator = £21 - £7.50 = £13.50
Next, we can calculate the total contribution margin needed to achieve the target profit. Since the fixed costs are already covered, the target profit is the additional amount required.
Target profit = £40,000
Number of calculators to be sold = Target profit / Contribution margin per calculator
Number of calculators to be sold = £40,000 / £13.50 ≈ 2962.96
Rounded to the nearest whole number, the number of calculators that must be sold to reach the target profit is approximately 2963.
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Identify a business-related research question. Describe your question and state whether you think it would be best studied with a qualitative research method, a quantitative research method, or a mixe
Qualitative research is often the preferred method of study for research questions that aim to understand people's experiences, attitudes, and behaviors.
Such research questions often lack a predetermined hypothesis, are broad in scope, and seek to gain insight into human behavior. Qualitative research methods allow researchers to investigate a research question from a more subjective and exploratory perspective.
As a result, the researchers can generate new theories and hypotheses that will inform future studies. On the other hand, quantitative research seeks to quantify or measure phenomena or variables and often uses numerical data and statistical analysis to draw conclusions.
Research questions that aim to establish the degree, extent, or frequency of an event or a phenomenon, as well as their correlations with other variables, are best studied with a quantitative research method. The study of customer loyalty in the banking industry is best studied using a qualitative research method.
This is because the research question aims to understand customers' attitudes, experiences, and behaviors regarding the banking industry. Therefore, qualitative research methods like focus groups, in-depth interviews, and observations would allow researchers to collect detailed data from customers, which can be analyzed to gain insights into factors that influence customer loyalty.
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To determine the most suitable research method, we need to consider the nature of the question and the type of data required.
A qualitative research method would be appropriate for this research question. Qualitative methods involve in-depth exploration and understanding of participants' perspectives and experiences. Conducting interviews or focus groups with e-commerce customers would provide rich insights into their satisfaction levels
A mixed research method combining qualitative and quantitative approaches can also be beneficial. Quantitative methods, such as surveys or questionnaires, can be used to collect numerical data to measure the level of customer satisfaction and identify statistical relationships between variables.
In summary, while the research question of factors influencing customer satisfaction in the e-commerce industry can be explored using qualitative research methods, a mixed research approach combining qualitative and quantitative methods can yield a more comprehensive understanding of the topic.
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Actual investment spending does not include:
a. spending on consumer durable goods
b. spending on new capital equipment
c. spending on new houses
d. changes in inventories
The correct answer is: d. changes in inventories. Changes in inventories are accounted for separately in order to track the level of unsold goods and their impact on the economy.
Actual investment spending refers to the expenditure on acquiring new capital goods or assets that are expected to generate income or provide future benefits. It includes spending on consumer durable goods, new capital equipment, and new houses. However, changes in inventories are not considered as actual investment spending. Changes in inventories refer to the difference between the beginning and ending inventories of goods held by businesses. It represents the value of goods produced but not sold during a specific period.
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a u.s. firm has significant profits that were earned overseas. when the u.s. taxes are paid on these profits, the profits are considered to be
When the U.S. taxes are paid on significant profits that were earned overseas by a U.S. firm, the profits are considered to be foreign source income.
Foreign-source income refers to the income earned by a company or individual from activities outside their home country. In other words, it refers to income that is sourced from outside the United States (US) when it comes to US taxation. Such income is subject to US taxation rules under the Internal Revenue Code. To avoid double taxation on foreign income, there are rules and regulations in place for foreign tax credits or exclusion of such income from tax, under specific terms and conditions.Therefore, when a U.S. firm has significant profits that were earned overseas and the U.S. taxes are paid on these profits, the profits are considered to be foreign source income.
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Land Transportation Services (LTS) is renewing the logistics feet. The LTS manager is considering to operate trucks for two, three, or four years before replacing them. He prepared the following estimate of the cost of operating the three plans. Service Life Investment Year 1 Year2 Year3 Year4 Salvage 2 years -40,000 -12.000 -15,000 200003 years -40,000 -12.000 -15,000 -20.000 170004 years -40,000 -12.000 -15,000 -20.000 -25000 12000Assuming a 10% cost of fund and a zero tax rate. Which service life should the company choose to optimize its operating costs? o Should reject all projects Four years service life o Four years service life There is no enough information to answer the question o Two years service o Three years service life
The company should choose a three-year service life for its trucks to optimize its operating costs.
To determine the optimal service life for the trucks, we need to calculate the net present value (NPV) of each option. NPV takes into account the initial investment, cash flows over the service life, salvage value, and the cost of funds.
