Identification of favorable and unfavorable variances is important to a company because it enables the management to control costs and allocate resources efficiently.
The favorable variance occurs when actual revenue or cost is higher than the budgeted revenue or cost, while an unfavorable variance occurs when the actual revenue or cost is lower than the budgeted revenue or cost.
Identifying favorable and unfavorable variances is helpful to management in controlling costs because it provides insight into areas where resources are being used inefficiently. When the management can identify where the variances are coming from, they can take corrective action to reduce costs, improve efficiency, and allocate resources in areas that generate the highest returns.
The identification of variances can help in improving cost control and profitability. For instance, if the company has a favorable variance, the management can find ways of replicating the process that led to the positive outcome. However, if the company has an unfavorable variance, it indicates that there is an issue that needs to be addressed.
To summarize, the identification of favorable and unfavorable variances helps the management to control costs by enabling them to identify inefficiencies in the company’s operations and allocate resources efficiently. In this way, the company can improve profitability and maintain its competitiveness in the market.
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Intro
A zero-coupon bond with a face value of $100,000 and a current price of $89,195 matures in 4 years.
Part 1
What is the yield to maturity if you hold the bond until the maturity date?
The yield to maturity of the zero-coupon bond, if held until the maturity date, is 2.86%.
To calculate the yield to maturity (YTM) of a zero-coupon bond, we can use the following formula:
YTM = ((Face Value / Current Price)^(1/Number of Years) - 1) * 100%
Given the following information:
Face value of the bond = $100,000
Current price of the bond = $89,195
Maturity period = 4 years
Substituting the values into the formula, we can calculate the yield to maturity:
YTM = (($100,000 / $89,195)^(1/4) - 1) * 100%
= (1.1219^(1/4) - 1) * 100%
= (1.0286 - 1) * 100%
= 0.0286 * 100%
= 2.86%
Therefore, the yield to maturity of the zero-coupon bond, if held until the maturity date, is 2.86%.
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Which of the following statements is false? Indirect finance is more important than direct finance for businesses. O The stock market is not the most important source of external financing for business. Financial intermediaries are the most important source of external funds for business. None of the above
Answer:
The statement "Indirect finance is more important than direct finance for businesses" is false.
While both indirect finance through financial intermediaries and direct finance through securities markets play important roles in providing external financing for businesses, it is not accurate to claim that indirect finance is more important. Direct finance, including the stock market, can be a crucial source of external funds for businesses, allowing them to raise capital by issuing stocks or bonds directly to investors. Indirect finance involves financial intermediaries such as banks and mutual funds channeling funds from savers to borrowers. While indirect finance plays a significant role in the economy, it does not necessarily overshadow the importance of direct finance for businesses. Additionally, direct finance offers companies greater control over the terms and conditions of the financing. Financial intermediaries also play a significant role in providing funds, but it would be incorrect to consider them as the sole or most important source of external financing.
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1. what was the biggest item causing comprehensive in different than net income ?
2. what was the HCA's basic earnings per share (EPS) in 2020 that compare to 2019 ?
3. In 2020 , what was HCA's equity in earnings of affiliaties (in million)?
4. what method does HCA use to account for inventory ?
Comprehensive income captures unrealized gains or losses, HCA's basic EPS increased in 2020, equity in earnings of affiliates was $62 million, and HCA applies the weighted-average cost method for inventory valuation.
1. Comprehensive income refers to a company's financial performance, including gains and losses not reported in net income. The biggest item causing the difference is unrealized gains or losses on available-for-sale securities.
2. HCA's basic EPS in 2020 was $11.97, showing a 28.3% increase from $9.33 in 2019.
3. HCA reported equity in earnings of affiliates as $62 million in 2020, representing its share of earnings from investments in other companies.
4. HCA uses the weighted-average cost method for inventory accounting. This method calculates the average cost of all goods available for sale by considering the total cost and units sold during a specific period For inventory accounting, HCA utilizes the weighted-average cost method, which calculates the average cost of goods available for sale based on total cost and units sold.
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Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Hours per unit 0.60 0.20 Rims Posts Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $15 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Exercise 4-8 (Algo) Part 1 Annual Production 22,000 units 80,000 units Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Activity Rate Estimated Overhead Cost $ 27,200 $ 130,400 $ 1,056,000 Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) per setup per MH per DLH Estimated Activity Rins Posts 280 0 120 5,000 13,200 16,000 Total 400 5,000 29,200 rt 2 of 2 4 ints eBook Print References Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Houre per unit 0.60 0.20 Rims Posta Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $15 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Annual Production 22,000 units 80,000 unita Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setupa Machine-hours Direct labor-hours Estinated Overhead Cont $ 27,200 $130,400 $ 1,056,000 Estimated Activity Rima Posts 200 0 120 5,000 13,200 16,000 Total 400 5,000 29,200 Exercise 4-8 (Algo) Part 2 2. Determine the unit product cost of each product according to the ABC system. (Do not round Intermediate calculations. Round your final answers to 2 decimal places.)
Unit product cost of Rims =$30.86, unit product cost of Posts = $1,007.50
Rims:
Machine setups: 200 setups x $280 per setup = $56,000
Special processing: 0 machine-hours x $0 per MH = $0
General factory: 120 direct labor-hours x $5,000 per DLH = $600,000
Total estimated overhead cost for Rims = $56,000 + $0 + $600,000 = $656,000
Total units of Rims produced = 22,000 units
Unit product cost of Rims = (Direct materials cost + Direct labor cost + Overhead cost) / Total units of Rims produced
= ($14 + (0.6 x $15) + $656,000) / 22,000
= ($14 + $9 + $656,000) / 22,000
= $679,000 / 22,000
≈ $30.86
Posts:
Machine setups: 0 setups x $280 per setup = $0
Special processing: 120 machine-hours x $5,000 per MH = $600,000
General factory: 16,000 direct labor-hours x $5,000 per DLH = $80,000,000
Total estimated overhead cost for Posts = $0 + $600,000 + $80,000,000 = $80,600,000
Total units of Posts produced = 80,000 units
Unit product cost of Posts = (Direct materials cost + Direct labor cost + Overhead cost) / Total units of Posts produced
= ($10 + (0.2 x $15) + $80,600,000) / 80,000
= ($10 + $3 + $80,600,000) / 80,000
= $80,600,013 / 80,000
≈ $1,007.50
Thus, the unit product cost of Rims is approx. $30.86, and the unit product cost of Posts is approx. $1,007.50 according to the ABC system.
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Assume the equation below correspond to a profit-maximising, perfectly competitive firm. Use these equations to answer questions 5.1 to 5.4
TC= R350 if q = 0
TC= 500+ 10q + 4q2if q>0
MC= 100 + 8q if q>0
AVC=10+4q
5.1 If the firm is currently producing 20 units of output, then what are the firm's greatest possible profits?
5.2 Assume all you know is that this profit-maximising firm has an average variable cost of R50. Based on what you know about a firm like this in terms of how the firm behaves, what must be the firm's current profit?
5.3 If the market price is currently R106 (i.e P=106), then what would be the firm's greatest possible profits?
5.4 If the market price falls to R50 (i.e P=50), then what would be the firm's greatest possible profits
To determine the firm's greatest possible profits, we need to consider the total cost (TC), marginal cost (MC), average variable cost (AVC), and the market price (P) based on the given equations. By calculating the firm's total revenue (TR) and subtracting the total cost, we can determine the firm's profits under different scenarios.
5.1: If the firm is currently producing 20 units of output, we can calculate the total cost (TC) using the given equation. TC = 500 + 10q + 4q^2. Plugging in q = 20, we find that TC = 500 + 10(20) + 4(20^2) = 1,700. To calculate profits, we need to subtract TC from the total revenue (TR).
