Answer:
(a). $10000.
(b). Cost variance and Scheduled variance = -$5000.
(c). 0.66 and 0.66.
(d). task is behind schedule and the task is over budget.
Explanation:
(a). Earned value at the end of the first month can be calculated by using the formula below;
= A × B.
Where A = first month budget and B = rate at which the work is getting completed.
Earned value at the end of the first month = 15000× (2/3)
Earned value at the end of the first month = $10000
(b). The Cost Variance and the Schedule Variance can be calculated using the formula below;
Cost variance = Earned value at the end of the first month - monthly budget
Cost variance= 10000 - 15000
Cost variance = -$5000
Also, the Scheduled variance = Earned value at the end of the first month - monthly budget
= 10000 - 15000
= - $5000
(c). The cost Performance Index and the Schedule Performance Index can be calculated by using the formula below;
Cost performnace index = 10000 / 15000
= 0.66
Schedule performance index = the amount Earned / the amount that was planned.
Schedule performance index = 10000 / 15000
= 0.66.
(d). Since both schedule performance index and the Cost performance index are less than one that is 0.66, task is behind schedule and the task is over budget respectively.
LaserLife Printer Company is a decentralized organization with several autonomous divisions. The division managers are evaluated, in part, on the basis of the change in their return on invested assets. Operating results for the Packer Division for 2019 are budgeted as follows:
Sale $5,000,000
Less variable costs 2,500,000
Contribution margin 2,500,000
Less fixed expenses 1,800,000
Net operating income $ 700,000
Invested capital for the division are currently $3,600,000. For 2019, the division can add a new product line for an investment of $600,000. The new product line will generate sales of $1,600,000 and will incur fixed expenses of $600,000 annually. Variable costs of the new product will average 60% of the selling price.
REQUIRED:
1. What is current ROI? Profit margin (or Return on sales)? Investment (or Capital) turnover?
2. What is the effect on ROI of accepting the new product line?
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, would this encourage the division to accept the new product line? Explain and show computations.
Answer:
1. The current ROI is 19.44%. The Profit margin (or Return on sales) is 14%. TheInvestment (or Capital) turnover is 1.39 times.
2. The effect on ROI of accepting the new product line is 17.62%. ROI will be decreased by 1.82%
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers the residual income amount would be of $4,000 and so Managers should accept the new product line
Explanation:
1. To calculate the profit margin we have to use the following formula:
Profit margin= Net operating income/Sale
Hence, Profit margin = $700,000/$5,000,000 = 14%
ROI= Net operating income/Invested capital
Hence, ROI = $700,000/$3,600,000 = 19.44%
Investment (or Capital) turnover=Sale/Invested capital
Hence, Investment (or Capital) turnover = $5,000,000/$3,600,000 = 1.39 times
2. The Net operating income= ($5,000,000+$1,600,000)-($2,500,000+1,600,000*60%)-$(1,800,000+$600,000) = $740,000
Hence, ROI = $740,000/$4,200,000 = 17.62%
ROI will be decreased by (19.44-17.62) 1.82%.
In order to know if the division would accept the new product line If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, we would have to calculate the residual income as follows:
Residual income = operating income - invesed capital*required rate of return
= ($740,000-$700,000)-$600,000*6%
= $4,000
Therefore, Managers should accept the new product line.
What is 30% of 3/5
Answer: Solution for What is 30 percent of 3/5
30 percent *3.50 =
(30:100)*3.50 =
(30*3.50):100 =
105:100 = 1.05
Now we have: 30 percent of 3.50 = 1.05
Question: What is 30 percent of 3.50?
Percentage solution with steps:
Step 1: Our output value is 3.50.
Step 2: We represent the unknown value with $x$x.
Step 3: From step 1 above,$3.50=100\%$3.50=100%.
Step 4: Similarly, $x=30\%$x=30%.
Step 5: This results in a pair of simple equations:
$3.50=100\%(1)$3.50=100%(1).
$x=30\%(2)$x=30%(2).