For the two-year service life, the NPV can be calculated as follows:
NPV = -40,000 + (-12,000)/(1+0.1) + (-15,000)/(1+0.1)^2 + 20,000/(1+0.1)^2
= -40,000 - 10,909 - 12,648 + 16,529
= -46,028
For the three-year service life:
NPV = -40,000 + (-12,000)/(1+0.1) + (-15,000)/(1+0.1)^2 + (-20,000)/(1+0.1)^3 + 17,000/(1+0.1)^3
= -40,000 - 10,909 - 12,648 - 15,393 + 13,764
= -65,186
For the four-year service life:
NPV = -40,000 + (-12,000)/(1+0.1) + (-15,000)/(1+0.1)^2 + (-20,000)/(1+0.1)^3 + (-25,000)/(1+0.1)^4 + 12,000/(1+0.1)^4
= -40,000 - 10,909 - 12,648 - 15,393 - 16,480 + 7,407
= -87,123
Comparing the NPVs, we can see that the three-year service life has the highest NPV (-65,186), indicating the lowest operating costs. Therefore, the company should choose a three-year service life to optimize its operating costs. The two-year and four-year options result in negative NPVs, indicating higher costs.
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Externality: Give examples for positive and negative
externality in production and consumption (4 cases)
Examples of positive externality in production are Vaccination Programs and negative externality Environmental Pollution.
An example of positive externality in consumption is Education and a negative externality is Smoking.
When people obtain vaccines, society as a whole gains from less disease transmission and enhanced public health in addition to the protection against illnesses that immunizations provide for the individual.
By resulting in health problems, ecological harm, and a decrease in the quality of life for populations close to the production sites, industrial operations that produce pollution, such as air or water pollution, can have an expensive impact on society.
In addition to gaining information and skills for their own advantage, those who pursue education also help society as a whole grow and become more productive.
In addition to endangering the health of the smoker, smoking has a detrimental impact on individuals who are exposed to secondhand smoke, resulting in health problems and higher healthcare expenditures for society.
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Problem 9-45 Annuity with changing interest rates (LO9-4) You are chairperson of the investment fund for the Continental Soccer League. You are asked to set up a fund of semiannual payments to be compounded semiannually to accumulate a sum of $350.000 after ten years at a 16 percent annual rate (20 payments). The first payment into the fund is to take place six months from today, and the last payment is to take place at the end of the tenth year. Use And Agends C for an approximate answer, but calculate your final answer using the formula and financial calculator methods a. Determine how much the semiannual payment should be. (Do not round intermediate calculations. Round your final answer to 2 decimal places) On the day after the sixth payment is made (the beginning of the fourth year, the interest rate goes up to an annual rate of 18 percent. This new rate applies to the funds that have been accumulated as well as all future payments into the fund Interest is to be compounded semiannually on all funds b. Determine how much the revised semiannual payments should be after this rate change (there are 14 payments and compounding dates). The next payment will be in the middle of the fourth year. (Do not round intermediate calculations. Round your finel answer to 2 decimal places) Revised sem annual payment
Problem 9-45 deals with setting up an investment fund to accumulate a sum of $350,000 over ten years with changing interest rates.
The goal is to determine the semiannual payment required to achieve this accumulation at a 16 percent annual rate. Using the formula and financial calculator methods, the semiannual payment is calculated.
In the second part of the problem, a change in interest rate occurs after the sixth payment is made, with the new rate being 18 percent annually. This revised rate applies to both the accumulated funds and all future payments. The objective is to calculate the revised semiannual payments after the rate change, considering there are 14 payments and compounding dates. The next payment is scheduled for the middle of the fourth year.
The task is to determine the initial semiannual payment required to accumulate $350,000 over ten years at a 16 percent annual rate. In the second part, the revised semiannual payments are calculated after a rate change to 18 percent annually, considering 14 total payments and compounding dates.
To solve the first part, the formula for the future value of an ordinary annuity is used:
FV = P * [(1 + r/n)^(nt) - 1] / (r/n)
Where FV is the future value, P is the semiannual payment, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
Plugging in the given values:
FV = $350,000, r = 16% = 0.16, n = 2 (semiannual compounding), t = 10 years
Rearranging the formula to solve for P:
P = FV * (r/n) / [(1 + r/n)^(nt) - 1]
Calculating P using the formula or a financial calculator yields the semiannual payment needed to accumulate $350,000 over ten years at a 16 percent annual rate.
In the second part, after the sixth payment, the interest rate increases to 18 percent annually. The same formula is used, but with adjusted values:
FV = $350,000 (already accumulated), r = 18% = 0.18, n = 2, t = 10 - 3.5 = 6.5 years (remaining time)
Solving for P again provides the revised semiannual payment required to achieve the desired accumulation with the increased interest rate.
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which statement best characterizes the perspectives of the definition of done (dod)
The statement that characterizes the perspectives of the definition of done (DoD) is Product Owners focus on the Iteration while Product Managers focus on the release. Thus, option C is correct.
