Answer:
See below.
Explanation:
Lets summarize the information first.
Cumulative preferred stock @ 10% = 24,000 * 60 = $1,440,000
Common Stock = 37,000 shares
Preferred dividend arrears = $13,000
Total Declared dividend = $222,000
Total Payable for preferred stock this year = 1,440,000*0.10 = $144,000
So total share payable to preferred stock = $144,000 + $13,000 = $157,000
Total payable to common stock holders = $222,000 - $157,000 = $65,000
Hope that helps.
In this type of control system, the master budget is based on a single prediction for sales volume, and the budgeted amount for each cost essentially assumes that a specific amount of sales will occur: Select one: a. Sales budget. b. Standard budget. c. Flexible budget. d. Fixed budget. e. Variable budget.
Answer:
(e) Variable budget
Explanation:
A budget is a money related arrangement for a characterized period, regularly one year. It might likewise incorporate arranged deals volumes and incomes, asset amounts, expenses and costs, resources, liabilities and incomes
Variable budget plan, is monetary arrangement of evaluated incomes and costs dependent on the current real measure of yield.
The board frequently utilizes variable spending plans before a period to foresee both a best case and more regrettable case situation for the up and coming bookkeeping period.
Cain Inc. reports net income of $15,600. Its comparative balance sheet shows the following changes: accounts receivable increased $6,600; inventory decreased $8,600; prepaid insurance decreased $1,600; accounts payable increased $3,600 and taxes payable decreased $2,600. Compute cash flows from operations using the indirect method.
Answer:
$20,200
Explanation:
Amount in $
Net income 15,600
Increase in receivables (6,600)
Decrease in inventory 8,600
Decrease in prepaid insurance 1,600
Increase in account payable 3,600
Decrease in tax payable (2,600)
Net cash flows from operations 20,200
The cash flows from operations for Cain Inc. using the indirect method is computed to be $20,200 by adjusting net income with the changes in current assets and liabilities.
Explanation:The question asks about computing the cash flows from operations for Cain Inc., using the indirect method. Starting with the net income, we need to adjust for changes in current assets and liabilities. The steps are as follows:
Start with net income: $15,600 Adjust for increases in current assets, which are uses of cash, i.e., account receivables (+$6,600) Adjust for decreases in current assets, which are sources of cash, i.e., inventory (-$8,600), prepaid insurance (-$1,600) Adjust for increases in current liabilities, which are sources of cash, i.e., accounts payable (+$3,600) Adjust for decreases in current liabilities, which are uses of cash, i.e., taxes payable (-$2,600)
The cash flows from operations would therefore be $15,600 - $6,600 + $8,600 + $1,600 + $3,600 - $2,600 = $20,200.
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Do you think it is possible for an outsider to accurately discern about the underlying cultural values of an organization by analyzing symbols, ceremonies, dress, or other observable aspects of culture in comparison to an insider with several years of work experience? Select a percentage (e.g., 10%, 70%, etc.) and explain your reasoning.
Answer:
From the given variables, an outsider might be able to understand roughly 35% of the organization's culture.
Explanation:
Culture is ultimately a state of mind, a mode of perception and a collective conscious.
Symbols, Ceremonies, dress and other observable aspects of culture reflects a certain degree of the internal culture, yet to understand it full, it is vital to observe the human behavior and the inter relationships within the organization.
Moreover, the power distance between ranks, distribution of authority and responsibilities, reward systems, means of communication and organizational goals also influences the culture within a company. These aspects are difficult for an outsider to see as they do not stay inside and get exposed to the internal environment of the organization.
Final answer:
Outsiders can discern about 60% of underlying cultural values through observable aspects compared to insiders.
Explanation:
Cultural Understanding and Analysis:
When analyzing an organization's cultural values using symbols, ceremonies, dress, or other observable aspects, an outsider may be able to discern about 60% of the underlying cultural values compared to an insider. This is because while observable aspects provide valuable insights, the deeper values and assumptions guiding the culture may require insider knowledge to fully grasp.
Example: An outsider may notice that employees dress casually, indicating a more relaxed culture, but an insider with work experience may understand that work-life balance and family values are paramount, influencing this dress code.
Here is the income statement for Skysong, Inc.
SKYSONG, INC. Income Statement For the Year Ended December 31, 2022
Sales revenue $404,100
Cost of goods sold 234,000
Gross profit 170,100
Expenses (including $16,700 interest and $26,400 income taxes) 83,500
Net income $ 86,600
Additional information:
1. Common stock outstanding January 1, 2022, was 24,700 shares, and 37,100 shares were outstanding at December 31, 2022.
2. The market price of Skysong stock was $14 in 2022.
3. Cash dividends of $22,900 were paid, $4,900 of which were to preferred stockholders.
Compute the following measures for 2022. (Round all answers to 2 decimal places, e.g. 1.83 or 2.51%)
(a) Earnings per share $enter earnings per share in dollars
(b) Price-earnings ratio enter price-earnings ratio in times times
(c) Payout ratio enter payout ratio in percentages % (d) Times interest earned enter times interest earned times
Answer:
Earnings per share
= Net income - Preferred dividend
No of common stocks outstanding at the end
= $86,600 - $4,900
37, 100 shares
= $2.20 per share
b. Price-earnings ratio
= Market price per share
Earnings per share
= $14
$2.20
= 6.36
c. Pay-out ratio
= Ordinary dividend paid x 100
Earnings after preferred dividend
= $18,000 x 100
$81,700
= 22.03%
c. Times interest earned
= Earnings before interest and tax
Interest expense
= Net income + Interest expense+ Tax
Interest expense
= $86,600 + $16,700 + $26,400
$16,700
= 7.77 times
Explanation:
Earnings per share equals net income minus preferred dividend divided by number of common stocks outstanding at the end of the year.