Step 6: By dividing equation 1 by equation 2 and noting that both the RHS (right hand side) of both
equations have the same unit (%); we have
$\frac{3.50}{x}=\frac{100\%}{30\%}$
3.50
x=
100%
30%
Step 7: Again, the reciprocal of both sides gives
$\frac{x}{3.50}=\frac{30}{100}$
x
3.50=
30
100
$\Rightarrow x=1.05$⇒x=1.05
Therefore, $30\%$30% of $3.50$3.50 is $1.05$
Explanation:
Answer: 2
Explanation:
30% 0f that number works out to be 3/5
30/100 * x = 3/5
isolate x by multiplying on both sides by 100/30
100/30 * 30/100 *x = 100/30 * 3/5
x = 20/10 = 2
Treat it as direct proportion
3/5 = 0.6
so,
x/100 = 0.6/30
x = 100*0.6/30
x = 2
he income statement of Sarasota Company is shown below. SARASOTA COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
Answer:
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Explanation:
Prepare a statement of cash flows` operating activities section as follows :
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Cash Receipts from Customers Calculations
Sales revenue $6,890,000
Add Decrease in Accounts Receivables $350,000
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees Calculations
Cost of goods sold $4,700,000
Add
Selling expenses $460,000
Administrative expenses $700,000
Less depreciation expense of $50,000
Decrease in Accounts Payable $300,000
Decrease in Accrued Expenses $90,000
Increase in Prepaid expenses $160,000
Cash Paid to Suppliers and Employees $6,460,000
A consumer values a house at $525,000 and a producer values the same house at $485,000. If the transaction is completed at $510,000, the transaction will generate: a. No surplus b. $25,000 worth of seller surplus and unknown amount of buyer surplus c. $15,000 worth of buyer surplus and $25,000 of seller surplus d. $25,000 worth of buyer surplus and unknown amount of seller surplus
Answer:
c. $15,000 worth of buyer surplus and $25,000 of seller surplus
Explanation:
Consumer surplus is the different between the value a consumer places on a product and the price of the product.
Consumer surplus = value of the product - price of the product
$525,000 - $510,000 = $15,000
Producer surplus is the difference between the price and the least price the seller is willing to sell his product.
Producer surplus = price - least price the seller is willing to sell his product
$510,000 - $485,000 = $25,000
I hope my answer helps you
The Stores and Service Fund of the City of Monroe had the following account balances as of January 1, 2017:
Debits Credits
Cash $28,000
Due from other funds 27,000
Inventory of supplies 27,500
Land 18,000
Buildings 84,000
Accumulated depreciation—buildings $30,000
Equipment 46,000
Accumulated depreciation—equipment 25,000
Accounts payable 19,000
Advance from water utility fund 30,000
Net position 126,500
Totals $ 230,500
Required:
a. Open a general journal for the City of Monroe Stores and Service Fund and record the following transactions.
(1) A budget was prepared for FY 2017. It was estimated that the price charged other departments for supplies should be 1.25% of cost to achieve the desired breakeven for the year.
(2) The amount due from other funds as of January 1, 2017, was collected in full.
(3) During the year, supplies were ordered and received in the amount of $307,000. This amount was posted to accounts payable.
(4) $15,000 of the advance from the Water Utility Fund, originally provided for construction, was repaid. No interest is charged. (5) During the year, supplies costing $250,560 were issued to the General Fund, and supplies costing $46,400 were issued to the Water Utility Fund. These funds were charged based on the previously determined markup ($ 313,200 to General Fund and 58,000 to the Water Utility Fund).
(6) Operating expenses, exclusive of depreciation, were recorded in accounts payable as follows: Purchasing, $15,000; Warehousing, $16,900; Delivery, $17,500; and Administrative, $9,000.
(7) Cash was received from the General Fund in the amount of $310,000 and from the Water Utility Fund in the amount of $50,000.
(8) Accounts payable were paid in the amount of $365,000.
(9) Depreciation in the amount of $10,000 was recorded for buildings and $4,600 for equipment.
Answer and Explanation:
The Journal entry is shown below:-
1. No Journal entry is required
2. Cash Dr, $27,000
To Due from other funds $27,000
(Being the cash collected which is due from others is recorded)
3. Inventory of suppliers Dr, $307,000
To Accounts payable $307,000
(Being purchase of supplies is recorded)
4. Advance from water utility fund Dr, $15,000
To Cash $15,000
(Being repayment of advance of water utility fund is recorded)
5. Operating expenses Dr, $296,960
($250,560 + $46,400)
To Inventory of supplies $296,960
(Being issue of supplied is recorded)
5. Due from other funds Dr, $371,200
($313,200 + $58,000)
To Revenue charged for services and sales $371,200
(Being the charge of supplies is recorded)
6. Operating expenses of sale and services Dr, $49,400
($15,000 + $16,900 + $17,500)
Operating expenses of administrative Dr, $9,000
To Accounts payable $58,400
(Being operating expenses is recorded)
7. Cash Dr, $350,000
($310,000 + $50,000)
To Due from others $350,000
(Being cash received from general fund is recorded)
8. Accounts Dr,$365,000
To Cash $365,000
(Being the payment of accounts payable is recorded)
9. Operating expenses cost of depreciation Dr, $14,600
To Accumulated Dep - Building $10,000
To Accumulated Dep - Equipment $4,600
(Being depreciation expenses is recorded)
Revenue charged for sales and services Dr, $444,200
To operating expenses cost of depreciation $14,600
To operating expenses cost of administrative $9,000
To operating expenses cost of sale and services $49,400
To operating expenses cost of sale $371,200
(Being transfer the operating expenses is recorded)
A comparison of the marketing concept and customer relationship management indicates that customer relationship management:__________
a) And the marketing concept are in fact identical.
b) Attempts to improve profits by keeping quality high, while the marketing concept attempts to improve profits by a careful design of the promotional mix.
c) Turns the marketing concept upside down. The marketing concept emphasized that marketing was the most important function performed by a firm, but customer relationship management views management to be the most important function.
d) Extends the marketing concept by calling for the firm to learn more about its customers so that it not only satisfies them, but exceeds their expectations over time.