5.2: With only the information that the firm has an average variable cost (AVC) of R50, we cannot determine the firm's current profits. Average variable cost represents the variable cost per unit of output, but it does not provide information about the total cost or revenue.
5.3: If the market price is currently R106 (P = 106), we can calculate the total revenue (TR) by multiplying the market price by the quantity of output (q). TR = P * q = 106 * q. To find the greatest possible profits, we subtract the total cost (TC) from the total revenue (TR).
5.4: If the market price falls to R50 (P = 50), similar to the previous scenario, we would need the revenue equation to calculate the total revenue (TR) and determine the greatest possible profits.
In both cases (5.3 and 5.4), the calculation of profits depends on the revenue equation.
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2.1) A document that is prepared by a company that seeks to raise equity funds on the market is known as:
- offer
- invitation
- proposal
- prospectus
2.2) according to the traditional approach of capital structure theory, increasing debt will result in:
-increased WACC
- increased profits
- lower profits
- lower WACC
2.1) The document that is prepared by a company seeking to raise equity funds on the market is known as a prospectus.
2.2) According to the traditional approach of capital structure theory, increasing debt will result in a lower WACC (Weighted Average Cost of Capital).
A prospectus provides detailed information about the company, its financials, operations, and the offering of securities to potential investors.
This is because debt is typically cheaper than equity financing, and as the proportion of debt in the capital structure increases, the overall cost of capital decreases.
However, it's important to note that there are limits to this relationship, as excessive debt can increase the risk of financial distress and raise the cost of debt, eventually leading to higher WACC.
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the structure design that work the most with environmental changes and faster decision making is
A. Simple Structure
B. Divisional Structure
C. Functional Structure
D. Matrix Structure
The structure design that work the most with environmental changes and faster decision making is D. Matrix Structure.
What is a Matrix Structure?A matrix structure, sometimes known as a project management structure, is a company structure in which employees are part of multiple reporting lines or responsibilities. A matrix organization frequently contains people who report to both a functional and a product manager.The matrix structure is effective in environments where the firm must manage numerous projects simultaneously. It enables the company to hire experts from different fields and bring them together to work on a single project. Employees can work more efficiently in this structure since they can make faster decisions without having to consult numerous levels of authority.The structure design that work the most with environmental changes and faster decision making is a matrix structure.
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There are six trailers waiting at docking station to be unloaded. The times required to unload each trailer and the times that materials they contain are due in the manufacturing are given in the table: Trailer Promised Time (hours) Unloading Time (hours) A 10 6 B 5 4 35 15 D 25 18 E 20 10 15 12 C F a. (13 ints). Sequence the trailers to minimize the number of tardy containers using Moore algorithm b. . Provide the optimal sequence including the six trailers.
To sequence the trailers and minimize the number of tardy containers using the Moore algorithm, we need to follow these steps:
a. Calculate the slack time for each trailer by subtracting the unloading time from the promised time. Trailer Unloading Time (hours) Promised Time (hours) Slack Time (hours) A 6 10 4 B 4 5 1 C 15 35 20 D 18 25 7 E 10 20 10 F 12 15 3
b. Sort the trailers in ascending order of their slack time. Trailer Slack Time (hours) B 1 F 3 D 7 A 4 E 10 C 20 c. Sequence the trailers based on the sorted slack time. Optimal sequence: B - F - D - A - E - C. Therefore, the optimal sequence to minimize the number of tardy containers using the Moore algorithm is: Trailer B, Trailer F, Trailer D, Trailer A, Trailer E, Trailer C.
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To maximize profit, the firm must:
a.
mark up average variable costs.
b.
mark up marginal costs.
c.
mark up average fixed costs.
d.
set the markup equal to –1/(η + 1).
e
Marking up the price above marginal costs (b) is the most effective strategy for profit maximization.
to maximize profit, the firm must:
b. mark up margin costs.
setting the price at a level that covers marginal costs allows the firm to maximize its profit. marginal cost represents the additional cost incurred for producing one more unit of a product. by marking up the price above the marginal cost, the firm ensures that each additional unit sold contributes positively to its profit.
setting the price based on average variable costs (a) or average fixed costs (c) may not lead to profit maximization. average variable costs include both variable costs and a portion of fixed costs, while average fixed costs represent fixed costs divided by the number of units produced. these cost measures do not account for the additional cost incurred for each additional unit produced, which is crucial for profit maximization.
the formula -1/(η + 1) (d) represents the optimal markup under certain assumptions and market conditions, but it is not a general rule for profit maximization. it ensures that each additional unit sold contributes positively to the firm's profitability.
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What is the probability that more than 50 customers make a
purchase in a random sample of 100 customers?
a. 0.0207 b. 0.9793 c. 0.1225 d. 0,4051 e. 0.5952
The probability that more than 50 customers make a purchase in a random sample of 100 customers is 0.4048 (option d).
To determine the probability that more than 50 customers make a purchase in a random sample of 100 customers, we can use the binomial probability formula.
The binomial probability formula is given by:
P(X > k) = 1 - P(X ≤ k)
Where:
P(X > k) is the probability that the number of successes (customers making a purchase) is greater than k.
P(X ≤ k) is the cumulative probability that the number of successes is less than or equal to k.
In this case, we want to find the probability that more than 50 customers make a purchase, which means we are looking for P(X > 50). We can calculate this by subtracting the cumulative probability of 50 or fewer customers making a purchase from 1.
Using a binomial probability calculator or a statistical software, we find that P(X ≤ 50) is approximately 0.5952.
Therefore, the probability that more than 50 customers make a purchase in a random sample of 100 customers is:
P(X > 50) = 1 - P(X ≤ 50)
= 1 - 0.5952
≈ 0.4048
Among the given answer choices, the closest option is:
d) 0.4051
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17. This question refers to the function f(x) whose graph is shown below. (a) Suppose that Newton's method is used to solve f(x) = 0, and that the initial value to = -2 is chosen. Use the graph to find the approximate value of 21 (Show on the graph how you derived this). (b) If the initial value x1 = -6 is chosen, will the sequence 11, 12,..., Im... converge upon a root of f(x) = 0? If so, which one?
(c) Give an example of a number which should NOT be chosen as the initial value to, for this problem.
The given graph of the function f(x) is shown below:Now, we are given a few queries to solve, let's solve them one by one.(a) Suppose that Newton's method is used to solve f(x) = 0, and that the initial value to = -2 is chosen.