Price-earnings ratio is market price price per share divided by earnings per share.
Pay-out ratio is ordinary dividend paid divided by earnings after preferred dividend.
Times interest earned is earnings before interest and tax divided by interest expense. Earnings before interest and tax equals net income plus interest expense plus income tax.
A company has the following transactions during the year related to stockholders’ equity.
February 1 Issues 5,600 shares of no-par common stock for $15 per share.
May 15 Issues 400 shares of $10 par value, 10.5% preferred stock for $12 per share.
October 1 Declares a cash dividend of $1.05 per share to all stockholders of record (both common and preferred) on October 15.
October 15 Date of record.
October 31 Pays the cash dividend declared on October 1.
Required:
1. Record each of these transactions.
Answer:
a- Cash/bank Dr $84000
common stock Cr $84000
b- Cash/bank Dr $4800
Preferred stock Cr $4000
paid-in capital Cr $800.
c- Retained earnings Dr $6300 ($1.05×6000)
Dividend Payable Cr $6300
d- Dividend Payable Dr $6300
Cash/Bank Cr $6300
Explanation:
A- Common stock with no par value are stock issued without discount or premium so the total amount received is debited to cash/bank account and credited to common/equity stock account. The entry is as follows:
Cash/bank $84000
common stock $84000
B- The issuance of preferred stock at a premium results in an entry for paid in capital which is the excess of par value. The entry is as follows;
Cash/bank $4800
Preferred stock $4000
paid-in capital $800.
C- Once a dividend is declared, the company becomes liable to pay which creates a liability until it's settled/paid off to shareholders. The entry is:
Retained earnings $6300 ($1.05×6000)
Dividend Payable $6300
D- Once we settle Payment of dividend we decrease our liability and decrease our cash/bank depending upon mode of payment. The entry is:
Dividend Payable $6300
Cash/Bank $6300
Answer:
1 February
Dr Cash 84,000
Cr Common shares 84,000
(to record the issuance of 5,600 common share at $15 per share)
May 15th
Dr Cash 4,800
Cr Preferred shares 4,000
Cr Paid-in capital - preferred shares 800
(to record issuance of 400 preferred shares at with par value at $10 and issuing price at $12)
October 1st
Dr Retained Earnings 6,300
Cr Dividend Payable - Common and Preferred shares 6,300
(to record the dividend declaration paid to 6,000 preferred and common stocks outstanding).
Oct 15: No entries needed
October 31st
Dr Dividend Payable - Common and Preferred shares 6,300
Cr Cash 6,300
(to record cash dividend payment)
Explanation:
All entries has the explanation part below. Calculations are shown as below:
1 Feb: Because the stock has no par, Common stock account is recorded as much as the actual cash receipt: 5,600 x 15 = $84,000
May 15: Cash receipt is 400 x 12 = 4,800. Preferred shares account is credited at No of shares issued x par-value =400 x 10 =$4,000. The surplus of $800 due to issuing price is higher than par is credited into Paid-in capital account.
Oct 1st: Dividend payment obligations is calculated as 1.05 x shares outstanding = 1.05 x (5,600 + 400) = $6,300.
Spade Agency separates its accounts receivable into three age groups for purposes of estimating the percentage of uncollectible accounts. In addition, the balance of Allowance for Uncollectible Accounts before adjustment is $6,500 (credit).Accounts not yet due = $36,000; estimated uncollectible = 4%.Accounts 1–60 days past due = $21,000; estimated uncollectible = 25%.Accounts more than 60 days past due = $16,000; estimated uncollectible = 50%.Required:a. Compute the total estimated un-collectible accounts.b. Record the year-end adjustment for estmated un-collectable accounts.
Answer:
a. total estimated uncollectible accounts is $21,190
b. to entry the adjustment, we have to debit bad debt expense and credit allowance for doubtful accounts in the amount of $14,690
Explanation:
a. to compute the estimated uncollectible accounts, we have to multiply the specific % to the accounts receivable plus the beginning balance;
•Accounts not due
$36,000 x 4% = $1,440
•Accounts 1 - 60 days past due
$21,000 x 25% = $5,250
•Accounts more than 60 days past due
$16,000 x 50% = $8,000
So the total uncollectible accounts would be; $6,500 + $1,440 + $5,250 + $8,000 = $21,190
b. to record the year-end adjustment of the uncollectible accounts, we have to debit bad debt expense and credit allowance for doubtful accounts in the amount of $14,690. This figure is the uncollectible amount we computed earlier based on the aging.