Answer:
d
Explanation:
A comparison of the marketing concept and customer relationship management indicates that customer relationship management: extends the marketing concept by calling for the firm to learn more about its customers so that it not only satisfies them but exceeds their expectations over time. The correct option is (d).
Customer relationship management (CRM) involves gathering data and insights about customers, analyzing their behaviors and preferences, and using this information to personalize interactions and provide tailored offerings.
The customer relationship management extends the marketing concept by emphasizing the importance of building strong customer relationships, learning more about customers, and continuously exceeding their expectations to drive customer loyalty and long-term business success.
Thus, the ideal selection is option (d).
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Under the allowance method of accounting for uncollectible accounts, a. the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. b. Bad Debts Expense is debited when a specific account is written off as uncollectible. c. the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. d. Allowance for Doubtful Accounts is closed each year to Income Summary.
Answer:
c. the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off.
Explanation:
Under the allowance method of accounting for uncollectible accounts, the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off and bad debt expenses is debited.
This means that in the period in which an account previously written off is collected, the income is unaffected.
Also, under the allowance method of accounting, total assets will remain unchanged when a particular account is being written off.
Pollution Busters Inc. is considering a purchase of 10 additional carbon sequesters for $120,000 apiece. The sequesters last for only 1 year before becoming saturated. Then the carbon is sold to the government. a. Suppose the government guarantees the price of carbon. At this price, the payoff after 1 year is $140,400 for sure. How would you determine the opportunity cost of capital for this investment? b-1. Suppose instead that the sequestered carbon has to be sold on the London Carbon Exchange. Carbon prices have been extremely volatile, but Pollution Busters’ CFO learns that average rates of return from investments on that exchange have been about 22%. She thinks this is a reasonable forecast for the future. What is the opportunity cost of capital in this case? b-2. If the expected return on the investment is still 17%, but instead depends on the price of carbon (so that it is no longer risk-free), then is the purchase of additional sequesters an attractive investment for the firm?
Answer:
(a) 17% (b) the purchase of additional sequesters an attractive investment for the firm is worthwhile investment if no other similar project offers a higher return of over 17%, which in this case here is 17%.
Explanation:
Solution:
(a) Calculate the opportunity cost of capital
Opportunity cost of capital = pay off at one year/Current investment
= $140,400-$120,000/$120,000
=20,400/120,000 = 0.17 or 17%
What it means is that, the project offers a guarantee of 17% return. it should be accepted unless another project offers a higher return of over 17%
(b) The opportunity cost of capital, if the sequestered carbon has to be sold on the London Carbon Exchange which is simply the average rate of return of investment.
Therefore the opportunity cost per capital in this case is 22%
The purchase of additional sequesters an attractive investment for the firm is worthwhile investment if no other similar project offers a higher return of over 17%, which in this case here is 17%.
Due to historical differences, countries often differ in how quickly a change in actual inflation is incorporated into a change in expected inflation. In a country such as Japan, which has had very little inflation in recent memory, it will take longer for a change in the actual inflation rate to be reflected in a corresponding change in the expected inflation rate. In contrast, in a country such as Zimbabwe, which has recently had very high inflation, a change in the actual inflation rate will immediately be reflected in a corresponding change in the expected inflation rate.
What is the slope of Japan’s short-run Phillips curve?
a. Steep downward slopeb. Flat downward slopec. Steep upward sloped. Flat upward slopee. Verticalf. Horizontal
Answer:
Due to historical differences, countries often differ in how quickly a change in actual inflation is incorporated into a change in expected inflation. In a country such as Japan, which has had very little inflation in recent memory, it will take longer for a change in the actual inflation rate to be reflected in a corresponding change in the expected inflation rate. In contrast, in a country such as Zimbabwe, which has recently had very high inflation, a change in the actual inflation rate will immediately be reflected in a corresponding change in the expected inflation rate.
What is the slope of Japan’s short-run Phillips curve?
Option B is the correct answer.
Explanation:
The slope of Japan’s short-run Phillips curve will be a flat downward slope because "it will take longer for a change in the actual inflation rate to be reflected in a corresponding change in the expected inflation rate".
Therefore, option B is the correct answer.
On January 1, a company issues bonds dated January 1 with a par value of $240,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $249,262. The journal entry recorded on the maturity date (after the last semiannual interest payment has been made and recorded) is:
Answer:
The journal entry on maturity is as follows:
Dr bonds payable $240,000
Cr cash $240,000
Being redemption of bonds
Explanation:
At the end of the life of the bond,the bond premium or discount would have been fully amortized,hence the only entry left to be made is to debit bonds payable account with face value of the bond and a credit of the same amount to cash account to record the outflow of cash.