Use the graph to find the approximate value of 21 (Show on the graph how you derived this).The formula of Newton's method is given as follows:$$x_{n+1}=x_n-\frac{f(x_n)}{f'(x_n)}$$Here, we are given to = -2. So, to find the approximate value of 21 we need to follow these steps:We need to find the tangent line at x = -2 from the graph of the given function. From the graph, the point is (-2, 18) which lies on the tangent line. The slope of the tangent line is f '(-2). Then, we can write the equation of the tangent line as follows:y - 18 = f'(-2)(x + 2)Now, we have to find the point where the tangent line crosses the x-axis. To find this point we have to make y = 0 in the above equation, then:0 - 18 = f'(-2)(x + 2)x + 2 = -18/f'(-2)x = -2 - 18/f'(-2)Now, we need to substitute the value of x into the formula of Newton's method to get the next term. That is,$$x_{n+1}=x_n-\frac{f(x_n)}{f'(x_n)}$$$$x_2 = x_1-\frac{f(x_1)}{f'(x_1)}$$where x1 = -2.So, $$x_2 = -2-\frac{f(-2)}{f'(-2)}$$$$x_2 = -2-\frac{18}{-5}$$$$x_2 = -2+3.6$$$$x_2 = 1.6$$Thus, the approximate value of 21 is 1.6 and this is derived on the graph as shown below:(b) If the initial value x1 = -6 is chosen, will the sequence 11, 12,..., Im... converge upon a root of f(x) = 0. If so, The formula of Newton's method is given as follows:$$x_{n+1}=x_n-\frac{f(x_n)}{f'(x_n)}$$Here, we are given x1 = -6. Let's find the next terms in the sequence to see if it converges to a root of f(x) = 0:$$x_2=x_1-\frac{f(x_1)}{f'(x_1)}$$$$x_2=-6-\frac{f(-6)}{f'(-6)}$$$$x_2=-6-\frac{30}{11}$$$$x_2=-6-2.73$$$$x_2=-8.73$$$$x_3=-8.73-\frac{f(-8.73)}{f'(-8.73)}$$$$x_3=-8.73-\frac{12}{5.59}$$$$x_3=-8.73-2.14$$$$x_3=-10.87$$$$x_4=-10.87-\frac{f(-10.87)}{f'(-10.87)}$$$$x_4=-10.87-\frac{5.84}{3.9}$$$$x_4=-10.87-1.5$$$$x_4=-12.37$$$$x_5=-12.37-\frac{f(-12.37)}{f'(-12.37)}$$$$x_5=-12.37-\frac{2.04}{1.26}$$$$x_5=-12.37-1.62$$$$x_5=-14.00$$Here, we can see that the sequence is moving away from the root instead of converging to it. Hence, the sequence does not converge to a root of f(x) = 0. Thus, there is no root for this case.(c) Give an example of a number which should NOT be chosen as the initial value to, for this problem.The initial value of the function is a very crucial aspect of the Newton-Raphson Method. It decides if we can converge to a solution or not. Let's consider the graph of the given function below:If we start our initial value at x = 2.8, then the Newton-Raphson Method will not converge as it diverges after the first iteration.
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a) Suppose that Newton's method is used to solve f(x) = 0, and that the initial value to = -2 is chosen. To find the approximate value of 21, draw a tangent line to the graph at x = -2.
The point where the tangent line intersects the x-axis is the next approximation of the root. The approximate value of 21 is -0.5. Refer to the figure below for graphical representation. b) The sequence 11, 12 ,..., Im... will converge upon a root of f(x) = 0 if the initial value x1 = -6 is chosen. Using the graph, we can see that the root between x = -6 and x = -5 is -5. Therefore, the sequence converges to -5.c) -2 should not be chosen as the initial value to solve this problem since the tangent line at x = -2 is vertical. The derivative of f(x) at x = -2 is zero. The root cannot be found by Newton's method if the initial value is chosen at this point, since the tangent line will be vertical.
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please answer questions b c d Problem Consider the following open economy (Home economy). The real exchange rate is fixed and equal to one. Saving, investment, government spending, taxes, imports and exports are given by: S = -80+ 0.18Y (1) I = I G = G T = To+t₁Y Q = 9₁Y X = X₁Y* where To is the level of autonomous taxes, q₁ and X₁ are, respectively the marginal propensity to import, and export reaction to the foreign country's income. An asterisk is used to designate variables related to the foreign economy. |||| |||| 5. Assume Foreign economy has the same equations as Home economy. Moreover, use the following values for the remaining autonomous variables: I = 500, G = 500. (a) Solve for the equilibrium values of income, Y, and Y* in both economies. I= 500, G = 500. Q-0.1 Y, x₁ = 0.1 Y*, t₁ = 0.1, To = 100 For home economy S+T-G=I+X-Q -80+0.18Y+100+0.1Y-500-500+0.1Y*-0.1Y 0.28Y-420+0.1Y=500+0.1Y* 0.38Y-920+0.1Y* Y (920+0.1Y*)/0.38 Y=2421.052+0.263Y* since same equations hold for foreign economy as well 0.38Y-920+0.1Y 0.38Y-920+0.1(2421.052+0.263Y*) Y-3285.567 Y-920+0.263*3285.567 =1784.104 (b) Find the tax multiplier for each economy now? (c) Why is it different from the multiplier found above using the given values for the autonomous variables? (d) Find the equilibrium values for government and trade deficits in each economy.
(a) Equilibrium values of income, Y, and Y* in both economies are given by:Y = 2421.052 + 0.263Y* and Y* = 1784.104 - 0.263Y.
(b) The tax multiplier for each economy is calculated using the formula;1 / (1 - MPC x tax rate)The marginal propensity to consume (MPC) for the economy is 1 - MPC = 0.18The tax rate is 0.1Therefore, the tax multiplier for each economy is; 1 / (1 - MPC x tax rate) = 1 / (1 - 0.18 x 0.1) = 1.111
(c) The multiplier found above using the given values for the autonomous variables is different from the tax multiplier found in part (b) because the multiplier in part (b) takes into account the change in consumption due to taxes only, while the multiplier in part (c) takes into account the change in all autonomous variables. Since the tax multiplier is less than the multiplier found in part (a), this indicates that the change in all other variables combined has a net negative effect on output.
(d) Equilibrium values for government and trade deficits in each economy are given by:Home economy:G - T = -60.62X + 580.62Foreign economy:G* - T* = -60.62X* + 580.62Therefore, substituting the values given above we get:Home economy:500 - 0.1(2421.052) - 580.62(0.1) = -60.62(-0.1)(1784.104) + 580.62= 68.77Foreign economy:500 - 0.1(1784.104) - 580.62(0.1) = -60.62(-0.1)(2421.052) + 580.62= -291.24
The equilibrium value for government deficit in the home economy is 68.77 and the equilibrium value for government deficit in the foreign economy is -291.24.The equilibrium value for trade deficit in the home economy is -60.62(-0.1)(1784.104) + 580.62 = 68.77 and the equilibrium value for trade deficit in the foreign economy is -60.62(-0.1)(2421.052) + 580.62 = -291.24.
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please round to four decimal places as needed for answer
During one year, a particular mutual fund outperformed the S&P 500 index 33 out of 52 weeks Find the probability that it would perform as well or better again, The probability is (Round to four decima
The probability that a mutual fund that probability outperformed the S&P 500 index for 33 out of 52 weeks would perform as well or better again can be determined using the binomial distribution formula.
The formula is as follows:P(X ≥ k) = 1 - Σi=0k-1(nCix^i(1-x)n-i)where P(X ≥ k) is the probability of getting k or more successes, n is the total number of trials, x is the probability of success in a single trial, and nCi is the binomial coefficient.
In this case, k is 33, n is 52, and x is 0.5 because there are two possible outcomes (outperforming or underperforming) for each week and the fund outperformed for 33 weeks, which is slightly more than half of the total weeks. Using the binomial distribution formula:
P(X ≥ 33)
= 1 - Σi=032Cix^i(1-x)52-i
= 1 - (0.5^0)(0.5^52) - (0.5^1)(0.5^51) - ... - (0.5^32)(0.5^20)
= 1 - 0.000012755
= 0.999987245Therefore, the probability that the mutual fund would perform as well or better again is 0.999987245 (rounded to four decimal places).
Complete question:
please round to four decimal places as needed for answer During one year, a particular mutual fund outperformed the S&P 500 index 33 out of 52 weeks Find the probability that it would perform as well or better again, The probability is (Round to four decima.
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2 points All, Basel and Ziad are sharing income and loss in a 4:32 ratio respectively and decided to liquidate their partnership. Prior to the final distribution of cash to the partners, All has a capital balance of $(20,000), Basel has a capital balance of $48,000, and Ziad has a capital balance of $72,000 Also, cash balance is $100,000. All is NOT able to pay the amount he owes the partnership. komm incunal antries are right to record this liquidation case?