Determine which reason for downward-sloping demand best explains each examples below. Drag the reason to the example to complete the problem. When a new cupcake store in your town sells giant cupcakes for $5 each, you buy one. When the store puts cupcakes on sale for $2.50, you buy two. Your favorite cereal is Frootie-Os. When it is on sale for $2 a box, you buy one. When a box of Frootie-Os is selling at its regular price of $3.50, you buy the generic store brand instead. Every Friday. you order a pizza for dinner. The first two slices are delicious, and you devour them. The third and fourth slices take you a bit longer to eat, and you do not enjoy them as much. You do not eat a fifth slice. Diminishing Substitution marginal Income effect effect utility
Answer:
Income effect
Substitution effect
Diminishing marginal utility
Explanation:
The demand curve in downward sloping. The demand curve shows that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
The income effect says that if prices fall, a consumer would be able to buy more quantities of the good as the consumer's real income rises. Conversely, if prices rise , the consumer would be able to buy less quantities of the good as the consumer's real income falls.
In the question ,when the price of cupcakes fall, the quantities purchased increases.
Substitution effect assumes that If the prices of a good falls, consumers would substituite the consumption of other goods for the good whose price fell. As a result, the quantity demanded of the good whose price falls increases. Conversely, if the price of a good rises, consumers would substituite the consumption of the good for cheaper goods.
In the question, when the price of the cereal increases, the consumer substituites the consumption of the cereal for a generic cereal.
Diminishing marginal utility states that as more and more of the quantity of a good is consumed ,the level of utility derived from the consumption of the good falls and the quantity consumed falls.
I hope my answer helps you.
Consider brand names and advertising, and then choose the correct statement.
A. Suppliers of advertising face two interdependent supply curves.
B. Firms that produce advertising trade in a "two-sided market".
C. The advertising market produces the efficient quantity of advertising and brand names.
D. Brand names give producers an incentive to create below-standard products after customers become loyal.
Answer:
B. Firms that produce advertising trade in a "two-sided market".
Explanation:
It is a business model for economic exchange between two distinct user groups.
From the graphs, it is evident that the United States imports about 50% more in – than it exports, but exports about 50% more in – than it imports. It is also evident, from a comparison of the vertical scales, that the United States imports almost – as much in goods as in services and that it exports a little over – as much in goods as in services.
The U.S. imports about 50% more textiles and apparel than it exports and exports more aircrafts than it imports. It mainly imports goods rather than services and records a service surplus. The U.S. experiences a trade deficit, influenced by both intra-industry trade and the theory of comparative advantage.
From the provided information, we can infer several aspects of United States trade. Firstly, it is evident that the U.S. imports about 50% more textiles and apparel than it exports. Contrarily, for goods like aircraft, the U.S. actually exports about 50% more than it imports. When considering trade in goods and services, it is apparent that the U.S. imports nearly twice as much in goods as in services and exports a little over twice as much in goods as in services.
The theory of comparative advantage explains why the U.S. engages in substantial intra-industry trade, where it produces and trades goods within the same industry, as is the case with the automotive industry. For example, in 2021, the U.S. exported $131 billion worth of autos and imported $317 billion worth of autos. Additionally, the U.S. recorded a service surplus, exporting more services than it imports from the rest of the world, with over $144 billion in 2008.
On June 1, 2018, Top Performance Cell Phones sold $ 26 comma 000 of merchandise to Alright Trucking Company on account. Alright fell on hard times and on July 15 paid only $ 7 comma 500 of the account receivable. After repeated attempts to collect, Top Performance finally wrote off its accounts receivable from Alright on September 5. Six months later, March 5, 2019, Top Performance received Alright's check for $ 18 comma 500 with a note apologizing for the late payment.
REQUIREMENTS
1. Journalize the transactions for High Performance Cell PhonesHigh Performance Cell Phones using the direct write-off method. Ignore Cost of Goods Sold.
2. What are some limitations that High Performance will encounter when using the direct write-off method?
Answer:
1.
June 1 2018
Dr Account Receivable 26,000
Cr Sales 26,000
( to record sales on account to Alright trucking)
July 15 2018
Dr Cash 7,500
Cr Account Receivable 7,500
( to record cash collection from Alright trucking)
Sep 5 2018
Dr Bad Debt Expenses 18,500
Cr Account Receivable 18,500
( to record bad debt expenses from Alright trucking's receivables)
March 5,2019
Dr Account Receivables 18,500
Cr Bad Debt Expenses 18,500
( to reverse the bad debt record of Alright trucking's receivables)
Dr Cash 18,500
Cr Account Receivable 18,500
( to record cash collection from Alright trucking)
2.
The limitations of direct written-off method is Bad Debt expenses is only recorded when it is incurred rather than when it is highly possible to be foreseen and estimated.
As a result, Account Receivables is tend to be recorded at the higher balance and Bad Debt expenses is recorded with the lack of timely manner ( that is, period after it is incurred) and thus does not match with the period the originating Sales is earned.
Explanation:
Which of the following is an example of strategic entry deterrence?
A. building excess capacity
B. price reductions
C. economies of scale
D. both b and c
E. both a and b
Answer:
E. both a and b
Explanation:
Strategic entry deterrence refers to any act that prevents potential market participants from competing in a particular market. Such actions or barriers to entry may include rival capture, product differentiation for extensive product development, capacity building to lower unit costs, and predatory pricing. While many entry barriers can be created, time can also be a barrier to entry because potential marketers are less likely to enter the market if it takes longer to complete the task. they spend and lose their profits over time. Entrance barriers are sometimes considered anti-competitive and may be subject to different competition laws.
One way to block access to the new entrants is to produce products at a lower price than the monopoly level. This not only reduces profitability, but also makes them less attractive to participants, but also means that the current person is more likely to meet market demand and to leave any potential bidder in the market.