In the context of Agile development, the DoD outlines the criteria that must be met for a product increment to be considered complete. It sets the quality standards and expectations for the work done by the development team.
The perspectives of the Product Owner and Product Manager differ in terms of their focus within the DoD. Product Owners primarily focus on iteration, which refers to the specific development cycle or sprint.
They collaborate closely with the development team to define and prioritize user stories, provide clarification, and ensure that the agreed-upon functionality is implemented within the iteration.
The Product Owner's role is to ensure that the iteration delivers value to the end users and meets their needs. On the other hand, Product Managers focus on the release, which encompasses a broader timeframe that includes multiple iterations.
They take a strategic perspective and work closely with stakeholders to define the product roadmap, prioritize features, and coordinate with marketing and sales teams for the successful release of the product.
The Product Manager's focus is on the overall product strategy and ensuring that the released product aligns with business goals and customer expectations.
In conclusion, the perspectives of the definition of done (DoD) involve the Product Owner focusing on the iteration to deliver value in the short term, while the Product Manager focuses on the release to drive the overall product strategy and align with long-term business objectives.
Both perspectives are essential for the successful development and delivery of a product. Thus, option C is correct.
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Complete Question:
Which statement characterizes the perspectives of the definition of done (DoD)?
A) Product Owners focus on Features while Product Managers focus on Stories
B) Product Owners focus on the release while Product Managers focus on the team increment
C) Product Owners focus on the Iteration while Product Managers focus on the release
D) Product Owners focus on the Solution while Product Managers focus on the team increment
Pome, Inc. sells two products: G25 and J89. Selected financial data is as follows. What is Pome's sales mix? G25 Total J89 $450,000 Sales $900,000 $1,350,000 Variable expenses 540,000 240,000 780,000
Pome's sales mix is 40% for G25 and 60% for J89. This calculation is based on the ratio of the sales revenue for each product to the total sales revenue of both products.
To calculate the sales mix, we need to determine the proportion of sales revenue contributed by each product. In this case, the sales revenue for G25 is $900,000 and for J89 is $450,000. The total sales revenue for both products is $1,350,000 ($900,000 + $450,000).
To find the sales mix for G25, we divide the sales revenue of G25 ($900,000) by the total sales revenue ($1,350,000) and multiply by 100%:
($900,000 / $1,350,000) * 100% = 66.67%
Similarly, for J89, we divide the sales revenue of J89 ($450,000) by the total sales revenue ($1,350,000) and multiply by 100%:
($450,000 / $1,350,000) * 100% = 33.33%
Therefore, Pome's sales mix is 66.67% for G25 and 33.33% for J89.
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Determining Financial Statement Effects of Various Transactions, and Interpreting the Current Ratio LO2-3,2-4, 2-6 East Hill Home Healthcare Services was organized on January 1, 2019 by four friends. Each organizer invested $10,000 in the company and, in turn, was issued 9,000 shares. To date, they are the only shareholders. At the end of 2020, the accounting records reflected total assets of $912,000 ($66,000 cash, $640,000 land, $66,000 equipment, and $140,000 buildings), total liabilities of $382,000 (short-term notes payable of $95,000 and long-term notes payable of $287,000), and shareholders' equity of $530,000 ($100,000 contributed capital and $430,000 retained earnings). The following summarized events occurred during January 2021: a. Sold 8,000 additional shares to the original organizers for a total of $80,000 cash. b. Purchased a building for $52,000, equipment for $13,000, and four acres of land for $12,000; paid $7,000 in cash and signed a note for the balance (due in 15 years). (Hint: Five different accounts are affected.) c. Sold one acre of land acquired in (b) for $5,000 cash to another company. d. Purchased short-term investments for $15,500 cash. e. One shareholder reported to the company that he sold 500 East Hill shares to another shareholder for $5,000 cash. 1. Lent $5,800 to one of the shareholders for moving costs, receiving a signed six-month note from the shareholder. Required: 1. Was East Hill Home Healthcare Services organized as a sole proprietorship, a partnership, or a corporation? Sole proprietorship Partnership Corporation 2. During January 2021, the records of the company were inadequate. You were asked to prepare the summary of the preceding transactions. To develop a quick assessment of their economic effects on East Hill Home Healthcare Services. (If a transaction does not require an entry, leave the cells blank. Enter any decreases to account balances with a minus sign.) Liabilities Shareholders' Equity Assets Short-Term Notes Investments Receivable Cash Buildings Equipment Short- Term Notes Payable 95.000 Contributed Capital Retained Earnings Land Long-Term Notes Payable 287.000 + 100.000 430,000 140.000 66.000 66,000 640,000 Beg b. C d e $ 0 $ $ 0 4. Based only on the completed tabulation, provide the following amounts at January 31, 2021. a. Total assets b. Total liabilities c. Total shareholders' equity d. Cash balance e. Total current assets 5. Compute the current ratio at January 31, 2021. (Round the final answer to 2 decimal places.) Current ratio
East Hill Home Healthcare Services was organized as a corporation. The summary of the transactions is as follows:
Liabilities Shareholders' Equity Assets Short-Term Notes Payable $95,000 Contributed Capital $100,000 Cash $67,500 Buildings $192,000 Long-Term Notes Payable $287,000 Retained Earnings $430,000 Land $638,000 Equipment $79,000 Short-Term Investments $15,500 The current ratio at January 31, 2021 is: Current Ratio = Total Current Assets / Total Current Liabilities Current Ratio = $83,000 / $95,000 Current Ratio = 0.8737 (rounded to 2 decimal places)Based on the completed tabulation, the amounts at January 31, 2021 are: a. Total assets: $872,500 b. Total liabilities: $382,000 c. Total shareholders' equity: $490,500
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Which of the following statements is CORRECT?