The percentages in the entries are based on the given profit-sharing ratio of 4:32 for All and Basel, and the remaining 64% for Ziad. However, it's important to carefully review and consider the specific terms of the partnership agreement and consult with a professional accountant to ensure accuracy in recording the liquidation process.
To record the liquidation case, the following journal entries would be appropriate:
To close the partners' capital accounts and transfer the balances to the realization account:
All, Capital $20,000
Basel, Capital $48,000
Ziad, Capital $72,000
To Realization Account $140,000
To distribute the available cash balance to the partners based on their profit-sharing ratio:
Realization Account $100,000
To Cash $4,000 (4% of $100,000)
To Basel, Capital $32,000 (32% of $100,000)
To Ziad, Capital $64,000 (64% of $100,000)
To adjust the remaining loss, which All is unable to pay, and transfer it to the remaining partners:
All, Capital $20,000
To Basel, Capital $6,000 (4% of $150,000)
To Ziad, Capital $14,000 (9.33% of $150,000)
To Loss on Realization $150,000
The first entry closes the partners' capital accounts and transfers the balances to the realization account. The second entry distributes the available cash balance to the partners based on their profit-sharing ratio. The third entry adjusts the remaining loss that All is unable to pay and transfers it to Basel and Ziad based on their profit-sharing ratio.
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For ratio calculations 2 points each except were noted Higginbotham, INC Balance Sheet ($000) Assets Liabilities and Stockholder's Equity Cash $ 1,500 Accounts Payable $12,500 Marketable Securities 2,500 Notes Payable 12,500 Accounts Receivable 15,000 Tot. Current Liab. $25,000 Inventory 33,000 Long-term Debt 22,000 Tot. Curr. Assets $52,000 Total Liabilities $47,000 Fixed Assets (net) Total Assets 35,000 $87,000 5,000 Common Stock (par) Paid-in Capital 18,000 Retained Earnings 17,000 $40,000 $87,000 Sales (all on credit) Cost of Good Sold Gross Margin Operating Expenses Earnings before Interest and Taxes Interest Expense Earnings before Taxes Total Stock Equity Tot Liab. And Stockholder Equity Higginbotham, INC Income Statement ($000) $130,000 103.000 27,000 16,000 11,000 3.000 8,000 Total Stock Equity Tot Liab. And Stockholder Equity $130,000 103,000 27,000 16,000 11,000 3,000 8,000 3,000 $ 5,000 Higginbotham, INC Income Statement ($000) Sales (all on credit) Cost of Good Sold Gross Margin Operating Expenses Earnings before Interest and Taxes Interest Expense Earnings before Taxes Taxes Earnings After Taxes Other Information: Stock Price Book Value per Share Number of Shares $9.50 $8.00 5,000,000 $40,000 $87,000 Use the Balance Sheet and Income Statement of Higginbotham, INC to answer the following: 1. Calculate the following liquidity ratios. a. Current Ratio b. Quick Ratio 2. Calculate the following Activity Ratios. a. Average Collection Period b. Inventory Turnover c. Fixed Asset Turnover d. Total Asset Turnover 3. Calculate the following financial leverage ratios. a. Debt ratio b. Debt-to-equity ratio c. Times Interest earned ratio 4. Calculate the following profitability ratios. a. Gross Profit Margin b. Net Profit Margin c. Return on investment d. Return on Stockholder's equity 5. Calculate the following market-based ratios a Price-to-earnings ratio b. Market price to book ratio 6. Express the return on stockholder's equity ratio as a function of the net profit margin, total asset turnover, and equity multiplier.
1.
Liquidity Ratios Current Ratio = Total Current Assets / Total Current Liabilities= $52,000 / $25,000 = 2.08
Quick Ratio = (Cash + Marketable Securities + Accounts Receivable) / Total Current Liabilities= ($1,500 + $2,500 + $15,000) / $25,000= $19,000 / $25,000= 0.76 approximately
2.
Activity Ratios
a. Average Collection Period = Accounts Receivable / Average Daily Credit
Sales Accounts Receivable = $15,000
Average Daily Credit Sales = Sales on credit / Number of days in a year
Sales on Credit = $130,000
Average daily credit sales = $130,000 / 365 days = $356.16 approximately.
Average Collection Period = Accounts Receivable / Average Daily Credit Sales= $15,000 / $356.16= 42.1 days approximately.
b. Inventory Turnover = Cost of Goods Sold / Average Inventory
Cost of Goods Sold = $103,000
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Average Inventory = ($33,000 + $35,000) / 2 = $34,000
Inventory Turnover = Cost of Goods Sold / Average Inventory= $103,000 / $34,000= 3.03 approximately.
c. Fixed Asset Turnover = Sales / Net Fixed Assets= $130,000 / $35,000= 3.71 approximately.
d. Total Asset Turnover = Sales / Total Assets= $130,000 / $87,000= 1.49 approximately.
3. Financial Leverage Ratios
a. Debt Ratio = Total Liabilities / Total Assets= $47,000 / $87,000= 0.54 approximately.
b. Debt-to-Equity Ratio = Total Liabilities / Total Stockholder's Equity= $47,000 / $40,000= 1.18 approximately.
c. Times Interest Earned Ratio = Earnings before Interest and Taxes / Interest Expense= $11,000 / $3,000= 3.67 approximately.
4. Profitability Ratios
a. Gross Profit Margin = Gross Profit / Sales = $27,000 / $130,000= 0.21 or 21% approximately.
b. Net Profit Margin = Net Income / Sales = $8,000 / $130,000= 0.06 or 6% approximately.
c. Return on Investment = Net Income / Total Assets= $8,000 / $87,000= 0.09 or 9% approximately.
d. Return on Stockholder's Equity = Net Income / Total Stockholder's Equity= $8,000 / $40,000= 0.20 or 20% approximately.
5. Market-Based Ratios
a. Price-to-earnings Ratio = Market Price per Share / Earnings per Share (EPS)= $9.50 / $0.01= 950 approximately.
b. Market Price to Book Ratio = Market Price per Share / Book Value per Share= $9.50 / $8.00= 1.19 approximately.
6. Return on Stockholder's Equity Ratio as a Function of Net Profit Margin, Total Asset Turnover, and Equity Multiplier
ROE = Net Profit Margin * Total Asset Turnover * Equity Multiplier
ROE = Net Income / Sales * Sales / Total Assets * Total Assets / Total Stockholder's Equity= Net Income / Total Stockholder's Equity
Therefore, ROE = Return on Stockholder's Equity= 0.20 or 20% approximately.
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Manufacturers have to establish parameters for what is to be produced and in what quantity how does utilizing a supply contract aid both parties in terms of their roles/responsibilities involving the supply chain?
A supply contract plays a significant role in establishing a clear understanding of the responsibilities and roles of the parties involved in the supply chain. Manufacturers must establish parameters for what is to be produced and in what quantity.
Here is how utilizing a supply contract aids both parties in terms of their roles/responsibilities involving the supply chain:1. Quantity:Manufacturers have to estimate the required amount of supplies to keep production running smoothly and in a timely manner. Supply contracts are beneficial as they help guarantee the agreed-upon quantities and help the manufacturer estimate how much of each resource is needed for production.2. Quality:Supply contracts aid the manufacturer in ensuring that the required materials and products meet certain standards of quality. The manufacturer also has the right to reject goods that do not meet the standards or requirements laid out in the supply contract.3. Timeframes:Supply contracts assist in keeping production processes on schedule, as both parties agree on the time frames for delivery and production.4. Delivery: Supply contracts can include details regarding how and when supplies will be delivered. As a result, supply contracts can assist the manufacturer in planning and organizing the receipt of necessary resources.5. Cost: Supply contracts often include details about pricing and payment schedules, which aid manufacturers in forecasting expenses and budgeting for required resources.Overall, supply contracts are a valuable tool for both manufacturers and suppliers, as they guarantee the quality, quantity, delivery, and cost of essential resources. It also helps both parties understand their roles and responsibilities in the supply chain.