The current company has the advantage of being the first carrier, so it can act in a way that it knows will affect the decision of the participant. Assuming incomplete data (ie, the costs of the current firm are known only) can only make assumptions about the cost structure of the participant with price and output levels. Therefore, duty people can use them as a signal to any potential bidder.
An officer trying to strategically hinder access may do so by trying to minimize market entry. Expected revenues depend heavily on the number of customers waiting for the participant - so one way to prevent access is the "shutting-down" consumer.
Suppose the market demand for pizza is given by:
Qd = 300 - 20P
Qs = 20P - 100 where P = price (per pizza).
1. Suppose the price of hamburgers, a subsitute for pizza, doubles. This leads to a doubling of the demand for pizza. (At each price, consumers demand twice as much pizza as before.) Write the equation for the new market demand for pizza.
Answer:
QD=600-40P
Explanation:
The old equation for the demand for pizza is Qd = 300 - 20P
Now because of an increase in the price of a substitute the demand for pizza doubles, in order to find the new equation will multiply the old equation by 2 because the demand has doubled.
300*2=600
20P*2=40P
New equation = 600-40P
We can check whether our new equation is correct or not.
If we assume the price of pizza to be 10 and then put 10 in both the equations the quantity from equation 2 should be double that of equation 1.
Equation 1= 300-(20*10)
=300-200=100
Equation 2 = 600-(40*10)
=600-400=200
AS we can see the quantity doubled on the same price which means our equation is correct.
The new equation for the market demand for pizza comes to be Qd = 600 - 40P, assuming that the price of hamburgers doubles which leads to a doubling of the demand for pizza.
Explanation:The original equation for the demand for pizza is Qd = 300 - 20P. According to the situation mentioned, if the price of hamburgers (a substitute for pizza) doubles, that leads to a doubling of the demand for pizza.
This means that at every price, consumers are now demanding twice as much pizza as they were before. So the new equation for the market demand for pizza becomes Qd = 2 * (300 - 20P), which simplifies to Qd = 600 - 40P.
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Gerald's had opening total stockholders' equity of $160,000. During the year, total assets increased by $240,000 and total liabilities increased by $120,000. Their net income was $180,000. No additional investments were made. However, some amount was paid as dividend during the year. What was the amount of the dividend paid?
Final answer:
Gerald's paid out $60,000 in dividends during the year. This was calculated by determining the expected Stockholders' Equity after accounting for Net Income and comparing it to the actual Stockholders' Equity, accounting for the increases in total assets and liabilities.
Explanation:
To determine the amount of the dividend paid, we need to assess the change in Stockholder's Equity using the accounting equation:
Stockholder's Equity = Total Assets - Total Liabilities
We know Gerald's starting Stockholders' Equity is $160,000. Over the year, Total Assets increased by $240,000 and Total Liabilities increased by $120,000, thus:
New Total Assets = Old Total Assets + Increase = Starting Stockholders' Equity + Increase in Total Assets = $160,000 + $240,000 = $400,000.
New Total Liabilities = Old Total Liabilities + Increase = Increase in Total Liabilities = $120,000 (since we don't have the starting total liabilities).
New Stockholders' Equity = New Total Assets - New Total Liabilities = $400,000 - $120,000 = $280,000.
Net Income which contributes to Stockholder's Equity = $180,000. Thus, before considering dividends, the expected Stockholders' Equity should be the Starting Stockholders' Equity + Net Income = $160,000 + $180,000 = $340,000.
The actual Stockholders Equity though is $280,000. This means that the difference, which is paid out as dividends, is Stockholders' Equity expected - Actual Stockholders' Equity = $340,000 - $280,000 = $60,000.
Therefore, Gerald's paid out $60,000 in dividends during the year.
Jack claims that Pluto has five moons: Charon, Nix, and Hydra, Kerberos, and Styx. Jill disagrees with Jack’s claim, insisting that Nix, Hydra, Kerberos, and Styx are actually moons of both Pluto and Charon. From an objective perspective, which claim makes more sense based upon our external view of the Pluto-Charon system?
Final answer:
Both Jack's and Jill's claims are valid depending on the perspective: Jack views Pluto's moons individually, while Jill considers the unique binary system Pluto forms with Charon.
Explanation:
Jack's claim that Pluto has five moons: Charon, Nix, Hydra, Kerberos, and Styx is factually accurate when considering the celestial bodies as individual entities orbiting Pluto. However, Jill's perspective that Nix, Hydra, Kerberos, and Styx are moons of both Pluto and Charon is also valid given the unique relationship between Pluto and its largest moon, Charon. This is due to the fact that Pluto and Charon are in a double tidal lock with each other, constantly facing one another as they orbit a common center of gravity, which could be perceived as them forming a sort of binary or double world system. Therefore, from an objective perspective, both claims make sense depending on whether one defines moons strictly by their direct orbital relationship with Pluto or includes the consideration of the binary system.
Final answer:
Nix, Hydra, Kerberos, and Styx are considered moons of Pluto, not shared with Charon, even though Charon's large size in relation to Pluto makes their system unique, resulting in a double tidal lock. This view is supported by scientific literature and the New Horizons mission findings, which affirm Pluto as the primary gravitational center for these moons.