Answer
Since the costs of internal and external
equity are related, an increase in the flotation cost required to sell a new issue of stock will increase the cost of retained earnings.
Since its stockholders are not directly
responsible for paying a corporation
The correct statement among the options provided is: "Since its stockholders are not directly responsible for paying a corporation's taxes, and since interest payments are tax-deductible, the cost of debt to a firm is always lower than the cost of equity."
Explanation:
The cost of debt refers to the cost a company incurs in order to borrow funds through debt financing, while the cost of equity refers to the cost of raising funds by issuing shares to investors. The statement correctly states that the cost of debt is lower than the cost of equity due to two main factors:
Tax advantage: Interest payments made on debt are tax-deductible expenses for a corporation, meaning they can be subtracted from the company's taxable income. This reduces the overall tax burden of the company. In contrast, equity financing does not offer any tax advantages.
Shareholders' responsibility for taxes: Stockholders, who hold equity in the company, are not directly responsible for paying the corporation's taxes. The tax obligations are the responsibility of the corporation itself. On the other hand, interest payments made on debt are considered business expenses and can be deducted from the company's taxable income.
Due to these factors, the cost of debt is generally lower than the cost of equity. Companies often prefer to utilize debt financing because it allows them to benefit from tax advantages and lower borrowing costs. However, it's important to note that excessive debt can increase financial risk and affect the company's creditworthiness.
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which of the following terms means knowing how a business is run and how it is influenced by external forces, and knowing and understanding the overall industry
"business acumen" is the term that encompasses the knowledge and understanding of how a business is run, how it is influenced by external forces, and understanding the overall industry.
the term that best corresponds to knowing how a business is run, how it is influenced by external forces, and understanding the overall industry is "business acumen."
business acumen refers to a combination of knowledge, understanding, and skills related to the operation and management of a business. it encompasses an awareness of how various internal and external factors impact business performance and decision-making. this includes understanding the internal workings of a business, such as its operations, finances, marketing strategies, and organizational structure. it also involves recognizing and analyzing external factors such as market dynamics, industry trends, competitive forces, regulatory environment, and economic conditions that influence the business's success.
having strong business acumen enables individuals to make informed decisions, identify opportunities and risks, and navigate the complexities of the business environment effectively. it involves a holistic understanding of the business and industry, which helps in strategic planning, resource allocation, problem-solving, and overall business management.
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a company must decide between scrapping or reworking units that do not pass inspection. the company has 22,000 defective units that have already cost $132,000 to manufacture. the units can be sold as scrap for $78,000 or reworked for $99,000 and then sold for $187,000.
The company should choose to rework the defective units instead of selling them as scrap, as it would result in higher net benefits.
In this scenario, the company is faced with a decision between scrapping the defective units or reworking them. To make an informed decision, the company needs to compare the costs and benefits associated with each option. If the company chooses to sell the units as scrap, it would receive $78,000. However, this would result in a loss as the units have already cost $132,000 to manufacture. Therefore, the net benefit of scrapping would be -$54,000 ($78,000 - $132,000). On the other hand, if the company decides to rework the units, it would incur an additional cost of $99,000. However, after reworking, the units can be sold for $187,000. This would result in a net benefit of $88,000 ($187,000 - $99,000). Comparing the net benefits of the two options, reworking the units would result in a higher net benefit of $88,000, whereas selling them as scrap would lead to a net loss of -$54,000. Therefore, the company should choose to rework the units rather than scrapping them to maximize its financial gain.