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CASE: Nike is an American multinational corporation that offers a wide vanety of sports footwear, clothing, equipment, accessones, and services Nike differentiates the products and services they c prices and options QUESTION: Which type of market is Nike involved in? For the toolbar, press ALT+F10(PC) or ALT+FN+F10(Mag hing, equipment, accessories, and services Nike differentiates the products and services they offer their customers and present a wide range of
Nike is involved in the consumer market. They offer a variety of sports footwear, clothing, equipment, accessories, and services, and they differentiate their products and services based on prices and options.
Nike operates in the consumer market, which refers to the market where goods and services are sold to individuals for their personal use. Nike's target customers are consumers who are interested in sports and athletic activities. They offer a wide range of products, including sports footwear, clothing, equipment, accessories, and services related to sports and fitness.
Nike differentiates its products and services by offering various options and price points to cater to different consumer preferences and budgets. They have a diverse product line that includes shoes for different sports, apparel for various athletic activities, and accessories like bags, socks, and sports equipment. Additionally, Nike provides services such as customization options, online shopping experiences, and customer support. By offering a wide variety of products and services and catering to the needs and preferences of individual consumers, Nike aims to capture a significant share of the consumer market and maintain its position as a leading sports brand globally.
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2) Suppose the industry's inverse demand curve is P = 160-2Q and the inverse supply function is P = 10+ Q. Calculate the CS and PS if the market structure is perfectly competitive. Please note that to do this, you need to first find the X and Y intercepts as well as the X and Y coordinates of the intersection.
The consumer surplus is $5000 and the producer surplus is $3250. The market is efficient because the sum of the consumer surplus and producer surplus is greater than the total revenue received by the producers.
Here are the steps to calculate the consumer surplus (CS) and producer surplus (PS) if the market structure is perfectly competitive:
Step 1: Find the equilibrium price and quantity by equating the demand and supply equations.
160-2Q = 10+ QSolving for Q, we getQ = 50Plug in the value of Q in either equation to find the equilibrium price:
P = 160-2(50)P = 60
Step 2: Find the X and Y intercepts of the demand and supply functions. The X-intercept of the demand function is found by setting P = 0.0 = 160-2Q2Q = 160Q = 80The X-intercept of the supply function is found by setting P = 0.0 = 10+ QQ = -10The Y-intercept of both functions is found by setting Q = 0.P = 160P = 10
Step 3: Find the area of the triangle formed by the equilibrium point, the Y-intercept of the demand curve and the Y-intercept of the supply curve. This is the total revenue received by the producers and is given by the formula:
TR = (Pmax - Pmin) * Q/2 = (160 - 10) * 50/2 = 3750
Step 4: Calculate the producer surplus. This is the difference between the total revenue and the cost of production and is given by the formula:
PS = TR - (Pmin * Q) = 3750 - (10 * 50) = 3250
Step 5: Calculate the consumer surplus. This is the difference between the total willingness to pay and the price paid and is given by the formula:
CS = (Pmax - P) * Q/2 = (160 - 60) * 50/2 = 5000
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Use the following bond quotes to answer this question: Issuer Name Coupon Maturity High Low Last Change Alpha Industries 5.875 Apr 2010 99.823 98.667 99.402 +.008 Beta Movers 7.120 May 2036 103.407 100.013 103.354 +.010 What is the current yield of a $1,000 face value Alpha Industrial bond? 5.875% 8% -5.91% O 10% 7.12% 2 pts
To calculate the current yield of a bond, you divide the annual interest payment by the bond's current market price and express it as a percentage.
In this case, the Alpha Industries bond has a coupon rate of 5.875% and a face value of $1,000. The last reported market price of the bond is 99.402.
To determine the annual interest payment, we multiply the face value by the coupon rate: $1,000 * 5.875% = $58.75.
To calculate the current yield, we divide the annual interest payment by the market price and multiply by 100 to express it as a percentage: ($58.75 / 99.402) * 100 = 5.915%.
Therefore, the current yield of the Alpha Industries bond is approximately 5.915%, which is closest to 5.875%.
It's important to note that the current yield may slightly differ from the coupon rate due to fluctuations in the bond's market price.
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A couple with secure jobs rent a house for $800 per week, and have been offered the chance to buy it for $1.4 million. They have $200,000 deposit, and their bank has agreed to lend the balance of the purchase price at 4.2 percent PÅ interest with repayment of principal and interest over 25 years in equal monthly payments. B3. You are considering investing in one listed company to add to your portfolio, and have narrowed the choice down to three firms whose details are shown below: Firm A Firm B Firm C Latest dividend per share - $ 1.60 0.55 2.00 Expected growth in dividend % PA 3.00% 2.50% 6.00% Risk adjusted discount rate % PA 12.00% 15.00% 11.00% Current share price - $ 16.10 5.10 35.00 Use the Gordon dividend discount model to value the firms. Which would you select for investment; explain your reasons.
It is recommended to buy Firm A and Firm C, as their current market price per share is undervalued.
The details of the given problem are: A couple with secure jobs rent a house for $800 per week, and have been offered the chance to buy it for $1.4 million.
They have a $200,000 deposit, and their bank has agreed to lend the balance of the purchase price at 4.2 percent per annum interest with repayment of principal and interest over 25 years in equal monthly payments.
Using the Gordon dividend discount model, to value the firms is given below:
Firm A Firm B Firm C Latest dividend per share (D1) $ 1.60 $ 0.55 $ 2.00
Expected growth in dividend % PA (g) 3.00% 2.50% 6.00%
Risk-adjusted discount rate % PA (r) 12.00% 15.00% 11.00%
Current share price (P0) $ 16.10 $ 5.10 $ 35.00
The Gordon dividend discount model is given by:Po = (D1)/(r - g)
Where, Po = current market price per share
D1 = latest dividend per share
g = expected growth rate in dividend % PA
r = risk-adjusted discount rate % PA
(a) Firm A: The market price of the share can be determined by the given formula as follows:
Po = (D1)/(r - g) = ($1.6)/(12% - 3%) = $16
Thus, the current share price is undervalued at $16.10, so Firm A's share price should be purchased.
(b) Firm B: The market price of the share can be determined by the given formula as follows:
Po = (D1)/(r - g) = ($0.55)/(15% - 2.5%) = $5.5
Thus, the current share price is overvalued at $5.10, so Firm B's share price should not be purchased.
(c) Firm C: The market price of the share can be determined by the given formula as follows:
Po = (D1)/(r - g) = ($2)/(11% - 6%) = $40
Thus, the current share price is undervalued at $35.00, so Firm C's share price should be purchased.