The face value of the bond is $240,000,hence the $240,000 is debited to bonds payable in order to finally cancel the debt obligation.
Answer:
Journal Entry on Maturity
Dr. Bond Payable $240,000
Cr. Cash $240,000
last Interest Payment
Dr. Interest Expense $12,463
Dr. Premium on Bonds Payable $737
Cr. Cash $13,200
Explanation:
When bond is issued over the its face value, then bond is known as issued at premium. The premium value is amortized over the life of the bond.
Interest payment = $240,000 x 11% x 6/12 = $13,200
Now calculate the bond amortization using effective interest method.
Premium amortization = $13,200 - (249,262 x 10% x 6/12) = $737
Interest Expense can be calculated as follow
Interest expense = Interest Payment - Premium amortization = $13,200 - $737 = $12,463
Lee is considering buying one of two newlyminusissued bonds. Bond A is a twentyminusyear, 7.5% coupon bond that is nonminuscallable. Bond B is a twentyminusyear, 8.25% bond that is callable after two years. Both bonds are comparable in all other aspects. Lee plans on holding his bond to maturity. What should Lee do if he feels that interest rates are going to decline by 2% in the near future and then remain relatively stable thereafter?
Answer:
Bond A will be purchased
Explanation:
He will purchase Bond A, since the 20-year interest payments are fixed guaranteed and can not be named called. When he buys bond B, after 2 years the corporation will actually call the bond, as it would be easier to call the bond and issue a new bond at a lesser interest rate.
When a bond is named it means the issuer takes the bond back and charges the holder the bond's face value (what the initial purchaser paid for it)
g On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin receiving cash of $9,594,415. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. 2. 3. b. Determine the amount of the bond interest expense for the first year. $ c. Why was the company able to issue the bonds for only $9,594,415 rather than for the face amount of $10,000,000? The market rate of interest is the contract rate of interest. Therefore, inventors wi
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Total Years = 5, semiannually = 5 × 2 = 10
Rate = 7% yearly, semiannually rate = 7 ÷ 2 = 3.5%
Journal Entries
On Jan 1
Cash A/c Dr. $9,594,415
Discount on bonds payable A/c Dr. $405,585
To Bonds payable A/c $10,000,000
(Being the issuance of bond payable is recorded)
Discount value of issued bonds = $10,000,000 - $9,594,415 = $405,585
2).
On Jun
Interest expenses A/c Dr. $390,559
Discount on bonds payable A/c($405,585 ÷10) Dr.40,559
To Cash A/c($10,000,0000 × 3.5%) $350,000
(Being the payment of first semiannual interest is recorded)
3).
On Dec 31
Interest expenses A/c Dr. $390,559
Discount on bonds payable A/c($405,585*10/100) Dr.$40,559
To Cash A/c($10,000,000*3.5/100) $350,000
(Being the payment of second semiannual interest is recorded)
b). Bond Interest Expense Amount for First Year
= Interest Expenses + Amortized Discount
= $700,000 + $81,117
= $781,117
Interest expenses = $350,000 + $350,000 = $700,000
Amortized Discount = $40,559 + $40,559 = $81,117
c).The Company issued the bonds at $9,594,415 for the face amount of $10,000,000 because bonds issued at discount for $405,585 as the coupon rate is less than the market interest.
Splash World is considering purchasing a water park in Atlanta, Georgia, for $ 1,870,000 . The new facility will generate annual net cash inflows of $ 472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12 % on investments of this nature.
Requirements
1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment.
2. Recommend whether the company should invest in this project.
Answer:
1)
Payback period = Initial investment / Annul cash flow
Payback period = 1,880,000 / 480,000
Payback period = 3.92 years
2)
Accounting rate of return = Average cash flow / ( initial investment - book value) / 2
Accounting rate of return = 480,000 / ( 1,880,000 - 0)/2
Accounting rate of return = 0.5106 or 51.06%
3)
NPV = Present value of cash inflows - present value of cash outflows
NPV = 480,000 * 4.968 - 1,880,000
NPV = $504,640
4)
IRR is the rate of return that makes NPV equal to 0
NPV = Annuity * [ 1 - 1 / ( 1 + R)n] / R - initial investment
NPV = 480,000 * [ 1 - 1 / ( 1 + R)8] / R - 1,880,000
Using trial and error method, i.e, after using various values for R, let's try R as 19.32%
NPV = 480,000 * [ 1 - 1 / ( 1 + 0.1932)8] / 0.1932 - 1,880,000
NPV = 0
Therefore, IRR is 19.32%
Splash world should invest in the project as it has a positive NPV and and IRR greater than cost of capital
Suppose the economy is in long-run equilibrium. In a short span of time, there is a sharp rise in the stock market, an increase in government purchases, an increase in the money supply and a decline in the value of the dollar. In the short run a. the price level and real GDP will both rise. b. the price level and real GDP will both fall. c. neither the price leave nor real GDP will change. d. All of the above are possible.