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The measure of activity in the standard costing system used at Esta GmbH is machining hours. The company's flexible manufacturing overhead budget and then data regarding the most recent period's operations are given below:Flexible Budget:Budgeted Level of Activity: 6,600 machining hoursOverhead costs at the Budgeted activity level:Variable Overhead Cost: $17,226Fixed Overhead Cost: $13,992Most Recent period's operations:Actual level of activity: 7,200 machining hoursStandard level of activity for output: 7,140 machining hoursActual total variable overhead cost: $17,856Actual total fixed overhead cost: $14,256PART AWhat is the variable overhead rate variance? (936 favorable, 481 unfavorable, 630 unfavorable, 779 favorable, OR 2,267 favorable)PART BWhat is the variable overhead efficiency variance? (157 unfavorable, 1409 unfavorable, 1566 unfavorable, 1488 unfavorable, OR 149 unfavorable)PART CWhat is the fixed overhead budget variance? (264 unfavorable, 1272 unfavorable, 127 unfavorable, 1272 favorable, OR 1145 unfavorable)PART DWhat is the fixed overhead volume variance? (1145 favorable, 1272 favorable, 264 unfavorable, none, OR 145 favorable)
PART A:
The variable overhead rate variance is $936 favorable.
Variable overhead rate variance measures the difference between the actual variable overhead rate per unit of activity and the standard variable overhead rate per unit of activity, multiplied by the actual activity level. The formula is:
Variable Overhead Rate Variance = (Actual Variable Overhead Rate - Standard Variable Overhead Rate) x Actual Activity Level
Given:
Actual Variable Overhead Cost = $17,856
Actual Level of Activity = 7,200 machining hours
Standard Level of Activity for Output = 7,140 machining hours
Variable Overhead Rate Variance = ($17,856 - $17,226) x 7,200 = $936 favorable
PART B:
The variable overhead efficiency variance is $1,409 unfavorable.
Variable overhead efficiency variance measures the difference between the actual activity level and the standard activity level, multiplied by the standard variable overhead rate per unit of activity. The formula is:
Variable Overhead Efficiency Variance = (Actual Activity Level - Standard Activity Level) x Standard Variable Overhead Rate
Given:
Actual Level of Activity = 7,200 machining hours
Standard Level of Activity for Output = 7,140 machining hours
Standard Variable Overhead Rate = $17,226 / 6,600 = $2.61 per machining hour
Variable Overhead Efficiency Variance = (7,200 - 7,140) x $2.61 = $1,409 unfavorable
PART C:
The fixed overhead budget variance is $1,272 unfavorable.
Fixed overhead budget variance measures the difference between the actual fixed overhead cost and the budgeted fixed overhead cost. The formula is:
Fixed Overhead Budget Variance = Actual Fixed Overhead Cost - Budgeted Fixed Overhead Cost
Given:
Actual Total Fixed Overhead Cost = $14,256
Budgeted Fixed Overhead Cost = $13,992
Fixed Overhead Budget Variance = $14,256 - $13,992 = $264 unfavorable
PART D:
The fixed overhead volume variance is $1,145 favorable.
Fixed overhead volume variance measures the difference between the budgeted fixed overhead cost and the standard fixed overhead cost for the actual activity level. The formula is:
Fixed Overhead Volume Variance = Budgeted Fixed Overhead Cost - (Standard Fixed Overhead Rate x Actual Activity Level)
Given:
Budgeted Fixed Overhead Cost = $13,992
Standard Fixed Overhead Rate = Budgeted Fixed Overhead Cost / Budgeted Level of Activity = $13,992 / 6,600 = $2.12 per machining hour
Actual Level of Activity = 7,200 machining hours
Fixed Overhead Volume Variance = $13,992 - ($2.12 x 7,200) = $1,145 favorable
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____ of an organization reveals the demographics of the firm's labor force and whether it is technically up-to-date and thoroughly trained, which is an important part of human resource management.
Workforce analysis is a crucial aspect of human resource management that provides insights into an organization's labor force demographics, technological proficiency, and training effectiveness.
Workforce analysis refers to the systematic examination of an organization's labor force to gain a comprehensive understanding of its composition, skills, and capabilities. It involves assessing various aspects such as demographics, including age, gender, ethnicity, and educational background, which help identify any potential imbalances or disparities within the workforce. By analyzing the demographics, organizations can ensure diversity and inclusion, which fosters a more inclusive and equitable work environment.
Furthermore, conducting a workforce analysis also allows organizations to assess the technical proficiency of their employees. This involves evaluating the extent to which the workforce is up-to-date with the latest technological advancements and possesses the necessary skills to perform their jobs effectively. In today's rapidly evolving digital landscape, it is crucial for organizations to have a technologically competent workforce to remain competitive.
Additionally, the analysis provides insights into the effectiveness of training programs within the organization. By examining the skill levels and competencies of employees, organizations can identify areas where additional training may be required. This helps in addressing any skill gaps and ensuring that the workforce remains well-equipped to meet the evolving demands of the job market.