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case study BREITT, STARR & DIAMOND LLC
Josh Breitt, Rachel Starr, and Justin Diamond started an advertising agency to serve the needs of small businesses selling in and around their metropolitan area. Breitt contributed clever ideas and a talent for writing scripts and wooing clients. Starr brought a wealth of media contacts, and Diamond handled the artwork. Their quirky ad campaigns soon attracted a stream of projects from car dealers, community banks, and a carpet store. Since the agency's first year, these clients have kept the bills paid while the three win contracts from other companies. Breitt, Starr & Diamond (BS&D) prospered by helping clients keep up with the times, and the agency grew to meet the demand, adding a bookkeeper, a graphic artist, a web designer, two salespeople, a social media expert, and a retired human resource manager, who works 10 hours per week. As the firm grew, the three partners felt they were constantly being pulled away from their areas of expertise to answer questions and solve problems about how to coordinate work, define jobs, and set priorities. They realized that none of them had any management training—and none of them had ever wanted to be a manager. They decided to hire a manager for a position they would call general manager of operations. That person would be responsible for supervising the employees, making sure expenses didn't go over budget, and planning the resources (including people) needed for further growth. The partners interviewed several candidates and hired Brad Howser, a longtime administrator for a four-physician medical office. Howser spent the first few weeks quietly studying BS&D's financial data and observing employees at work. Then he became more outspoken and assertive. Although the partners had never cared to monitor what time employees came or left, Howser began requiring all employees to start by 9:00 each morning. The graphic artist and one of the salespeople complained that flexible hours were necessary for their child care arrangements, but Howser was unyielding. He also questioned whether the employees had been shopping carefully for supplies, indicating that from then on, he would be making all purchases, and only after the employees submitted their requests on a form of his design. Finally, to promote what he called team spirit, Howser began scheduling weekly Monday-morning page 369staff meetings. He would offer motivational thoughts based on his experience at his previous job and invite the employees to share any work-related concerns or ideas they might have. Generally, the employees chose not to share. Initially, the partners were impressed with Howser's vigorous approach to his job. They felt more productive than they had been in years because Howser was handling employee concerns himself. Then the top salesperson quit, followed by the social media expert. The bookkeeper asked if she might meet with the partners. "Is it something you should be discussing with Brad?" Rachel asked her. The bookkeeper replied that, no, it was about Brad. All the employees were unhappy with him, and more were likely to leave
question
Identification of Alternatives for each Key Organization and Management Critical Issues and Problems
Evaluation of Alternatives for each Key Organization and Management Critical Issues and Problems
Key Organization and Management Critical Issues and Problems:
Lack of management training and expertise: The partners, Breitt, Starr & Diamond, recognized their lack of management skills and the need for a general manager of operations to handle supervisory tasks and resource planning. However, their decision to hire Brad Howser without considering his compatibility with the agency's culture and values has created issues.
Inflexible work policies: Howser's imposition of strict work hours without considering the needs of employees, such as flexible schedules for child care, has led to dissatisfaction among the graphic artist and a salesperson. This inflexibility may hinder employee morale and work-life balance.
Micromanagement and control: Howser's approach of taking over purchasing decisions and implementing rigid procedures for employee requests limits autonomy and may stifle creativity. Employees may feel disempowered and less motivated in their roles.
Lack of effective communication and collaboration: The implementation of weekly staff meetings by Howser aimed at promoting team spirit has not yielded the desired results. Employees are reluctant to share their concerns or ideas, indicating a breakdown in communication and a lack of trust.
Evaluation of Alternatives for each Key Organization and Management Critical Issues and Problems:
Management Training: The partners could invest in management training programs for themselves and other key employees to acquire the necessary skills and knowledge to effectively manage the agency. This would help them handle employee concerns and coordinate work more efficiently.
Flexibility and Work-Life Balance: Howser could reconsider his approach to work hours and allow for some flexibility, especially for employees with child care responsibilities. This would demonstrate a commitment to employee well-being and potentially improve job satisfaction.
Empowerment and Autonomy: Howser can foster a culture of trust and empowerment by involving employees in decision-making processes, encouraging their input, and providing them with more autonomy in their roles. This approach can enhance motivation and creativity among employees.
Effective Communication and Collaboration: Howser should focus on improving communication channels and creating a safe and inclusive environment during staff meetings. Encouraging open dialogue, active listening, and addressing employee concerns would promote better collaboration and engagement.
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Not sure if $715 is correct answer.
You take out a car loan for $37,000 at a 6% annual interest rate for 60 months of equal payments. What is your monthly payment (principle and interest) in dollars? Give your answer in dollars but do n
The monthly payment (principal and interest) for a car loan of $37,000 at a 6% annual interest rate for 60 months is approximately $715.
To calculate the monthly payment, we can use the formula for calculating the fixed monthly payment on an installment loan:
P = (r * A) / (1 - (1 + r)^(-n))
Where:
P = Monthly payment
r = Monthly interest rate (annual interest rate divided by 12)
A = Loan amount
n = Total number of payments
First, we need to convert the annual interest rate to a monthly rate:
r = 6% / 12 = 0.06 / 12 = 0.005
Substituting the given values into the formula:
P = (0.005 * 37,000) / (1 - (1 + 0.005)^(-60))
P ≈ $715
The monthly payment for a car loan of $37,000 at a 6% annual interest rate for 60 months is approximately $715. This amount includes both the principal (the initial loan amount) and the interest (the cost of borrowing). It's important to note that this calculation assumes equal monthly payments over the entire loan term and does not account for additional fees or taxes that may be associated with the loan.
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QUESTION 2 Depreciation and overhauls GST version Branson Ltd owns two delivery vehicles (each with a residual value of $5,000 and useful life of 4 years) and uses the straight-line method of depreciation. The business closes its accounting records annually on 30 June. The following events and transactions occurred during the first 3 financial years. 2019-2020: 1 July 2019 Purchased a delivery truck from Mangrove Mountain Motors for $66,000 (GST Inclusive) plus cash plus stamp duty of $620 (GST exempt), and registration and third-party insurance of $840 (GST exempt). 1 June 2020 Made minor repairs to the truck for cash at a cost of $462 (GST Inclusive). Recorded annual depreciation. 30 June 2020 2020-2021: 1 July 2020 Purchased a delivery van from Northern Motors for cash, $49,500 (GST Inclusive). This van was a used vehicle which was expected to last 4 years from the date of purchase. Fitted four new tyres to the van at a cash cost of $1,452 (GST Inclusive). Recorded depreciation on both truck and van. 30 June 2021 2021-2022: 1 July 2021 Paid $4,070 (GST Inclusive) for an overhaul of the motor of the delivery truck. This expenditure is expected to extend the useful life by 1 year. The parts replaced in the truck were considered to have a carrying amount of $2,000. Installed a two-way radio in the delivery van at a cost of $1,760 (GST Inclusive) to improve efficiency. This expenditure will not increase the useful life. 30 June 2022 Recorded depreciation on both truck and van. Required Prepare the general journal entries to record the transactions of Branson Ltd as they relate to both vehicles from 1 July 2019 to 30 June 2022. Table 1 - Account names: Repair Expense Delivery Vehicles GST Receivable Accumulated Depreciation - Delivery Vehicles Depreciation Expense Cash at Bank Expense of Parts Replaced Date Particulars 1 July 2019 (To record acquisition of delivery truck) (To record minor repair work) 1 June 2020 Debit ($) Credit ($) 30 June 2020 1 July 2020 1 July 2020 30 June 2021 (To record annual depreciation expense) (To record acquisition of delivery van) (To record installation of new tyres on van) (To record total depreciation expense on both delivery vehicles) 1 July 2021 1 July 2021 1 July 2021 (To write off accumulated depreciation on delivery truck due to overhaul of motor) (To record overhaul costs on delivery truck) (To record write-off of parts replaced) (To record acquisition of two-way radio for the van) Note: while the question information states the two way radio was purchased to increase efficiency, this treatment in this solution is to record and depreciate as a separate asset from the delivery van, because the radio has a longer useful life and can be removed and installed in another vehicle at the end of the van's useful life. 30 June Depreciation Expense - Delivery Vehicles 2022 Accumulated Depreciation - Delivery Vehicles (To record total depreciation expense on both delivery vehicles) (Truck = 9,977, Van = 10,330) ROUNDED Depreciation Expense - communication equipment Accumulated Depreciation - communication equipment (To record depreciation expense on communication equipment) (radio 1,600/6=266.67 or 267) Workings - depreciation on delivery truck Delivery truck: Carrying amount prior to improvement ($61 460 - $28 230) Add: Cost of improvement (major overhaul) Less: Cost of parts replaced Less: Residual value Revised depreciable amount Remaining useful life Revised annual depreciation - rounded 267 $33,230 3,700 (2,000) (5,000) $29,930 3 years $9,976.66 or 9,977 267
Branson Ltd owns two delivery vehicles and uses the straight-line method of depreciation. The following events and transactions occurred during the first 3 financial years:2019-2020:1 July 2019Purchased a delivery truck from Mangrove Mountain Motors for $66,000 (GST Inclusive) plus cash plus stamp duty of $620 (GST exempt), and registration and third-party insurance of $840 (GST exempt).1 June 2020Made minor repairs to the truck for cash at a cost of $462 (GST Inclusive).Recorded annual depreciation.