Explanation:
From an objective perspective, based on our external view of the Pluto-Charon system, it makes more sense to consider Nix, Hydra, Kerberos, and Styx as moons of Pluto rather than as moons of both Pluto and Charon. While Charon is unique due to its large size relative to Pluto, causing some to consider them a double dwarf planet or a binary system, the four smaller moons orbit Pluto as the primary center of gravity. This is evident from astronomical observations and the fact that these moons are referred to as belonging to Pluto in most scientific literature and discussions.
Charon is indeed a significant moon, having a diameter of about 1200 kilometers, making it more than half the size of Pluto itself. The size and relative position of Charon and Pluto result in a special double tidal lock where each keeps the same face toward the other, likened to two dancers facing one another. Despite this, Nix, Hydra, Kerberos, and Styx are still regarded as satellites of Pluto rather than being shared moons with Charon.
The New Horizons spacecraft has provided many insights into the Pluto-Charon system, showing both to be dynamic and geologically active. Yet, in discussions of moons and satellites, the standard naming convention places these four moons as orbiting Pluto, reinforcing the viewpoint that Jack's claim aligns more closely with the accepted astronomical perspective.
Atlas Company plans to sell 145,000 units in November and 190,000 units in December. Atlas's policy is that 15% of the following month's sales must be in ending inventory. On November 1, there were 21,750 units in inventory. It takes 35 minutes of direct labor time to make one unit. Direct labor wages average $19 per hour. Variable overhead is applied at the rate of $7 per direct labor hour. Fixed overhead is budgeted at $60,500 per month. What is the budgeted production in units for November?
a. 121,000 units
b. 151,750 units
c. 100,000 units
d. 125,600 units
e. 140,000 units
Answer:
Option (b) is correct.
Explanation:
Given that,
Sales = 145,000 units
Desired ending inventory = 28,500 units
Beginning inventory = 21,750
Budgeted production in units for November:
= Sales + desired ending inventory - Beginning inventory
= 145,000 units + (190,000 × 15%) - 21,750
= 145,000 units + 28,500 - 21,750
= 151,750 units
A firm practicing third-degree price discrimination may:
I. segment its customers by age, such as offering senior citizen discounts.
II. charge customers living in certain zip codes a higher price than customers living in other locations.
III. initially charge high prices and then reduce the price over time to sell to the more price-sensitive consumers.
(A) I
(B) I and II
(C) II
(D) I, II, and III
Answer:
(B) I and II
Explanation:
Price discrimination is when a producer charges different prices for his good or service.
Third degree price discrimination is when consumers are charged different prices for the same good due to certain factors. E.g. age, gender, location.
Second degree price discrimination is when consumers who buy in bulk are given discounts.
First price discrimination is when consumers are charged different prices according to their willingness to pay. Example of first price discrimination is initially charging high prices and then reducing the price over time to sell to the more price-sensitive consumers.
I hope my answer helps you.
Harrison's Supply Co. suffered a fire loss on April 20, 2013. The company's last physical inventory was taken January 30, 2013, at which time the inventory totaled $220,000. Sales from January 30 to April 20 were $600,000 and purchases during that time were $450,000. Harrison's consistently reports a 30% gross profit. The estimated inventory loss is:a. $490,000. b. $238,000. c. $250,000. d. None of these
Answer:
c. $250,000
Explanation:
The computation of the estimated inventory loss is shown below:
= Total amount of inventory + purchase made during the year - costs of goods sold
= $220,000 + 450,000 - $420,000
= $670,000 - $420,000
= $250,000
The cost of goods would be
= Sales - sales × gross profit margin
= $600,000 - $600,000 × 30%
= $600,000 - $180,000
= $420,000
Identify the characteristics that have enabled Singapore to become one of the world’s most prosperous nations. Correct Answer(s) rich mineral deposits self-sufficiency in regard to water, food, and energy stable financial system strategic location high literacy rate strong agricultural sector Incorrect Answer(s)
Answer:
The answers are : Stable financial system; Strategic location; High literacy rate.
Explanation:
Singapore is a small island, highly populated country without much natural resources and little resources are paid to agricultural sector and energy sector thus lack of self-sufficiency in regard to water, food (due to limited land, lack of water supply and high labor cost). Currently, more than 40% of the country's water consumption are exported from Malaysia.
However, thanks to its strategic location lying in the center of the trade flow between the America, Europe, Middle East - Africa and Asia and the heart of Asia; its stable financial system which is one of the financial centers of Asia and the world due to its pretty open economy; its highly-educated citizens ( according to UNESCO Singapore literacy rate has been going up from nearly 83% in 1980 to more than 97% in 2018), the country is among one of the most prosperous countries in the world.
Singapore is a prosperous nation due to its strategic location, high literacy rate, stable financial system, and high-tech manufacturing. It has formed beneficial trade relationships and maintains a strict, business-friendly environment. Despite a lack of natural resources, Singapore's focus on profitable manufacturing and its status as a distribution hub make it a leading economy in Southeast Asia.
The characteristics that have enabled Singapore to become one of the world's most prosperous nations include its strategic location, a high literacy rate, a stable financial system, and high-tech manufacturing as a main method of wealth generation. Despite lacking rich mineral deposits and self-sufficiency in water, food, and energy, Singapore has made good strategic use of its geographic location by acting as a hub for the distribution of goods.
The country has also forged economic ties in a trade triangle with neighboring Malaysia and Indonesia, where it receives raw materials and labor in exchange for technical know-how and financial support. This has helped Singapore to emerge as a high-income, 100-percent urban economy that thrives on the processing of raw materials and high-tech manufacturing, making it an economic power in Southeast Asia.