In summary, conducting a thorough workforce analysis is essential for human resource management. It reveals the demographics of the labor force, enabling organizations to promote diversity and inclusion. It also helps assess the technical proficiency of employees and identify training needs, ensuring a well-trained and up-to-date workforce. By leveraging workforce analysis, organizations can make informed decisions regarding recruitment, training, and talent development, leading to improved overall performance and productivity.
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which of the following is the strongest indication of a bust-out? a. inventory suddenly and dramatically increases. b. management suddenly changes without public notice. c. one of the credit references is an out-of-town bank. d. the company has one permanent residential street address.
Bust-out is a fraudulent scheme in which a company purposely piles up debt and then disappears with the borrowed funds without any intention of repaying the money. (a). Inventory suddenly and dramatically increases.
An inventory that suddenly and dramatically increases could be a strong indication of a bust-out. The answer is a because inventory growth, particularly if it's rapid, may be an indication that a company is stockpiling goods before fraudulently selling them for a profit in a bust-out scheme. The other options, b, c, and d, are not as strong indicators of a bust-out as option a is.Therefore, the correct option is a: Inventory suddenly and dramatically increases.
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Which of the two basic reporting approaches for the cash flows from operating activities did the home depot use?
The direct method reports the major classes of gross cash receipts and gross cash payments, while the indirect method starts with net income and adjusts it for non-cash items and changes in working capital to arrive at the net cash provided by or used in operating activities.
The two basic reporting approaches are the direct method and the indirect method.
The direct method reports the major classes of gross cash receipts and gross cash payments, while the indirect method starts with net income and adjusts it for non-cash items and changes in working capital to arrive at the net cash provided by or used in operating activities.
To determine which method a company used, one would need to refer to their financial statements, specifically the statement of cash flows. The statement of cash flows provides a detailed breakdown of cash inflows and outflows from operating, investing, and financing activities, and it specifies the method used for reporting the cash flows from operating activities.
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Mercury Auto Parts is a chain retailer with 200 stores in the southeastern part of the country. It its fifth year of operations, it total sales were $380 million. In its sixth year of operations, Mercury Auto Parts decides to increase sales by opening 70 new stores in year 6. The stores then compete heavily with each other, and same-store sales for the old stores decrease by 20 percent in year 6 compared to year 5. The total sales for the new stores that opened in year 6 are $50 million.
How much did total sales for Mercury Auto Parts decrease in year 6 over year 5 in dollars and in percentage?
To calculate the decrease in total sales for Mercury Auto Parts in year 6 over year 5, we need to compare the sales figures for both years.
Year 5 total sales: $380 million
Number of stores in year 5: 200
Number of new stores opened in year 6: 70
Same-store sales decrease in year 6: 20%
Sales for new stores opened in year 6: $50 million
First, we calculate the sales for the old stores in year 6:
Same-store sales decrease = 20% = 0.20
Same-store sales in year 6 = Year 5 total sales - (Year 5 total sales * Same-store sales decrease)
Same-store sales in year 6 = $380 million - ($380 million * 0.20) = $380 million - $76 million = $304 million
Next, we calculate the total sales for year 6:
Total sales in year 6 = Same-store sales in year 6 + Sales for new stores in year 6
Total sales in year 6 = $304 million + $50 million = $354 million
To calculate the decrease in total sales:
Decrease in total sales = Year 5 total sales - Total sales in year 6
Decrease in total sales = $380 million - $354 million = $26 million
Therefore, the total sales for Mercury Auto Parts decreased by $26 million in year 6 over year 5.
To calculate the percentage decrease:
Percentage decrease = (Decrease in total sales / Year 5 total sales) * 100
Percentage decrease = ($26 million / $380 million) * 100 ≈ 6.84%
Therefore, the total sales for Mercury Auto Parts decreased by approximately 6.84% in year 6 over year 5.
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Determine the cost of goods manufactured and the cost of goods sold for 2021.
If 200,000 units were sold, what is the cost of goods manufactured per unit?
How much would Sales for 2021 have been to generate an operating income of $120,000?
To determine the cost of goods manufactured and the cost of goods sold for 2021, I would need specific financial information such as the cost of raw materials, direct labor costs, and manufacturing overhead expenses.
Without these details, I cannot provide an accurate calculation. However, I can explain the concepts involved.The cost of goods manufactured refers to the total cost incurred to produce finished goods during a specific period. It includes direct materials, direct labor, and manufacturing overhead costs.The cost of goods sold represents the cost associated with the units sold during a particular period. It is calculated by multiplying the cost per unit by the number of units sold.
To calculate the cost of goods manufactured per unit, divide the total cost of goods manufactured by the total number of units produced.
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manfred mining company is required to restore a piece of land to its original condition after it completes extraction of precious metals. from a financial reporting perspective, the related obligation is referred to as an asset multiple choice question. A. development cost. B. retirement obligation. C. exploration D. obligation.