Answer:
All of the above are possible.
Explanation:
Discussions here center on equilibrium of an economy in a long run, and here after the government activities, their is a decline in dollar value; therefore in the short run, the price level and real GDP will both rise in as much as the price level and real GDP will also both fall. It is also gathered that neither the price leave nor real GDP will change.
The transition from the short run to the long run may be done by considering some short run equilibrium that is also a long run equilibrium as to supply and demand, then comparing that state against a new short run and long run equilibrium state from a change that disturbs equilibrium, say in the sales tax rate, tracing out the short run adjustment first, then the long run adjustment.
In preparation for developing its statement of cash flows for the year just ended, D-Rose Distributors collected the following information: ($ in millions) Purchase of treasury bills (considered a cash equivalent) 6.7 Sale of preferred stock 150.7 Gain on sale of land 4.7 Proceeds from sale of land 25.7 Issuance of bonds payable for cash 140.7 Purchase of equipment for cash 30.7 Purchase of GE stock 35.7 Declaration of cash dividends 134.7 Payment of cash dividends declared in previous year 130.7 Purchase of treasury stock 120.7 Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) 110.7 Required: 1. Prepare the investing activities section of D-Rose's statement of cash flows. 2. Prepare the financing activities section of D-Rose's statement of cash flows.
Answer and Explanation:
1. The preparation of the investing activities is presented below:
Cash flow from investing activities
Proceeds from sale of land $25.7
Purchase of equipment for cash -$30.7
Purchase of GE stock -$35.7
Net cash used by investing activities -$40.7
2. The preparation of the financing activities is presented below:
Cash flow from financing activities
Sale of preferred stock 150.7
Issuance of bonds payable for cash 140.7
Payment of cash dividends declared in previous year -130
Purchase of treasury stock -120
Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) -110.7
Net cash used by financing activities -$69.3
The minus sign shows the cash outflow and the positives sign shows the cash inflow
Robert has a passion for making ice cream. Assume that ice cream parlors have a market structure of monopolistic competition. Between the local Amy's, Cold Stone Creamery, Marble Slab, Ben & Jerry's, and Baskin Robbins, he has an uphill battle to break into the local ice cream market. Determine which suggestions below might help Robert differentiate his ice cream shop, JubJub's, so that he can garner some market power.
Select all of the following ideas that will help differentiate JubJub's from the other ice cream parlors.
1. Changes his menu to include only the exact flavors of his competitors, including the ice cream flavor names.
2. Open JubJub's next to "The Triangle, " an area with an elementary school, a middle school, and a high school less than 5 minutes away.
3. Make ice cream using fresh organic milk and fruit, something none of the other competitors are doing.
4. Price ice cream at JubJub's to appeal to the luxury crowd - $100 a scoop.
Answer:
The Ideas that will assit the JubJub's to diffrentiate from other icecream parlors are "2, 3 and 4"
Explanation:
Individual Robert can utilize Customer focusing on that pull specifically cates.ory of client and make advantage by lessening the opposition. Individual R can pick Location inclinations system under which he picks an area where he can draw in the potential purchasers or he can utilize one of a kind items to pull in individuals and separate items from contenders will give him showcase power.
Answer:
2. Open JubJub's next to "The Triangle, " an area with an elementary school, a middle school, and a high school less than 5 minutes away.
3. Make ice cream using fresh organic milk and fruit, something none of the other competitors are doing.
4. Price ice cream at JubJub's to appeal to the luxury crowd - $100 a scoop.
Explanation:
The following ideas that will help differentiate JubJub's from the other ice cream parlors:
Open JubJub's next to "The Triangle, " an area with an elementary school, a middle school, and a high school less than 5 minutes away. Make ice cream using fresh organic milk and fruit, something none of the other competitors are doing. Price ice cream at JubJub's to appeal to the luxury crowd - $100 a scoop.Individual Robert can utilize Customer focusing on that pull specifically catesgory of client and make advantage by lessening the opposition.Thus , the correct answer is 2,3 and 4.
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Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $14,500 and will produce cash flows as follows: End of Year Investment A B 1 $ 9,500 $ 0 2 9,500 0 3 9,500 28,500 The present value factors of $1 each year at 15% are: 1 0.8696 2 0.7561 3 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment B is:
Answer:
The net present value of Investment B is $4238.75
Explanation:
Solution
The Net present value = present value of cash inflows - present value of cash outflow
Now,
The Present value of cash outflows= initial investment= $14500
Thus,
The Present value of cash inflows: is defined as follows:
Since in project B there is only one inflow at the end of year 3, it is discounted to present using present value discount factor applicable for 3 years, 15% which is= 0.6575
so,
The Present value of cash flow at the end of year 3= 28500* 0.6575= 18738.75
NPV= 18738.75 - 14500= $4238.75
The Kaufusi Company has the following budgeted sales: April May June July Credit sales..................................... $ 320,000 $ 300,000 $ 350,000 $ 400,000 Cash sales....................................... $ 70,000 $ 80,000 $ 90,000 $ 70,000 The regular pattern of collection of credit sales is 30% in the month of sale, 60% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts. The budgeted accounts receivable balance on May 31 would be:
Answer: $242,000
Explanation:
Seeing as this is the balance on the 31st of May, it can be assumed that the 60% to be collected in May (being the month following April) from April Credit Sales has already been collected so only 10% remains.