Lopez Information Systems management is planning on issuing 10-year bonds at a yield to matu-rity of 8.125 percent. Assume coupon payments will be made semiannually. Management is currentlydeciding between issuing a 8 percent coupon bond or a 8.5 percent coupon bond. Lopez needs to raise$1 million.(a.)What will the price of the 8 percent coupon bond be?
Answer:
Coupon (R) = 8% x $1,000 = $80
No of years to maturity = 10 years
Yield to maturity (Kd) = 8.125% = 0.08125
Po = R/2(1-(1+Kd/2)-n)/kd/2 + FV/ (1+Kd/2)n
Po = $80/2(1-(1+0.08125/2)-10 + $1,000/(1 + 0.08125)10
0.08125/2
Po = $40(1-(1+0.040625)-10 + $1,000/(1+0.040625)10
0.040625
Po = $40(8.0857) + $671.52
Po = $994.95 = $995
Explanation:
The current market price of a bond equals the present value of the semi-annual coupon and the present value of the face value. There is need to discount the coupon at the annuity factor of 8,125% for 10 years in order to obtain the present value of the coupon. We also need to discount the face value at 8,125% for 10 years to obtain the present value of the face value. The summation of the present value of coupon and the present value of face value gives the current market price of the bond.
Suppose that a firm’s marginal production costs are given by MC = 10 + 4Q. The firm’s production process generates a toxic waste, which imposes an increasingly large cost on the residents of the town where it operates: the marginal external cost (i.e. marginal damage inflicted on the residents) associated with the Qth unit of production is given by 2Q. Hint: The social marginal cost takes into account the private cost of the firm as well the marginal damage to the society of the firm’s production activities.
(a) What is the marginal private cost associated with the 10th unit produced?
(b) What is the total marginal cost to society associated with producing the 10th unit (the marginal social cost of the 10th unit)?
Answer:
A) Marginal private cost= 50
B) Total Marginal social cost to society = 70
Explanation:
A) In order to find the marginal private cost we will use the firms production cost formula as it is the private cost that the firm is enduring and is only relevant to the firm's cost and not the society's cost.
In order to find the marginal unit cost of the 10th unit produced will will replace Q in the formula by 10 as it represents quantity.
MC= 10 + 4Q
MC= 10 + 4(10)
MC= 10 +40 = 50
B) In order to find the marginal cost to society we will add the marginal external cost of the 10th unit to its private cost. We already know the marginal private cost is 50 now we need to find the marginal external cost to it to find the total marginal cost.
Marginal external cost = 2Q
Q= 10
Marginal external cost = 2*10 =20
The total Marginal cost to society= 50 + 20= 70
The marginal private cost of producing the 10th unit is 50. The total marginal cost to society, which includes both private and external costs, for producing the 10th unit is 70.
(a) To calculate the marginal private cost (MC) for the 10th unit, we use the given function MC = 10 + 4Q, where Q is the quantity produced. Substituting Q = 10, we get:
MC = 10 + 4 × 10 = 10 + 40 = 50.Thus, the marginal private cost associated with producing the 10th unit is 50.
(b) The marginal social cost (MSC) is the sum of the marginal private cost (MC) and the marginal external cost (MEC). The marginal external cost for the 10th unit is given by the function MEC = 2Q.
Substituting Q = 10, we get:
MEC = 2 × 10 = 20.Thus, the marginal social cost (MSC) is:
MSC = MC + MEC = 50 + 20 = 70.Therefore, the total marginal cost to society associated with producing the 10th unit is 70.
You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 10% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places.
Answer:
Monthy payment will be of $536.99. The loan's EAR is 8.72%.
Explanation:
To solve this exercise, you first has to convert the nominal rate to real rate with this formula: i=(1+r/m)^m−1
i=(1+0.1/12)^12−1
i=0.104713
I=i×100=10.4713%
To calculate the loan monthly payment, you need to calcualte the monthy rate (10.41/12)=8.72
With this, yu calculate the discount factor D, using the number of periodic payments (60) and the rate:
D=((1+r)^n-1)/(r*[(1+r)^n]
D=(((1+0.008726)^60)-1)/(0.008726*(1+0.008726)^60)=46.56
Finally, yo calculate the loan payment by: A/D=25,000/46.56=536.99
The monthly loan payment for a $25,000 loan over 5 years at a nominal interest rate of 10% compounded monthly is approximately $531.18, and the loan's Effective Annual Rate (EAR) is approximately 10.47%.
To determine your monthly loan payment for a $25,000 loan over 5 years with a 10% nominal interest rate paid monthly, we need to use the formula for fully amortizing loans:
M = P * [i(1+i)ⁿ] / [(1+i)ⁿ⁻¹
Where:
M = monthly payment
P = principal amount ($25,000)
i = monthly interest rate (10% nominal annual rate / 12 months = 0.1/12)
n = total number of payments (5 years * 12 months/year = 60)
Plugging in the numbers:
M = $25,000 * [0.008333(1+0.008333)⁶⁰ / [(1+0.008333)⁶⁰⁻¹
After calculating, you get M ≈ $531.18.
To find the loan's Effective Annual Rate (EAR), we use the formula for EAR when interest is compounded monthly:
EAR = (1 + i)ⁿ⁻¹
Plugging in the values:
EAR = (1 + 0.008333)¹²⁻¹
EAR ≈ 0.1047 or 10.47% when rounded to two decimal places.