From a financial reporting perspective, the obligation of Manfred Mining Company to restore a piece of land to its original condition after completing extraction of precious metals is referred to as a retirement obligation.
In financial reporting, a retirement obligation refers to the responsibility or liability a company incurs for the future costs associated with the retirement or disposal of an asset. In the case of Manfred Mining Company, the obligation to restore the land to its original condition after completing the extraction of precious metals falls under this category. The restoration obligation arises because the company is legally required to rehabilitate the land and mitigate any adverse environmental impacts caused by the mining activities. This includes activities such as reclamation, re-vegetation, and ensuring the land is safe and suitable for future use. From a financial reporting perspective, the retirement obligation is recognized as a liability on the company's balance sheet. It represents the estimated future costs that the company is expected to incur to fulfill its obligation. The recognition of this liability ensures transparency in financial reporting and reflects the company's commitment to environmental stewardship and compliance with regulations. Therefore, in the context of Manfred Mining Company, the obligation to restore the land is referred to as a retirement obligation, representing the financial responsibility for the future costs of land restoration.
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FILL THE BLANK. The following transactions occurred during June 2020 for Rashid Est. June 1: Invested BD64,000 cash in the business. June 8 : Purchased supplies for BD3,250 from Nader Est on credit. June 16: Performed services to customer Salem for BD9,200 on account. June 20: Paid balance due to creditor Nader Est. June 23: Received BD4,200 from customer Salem. June 27: Paid BD1,700 cash for electricity. June 30: Rashid withdrew BD2,400 cash for personal use. Required: Prepare the Journal entry for June 27 transactions, like this example: BD ................... Dr: Cr: BD (2 Points) Enter your answer
The requested transaction for June 27 involves Rashid Est. paying BD1,700 in cash for electricity. We are required to prepare the journal entry for this transaction.
The journal entry will reflect the appropriate debit and credit amounts to record the cash payment for electricity expenses.
To record the June 27 transaction for Rashid Est., we need to prepare the journal entry with appropriate debit and credit amounts. Since Rashid is paying BD1,700 in cash for electricity, we will debit the Electricity Expense account to reflect the expense incurred. On the other side, we will credit the Cash account to record the cash outflow.
The journal entry for the June 27 transaction would look as follows:
BD Electricity Expense............ Dr: BD1,700
Cr: Cash.................... BD1,700
By debiting the Electricity Expense account, we recognize the expense and reduce the company's net income. By crediting the Cash account, we record the cash outflow and reduce the company's cash balance.
This journal entry ensures that the financial records accurately reflect the payment made by Rashid Est. for the electricity expense incurred during June 2020.
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Using a required rate of return of 14 percent, determine the present value of an annual perpetuity of $1,000, with the first payment to be received exactly one year from today; received today; six months from today and five years from today
To determine the present value of an annual perpetuity, we can use the formula:
Present Value = Payment / Rate of Return
Present value of an annual perpetuity with the first payment to be received exactly one year from today:
PV = $1,000 / 0.14
PV = $7,142.86
Present value of an annual perpetuity received today:
PV = $1,000 / 0.14
PV = $7,142.86
Present value of an annual perpetuity with the first payment to be received six months from today:
Since the payment is six months away, we need to discount the perpetuity by half a year. The rate of return should also be adjusted to reflect the six-month period. Assuming a continuous compounding, the adjusted rate of return would be 14% / 2 = 7%.
PV = $1,000 / 0.07
PV = $14,285.71
Present value of an annual perpetuity with the first payment to be received five years from today:
Since the payment is five years away, we need to discount the perpetuity by five years. The rate of return remains at 14%.
PV = $1,000 / (0.14 * (1 - 1 / (1 + 0.14)^5))
PV = $5,000
Note: In the case of perpetual cash flows, such as an annual perpetuity, the present value is finite and can be calculated using the formula provided. However, it is important to note that for perpetuities with payments far into the future, the present value may approach a theoretical infinite value.
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Final end-use customers are upstream members of a supply chain. true or false
Final end-use customers are not upstream members of a supply chain is False.
Final end-use customers are the ultimate consumers or users of a product or service. They are the individuals or entities that purchase goods or services for their own consumption or use. Therefore, they are not considered upstream members of a supply chain.
In a supply chain, the flow of products or services typically moves from upstream to downstream. Upstream members of a supply chain include suppliers, manufacturers, distributors, and other intermediaries involved in the production, sourcing, and distribution of goods or services. They are responsible for supplying inputs, materials, or components to the subsequent stages of the supply chain.
Final end-use customers, on the other hand, are situated at the downstream end of the supply chain. They receive the finished products or services and consume or utilize them for their intended purposes. They are the ultimate recipients of the value created through the supply chain.