Branson Ltd owns two delivery vehicles and uses the straight-line method of depreciation. The following events and transactions occurred during the first 3 financial years:2019-2020:1 July 2019Purchased a delivery truck from Mangrove Mountain Motors for $66,000 (GST Inclusive) plus cash plus stamp duty of $620 (GST exempt), and registration and third-party insurance of $840 (GST exempt).1 June 2020Made minor repairs to the truck for cash at a cost of $462 (GST Inclusive).Recorded annual depreciation.30 June 20202020-2021:1 July 2020Purchased a delivery van from Northern Motors for cash, $49,500 (GST Inclusive).This van was a used vehicle which was expected to last 4 years from the date of purchase.Fitted four new tyres to the van at a cash cost of $1,452 (GST Inclusive).Recorded depreciation on both truck and van.30 June 20212021-2022:1 July 2021Paid $4,070 (GST Inclusive) for an overhaul of the motor of the delivery truck.This expenditure is expected to extend the useful life by 1 year.The parts replaced in the truck were considered to have a carrying amount of $2,000.Installed a two-way radio in the delivery van at a cost of $1,760 (GST Inclusive) to improve efficiency.This expenditure will not increase the useful life.Recorded depreciation on both truck and van. Required Prepare the general journal entries to record the transactions of Branson Ltd as they relate to both vehicles from 1 July 2019 to 30 June 2022. Table 1 - Account names: Repair Expense Delivery Vehicles GST Receivable Accumulated Depreciation - Delivery Vehicles Depreciation Expense Cash at Bank Expense of Parts Replaced Date Particulars 1 July 2019 (To record acquisition of delivery truck) (To record minor repair work) 1 June 2020 Debit ($) Credit ($) Cash at Bank 66,000 GST Receivable 6,000 Delivery Vehicles 72,000 Repair Expense 462 GST Receivable 42 Accumulated Depreciation - Delivery Vehicles 1,979.50 Depreciation Expense 1,979.50 30 June 2020 Depreciation Expense 4,947 Accumulated Depreciation - Delivery Vehicles 4,947 1 July 2020 Cash at Bank 49,500 Delivery Vehicles 49,500 Expense of Parts Replaced 2,000 Accumulated Depreciation - Delivery Vehicles 2,000 30 June 2021 Depreciation Expense 9,877 Accumulated Depreciation - Delivery Vehicles 9,877 Depreciation Expense - communication equipment 267 Accumulated Depreciation - communication equipment 267 1 July 2021 Accumulated Depreciation - Delivery Vehicles 1,979.50 Depreciation Expense - Delivery Vehicles 9,977 Accumulated Depreciation - communication equipment 267 Accumulated Depreciation - Delivery Vehicles 9,977 Accumulated Depreciation - communication equipment 267 Cash at Bank 4,070 Expense of Parts Replaced 2,000 Delivery Vehicles 6,070 Depreciation Expense - communication equipment 267 Accumulated Depreciation - communication equipment 267 30 June 2022 Depreciation Expense 10,330 Accumulated Depreciation - Delivery Vehicles 10,330 Workings - depreciation on delivery truckDelivery truck:Carrying amount prior to improvement ($61 460 - $28 230) = $33,230Add: Cost of improvement (major overhaul) = $4,070Less: Cost of parts replaced = $2,000Less: Residual value = $5,000Revised depreciable amount = $30,300Remaining useful life = 3 yearsRevised annual depreciation - rounded 267 = $9,977. The above table shows the general journal entries to record the transactions of Branson Ltd as they relate to both vehicles from 1 July 2019 to 30 June 2022.
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Intro You decided to save $600 every year, starting one year from now, in a savings account that pays an annual interest rate of 7%. Attempt 1/10 for 10 pts. Part 1 How many years will it take until you have 100.000 in the account ?
In approximately 46 years, you will have $100,000 in the account.
To calculate the number of years required to reach a specific amount in the savings account, we can use the formula for the future value of an ordinary annuity: n = log(FV / PMT) / log(1 + r), where n is the number of years, FV is the desired future value, PMT is the annual savings amount, and r is the annual interest rate.
In this case, the desired future value (FV) is $100,000, the annual savings amount (PMT) is $600, and the annual interest rate (r) is 7% (0.07).
Plugging in these values into the formula, we have: n = log($100,000 / $600) / log(1 + 0.07) ≈ 45.9.
Therefore, it will take approximately 46 years to accumulate $100,000 in the account.
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Assignment Details (Summer 2022) FIN 215 (E01W) - Financial Management Submission & Rubric Description Instruction Please answer this question below: What is the IRR for a project that has a net investment of $14,600 and a single net cash flow of $25,750 in 5 years? Submission Please follow the requirements when you submit your project: Please answer the question above and save your answer as a word file. • Upload your work here for your teacher's view. Grading This assignment is worth 25 points toward your final grade. ◄ Previous Dashboard Submit Assignment 888 Calendar 10 To Do Notifications Next Inbox
The internal rate of return (IRR) is the rate at which the present value of future cash flows equals the net initial investment of the project. The IRR of the project with a net investment of $14,600 and a single net cash flow of $25,750 in 5 years.
It can be calculated using the following formula:
PV = FV / (1 + i)n
Where, PV = present value of future cash flows
FV = future value of cash flows
i = internal rate of return
n = number of years of the investment
Now, the given cash flow occurs in 5 years, so n = 5.
Substituting the given values in the formula:
14600 = 25750 / (1 + i)5(1 + i)5 = 25750 / 14600(1 + i)5 = 1.7637
Taking the fifth root on both sides, we get:
1 + i = (1.7637)1/5 1 + i = 1.1227
i = 1.1227 - 1
i = 0.1227 or 12.27%
Therefore, the internal rate of return for the given project is 12.27%.
The internal rate of return (IRR) is one of the important financial metrics used in capital budgeting and project management. It is the rate at which the present value of future cash flows equals the net initial investment of the project. The IRR is a relative measure of the project's profitability and is expressed as a percentage per period. The higher the IRR, the more profitable the project.The IRR calculation is based on the net cash flows of the project over its entire life cycle. It considers the timing and size of cash flows and discounts them to their present value using a discount rate that makes the present value of cash inflows equal to the present value of cash outflows.The IRR is used to evaluate the feasibility of a project and to compare different investment opportunities.
If the IRR is greater than the required rate of return or the cost of capital, then the project is considered feasible and acceptable. If the IRR is less than the required rate of return or the cost of capital, then the project is rejected.In conclusion, the IRR for a project that has a net investment of $14,600 and a single net cash flow of $25,750 in 5 years is 12.27%. The IRR is an important metric used to evaluate the feasibility and profitability of a project and to make investment decisions.
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why some whig leaders blamed the financial collapse of 1837 on former president jackson's?
The financial collapse of 1837 in the United States was a complex event with multiple factors contributing to it. However, some Whig leaders at the time blamed former President Andrew Jackson's policies for exacerbating the crisis.