For May, we can assume that the 30% has been collected leaving only 70% still to be collected on the 31st.
Calculating therefore,
April Credit Sales Due 31st of May = 320,000 * 10%
= $32,000
May Credit Sales due 31st of May = 300,000 * 70%
= $210,000
Total on the 31st of May is therefore,
= 32,000 + 210,000
= $242,000
The budgeted accounts receivable balance on May 31 would be $242,000.
The price of a home is $210,000. The bank requires a 5% down payment and three points at the time of closing. The cost of the home is financed with a 30-year fixed-rate mortgage at 7%. a. Find the required down payment. b. Find the amount of the mortgage. c. How much must be paid for the three points at closing? d. Find the total cost of interest over 30 years, to the nearest dollar.
Answer:
a.$31,500
b.$178,500
c.$5355
d.$ 249,021.60
Explanation:
The down payment is 15% of the price of the home=15%*$210,000=$31500
Amount of mortgage=price of the home-down payment
=$210,000-$31,500=$178,500
Amount to be paid for 3 points at closing =3%*amount of mortgage
=3%*$178,500=$5355
Note that 1 point costs 1 percent of mortgage amount
The amount of repayment monthly can be computed thus:
=pmt(rate,nper,-pv,fv)
rate is the fixed mortgage of 7%/12
nper is 30 years multiplied by 12=360 months
pv is the mortgage amount of $178,500
fv is the total of mortgage amount and total interest,it is not known
=pmt(7%/12,360,-178500,0)=$ 1,187.56
Total interest cost=total payment-mortgage amount=($ 1,187.56*360)-$178,500 =$ 249,021.60
• Why has the stock market declined so much?
We need a passage or something. not just the question
I Scream For Ice Cream sells specialty ice cream in three flavors: Rocky Road, Peanut Butter, and Fruity Tooty. It sold 10 comma 000 gallons last year. For every five gallons of ice cream sold, one pound is Fruity Tooty and the remainder is split evenly between Peanut Butter and Rocky Road. Fixed costs for I Scream For Ice Cream are $ 39,100 and additional information follows:
Rocky Road Peanut Butter Fruity Tooty
Sales price per pound $8.25 $5.50 $4.25
Variable cost per pound $3.25 $2.25 $3.75
Breakeven sales in dollars for I Scream For Ice Cream is:_______.
A. $100,625.
B. $33,925.
C. $73,025.
D. $57,500.
Answer:
C. $73,025
Explanation:
The computation of Break-even sales in dollars is shown below:-
For every 5 gallons, contribution margin = CM of Fruity tooty + (CM of Peanut butter) × 2 + (CM of Rocky Road) × 2
= ($4.25 - $3.75) + ($5.50 - $2.25) × 2 + ($8.25 - $3.25) × 2
= $0.5 + $6.5 + $10
= $17
Breakeven = Fixed cost ÷ Contribution margin
= $39,100 ÷ $17
= 2,300
As each contribution margin requires 5 gallons,So total breakeven sales of Ice cream = 2,300 × 5
= 11,500
In dollars considering units required for each 5 gallons = (2,300 × 2 × $8.25) + (2,300 × 2 × $5.50) + (2,300 × $4.25)
= $37,950 + $25,300 + $9,775
= $73,025
Now suppose country A imposes a tax on A's production of to curb emissions. Country B, however, is not taxed. A's cost function is now , while B's cost function is . World demand is . The amount of greenhouse gas emissions per unit is still , such that total world emissions are given by . What are total world emissions after country A enacts a carbon tax?
Answer:
286.5
Explanation:
P=99-qa-qb
MRa=99-2qb-qb
MCa=48
99-2qa-qb=48
Qa=25.5-0.5qb{ best response function of firm A)
MRb=99-qa-2qb
MCb=4
99-qa-2qb=4
Qb=47.5-0.5qa{ best response function of form b}
Qb=47.5-0.5(25.5-0.5qb)
Qb=34.75/0.75=46.33
Qa=25.5-0.5*46.33=2.33
Total world output=46.33+2.33=48.66
Total world emission=0.5*48.66=24.33
p=1146-qa-qb-qc
MRa=1146-2qa-qb-qc
MCa=0
1146-2qa-qb-qc=0
Qa=573-0.5(qb+qc) best response function of firm a)
By symmetry,
Qb=573-0.5(qa+qc)
Qc=573-0.5(qa+qb)
Qb+qc=1146-qa-0.5(qb+qc)
Qb+qc=764-qa/1.5
Qa=573-0.5(764-qa/1.5)=191+qa/3
Qa=191*3/2=286.5
Qa=Qb=Qc=286.5
Total output=3*286.5=859.5( cournot equilibrium market output)
Cartel output=573
Lower QUANTITY in cartel equilibrium compare to cournot equilibrium
=859.5-573
=286.5
Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques— warranties and premiums— to attract customers.