While final end-use customers play a crucial role in driving demand and shaping the overall supply chain, they are not considered upstream members. Their position is at the end of the supply chain, where the focus shifts from production and distribution to consumption and satisfaction of customer needs.
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john is a philosophy professor. when his wife is transferred to another state with his company, he quits her job so she can move with her. he can be classified as unemployed. A. cyclically B. structurallyC. naturally D. frictionally
John can be classified as structurally unemployed. John's decision to quit his job voluntarily to support his wife's relocation aligns with the definition of structural unemployment, as it reflects a personal circumstance rather than a lack of available job opportunities or economic factors.
Structural unemployment refers to the type of unemployment that occurs due to a mismatch between the skills and qualifications of job seekers and the available job opportunities in the labor market. In this case, John voluntarily quit his job as a philosophy professor to support his wife's job transfer to another state. His decision to leave his job was not influenced by economic factors or a lack of available jobs but rather by personal circumstances related to his wife's relocation. Therefore, John's unemployment can be categorized as structural unemployment. Structural unemployment is different from cyclical unemployment, which occurs due to fluctuations in the business cycle, or frictional unemployment, which is temporary and occurs when individuals are transitioning between jobs. Natural unemployment, on the other hand, refers to the combination of structural and frictional unemployment that exists even in a healthy, fully employed economy.
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Your company is considering purchasing a private company, Bargains Galore Pty Ltd. The company made a profit of $3.1 million last year (including depreciation and amortisation expenses of $0.2 million
The net profit of Bargains Galore Pty Ltd last year, after considering depreciation and amortization expenses, was $2.9 million ($3.1 million - $0.2 million).
To calculate the net profit of Bargains Galore Pty Ltd, we need to subtract the depreciation and amortization expenses from the total profit.
Given that the company made a profit of $3.1 million last year and incurred depreciation and amortization expenses of $0.2 million, we can calculate the net profit as follows:
Net Profit = Total Profit - Depreciation and Amortization Expenses
= $3.1 million - $0.2 million
= $2.9 million
Therefore, the net profit of Bargains Galore Pty Ltd last year, after considering depreciation and amortization expenses, was $2.9 million. This adjusted net profit provides a more accurate measure of the company's profitability by excluding non-cash expenses related to depreciation and amortization.
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The amount of income tax withheld from an individual's payroll is by three variables. Which one of the following is NOT determined a variable? Select one: O A. number of income tax deductions claimed by the employee O B. employee's gross pay OC. employee's net pay O D. length of the pay periodPrevious question
The variable that is NOT determined is C. employee's net pay. The amount of income tax withheld is determined by the number of deductions, gross pay, and pay period length.
The correct answer is C. employee's net pay. The amount of income tax withheld from an individual's payroll is determined by three variables: the number of income tax deductions claimed by the employee, the employee's gross pay, and the length of the pay period.
The net pay of the employee is the amount remaining after all deductions, including income tax withholding, have been taken out. Therefore, the employee's net pay is not a variable that determines the amount of income tax withheld, but rather the result of the withholding calculation.
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You are a manager of a U.S. firm that plans on exporting a product that is designated as a dual use product and you need to have a U.S. government approval before export can take place. What is the political motive behind this intervention?
A.
To ensure that other nations allow free trade
B.
To protect jobs from going to China
C.
To gain and maintain control over events in the Western Hemisphere
D.
To protection national identity
E.
To preserve national security
The correct option is E. To preserve national security. The political motive behind the U.S. government's intervention in requiring approval for the export of a dual-use product is to preserve national security (Option E).
National security is a primary concern for governments worldwide, and controlling the export of certain goods is one way to safeguard a nation's interests and protect its citizens.
Dual-use products are those that have both civilian and military applications. They can be used for peaceful purposes but also have the potential to be used for military or defense-related activities. Due to their nature, the export of such products requires careful scrutiny to prevent them from falling into the wrong hands or being used against national security interests.
By imposing restrictions and requiring government approval for the export of dual-use products, the U.S. government aims to control the flow of these goods and ensure they do not end up in the hands of unauthorized entities or hostile nations. This helps prevent the proliferation of advanced technologies and capabilities that could potentially be used against the United States or its allies.
Preserving national security is crucial for a country's overall stability, defense capabilities, and protection of its citizens. It involves safeguarding sensitive technologies, strategic resources, and critical infrastructure from potential threats. The government's intervention in controlling the export of dual-use products is a proactive measure to mitigate risks and protect national security interests.
While other factors, such as protecting jobs (Option B) or national identity (Option D), may be important considerations in certain policy decisions, they are not the primary political motives behind the government's intervention in this case. The protection of jobs and preservation of national identity can be pursued through other means, such as trade policies or domestic regulations, but the export control of dual-use products primarily revolves around national security concerns.
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