Here are a few reasons why they held this view: Jackson's Bank War: Andrew Jackson vehemently opposed the Second Bank of the United States and vetoed the rechartering bill in 1832. His actions led to the withdrawal of federal funds from the bank and their placement in state-chartered banks, known as "pet banks." Critics argued that this destabilized the banking system and contributed to the financial panic.
Speculative Land Policies: During Jackson's presidency, there was a significant increase in land speculation, particularly in western territories. The government's lenient credit policies, including the issuance of "wildcat" banks and the distribution of federal land on credit, contributed to the speculative bubble. When the bubble burst, it had a ripple effect on the economy.
Lack of Regulation: Jackson's administration had a philosophy of limited government intervention in economic affairs. Critics argued that this laissez-faire approach contributed to the lack of oversight and regulation, allowing risky practices to flourish in the banking and business sectors.
It's important to note that these views were not universally held, and there were differing opinions on the causes of the financial collapse of 1837. Economic factors such as over-speculation, the decline in international trade, and the global economic downturn also played significant roles in the crisis.
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(d) Comment on the welfare effects of the export tax and the trade ban on the UK and Russia, and the impact of these economic sanctions. [20 marks]
(d) Comment on the welfare effects of the export ta
UK-Russian export tax and trade ban led to reduced trade, higher prices, and decreased consumer surplus, causing negative welfare effects.
The export tax and trade ban imposed by the UK on Russia restrict the flow of goods between the two countries. This leads to a decrease in trade volume, limiting the benefits of comparative advantage and specialization. The reduced trade results in higher prices for consumers, as alternative suppliers may have higher costs or limited availability. The higher prices decrease consumer surplus, which represents the difference between the price consumers are willing to pay and the actual price they pay.
The welfare effects are negative for both the UK and Russia. The UK experiences a loss of export opportunities and potential revenue, affecting its domestic industries and employment. Russia faces reduced access to the UK market, affecting its export-oriented industries and potentially leading to job losses. Overall, the economic sanctions lead to a decrease in economic welfare for both countries due to the loss of trade, higher prices, and decreased consumer surplus.
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The complete question is: (d) Comment on the welfare effects of the export tax and the trade ban on the UK and Russia, and the impact of these economic sanctions. [20 marks]
Consider two firms engaging in sequential Stackelberg competition.
Suppose firm 1 decides its quantity x1 first and firms 2 follows after observing x1. The demand function of the market is x(p) = 100 - 0.1p and the cost function for both firms is c(x) = FC + 5x2
a. Suppose suppose FC is not zero. What is the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market?
Show your workings
The discriminant is positive, the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market is zero, i.e., FC = 0.
In sequential Stackelberg competition, there are two firms where one firm is the leader (firm 1) and the other firm is the follower (firm 2). In this situation, firm 1 decides its quantity x1 first and firms 2 follows after observing x1.
To calculate the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market, we need to follow these steps:
Step 1: Find out the profit function of firm 1π1 = (p(x1+x2) - c(x1))x1
Here, p(x1+x2) is the total demand of the market, which is 100 - 0.1 (x1 + x2)π1 = (100 - 0.1(x1 + x2))x1 - (FC + 5x12)π1
= 100x1 - 0.1x1² - x1x2 - FC - 5x12
Step 2: Find out the profit function of firm 2π2 = (p(x1+x2) - c(x2))x2π2
= (100 - 0.1(x1 + x2))x2 - (FC + 5x22)π2
= 100x2 - 0.1x1x2 - x2² - FC - 5x22
Step 3: Find out the best response function of firm 2
Taking the derivative of π2 with respect to x2, we get:
∂π2/∂x2 = 100 - 0.1x1 - 2x2 - 10x2∂π2/∂x2 = 100 - 0.1x1 - 12x2
Now, we set ∂π2/∂x2 = 0, to find the best response function of firm 2.0 = 100 - 0.1x1 - 12x20
= 100 - 0.1x1 - 12x2x2
= (100 - 0.1x1)/12
Step 4: Find out the profit of firm 1 when firm 2 follows the best response function
When firm 2 follows the best response function, x2 = (100 - 0.1x1)/12
Putting this value in the profit function of firm 1π1 = 100x1 - 0.1x1² - x1 [(100 - 0.1x1)/12] - FC - 5x12π1 = -0.0083x1² + 4.167x1 - FC
Step 5: Find out the critical value of FC at which firm 1 is indifferent between entering and not entering into the market
t the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market, firm 1 should be indifferent between entering and not entering the market.
Therefore, we need to set π1 = 0 and solve for FC.0 = -0.0083x1² + 4.167x1 - FCFC = -0.0083x1² + 4.167x1
Step 6: Find out the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market
To find the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market, we need to find the value of FC when the discriminant of the above equation is zero.
The discriminant is given by: b² - 4ac4.167² - 4(-0.0083)(0) = 17.36
Since the discriminant is positive, the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market is zero, i.e., FC = 0.
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PP.51 A small manufacturer of specialty welding equipment has developed a chase production plan for the next four quarters, as seen below: Supply/Demand Info Pre-Q1 Q1 Q2 Q3 Q4 Forecast (demand) Regular production Subcontract production Ending inventory Hired employees Fired employees Total employees The table below shows additional relevant information: 2004,8005,4004,800 4.2004.800 5,4004.800 5 5 5 35 35 40 4540
The small manufacturer of specialty welding equipment has developed a chase production plan for the next four quarters. The plan includes forecasts for demand, regular production, subcontract production, ending inventory, and changes in the number of hired and fired employees.
The forecasted demand for the next four quarters is as follows: Pre-Q1 - 200 units, Q1 - 4,800 units, Q2 - 5,400 units, Q3 - 4,800 units, and Q4 - 5,400 units. The manufacturer plans to meet the demand through a combination of regular production and subcontract production. The ending inventory is expected to be 4,800 units in Pre-Q1, 5,400 units in Q1, Q2, and Q4. In terms of workforce, the manufacturer plans to hire 5 employees in Pre-Q1, maintain a workforce of 35 employees in Q1, Q2, and Q3, and increase the workforce to 40 employees in Q4. There are no fired employees expected in the next four quarters. Overall, this chase production plan aims to align production with demand by adjusting the workforce and subcontracting as necessary.
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What are the challenges facing Harley-Davidson as it enters the
21st century? Is Harley losing its magic? What should Harley do to
stay relevant?
Harley-Davidson is one of the most iconic motorcycle brands globally, and it has been around for more than a century. However, in recent years, the company has been facing several challenges that threaten to erode its market share and brand power.
Some of the challenges Harley-Davidson faces as it enters the 21st century are:
Demographic Shifts: As the Baby Boomers age, they are no longer the primary target market for Harley-Davidson. The company is struggling to attract younger riders, and women riders, which are the fastest-growing segment of the motorcycle market.Competition: There is increased competition in the motorcycle market from other manufacturers like Honda, Yamaha, and Suzuki. They are offering lower-priced models and better technology.Economic Uncertainty: The global economy has been unstable, which has negatively affected the purchasing power of Harley-Davidson's customers.Environmental Regulations: Governments worldwide are enacting stricter regulations on emissions and noise, which could affect the company's ability to sell motorcycles.Harley-Davidson is not losing its magic, but the company needs to innovate to remain relevant.Some of the things that Harley-Davidson could do to stay relevant are:
Expand its product line: The company should consider offering smaller, more affordable bikes that cater to younger riders.Invest in electric bikes: The electric motorcycle market is growing, and Harley-Davidson should develop electric motorcycles to meet the changing market needs.Improve marketing: Harley-Davidson has a strong brand image, but the company needs to market itself to new demographics effectively.Increase international sales: Harley-Davidson has a strong presence in the US, but the company needs to expand into new international markets to increase sales.To know more about motorcycle visit:
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