Below is the information to answer the required question.
a. Musical instruments and sound equipment are sold with a one- year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales.
b. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $ 20 for a CD player. Garison pays $ 32 for each CD player and estimates that 60% of the coupons given to customers will be redeemed.
c. Garison’s total sales for 2010 were $ 7,200,000—$ 5,700,000 from musical instruments and sound reproduction equipment and $ 1,500,000 from recorded music and sheet music.
d. Replacement parts and labor for warranty work totaled $ 164,000 during 2010.
e. A total of 6,500 CD players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2010.
f. The accrual method is used by Garison to account for the warranty and premium costs for financial reporting purposes.
The balances in the accounts related to warranties and premiums on January 1, 2010, were as shown below.
Inventory of Premium CD Players $ 37,600
Estimated Premium Claims Outstanding 44,800
Estimated Liability from Warranties 136,000
Question:
(a) Garison Music Emporium is preparing its financial statements for the year ended December 31, 2010. Determine the amounts that will be shown on the 2010 financial statements for the following.
(1) Warranty Expense -
(2) Estimated Liability from Warranties -
(3) Premium Expense -
(4) Inventory of Premium CD Players -
(5) Estimated Premium Claims Outstanding -
Answer:
Explanation:
(a)
Given:
Warranty exp = 2% of musical instrument & sound equipment
Calculation:
Warranty exp = Warranty exp * 5,424,000
Warranty exp = 2% * 5,424,000
Warranty exp = 108,480
(b)
Warranty liability as on December 2017 = Opening Balance + Warranty Expense - Warranty Claim
Warranty liability as on December 2017 = 138,000 + 108,480 - 156,400
Warranty liability as on December 2017 = $90,080
(c)
The customer receives one coupon for each dollar spend 2,138,000 only 50% coupon will be redeemed.
Exp provision liability created = 50% * 2,138,000
Exp provision liability created = 1,069,000
Customer can exchange 200 coupon & $30 for MP3 player which is purchase for 42 that mean 200 coupon will be for 12 i.e. (42-30) value of coupon will be
12
200
= 0.06.
Value of 1,069,000 coupon = 1,069,000 * 0.06
Value of 1,069,000 coupon = 64,140
(d)
1,138,000 coupons had been redeemed during the year each MP3 player required 200 coupons.
N
o
o
f
M
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3
p
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r
o
f
f
e
r
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d
=
1
,
138
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000
200
N
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f
M
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p
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r
o
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=
5
,
690
M
P
3
p
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a
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Cost = 5,690 * 42
Cost = 238,980
Inventory Premium = Opening Balance + Purchases - Utilized Redeemed Coupon
Inventory Premium = 39,210 + (7,010 * 42) - 238,980
Inventory Premium = 39,210 + 294,420 - 238,980
Inventory Premium = $94,650
(e)
Premium liability balance = Opening Balance + Premium Exp Provision - Coupon Redeemed
Premium liability balance = 41,670 + 64,140 - (1,138,000 * 0.06)
Premium liability balance = 41,670 + 64,140 - 68,280
Premium liability balance = 37,530
Exercise 24-1 Payback period computation; uneven cash flows LO P1 Beyer Company is considering the purchase of an asset for $180,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 60,000 $ 40,000 $ 70,000 $ 125,000 $ 35,000 $ 330,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.)
Answer:
3.08 years
Explanation:
The computation of payback period is shown below:-
Payback period = Year up to which cumulative cash flow are negative + (Cumulative cash flow in period in A ÷ cash flow of immediately year succeeding the period in A )
Year Cash flow cumulative cash flow
0 ($180,000) ($180,000)
1 $60,000 ($120,000)
($180,000 - $60,000)
2 $40,000 ($80,000)
($120,000 - $40,000)
3 $70,000 ($10,000)
($80,000 - $70,000)
4 $125,000 $115,000
(it will be end here because it excess from here)
Now we will put it into formula
Pay back period = 3 + (10,000 ÷ 125,000)
= 3 + 0.08
= 3.08 years
Indigo Incorporated factored $135,100 of accounts receivable with Sweet Factors Inc. on a without-recourse basis. Sweet assesses a 3% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Prepare the journal entry for Indigo Incorporated and Sweet Factors to record the factoring of the accounts receivable to Sweet.