Suppose the S&P 500 Index has an average return of 11.2% with a standard deviation of 23.7%, and the average return on Wells Fargo stock is 16.3% with a standard deviation of 42.3%. What is the beta for Wells Fargo is the correlation coefficient between Wells Fargo stock return and the S&P 500 Index return is 0.82?
Answer:
Beta = 1.46
Explanation:
Firstly, we need to calculate covariance of S&P 500 return and Well Fargo stock return, using below formula:
Correlation coefficient between Wells Fargo stock return and the S&P 500 Index return = Covariance of S&P 500 return and Well Fargo stock return/(Standard deviation of S&P 500 return x Standard deviation of Well Fargo stock return), or
0.82 = Covariance of S&P 500 return and Well Fargo stock return/(0.237 x 0.423). Solve the equation we get Covariance of S&P 500 return and Well Fargo stock return = 0.082.
Secondly, we calculate beta of S&P 500 return and Well Fargo stock return, using below formula:
Beta = Covariance of S&P 500 return and Well Fargo stock return/Variance of S&P 500 return
= 0.082/(0.237)^2 = 1.46
Final answer:
Using the provided statistics, the beta for Wells Fargo, with a correlation coefficient to the S&P 500 of 0.82, is calculated to be 1.44, indicating it is more volatile than the market.
Explanation:
The beta for Wells Fargo, given the correlation coefficient between Wells Fargo stock return and the S&P 500 Index return is 0.82 can be calculated using the formula β = (ρ × σ_{stock}) / σ_{market}). In this case, β represents the stock's sensitivity to market risk, ρ is the correlation coefficient between the stock and the market returns, σ_{stock} is the standard deviation of the stock's returns, and σ_{market} is the standard deviation of the market returns. By plugging in the values for Wells Fargo (σ_{stock} = 42.3%) and the S&P 500 (σ_{market} = 23.7%, ρ = 0.82), we can calculate Wells Fargo's beta:
β = (0.82 × 42.3%) / 23.7% = 1.44
Therefore, the beta for Wells Fargo is 1.44, indicating that it is more volatile than the market.
Libby Company purchased equipment by paying $6,700 cash on the purchase date and agreed to pay $6,700 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 6%. The equipment reported on the balance sheet as of the purchase date is closest to _________?
Answer:
The answer is $53,732.
Explanation:
The value of the equipment reported on Libby Company's balance sheet is equal to:
Cash payment at purchase + Present value of 8 equal semiannual payment, $6,700 each discounted at 3% ( because semiannual payment is made for 4 years so we have 2 x4 = 8 payments; and annual borrowing rate is 6% so we have discount rate = 6% /2 = 3%).
with:
Cash payment at purchase = $6,700;
Present value of 8 equal semiannual payment, $6,700 each discounted at 3% = (6,700/3%) x ( 1 - 1.03^(-8) ) = $47,032 ( that is, apply the formula to find present value of annuity).
we have:
The value of the equipment reported on Libby Company's balance sheet = 6,700 + 47,032 = $53,732.
On March 12, Medical Waste Services provides services on account to Grace Hospital for $9,700, terms 2/10, n/30. Grace pays for those services on March 20.
Required:
For Medical Waste Services, record the service on account on March 12 and the collection of cash on March 20.
Answer:
1. Accounts receivable A/c Dr $9,700
To Service revenue $9,700
(Being service provided is recorded)
2. Cash A/c Dr $9,506
Sales Discount A/c Dr $194 ($9,700 × 2%)
To Accounts receivable A/c $9,700
(Being cash received recorded and the remaining balance is reported to the cash account in the debit side)
Explanation:
The journal entries are shown below
On March 12
Accounts receivable A/c Dr $9,700
To Service revenue $9,700
(Being service provided is recorded)
On March 20
Cash A/c Dr $9,506
Sales Discount A/c Dr $194 ($9,700 × 2%)
To Accounts receivable A/c $9,700
(Being cash received recorded and the remaining balance is reported to the cash account in the debit side)
Which of the following categories in the portfolio matrix is a market leader and growing fast?
a.Star
b.Meteor
c.Cash cow
d.Shiner
e.Top dog
Answer:
It is Star (B)
Explanation:
Option (a) True. Star is a product with high relative market share in a high growing market . This product is full of potential but require more investment and spending in the areas of advertising,innovation and market research in order to maintain its market leadership position. Hence, it might be cash neutral at this stage.
In the long-run, it will eventually turns to cash cow in the portfolio if we can sustain its position.
Option(b) Meteor. False. This does not exist in product portfolio matrix.
Option (c) Cash cow. False.
This product has a large relative market share in a stagnating (mature) market, profits and cash flows are expected to be high. Because of the lower growth rate, investments needed should also be low.
Hence, they typically generate cash in excess of the amount of cash needed to maintain the business and this ‘excess cash’ is supposed to be ‘milked’ from the Cash Cow for investments in other business units (Stars and Question Marks). Cash Cows ultimately bring balance and stability to a portfolio.
Option (d) Shiner. False .It does not exist
Option (e) Top dog. It is a product with low relative market share in a stagnant market.
What type of good is often provided by the government because it is hard to get people to voluntarily contribute their fair share of the expense?
a. private goodsb. club goodsc. common-resource goodsd. public goodse. government goods
Answer:
Option (D) is the right answer.
Explanation:
According to the scenario, the most appropriate answer is option (D) because public goods are given by the government and It can be used by everyone at a time and without any cost.
While the other options are incorrect because of the following reasons:
Private goods are not given by the government. Club goods can be given by the government but at a cost. Common resource goods are of government and can not be used by everyone. Government goods can be used by the government only.Andre Candess manages an office supply store. One product in the store is computer paper. Andre knows that 10,000 boxes will be sold this year at a constant rate throughout the year. There are 250 working days per year and the lead-time is 3 days. The cost of placing an order is $30, while the holding cost is $15 per box per year. How many units should Andre order each time to minimize his annual inventory cost?
Answer:
Annual demand (D) = 10,000 boxes
Ordering cost (Co) = $30
Holding cost (H) = $15
EOQ = √2DCo
H
EOQ = √2 x 10,000 x $30
$15
EOQ = 200 units
Explanation:
EOQ is a function of square root of 2 multiplied by annual demand and ordering cost per order divided by holding cost per item per annum. EOQ is the quantity of stock that minimises the total inventory cost. In this case, EOQ equals 200 units
Andre should order approximately 632 boxes each time to minimize his annual inventory cost.
Explanation:To minimize his annual inventory cost, Andre should order a quantity that balances the cost of placing an order and the holding cost. The Economic Order Quantity (EOQ) formula can be used to calculate the optimal order quantity. EOQ formula is:
EOQ = √(2DS/H)
Where:
D is the annual demand (10,000 boxes)S is the cost of placing an order ($30)H is the holding cost per box per year ($15)Plugging in the values:
EOQ = √(2 x 10,000 * $30 / $15) = √400,000 = 632.45
Therefore, Andre should order approximately 632 boxes each time to minimize his annual inventory cost.
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Job 303 includes direct materials costs of $ 540 and direct labor costs of $ 400. If the predetermined overhead allocation rate is 50% of direct labor cost, what is the total cost assigned to Job 303?
Answer:
Total cost will be $1140
Explanation:
We have given direct material cost = $540
Direct labor cost = $400
And overhead allocation is 50 % of direct labor cost
So overhead allocation = 50 % of $400 = $200
We have to find the total cost assigned to the job
So total cost = direct material cost + direct labor cost + overhead allocation = $540 + $400 + $200 = $1140
So total cost will be $1140
The total cost assigned to Job 303, which includes direct materials, labor and overhead costs, is calculated as $1140.
Explanation:To calculate the total cost assigned to Job 303, you need to combine the direct materials costs, direct labor costs and the overhead cost which is calculated based on a predetermined overhead allocation rate. The overhead allocation rate is 50% of the direct labor cost.
Therefore, the overhead cost will be 50% of $400, which equals to $200. Hence, the total cost for Job 303 can be calculated as follows: $540 (direct materials) + $400 (direct labor) + $200 (overhead allocation) = $1140.
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Shunt Technology will spend $800,000 on a piece of equipment that will manufacture fine wire for the electronics industries. The shipping and installation charges will be $240,000 and net working capital will increase $48,000.The equipment will replace an existing machine that has a salvage value of $75,000 and a book value of $125,000. If Shunt has a current marginal tax rate of 34 percent, what is the net investment
Answer:
$1,180,000
Explanation:
The net initial investment will include the following components:
1. Fixed capital investment = Purchase cost of the equiment = $800,000 + $240,000 = $1,040,000
2. Increase in working capital of $48,000
3. Sales proceeds of existing machine of $75,000
4. Tax on gain/loss of sales on existing machine = (75,000 - 125,000) x 34% = $- 17,000
So, total net initial investment is $1,040,000 + $48,000 + $75,000 - (-$17,000) = $1,180,000
Final answer:
The net investment for Shunt Technology's new equipment is calculated by adding the initial cost of equipment, shipping and installation, and increase in net working capital, then subtracting the salvage value of the old machine and adding the tax savings due to the loss on disposal. The net investment comes to $1,030,000.
Explanation:
To calculate the net investment for Shunt Technology's new equipment, we consider the initial outlay plus any additional costs and adjustments for working capital, taxes from equipment disposal, and salvage value. Here is the breakdown:
Initial cost of equipment: $800,000Shipping and installation: $240,000Net working capital increase: $48,000Total initial outlay: $800,000 + $240,000 + $48,000 = $1,088,000Salvage value of old machine: $75,000Book value of old machine: $125,000Loss on disposal of old machine (book value - salvage value): $125,000 - $75,000 = $50,000Tax on disposal of old machine (loss on disposal × tax rate): $50,000 × 34% = $17,000Tax savings due to loss on disposal: $17,000The net investment is calculated as follows:
Net investment = Total initial outlay - Salvage value of old machine + Tax savings from disposal
Net investment = $1,088,000 - $75,000 + $17,000 = $1,030,000
IE 11-2 ... PPF Model – If this economy is presently positioned at Point S, then two of the immediate Costs of the Inflation are _______________________ . With the corresponding Business Cycle close to Area "y", there is a major Risk in this economy of moving into _______________ .
Answer:
Instability and Insecurity.
Stagflation (Accelerating Inflation)
Explanation:
Instability/Insecurity is an economic system whereby the rate of inflation and rate of economic growth are volatile. This usually occur when there is a considerably high unemployment in the system. Furthermore, stagflation (also known as accelerating inflation) is a condition where there is a constant increase in inflation rate and unemployment rate.