Answer:
Indigo Incorporated Journal entrie
Dr Cash 121,590
Dr Due from Factor 9,457
Dr Loss on Sale of Receivable 4,053
Cr Accounts Receivable 135,100
Sweet Factors Inc
Dr Account Receivable 135,100
Cr Due to Customer 9,457
Cr Finance Revenue 4,053
Cr Cash 121,590
Explanation:
Indigo Incorporated Journal entries
Dr Cash 121,590
Dr Due from Factor 9,457
Dr Loss on Sale of Receivable 4,053
Cr Accounts Receivable 135,100
Sweet Factors Inc
Dr Account Receivable 135,100
Cr Due to Customer 9,457
Cr Finance Revenue 4,053
Cr Cash 121,590
Due from Factor = 7% x $135,100 = $9,457
Loss on Sale of Receivables = 3% x $135,100= $4,053
Harrison Corporation is studying a project that would have an eight-year life and would require a $300,000 investment in equipment which has no salvage value. The project would provide net operating income each year as follows for the life of the project: Sales $500,000 Less cash variable expenses 200,000 Contribution margin 300,000 Less fixed expenses: Fixed cash expenses $150,000 Depreciation expenses 37,500 187,500 Net operating income $112,500 The company's required rate of return is 10%. The payback period for this project is closest to:
Answer:
The payback period for this project is closest to 2 years
Explanation:
Initial investment = $300,000
Sales = $500,000
Cash variable expenses = ($200,000)
Contribution margin = 300,000
Fixed cash expenses = $150,000
Depreciation expenses = $37,500
Total Fixed expenses: $150,000 + $37,500 = ($ 187,500 )
Net operating income = $112,500
Annual cash inflows = Net operating income + Depreciation
= $112,500 + $37,500
= $150,000
Payback period = Initial investment ÷ Annual cash inflows
= $300,000 ÷ $150,000 = 2 years
Select the incorrect statement concerning responsibility reports.
The reports should show clearly the budgeted and actual amounts of controllable revenues and expenses.
The reports should be stated in simple terms.
The reports become more specific for higher levels within the organization.
At the corporate level, responsibility reports generally include year-to-date contribution format income statements.
Answer:
compute the number of units that would have to be sold in 2017 to reach the stockholders desire profit level
Management in Life Annabelle and Bettina share a dorm room. They like each other, but they disagree about how often to clean. Eventually, Annabelle says to Bettina, "I'm afraid that if we clean the room only once a month, we're going to get bugs. Bettina replies, "Maybe, but this physics course is killing me, so I don't have time to clean more often than that." Annabelle and Bettina are engaged in conflict, based on Which of the following outcomes are likely in this situation?
A) Annabelle and Bettina will learn from each other.
B) The roommates will come up with a creative solution.
C) The roommates will stop speaking to each other.
D) Annabelle and Bettina will be angry at each other.
Answer:
A). Annabelle and Bettina will learn from each other .
B). The roommates will come up with a creative solution."
Explanation:
Anabelle and Bettina are involved in a 'cognitive' conflict as it occurs when they both experience a mental as well as emotional discomfort when they are confronted with the information that challenges their existing ideas or beliefs. The most likely outcomes of this situation would be that they 'both would learn from each other' by accepting each other's point of view and adapting with the new information that would help them 'reach a creative solution' to resolve their conflict over the cleaning of their room. Therefore, options A and B are the correct answers.
Warren Buffet opposes stock splits to lower the share price because he believes:________.
a. lower share price will encourage other companies to try to take over the company from existing shareholders.
b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
c. stock splits encourage long-term investing, which is detrimental to his firm's investment policy.
d. lower share price indicates poor growth prospects..
Answer:. b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
Explanation:
Warren Buffet has stated that he does not want to split Berkshire Hathaway's stock because he believes that it would attract short term investors whereas he is looking for long term investors. He believes that a stock being split makes it susceptible to investors who just want to buy it for the meantime, wait for it to appreciate a bit and then sell. He however prefers Companies with a long term potential so he prefers people investing for the long run.
Alex Company prepares its statement of cash flows using the direct method for operating activities. For the year ended December 31, 2018, Alex Company reports the following activity: Sales on account $2,100,000 Cash sales 1,110,000 Decrease in accounts receivable 915,000 Increase in accounts payable 108,000 Increase in inventory 72,000 Cost of good sold 1,575,000 What is the amount of cash collections from customers reported by Alex Company for the year ended December 31, 2018
Answer:
The amount of cash collections from customers reported by Alex company for the year ended December 31, 2018 is $4,125,000.
Explanation:
Cash collection refers to the collection of cash from from an individual or a business whom invoice has been issued to. Any invoice unpaid are noted as being outstanding.
Cash collection fomular is therefore;
Cash collection = Sales on account + Cash sales + Decrease in accounts receivable
=$2,100,000 +$1,110,000 + $915,000
=$4,125,000
